Senior Living Communities, Liability for COVID-19 Countermeasures, and the PREP Act: Is the Tide Turning for Providers? | Sheppard Mullin Richter & Hampton LLP | #seniorliving | #elderly | #seniors
[co-author: Genta Iwasaki]
In a February 10, 2021 ruling (the “Garcia Ruling”) out of the District Court for the Central District of California (the “CDCA Court”) in the case of Gilbert Garcia et al v. Welltower OpCo Group LLC, et. al., 20-02250JVS (C.D. Ca. Feb. 10, 2021), the CDCA Court held that the Public Readiness and Emergency Preparedness Act (42 U.S.C. § 247d–6d) (the “PREP Act”) provides senior living facilities with an exemption from civil liability for actions taken by such facilities to protect facility residents from COVID-19.
Given that long-term care and senior living facilities have experienced a disproportionate share of COVID-19 cases and deaths nationwide during the pandemic, with many states having experienced their worst COVID-19 outbreaks and highest number of deaths in long-term care facilities in December 2020, the extension of PREP Act liability protections to senior and long term care facilities is tremendously significant to the industry.
The Garcia Ruling’s significance is amplified by the fact that prior federal decisions regarding the PREP Act and its application to the long-term care and senior living providers did not give the provider community much to cheer about. Most recently, the federal District Court for the Western District of Pennsylvania (the “WDPA Court”) issued a ruling (the “Sherod Ruling”) in the case of Sherod v. Comprehensive Healthcare Management Services, LLC, 20cv1198 (W.D. Pa. Oct. 16, 2020) pursuant to which the WDPA Court concluded that a nursing home was not protected from civil liability under the PREP Act’s immunity provisions in relation to a housekeeper’s COVID-19 wrongful death suit being brought against the nursing home.
Given the significance of the Garcia Ruling for the industry and its break from prior precedent – i.e., the Sherod Ruling and others – a closer examination is warranted.
The Liability Debate: Long-Term Care Facilities and COVID-19 Cases
Since the early days of the COVID-19 pandemic, both federal and state governments alike have moved to insulate nursing homes and senior living communities from civil (and sometimes criminal) liability claims that relate to the provision of health care services to patients/residents with COVID-19. It was and is often argued that such liability protections were/are necessary to protect post-acute and senior living facilities from liability since such facilities are often asked to relieve pressure on hospitals by accepting COVID-19 patients who no longer require acute-level care, notwithstanding the fact that such patients could still be symptomatic and require isolation and treatment.
Although such liability protections have been welcomed by post-acute provider and long-term care facility industry groups (e.g., the American Health Care Association and the National Center for Assisted Living), patient and senior rights advocacy organizations (e.g., the AARP) have been highly critical of such protections because, as they argue, such protections leave patients and seniors vulnerable to substandard care without effective recourse against negligent care providers and facilities.
The PREP Act and the COVID-19 Declaration
As discussed in our May 8, 2020 Healthcare Law Blog post, “COVID-19: Medical Liability for Expanded Scope of Services,” one way that the federal government has addressed the post-acute/senior living liability issue is by invoking the PREP Act – federal legislation enacted in 2005 to encourage the rapid production of vaccines in case of a potential public health threat.
The PREP Act authorizes the Secretary (“Secretary”) of the U.S. Department of Health and Human Services (“HHS”) to issue a PREP Act declaration (“Declaration”) in the face of a, “disease or other health condition or other threat to health [that] constitutes a public health emergency, or that there is a credible risk that the disease, condition, or threat may in the future constitute such an emergency.” (42 U.S.C. § 247d–6d(b)(1)).
Subject to the terms of the Secretary’s Declaration, a “covered person” shall be immune from, “suit and liability under Federal and State law with respect to all claims for loss caused by, arising out of, relating to, or resulting from the administration to or the use by an individual of a covered countermeasure.” (42 U.S.C. § 247d–6d(a)(1)). Notwithstanding the foregoing, immunity from liability under the PREP Act is not available for death or serious physical injury caused by willful misconduct. (42 U.S. Code § 247d–6d(d)(1)).
As defined by the PREP Act, a “covered countermeasure” is a drug, biological product, or device that the Secretary determines to be a, “priority for use during a public health emergency.” (42 U.S.C. § 247d–6d(i)(1)). At the Secretary’s discretion, a “covered person” can be a manufacturer and/or distributor of a countermeasure, a “program planner” (individuals and entities involved in planning, administering, or supervising programs for distribution of a countermeasure), and/or a “qualified person” (persons who prescribe, administer, or dispense countermeasures such as healthcare and other providers or other categories of persons named in a Declaration, including contractors, employees, and volunteers for the federal government). (42 USC § 247d-6d(i)(2)).
Since its enactment, the PREP Act has been invoked several times including the issuance of Declarations in relation to the H1N1 pandemic in 2009, the Ebola outbreak in 2016, and other public health emergencies. In relation to the COVID-19 pandemic, the PREP Act was first invoked on March 17, 2020, when the Secretary issued the “Declaration Under the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19” (the “COVID-19 Declaration”) to provide PREP Act protections to covered persons in relation to COVID-19 countermeasures including, “any antiviral, any other drug, any biologic, any diagnostic, any other device, or any vaccine, used to treat, diagnose, cure, prevent, or mitigate COVID-19, or the transmission of SARS-CoV-2 or a virus mutating therefrom, or any device used in the administration of any such product, and all components and constituent materials of any such product.” As of the date of this writing, the COVID-19 Declaration has been amended five times with the most recent amendment dated January 28, 2021.
Garcia v. Welltower
In the Garcia Ruling, the CDCA Court considered whether the PREP Act’s liability immunity extended to, and completely insulates, senior living facilities/communities for imperfect countermeasures taken by such facilities in response to COVID-19. In evaluating the impact of its decision, the CDCA Court noted that the presumption of complete immunity for providers under the PREP Act is a tough one to overcome once a federal court decides to weigh in on the issue.
1. The Facts
The Garcia case was brought by three sons (the “Plaintiffs”) who alleged that their late father, Gilbert Garcia, died from COVID-19 largely due to a staff shortage and improper infection control measures at Sunrise Villa Bradford, an assisted living and memory care community in Placentia, California, where Mr. Garcia lived since August 2017. The Plaintiffs brought the suit against Sunrise Villa Bradford and Sunrise Villa Bradford’s parent companies, Sunrise Senior Living Management, Inc. and Welltower Opco Group, LLC (hereinafter, the term “Sunrise Villa” shall refer to Sunrise Villa Bradford and its two parent entities). The Plaintiffs sought unspecified damages from Sunrise Villa for elder abuse and neglect, wrongful death, and intentional infliction of emotional distress.
As summarized in the Garcia Ruling, the Plaintiffs alleged that Sunrise Villa failed to, “implement appropriate infection control measures or follow local or public health guidelines in preparing for and preventing COVID-19 spread” and that such failures resulted in their father’s death. More specifically, the Plaintiffs alleged that Sunrise Villa failed to follow its own policies and procedures including those related to symptom checking, staff monitoring and screening, limiting visitation within the facility, and maintaining adequate supplies of masks and other personal protective equipment (“PPE”) for Sunrise Villa staff and residents.
Although Mr. Garcia was identified as being in good health at the outset of the pandemic, Mr. Garcia died from COVID-19 on July 3, 2020. According to the Plaintiffs, their father’s death was directly linked to Sunrise Villa’s failure to follow its own COVID-19 related policies and procedures and otherwise take appropriate countermeasures to protect Sunrise Villa staff and residents from COVID-19.
2. The Argument
a. By the Plaintiffs
In order to assert their claims against Sunrise Villa, the Plaintiffs argued that the PREP Act does not immunize Sunrise Villa from liability for those facts and circumstances underlying Plaintiffs’ negligence claims against Sunrise Villa. According to the Plaintiffs, the PREP Act does not apply to Sunrise Villa because (i) the negligence claims being brought by Plaintiff do not relate to “covered countermeasures” as such term is defined in the PREP Act and included in the COVID-19 Declaration; and (ii) Sunrise Villa is not a “covered person” and, in turn, is not eligible for the liability protections offered by the PREP Act.
In arguing that the PREP Act does not apply to the types of claims being made against Sunrise Villa, the Plaintiffs maintained that the PREP Act only applies to a “very narrow class of claims” involving the “use” or “administration” of any “covered countermeasure.” Based upon the terms of the COVID-19 Declaration, the Plaintiffs argued that the “covered countermeasures” applicable here are limited to the, “physical provision of a countermeasure to a recipient, such as vaccination or handing drugs to patients. . . .” Since Plaintiffs’ claims do not relate to such covered countermeasures, Plaintiffs argued that Sunrise Villa cannot rely on the PREP Act to shield itself from liability for the actions and failures that are at the core of Plaintiffs’ claims against Sunrise Villa.
Finally, Plaintiffs argued that a failure to act is not a “countermeasure” and is, therefore, outside the purview of the PREP Act’s protections. As described in the Garcia Ruling, Plaintiffs maintained that their claims against Sunrise Villa related to Sunrise Villa’s failure to act in accordance with federal, state and local public health guidelines relating to COVID-19 and its transmission, as well as Sunrise Villa’s failure to act in accordance with its own infection control policies and procedures. From this vantage point, Plaintiffs concluded that the PREP Act does not immunize Sunrise Villa against liabilities relating to its inactions.
b. From Sunrise Villa
In response to Plaintiffs’ arguments, Sunrise Villa argued that claims being brought by Plaintiffs against Sunrise Villa were completely preempted by the PREP Act. In other words, the PREP Act is directly applicable to Plaintiffs’ claims and, as a result, Sunrise Villa has complete immunity from any liabilities related to such claims.
In making its arguments, Sunrise Villa relied on recent guidance from the HHS Office of General Counsel (“OGC”). According to OGC Advisory Opinion 20-21, “On the Public Readiness and Emergency Preparedness Act Scope of Preemption Provision” (January 8, 2021) (“AO 21-01”), OGC interprets the PREP Act, as promulgated by Congress, to be a complete preemption of state laws that, in turn, creates an exclusively federal cause of action for PREP Act violations. In addition, AO 21-01 provides that the PREP Act’s immunity provisions extend to, “anything ‘relating to’ the administration of a covered countermeasure.” Finally, according to AO 21-01, the OGC maintains that only instances of nonfeasance – i.e. circumstance in which, “defendant’s culpability is the result of its failure to make any decisions whatsoever, thereby abandoning its duty to act as a program planner or other covered person” – fall outside of the PREP Act’s protections.
Based upon the foregoing, Sunrise Villa argued that the PREP Act serves as a complete preemption to Plaintiffs’ claims in the present case and, as a result, Plaintiffs were foreclosed from pursuing their claims against Sunrise Villa.
3. The Ruling
a. The PREP Act is not limited to countermeasures relating to the administration/use of vaccines and medications.
As to Plaintiffs’ argument that their claims against Sunrise Villa fall outside of the PREP Act’s reach, the CDCA Court disagreed. In concluding that the claims at issue were covered by the PREP Act, the CDCA Court relied on, and gave deference to, AO 21-01 and other recent issuances from the OGC.
In its decision, the CDCA Court observed that Plaintiffs’ injuries as alleged in Plaintiffs’ underlying complaint arise out of, relate to, and result from the administration or use of a covered countermeasure as set forth in the COVID-19 Declaration. Following the OGC’s guidance in AO 01-21, the CDCA Court concluded that Plaintiffs’’ allegations of the use and misuse of PPE and Sunrise Villa’s failure to implement adequate and effective infection control measures directly related to covered countermeasures within the meaning of the PREP Act.
In reaching this conclusion, the CDCA Court noted that the acts and omissions being alleged by Plaintiffs against Sunrise Villa appear almost verbatim in AO 01-21. As qu0ted in the Garcia Ruling, AO 01-21 reads:
At one extreme, plaintiff may have pleaded that the facility failed in toto to provide any of its staff or patients with PPE… Other plaintiffs allege that the quantity of PPE was inadequate, that staff were not timely provided PPE or that staff were not adequately trained to use PPE… decision-making that leads to the non-use of covered countermeasures by certain individuals is in the grist of program planning, and is expressly covered by PREP Act.
b. The facts and circumstances underlying Plaintiffs’ claims do not show inaction by Sunrise Villa.
As evidenced by the Garcia Ruling, the CDCA Court agreed with the OGC’s conclusion as set forth in AO 01-21 that the PREP Act provides complete preemption when a party attempts to comply with federal guidelines – in this case, guidelines relating to COVID-19. According to the OGC, only instances of nonfeasance, i.e., where “defendant’s culpability is the result of its failure to make any decisions whatsoever, thereby abandoning its duty to act as a program planner or other covered person” would complete preemption not attach. Total inaction, therefore, would not be covered by the PREP Act.
In applying AO 02-21, the CDCA Court noted that Plaintiffs’ complaint acknowledged that Sunrise Villa undertook COVID-19 related infection control efforts – although allegedly without success – which, as referenced above, included COVID-19 screening and monitoring, the use (and in some case, misuse) of PPE, and the development and implementation of a facility operations plan to transition back to “business as usual” as soon as appropriate.
By highlighting such efforts, the CDCA Court noted that the Plaintiffs’ own compliant makes it clear that Sunrise Villa never abandoned its role as a covered person/program planner. As a result and notwithstanding Plaintiffs’ statements to the contrary, Plaintiffs’ claims against Sunrise Villa actually relate to countermeasures that Sunrise Villa undertook in its role as a program planner and, in turn, a covered person. Therefore, the CDCA Court concluded that the PREP Act provides complete preemption over the claims being asserted by the Plaintiffs against Sunrise Villa.
C. Senior living communities are “program planners” and, as a result, are covered by the PREP Act.
Finally, the CDCA Court disagreed with the Plaintiffs’ assertion that the Sunrise Villa is not a “covered person” under the PREP Act. The CDCA Court wrote in the Garcia Ruling that Sunrise Villa is a “program planner” and, in turn, a “covered person” under the PREP Act.
In reaching this conclusion, the CDCA Court cited to an August 14, 2020 letter (“OGC Letter”) written by the OGC in response to an inquiry from the American Seniors Housing Association and Argentum. According to the OGC Letter, senior living communities are properly considered “program planners” and, in turn, “covered persons” under the PREP Act. As quoted by the CDCA Court in the Garcia Ruling, the OGC Letter states:
[A] senior living community meets the definition of a “program planner” to the extent that it supervises or administers a program with respect to the administration, dispensing, distribution, provision, or use of a security countermeasure or a qualified pandemic or epidemic product, including by “provid[ing] a facility to administer or use a Covered Countermeasure in accordance with” the declaration).
Given that the claims at issue related to Sunrise Villa’s administration and implementation of infection control, PPE and other COVID-19 related policies and procedures – all countermeasures undertaken by Sunrise Villa in response to the COVID-19 Declaration – the CDCA Court agree with the OGC Letter’s rationale and concluded that Sunshine Villa is a program planner in relation to the facts and circumstances underlying the Plaintiffs’ claims.
Based upon the foregoing, the CDCA Court concluded that Sunrise Villa is (i) subject to the PREP Act and (ii) entitled to complete immunity from any liability arising from Plaintiffs’ claims.
Garcia and Sherod: What do they tell us?
As discussed at the beginning of this article, the Garcia Ruling is significant because it presents a clear break from prior precedent – e.g., the Sherod Ruling and others – and potentially gives the provider community guidance as to how the courts might start ruling in a post-Garcia and a post-OGC guidance world. In addition, assuming that the Garcia Ruling and OGC guidance will have influence over future court decisions and enforcement activities, providers are well advised to consider the Garcia Ruling and OGC guidance as roadmaps to how a provider can increase the likelihood of receiving immunity under the PREP Act for past COVID-19-related countermeasures – in other words, how a provider can increase the likelihood of getting a “Garcia Ruling” rather than a “Sherod Ruling.”
A. The Sherod Ruling
The Sherod case was brought by the estate of Elizabeth Wiles (the “Estate”) against Ms. Wile’s employer, Comprehensive Healthcare Management Services, LLC (“CHMS”), the owner/operator of a nursing home, Brighton Rehabilitation And Wellness Center (“Brighton”), at which Ms. Wiles worked as a housekeeper. The Estate sued Brighton in the state court alleging that Ms. Wiles contracted and died from COVID-19 because Brighton, “failed to take preventative measures and failed to utilize covered countermeasures,” to stop the spread of COVID-19 within the Brighton facility. Brighton attempted to remove the case from state court to federal district court – the WDPA Court – asserting that the PREP Act provides for federal immunity against claims based upon how countermeasures are used. The Estate, based upon its argument that the PREP Act did not apply in the present case, made a motion to remand the case to state court and, in turn, defeat Brighton’s attempt to remove the case to federal court.
In granting the Estate’s motion to remand the case to state court, the WDPA Court concluded that providers are only entitled to PREP Act immunity, “when a claim is brought against them for the countermeasures the facility actually utilized.” (emphasis added). By extension, the WDPA Court wrote in the Sherod Ruling that negligence and wrongful death claims based upon an alleged failure to use face masks and other PPE are not connected to a nursing facility’s use of protective equipment, because they demonstrate the lack of any such use. Accordingly, the WDPA Court found that there was no federal jurisdiction associated with the case and remanded it to state court for continued litigation.
When considering the Sherod Ruling, it is important to note that the Sherod Ruling was handed down in October 2020, before AO 21-01 was issued in January 2021. Therefore, the Sherod Decision was decided in the absence of guidance from HHS. Given the general proposition that courts must give deference to interpretations of statutes made by those government agencies charged with their enforcement, unless such interpretations are unreasonable – commonly referred to as the “Chevron Doctrine” – it is unclear whether the WDPA Court in Sherod would have issued the same Sherod Ruling if it had OGC’s guidance at the time it was considering the Estate’s claims.
b. It remains to be seen.
Although it remains to be seen whether the Garcia Ruling and AO 21-01 will hold sway in future PREP Act litigation, providers across the country – including nursing homes and senior living communities – are well advised to consider the Garcia Ruling and AO 21-01 when making decisions as to the implementation of COVID-19-related countermeasures.
As an example of how a provider can take action to enhance the likelihood of receiving PREP Act protections should its decisions lead to future litigation, when a provider makes choices as to how it will allocate its limited resources to protect its residents (or patients, in the case of inpatient and/or outpatient providers) from the spread and effects of COVID-19, the provider should carefully and completely document its decision-making process to show that it is making specific choices – i.e., taking actions as per AO 21-01 – to allocate its resources to certain countermeasures and not to others. Such documentation should include clear statements as to the provider’s rationale as to why certain countermeasures were or were not taken. By maintaining such records, a provider will be in a better position to support its argument that it did not, “abandon its duty to act as a program planner or other covered person,” when electing not to take certain countermeasures. As described in AO 21-01 and in the Garcia Ruling, such abandonment would likely prevent the provider from being protected under the PREP Act.
In the end, although we cannot predict whether AO 21-01 and the Garcia Ruling are bellwethers of favorable decisions to come or something less than that, the long-term care and senior living communities should be encouraged by, and learn from, the Garcia Ruling. What’s the lesson? Document, document, document!
 According to a Kaiser Family Foundation News Release dated January 14, 2021, a study of COVID-19 long-term care cases and deaths between April and August 2020 shows that 6% of all COVID-19 cases nationally and 38% of COVID-19 deaths have been associated with long-term care settings.
 “Patterns in COVID-19 Cases and Deaths in Long-Term Care Facilities in 2020,” by Priya Chidambaram and Rachel Garfield, Kaiser Family Foundation (January 14, 2021).
 For example, New York passed the Emergency or Disaster Treatment Protection Act on April 3, 2020 in which the state’s nursing homes and other facilities were given immunity to civil and criminal liability for their provision of patient care services pursuant to a COVID-19 emergency rule.
 See, “Nursing Home Liability Waivers and Nursing Home Investigations and Enforcement: A Delicate Balance During the COVID-19 Pandemic,” by Kenneth Yood and Theresa Thompson, Sheppard Mullin Healthcare Law Blog (May 6, 2020).
 “Covid Pits Nursing Homes Against Seniors’ Groups Over Liability,” by Alex Ruoff, Bloomberg Government (May 12, 2020).
 See, HHS Office of the Assistant Secretary for Preparedness and Response, PREP Act portal at https://www.phe.gov/Preparedness/legal/prepact/Pages/default.aspx.
 For example, the consolidated cases of Estate of Joseph Maglioli, et al. v. Andover Subacute Rehabilitation Center I, et al. and Estate of Wanda Kaegi, et al. v. Andover Subacute Rehabilitation Center I, et al., Civ. No. 20-6605 and 20-6985.
 Although the OGC Letter was issued prior to the Sherod Ruling and was, in fact, cited in the Sherod Ruling, the OGC Letter was limited to the conclusion that senior living communities are ‘covered persons’ when they provide a facility to administer or use a covered countermeasure in accordance with a Declaration under the PREP Act. Therefore, the WDPA Court in Sherod concluded that the OGC Letter was not germane to the question as to whether Brighton’s alleged inaction entitled Brighton to PREP Act protection.
 See, Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984)
 This advice applies retrospectively as well. Providers are well advised to proactively gather any such documentation that was generated at the time past COVID-19 decisions were made so, in the event that allegations are made in the future based upon a provider’s past decisions not to implement a specific countermeasure, the necessary decision-making documentation will have already been gathered for production, if necessary.