Category: COVID-19

“Hope Is On The Horizon”: California Governor Gavin Newsom Announces COVID-19 Vaccine Distribution Plan

N.B.  Concurrent with the posting of this article, the Vaccines and Related Biological Products Advisory Committee of the Food and Drug Administration (“FDA”) has decided to recommend to the FDA that the FDA approve the emergency use authorization applications submitted by Pfizer and BioNTech.  It is being reported that the FDA may formally approve the applications as soon as tomorrow, Friday, December 11, 2020.  More detail regarding the recommendation and the FDA’s decision will be discussed in a follow-up article.

California Governor Gavin Newsom announced that, “Hope is on the horizon with the [COVID-19] vaccination. We continue to accelerate our planning and preparedness for a safe and equitable vaccine distribution.”  As noted by the Governor, California expects to receive a little more than two million doses of the vaccine this month including 327,000 doses from pharmaceutical company, Pfizer, and 2.6 million doses from biotechnology maker, Moderna.

Now that there are estimated dates of delivery for both Pfizer’s and Moderna’s COVID-19 vaccines and it appears that the FDA – possibly as soon as tomorrow, Friday, December 11, 2020 – will be granting an emergency use authorization to Pfizer and BioNTech for the distribution of their COVID-19 vaccines based upon today’s recommendation from the FDA’s Vaccines and Related Biological Products Advisory Committee, California’s vaccine distribution plan (“Plan”) has claimed the public spotlight.

The following reviews California’s vaccine distribution strategy and highlights the populations receiving priority status for vaccination with the first round of vaccine doses scheduled to be delivered to California this month.

CALIFORNIA’S VACCINE DISTRIBUTION PLAN AND ALLOCATION GUIDELINES FOR COVID-19 VACCINE

During a December 3, 2020 online press conference, Governor Newsom described California’s “COVID-19 Vaccine Distribution Plan” (the “Plan”) and the California Department of Public Health (“CDPH”) “Allocation Guidelines for COVID-19 Vaccine During Phase 1A”  (the “Allocation Guidelines”) as putting healthcare workers[1] and vulnerable patient populations at the front of the line for vaccination.

A. Vaccination Priorities: A Tiered Vaccine Distribution Blueprint

According to the Allocation Guideline’s tiered vaccine distribution blueprint, vaccines will first be provided to (i) residents of skilled nursing facilities, assisted living facilities, and similar long-term care settings for older or medically vulnerable individuals; and (ii) healthcare workers who come into direct contact with patients positive for COVID-19 and those at the highest risk of exposure – e.g., paramedics, emergency medical technicians, and healthcare workers at acute care, correctional and psychiatric hospitals and nursing homes.  Next, healthcare workers in intermediate care facilities, home settings, and primary care clinics (e.g., federally qualified health centers, rural health centers, correctional facility clinics, and urgent care clinics) will be given access to the vaccine.  Finally, the Allocation Guideline’s “third tier” healthcare workers in less risky healthcare settings – e.g., dental offices, laboratories, and specialty clinics – will be eligible for vaccination.

Once vaccine is distributed to healthcare workers based upon the foregoing priority categories, the Plan directs the State to broaden vaccination access to other groups including essential workers – e.g., farm laborers, police officers, child care staff and teachers – and communities at increased risk of COVID-19, including minority communities disproportionately affected by COVID-19.  During a November 23, 2020 press conference, Governor Newsom said, “mass vaccinations are unlikely to occur anytime soon. For the back of the envelope purposes, March, April, May, June, July, where we start to scale, and we start getting into the subsequent phases (of vaccine distribution).”

B. Distribution Of Vaccine – The Mechanics.

According to the Plan, the State-wide distribution of vaccine will be based upon a multi-level and multi-step process designed to promote the equitable distribution of the vaccine and to protect, “California’s critical and vulnerable populations, especially during the early phases when vaccine supply will be limited.” See, Plan, pg. 35.

As outlined by Governor Newsom during his December 3, 2020 press conference, California’s distribution process is comprised of six distinct steps as set forth below:

Step One

Enroll Vaccine Providers and Establish Allocation Guidelines.  The first step involves enrolling healthcare providers to conduct vaccinations and developing guidelines for the allocation of the initial 327,000 doses of Pfizer’s vaccine among six vaccine regions.  As established by CDPH, the six regions and their respective allocation of Pfizer vaccine doses are as follows:

  1. Region I (126,750):  Los Angeles, Orange, San Diego, San Luis Obispo, Santa Barbara, Ventura;

  2. Region II (80, 497):  Alameda, Contra Costa, Del Norte, Humboldt, Lake, Marin, Mendocino, Monterey, Napa, San Benito, San Francisco, San Mateo, Santa Clara, Shasta, Solano, Sonoma;

  3. Region III (8,592):  Butte, Colusa, Glenn, Lassen, Modoc, Plumas, Santa Cruz, Sierra, Siskiyou, Sutter, Tehama, Trinity, Yuba;

  4. Region IV (35,145):  Alpine, Amador, Calaveras, El Dorado, Nevada, Placer, Sacramento, San Joaquin, Stanislaus, Tulare, Tuolumne, Yolo;

  5. Region V (16,706):  Fresno, Kern, Kings, Madera, Mariposa, Merced; and

  6. Region VI (59,910): Imperial, Inyo, Mono, Riverside, San Bernardino.

As noted above, the Allocation Guidelines were adopted and distributed by the CDPH on December 5, 2020.  In addition, the CDPH has identified the following hospitals as participating in the vaccination process: Cedars Sinai Medical Center, Los Angeles; Mercy Medical Center, Redding; Rady Children’s Hospital, San Diego; UCD Health, Sacramento; UCSF Medical Center, San Francisco; Valley Children’s Healthcare, Madera; and Zuckerberg San Francisco General Hospital.[2]  According to CDPH, these facilities were chosen based on their ultra-cold storage capabilities, as the Pfizer vaccine must be stored in negative 80-degree freezers, at large “highest-risk” healthcare population and/or their willingness to redistribute vaccines outside their facility and network. The final criteria was one of geography, as the Department said these places were chosen to be spread across the state as evenly as possible.[3]

Step Two

Review Vaccine Orders Submitted by Local County Departments of Health.  Under the Plan, local county departments of health are obligated to submit distribution plans for their respective geographic regions.  Such plans must include various elements including a description of the region’s “vaccine administration capacity” – such capacity being determined based upon multiple factors including the number of registered vaccination providers in the region; the number of “point of dispensing” (“POD”) sites available to vaccinate emergency responders and critical infrastructure personnel in the region; and the COVID-19 vaccine storage capacity at each POD.

Steps Three and Four

Local County Orders.  Steps 3 and 4 involve the process of preparing and filling of the local county orders.

Step Five

Vaccine Delivery Logistics.  Shipping companies like UPS and FedEx will drop off the vaccine to hospitals and vaccine providers who already have approved cold-chain storage units. To increase storage capacity, the State has purchased additional cold storage units for providers to use.

Step Six

Vaccine Administration.  Once again, the 327,000 Pfizer vaccine doses will be distributed and administered in accordance with the Allocation Guidelines as described above. As explained by Governor Newsom, notwithstanding the initiative of the vaccination process, mask and social distancing rules will remain in place.  Over time, this will change; however, as an initial matter, it is still unclear as to whether vaccinated individuals are still capable of spreading the virus to others.

A CLOSER LOOK:  VACCINE DISTRIBUTION CHALLENGES.

As noted above, the execution of the Plan and the delivery of vaccine to the priority populations identified in the Allocation Guidelines fall on the shoulders of the local county departments of health. Although each county will experience its own unique challenges during the vaccination process – such challenges could vary significantly from one county to the next given the extreme demographic, geographic and other differences between the counties – experts have identified certain common challenges that will likely create significant hurdles for all counties to overcome.

1. “Colder than Winter in Antarctica.”

As has been widely reported and discussed, the Pfizer vaccine needs to be kept extremely cold: minus 70 degrees Celsius, which is, “colder than winter in Antarctica.”[4]  By contrast, Moderna has said that its vaccine needs to be frozen too, but only at minus 20 Celsius, more like a regular freezer.[5]

Given the need to maintain the Pfizer vaccine at ultra-low temperatures, the storage and transportation of the vaccine presents significant logistical challenges.  In order to meet this challenge, counties and healthcare providers in California and elsewhere have been scrambling to get their hands on ultra-cold freezers.  For example, in the case of Los Angeles County (“LAC”), the LAC Department of Public Health purchased five ultra-cold freezers in addition to three from the State and eight purchased by the LAC Department of Health Services.  These 16 freezers will be placed in strategic locations across LAC; however, the eight LAC Department of Health Services freezers will be dedicated to staff and patients at the LAC’s four public hospitals and 27 health clinics.

2. Multi-Dose Vaccines and Compliance Challenges.

In addition to the cold storage and transportation challenges described above, both the Moderna and the Pfizer vaccines present significant challenges as multi-dose vaccines – i.e., vaccines that require more than one dose to reach maximum effectiveness.

Multi-dose vaccines present a number of challenges that will likely complicate the vaccination process.  For example, vaccines with two-dose regimens will require careful tracking of doses and follow up with each individual receiving the vaccine to ensure they receive the same vaccine, with the second dose given at the proper time.[6]  The CDC and local jurisdictions are in the process of implementing a new vaccine tracking system to monitor COVID-19 vaccine administration and help with multiple dose tracking, but it is unclear if, or how, the new system will integrate with existing immunization information systems.[7]

In addition to the technical/logistical challenges posed by multi-dose vaccines, research has shown that many patients who receive their first dose of a multi-dose vaccine often fail to return for their second dose.  For example, studies conducted in both the US and UK on the hepatitis B vaccine — which, like the Pfizer and Moderna Covid-19 vaccines, is supposed to have around a one-month period between the first and second doses — found that roughly 50% of patients failed to get their follow-up shot within a year after their first.[8]   By failing to obtain the second dose, a patient may experience little or no protective effect from the vaccine.  Therefore, to the extent that the goal of vaccination in this case is to bring the current public health emergency to an end, the public will need to be educated as to why the second dose of the vaccine is as much an imperative as the first dose.  For this reason, many have argued that public education is an indispensable element of any successful vaccination plan.

We will continue to monitor State and local implementation of the Plan, the Allocation Guidelines, and the general progress of California’s efforts to distribute vaccine in California.

This article is not an unequivocal statement of the law, but instead represents our best interpretation of where things currently stand.  This article does not address the potential impacts of the numerous other local, state and federal orders that have been issued in response to the COVID-19 pandemic, but which are not referenced in this article.

FOOTNOTES

[1]  As described in the Allocation Guidelines, the term “healthcare worker” includes both clinical personnel and non-clinical personnel at “direct risk of exposure in their non-clinical roles, such as, but not limited to, environmental services, patient transport, or interpretation.”  See, Allocation Guidelines, pg. 1.

[2] “Here’s where COVID-19 vaccines will be stored and distributed in California,” by Andie Judson, KXTV-TV (December 4, 2020) at https://www.abc10.com/article/news/health/coronavirus/heres-where-covid-….

[3] Id.

[4] “Why Does Pfizer’s COVID-19 Vaccine Need to be Kept Colder than Antarctica?” by S. Simmons-Duffin, Morning Edition, National Public Radio (November 17, 2020) at https://www.npr.org/sections/health-shots/2020/11/17/935563377/why-does-…

[5] Id.

[6] “Distributing a COVID-19 Vaccine Across the U.S. – A Look at Key Issues” by J.M. Follow and J.K. Follow, Kaiser Family Foundation (October 20, 2020) at https://www.kff.org/report-section/distributing-a-covid-19-vaccine-acros…

[7] Id.

[8] “Compliance with multiple-dose vaccine schedules among older children, adolescents, and adults: results from a vaccine safety datalink study,” by Nelson JC, Bittner RC, Bounds L, et al., Am J Public Health. 2009;99 Suppl 2(Suppl 2):S389-S397 at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4504385/.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.
For more articles on the coronavirus vaccine, visit the National Law Review Coronavirus News section.

In the News: Can Employers Require the COVID-19 Vaccine?

From when one will be available in the United States to where you may fall in the priority line, COVID-19 vaccines are dominating the news cycle right now. Unsurprisingly, a common question from employers has emerged: can we require employees to obtain a COVID-19 vaccine before returning to work?

In short, it depends

Because the EEOC has not issued guidance specific to the COVID-19 vaccine (not yet, anyway), its past guidance concerning whether an employer may require employees to get a flu vaccine is helpful. Generally, employers can require employees to receive a vaccine before returning to work, but there are a couple of caveats.

First, employees may be entitled to an exemption from a mandatory vaccination requirement, so it is important for employers to find out why an employee will not get the vaccine if asked to do so. An employee with (1) a covered disability or (2) a sincerely held religious belief, practice, or observance that prevents the employee from taking the vaccine may need to be excused from this requirement as a reasonable accommodation unless it will present undue hardship. For employers considering denying an accommodation based on undue hardship, it would be prudent to consult with your employment lawyer before doing so. Accommodation issues stemming from COVID-19, work from home, and administration of the COVID-19 vaccine are likely to continue to plague employers for the next couple of years (at least), so getting ahead of this issue is key.

Second, and practically speaking, it remains to be seen when vaccinations will start in the United States and, even then, how quickly vaccines will be commonly available for those who fall at the bottom of the priority line. In the meantime, employers should be considering whether a mandatory vaccination requirement is right for their workplace and, if so, when it will go into effect and the consequences for not complying (subject to the reasonable accommodation exemptions). What is right for each employer will depend on the workforce, the nature of the business, and many other factors.

So, what now?

With so many unknowns at this point, the best course of action is to plan ahead but remain flexible and wait to disseminate or implement any sort of policy or requirement. Take this opportunity to weigh the potential legal exposure of a mandatory vaccination requirement and consider whether a mandatory or voluntary (even if strongly encouraged) vaccination policy is appropriate based on the nature and needs of your business. Avoid a knee-jerk reaction; instead, balance workplace health and safety with employee rights and ensure those handling accommodation requests will be prepared. And if you have questions, consult your employment counsel before acting.

© 2020 Jones Walker LLP
For more articles on the COVID-19 vaccine, visit the National Law Review Coronavirus News section.

Eviction Moratoriums—A Light at the End of the Tunnel? It Depends

With increased cases of COVID 19, most industries are holding their breath as to how these cases will continue to affect their businesses.  This is especially true for residential landlords.  Since this past March there has been a mix of federal and state moratoriums restricting landlords from evicting tenants for non-payment of rent.  The most recent moratorium on residential evictions was issued by the Centers for Disease Control and Prevention (CDC).  The CDC’s order entitled “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19,” which took effect upon publication in the Federal Register on Sept. 4, declares a national moratorium on certain residential evictions in the name of protecting the public health. See 85 Fed.Reg. 55292 (Sept. 4, 2020).

The creation of Order established a protection for a certain category of tenants, so long as they executed a Declaration Form asserting their qualifications as a “covered person.”  Once a tenant provides the declaration, the text of the order states that a landlord shall not “evict” the tenant from residential premises. See 85 Fed.Reg. at 55296.

While the CDC Order was issued to protect tenants, the ambiguities of the CDC moratorium have left the state courts to issue a patchwork of local Administrative Orders interpreting the moratorium and putting new process in place at the Magisterial District Court and Court of Common Pleas levels.  The result?  Unequal access by landlords to challenge the truthfulness of the CDC Declaration.

A review of the 67 judicial districts reveals a handful of counties that address the CDC moratorium and how it affects current landlord-tenant procedures.  Additionally, certain counties provide remedies for landlords to challenge the truthfulness of the Declaration Form.  By certain counties allowing landlords to challenge the truthfulness of the Declaration Form, it allows the moratorium to protect those truly defined as a “covered person.”  A majority of the judicial districts however are silent as to the landlord’s ability to challenge the Declaration Form, thus leaving landlords frustrated in scenarios where the tenant may not truly be a covered person and are allowed to remain in their apartment with little to no consequence.

With the number of COVID-19 cases increasing and the lack of any additional economic stimulus packages available will the CDC Moratorium be further extended? If it is, will the state Courts address the inequitable remedies currently created amongst the local counties?  Only time will tell.

©2020 Strassburger McKenna Gutnick & Gefsky
For more articles on evictions, visit the National Law Review Real Estate section.

ICE COLD MOVE: US Government Warns of Cybercriminals Targeting Cold Supply Chain for COVID-19 Vaccine

No supply chain is immune from cyberattacks.  This includes, unfortunately, in regards to the COVID-19 vaccine.

Yesterday the US Homeland Security Department issued a warning that a series of cyberattacks is underway aimed at the companies and government organizations that will be distributing coronavirus vaccines around the world.  Specifically, the attacks target the COVID-19 cold chain (an integral part of delivering and storing a vaccine at safe temperatures).

The warning cautions that “[i]mpersonating a biomedical company, cyber actors are sending phishing and spearphishing emails to executives and global organizations involved in vaccine storage and transport to harvest account credentials.  The emails have been posed as requests for quotations for participation in a vaccine program.”  It is unclear at this time whether these attacks are for purposes of stealing the technology for keeping the vaccines refrigerated in transit or for sabotaging distribution of the vaccine.

Josh Corman, the chief strategist for healthcare at the US Cybersecurity and Infrastructure Security Agency (“CISA”) commented that this underscored the need for all “all organizations involved in vaccine storage and transport to harden attack surfaces, particularly in cold storage operation, and remain vigilant against all activity in this space.”

Although this warning was specific to the COVID cold supply chain, all organizations should take note as the core strategies utilized by cybercriminals cut across industries.

© Copyright 2020 Squire Patton Boggs (US) LLP
For more articles on cybercrime, visit the National Law Review Corporate & Business Organizations section.

COVID-19 Weekly Newsletter: Vaccine Progress Report

As countries in the Western Hemisphere prepare for the first shipments of vaccines, researchers continue to release new COVID-19 findings.

Vaccine News Galore!

  • U.K. Approves COVID-19 Vaccine, Ahead in the Western World: On December 2, the United Kingdom became the first country in the Western Hemisphere to approve a COVID-19 vaccine. Within days of the approval, 40 million doses of BioNTech/Pfizer’s two-dose vaccine were secured and will be distributed within days. Home care residents, health care workers, the elderly, and the medically vulnerable will be prioritized and get the two doses three weeks apart. The rest of the countries in the European Union (EU) could approve a vaccine for emergency use before the EU’s drug regulator, the European Medicines Agency (EMA), makes a decision, which is anticipated by December 29, but the European Commission has discouraged countries from doing so.
  • First Delivery of Pfizer Vaccine in the U.S. (Possibly) on December 15: The first shipment of the COVID-19 Pfizer vaccine for December 15 is contingent on the Food and Drug Administration’s Vaccines and Related Biological Products Advisory Committee’s (VRBPAC) decision to recommend FDA to issue an EUA for the vaccine. The group will meet December 10 to review Pfizer’s data and a week later, on December 17, will review Moderna’s vaccine data. The first shipment of Moderna’s vaccine, also contingent on the VRBPAC’s decision, could be on December 22. The United States could vaccinate 100 million people against the coronavirus by the end of February, according to Moncef Slaoui, chief scientific adviser to the Trump administration’s vaccine program, Operation Warp Speed.
  • Top Priority Groups for Vaccine Allocation Identified: Health Care Workers, Long-term Care Facility Residents: The Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP) held an emergency meeting on Tuesday to determine who should be prioritized for the first doses of the COVID-19 vaccine. Though the Advisory Committee voted 13-1 to recommend health care workers and long-term care residents as the first group of people to get vaccinated, ACIP will refine and finalize its full recommendations for vaccine distribution after FDA authorizes a vaccine. In order to address vaccine skepticism, the American Medical Association (AMA), American Hospital Association (AHA) and the Americans Nurses Association (ANA), the same day as the ACIP meeting, released an open letter asking the American public to trust the vaccine development process and to understand the importance of herd immunity.

COVID-19 Relief Package Talks Again

On December 1, a bipartisan group of lawmakers released a $908 billion proposal that included aid to states and localities, unemployment insurance, small businesses, the transportation industry, schools and colleges. On the same day, Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin testified at the Senate Banking Committee hearing. Powell warned against being guarded in the next relief package, because when Congress has not done enough during past recessions, the economy and people suffered. Last month, Mnuchin was under fire when he decided to terminate several federal emergency lending programs — a decision which is explicitly within the Treasury secretary’s authority, and which he argued was in adherence to the requirements of the Coronavirus Aid, Relief and Economic Security (CARES) Act passed in March — at the start of the pandemic. Senate Democrats also introduced a COVID-19 relief package this week, offering additional unemployment benefits and aid to the Pandemic Unemployment Assistance (PUA) Program of the CARES Act. The bill would ensure workers who have run out of regular state benefits or are receiving them under the federal PUA program would get an additional 26 weeks of aid. Today, House Speaker Nancy Pelosi (D-CA) indicated she and Senate Majority Leader Mitch McConnell (R-KY) are hopeful to pass a legislative vehicle that includes COVID relief and federal government funding, which is set to run out next Friday.

CDC Shortens COVID-19 Quarantine

The CDC issued new guidance that cuts quarantine time for people exposed to COVID-19 from 14 days to 10 days without a COVID-19 test and seven days if the person tested negative. Public health authorities have identified this as a harm reduction move that factors in the public’s resistance to restrictions and pandemic fatigue. Though CDC officials encourage the 14-day quarantine, they have given some flexibility considering occupational and financial pressures that play into someone’s ability to comply to restrictions. It also reflects the CDC’s desire that people quarantine for a shorter period of time rather than foregoing quarantine altogether.

More Than Half of COVID-19 Transmissions Are Caused by Asymptomatic or Pre-symptomatic Individuals

The latest CDC analysis indicates that the majority of COVID-19 transmissions are due to pre-symptomatic or asymptomatic individuals who “shed” the virus, e.g., in their breath, without even realizing that they are already infected — and infectious — and therefore dangerous to others around them. Earlier studies had already shown that people are contagious well before (three or more days before), as well as after the onset of symptoms, and that most symptoms usually develop 5-6 days after the infection. All these findings underscore the importance of masking and social distancing in minimizing risk of infection. They also reinforce the need to (self)-isolate after contact with individuals whose health status is uncertain, such as during travel.

Mechanical Ventilation Has Higher Risk of Complications if Patient Has COVID-19

Our bodies need oxygen to sustain life. When breathing is impaired and the oxygen level in the blood fall dangerously low — as could happen due to pneumonia, drug overdose or other problems — the situation further becomes life-threatening or even fatal if not addressed immediately. As a life-saving measure, mechanical ventilation can be used while the underlying root-cause problem is getting resolved (e.g., a bacterial pneumonia gets treated with antibiotics). To connect a mechanical ventilator to the patient’s respiratory tract, a plastic tube is inserted into patient’s airways through the trachea (windpipe). As with any procedure, mechanical ventilation carries some risk of complications, ranging from the effects of anesthesia to unintentional damage to the trachea. COVID-19 patients often do require mechanical ventilation, and unfortunately, the COVID-19 condition increases the incidence of long-term tracheal complications more than 20 times compared to matched controls (i.e., similar patients without COVID-19 who needed mechanical ventilation for other reasons). Some of the reasons behind this dramatic increase in the rate of complications have to do with the disturbances in natural blood coagulation processes, as well as the weakening of the normally-protective mucosal layers in the respiratory tract — which, in turn, is a consequence of the viral infection and high-dose long-term steroids often used as part of the COVID-19 treatment.

Timeline of a COVID-19 Illness

The CDC researchers, building on the growing accumulated knowledge about COVID-19 manifestations and treatments, are laying down the groundwork for characterizing and monitoring the various stages of a COVID-19 illness. Broadly speaking, three main phases can be identified: acute COVID-19 (lasting about a week), post-acute hyperinflammatory illness (lasting a couple of weeks), and late inflammatory and virological sequelae (beyond 3-4 weeks). Each phase has distinct clinical presentations and corresponding medical response. Overall, such a higher-level understanding of the COVID-19 picture is a pre-requisite for an optimal management of the disease in each individual patient as well as for the development of most effective public health measures.

COVID-19 Related Mortality Is Higher in the U.S. Than in 18 Other Countries

Per capita deaths from COVD-19 itself and excess deaths during the pandemic (relative to similar pre-pandemic periods) were lower in the U.S. compared to other countries in the first few months of 2020, but since June 2020, that index has been rising and now surpasses that of other countries’ multiple fold. Among reasons for this high toll could be inconsistent and de-centralized public health messaging and interventions.

SARS-CoV-2 Was Present in the U.S. by Mid-December 2019

CDC researchers analyzed blood donated to the American Red Cross between December 13, 2019 and January 17, 2020, and found evidence of SARS-CoV-2 antibodies in 84 samples. Those infections may have been missed at the time because — as is known by now — the SARS-CoV-2 infection causes only mild or no symptoms in about half the cases; and when symptoms do occur (e.g., headache, muscle ache, cough), they are easily mistaken for other illnesses unless a specific test for SARS-CoV-2 is performed. Previously, the first reported case of COVID-19 in the U.S. was dated January 20, 2020. New evidence suggests that the virus was present in the U.S. before that time.

© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.
For more articles on the COVID-19 vaccine, visit the National Law Review Coronavirus News section.

CDC COVID-19 Guidance: Safe Workplace and Home Holiday Celebrations

It seems especially important to celebrate the people and events that we care about after all that has been endured this year. Holidays are one of the ways we celebrate, but holidays need to look different in 2020. COVID-19 can spread easily from one person to another during routine activities. Traditional holiday activities, such as workplace parties and family gatherings, are no exception. Bringing together employees, family members (including pets) and friends increases the risk of spreading COVID-19. To mitigate this risk, the U.S. Centers for Disease Control and Prevention (CDC) published updated guidance on November 12, 2020, for holiday celebrations and small gathering as well as guidance for Thanksgiving celebrations.

Celebrate Holidays Virtually or Limit Celebrations to Single Households

The CDC recommends celebrating virtually (i.e., through phone and video chat) or limiting celebrations to personal households. Personal households include individuals who currently live and share common spaces in an apartment or house. People who do not currently live in the same household, including college students who are returning from school for the holidays, are considered to be from different households. Those individuals can be included through interactive virtual experiences. Virtual celebrations also are ideal for the workplace, especially with the continuation of remote work arrangements.

Host and Attend In-Person Gatherings Responsibly

When hosting or attending holiday gatherings in the workplace or at home, take preventative measures to keep everyone safe. Guidance includes these safety steps:

  • Check the COVID-19 infection rates in the area of the gathering to determine if it is safe to host or attend the celebration in person.

  • Limit the number of individuals in attendance to enable social distancing.

  • Host the celebration outdoors.

  • Require attendees to wear face masks whether the celebration takes place indoors or outdoors.

  • Avoid physical contact, including hugs and handshakes, with individuals outside one’s personal household.

  • Avoid touching shared surfaces whenever possible.

  • Encourage attendees to wash their hands often with soap and water or to use hand sanitizer.

  • Plan ahead and ask attendees to avoid contact with people outside their personal households for 14 days before the in-person gathering.

  • Treat pets as you would any other family member and limit their interactions with people outside of the personal household. 

Follow Food Safety Practices

While the CDC acknowledges that there is no evidence to suggest that eating food is associated with directly spreading COVID-19, touching food, food packaging, plates or utensils poses the risk of infection if the object touched has the virus on it. The CDC recommends following food safety practices to reduce the risk of infection. The safety practices are advisable for workplace gatherings as well as in-person home gatherings. 

Avoid Travel or Practice Travel Safety

Travel increases the chance of spreading COVID-19, so the CDC recommends staying at home as the best safety practice. Where travel is desired or necessary, the CDC recommends the now-familiar safety measures: wear a facemask in public, including when using public transportation; maintain social distancing by staying at least six feet apart from others; wash hands often; and avoid touching the face, eyes, nose and mouth. In addition, many states have issued travel advisories with recommendations for individuals traveling from and returning to their home states from states or other destinations with increasing rates of COVID-19 to self-quarantine for 14 days. Check the travel advisories as a first step to planning out-of-state travel to help assess the risks and consequences of travel, including an inability to return to the workplace for 14 days. 

Self-Quarantine If Exposed to COVID-19

Self-quarantine is recommended for individuals exposed to COVID-19 during holiday celebrations. The quarantine should last for 14 days after contact with a person who has COVID-19. The 14-day period is recommended because symptoms of the virus (e.g., fever, cough or shortness of breath) may appear 2 to 14 days after exposure, and some infected individuals never have symptoms but are still contagious.

With Thanksgiving and the winter holidays upon us, it is natural to want to forget about COVID-19, put social distancing behind us, and celebrate with our colleagues, families and friends. Traditional workplace and home holiday activities may help spread the virus. While it is tempting to get together and celebrate as we have in the past, it is important to follow CDC guidance and choose activities with less risk to avoid giving the unwanted gift of COVID-19 to employees, families and friends. Skipping the mistletoe this year, a workplace best practice, also is advisable.

© 2020 Wilson Elser
For more articles on COVID-19, visit the National Law Review Coronavirus News section.

Revisiting Force Majeure and Other Contractual Considerations Amid COVID-19

In addition to the tragic human toll that it has caused, the coronavirus pandemic has also wreaked havoc on businesses throughout world, leaving countless companies and individuals unable to perform their contractual obligations. While many businesses have reopened since our last client alert on this topic, others have experienced new interruptions amid new spikes in COVID cases. As a result, force majeure and its common law relatives—the doctrines of impossibility and frustration of purpose—remain poised to become a focus of business litigation for years to come.

Force Majeure

Once a party to a contract has made a promise to perform, it must fulfill its promise even where unforeseen circumstances, including an act of God, make performance burdensome, difficult, or more expensive. If the party fails to perform, it usually is responsible for damages to the other party.

However, if the contract contains a force majeure provision, unexpected events could provide a defense to a party’s failure to perform. While it is tempting to assume that the global catastrophic effects of COVID-19 would easily invoke force majeure, the validity of the defense, which courts will narrowly construe, relies upon the specific language of the applicable force majeure provision and the factual circumstances of the parties’ contract. Simply put, because force majeure is a matter of contract, the language in the parties’ agreement determines when and to what extent force majeure will excuse performance in that particular contract.

This is best illustrated by an examination of a typical provision that became the subject of a recent dispute involving a lease to operate a restaurant and catering facility at a state-owned park: It provides:

If either State Parks or Lessee shall be delayed or prevented from the performance of any act required by this Lease by reason of acts of God, weather, earth movement, lockout or labor trouble, unforeseen restrictive governmental laws, regulation, acts or omissions, or acts of war or terrorism which directly affects the Licensed Premises and/or facilities and services of Jones Beach State Park, riot or other similar causes, without fault and beyond the reasonable control of the party obligated, performance of such act, including payment of all License Fees and R & R deposits due, shall be permanently excused for the period of the delay and the period for the performance of such act shall be extended for a period equivalent to the period of such delay, at which time all payments due shall be resumed.

Like nearly every other force majeure clause, this example includes a list of triggering events that might excuse performance. Assuming a party claims that, during the peak of the coronavirus and the effects of government shutdown orders—or now with spikes in the virus potentially leading to new interruptions—it cannot perform its obligations, this clause might serve to excuse performance because it includes “unforeseen restrictive governmental laws” as a triggering event.

But had that language not been included, the application of this type of provision to COVID-19 becomes far less clear. While the pandemic may seem like an act of God, courts have historically defined that term narrowly. Texas courts, for example, have long defined it as “accidents produced by physical causes which are irresistible; as, for example, winds and storms, or a sudden gust of wind, by lightning, inundations, or earthquakes, sudden death or illness.”[1] Similarly, New York views an act of God as “an unusual, extraordinary and unprecedented event,” denoting “those losses and injuries occasioned exclusively by natural causes, such as could not be prevented by human care, skill and foresight.”[2] As pandemic-related litigation unfolds it remains to be seen whether an inability to perform based on COVID-19 would be considered an act of God. Even if the illness itself is deemed an act of God, performance-impeding issues like restrictions on business openings may be labeled a human reaction to the virus, not the act of God itself.

Other triggering events that may apply to COVID-related performance include the obvious—pandemics, epidemics and disease outbreaks—as well as events like labor shortages, where employees are not available to work due to stay-at-home orders or illness spread within a factory. The bottom line is that, in order to provide an effective defense, the force majeure provision must generally include a triggering event that applies to the COVID-related basis for nonperformance.

Many force majeure provisions also include “catch call” language such as “or other similar causes,” as in the example provided above. Catch-all provisions must be interpreted within the context of the provision as a whole, and the legal maxim of ejusdem generis may apply: the catch-all will be interpreted to include only items of the same kind as those listed. Thus, a force majeure provision listing storms, earthquakes, floods “and similar events” may not be interpreted to include events related to COVID-19. On the other hand, some contracts provide more expansive catch all language, capturing any event outside of the reasonable control of the parties.

Courts analyzing attempts to rely upon catch-all language, including in Texas and New York, may also consider the foreseeability of the triggering event.[3] Given prior epidemics and pandemics, including the 2009 H1N1 pandemic, it remains to be seen how courts will determine the foreseeability of COVID-19.

The presence of an applicable triggering event is only the first step in the process of determining whether a party has a valid defense to nonperformance. Unless the force majeure provision provides otherwise, courts generally require that performance be rendered impossible, and not merely more difficult or expensive. For example, a party obligated to manufacture a product may not be able to invoke force majeure where sourcing a component has been made more difficult, but not impossible, due to the pandemic. Issues of causation must also be considered, and language appearing in typical force majeure provisions stating that nonperformance must be “by reason of” or “caused by” requires a showing of direct causation.

These issues aside, parties seeking to invoke a force majeure provision must carefully consider what performance is actually excused. For example, force majeure language in commercial leases will typically exclude the payment of rent, meaning that even amidst the occurrence of a triggering event, rent must still be paid. Parties must also think about what happens when the force majeure event ends. By way of illustration, the example provided above makes clear that performance is excused only during the “period of the delay.”

Parties attempting to rely upon a force majeure provision must also follow any applicable notice provisions or risk losing the ability to invoke the defense. Depending upon the contractual language, force majeure provisions typically mandate that notice be provided within a certain period of time following the force majeure event, and some require that period updates on the force majeure condition be provided.

In litigation arising from the effects of COVID-19, courts have already begun to tackle issues related to force majeure and impossibility. For example, in Palm Springs Mile Associates, Ltd. v. Kirkland’s Stores, Inc., a federal court in Florida cast doubt on a tenant’s ability to claim that a COVID-related force majeure event prevented it from paying rent, observing that “Kirkland . . . has failed to point to factual allegations in the complaint that show the government regulations themselves actually prevented Kirkland from making rent payments.”[4] Similarly, in Future St. Ltd. v. Big Belly Solar, LLC, a Massachusetts court rejected an argument by a distributor of solar recycling bins that it could not perform its contractual obligations due to COVID-19.[5] These cases highlight the need to establish causation between the force majeure event and the performance at issue.

Alternatives to Force Majeure

Parties to contracts without force majeure provisions are not without a remedy, as the common law doctrines of impossibility and frustration of purpose may provide a defense to nonperformance. Impossibility is exactly as it sounds, and excuses performance where it has become objectively impossible. In addition, the impossibility must be the result of an event that was unforeseen and could not have been addressed by the contract. Similar to force majeure provisions discussed above, mere economic difficulty or burden is not enough to invoke impossibility.

In some circumstances, applying these narrow standards to COVID-related nonperformance will be straightforward, as in the case of a vendor who was unable to provide event services on a specified date due to the government’s stay at home orders. But the analysis becomes murkier in other hypothetical scenarios, such as a purchasing party to a real estate contract who claims that shut down orders made a scheduled closing impossible. The seller may assert that the closing could have taken place virtually, or that the purchaser is now trying to escape a contract that has become an economic burden. Such factual issues are likely to be the subject of future litigations. It is worth noting that some courts also recognize the doctrine of impracticability, although there is little functional difference between impracticability and impossibility.

Short of impossibility, frustration of purpose may also provide an avenue to relief. This doctrine, also narrowly construed, provides a defense to nonperformance where a change in circumstances makes one party’s performance virtually worthless to the other, frustrating the purpose of making the contract. As explained by one court, “the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense.”[6]

Practical Considerations

Based upon the nuances discussed above, parties seeking to invoke force majeure or common law doctrines to excuse performance should keep several practical considerations in mind:

  • Provide timely notice of the force majeure event, and consider doing so even if it is not required;
  • Communicate with the counterparty;
  • Maintain detailed records related to non-performance, including a timeline of events leading to the inability to perform, copies of relevant government orders and pronouncements, efforts to avoid the force majeure event or identify alternative means for nonperformance, and efforts to negotiate substituted performance.

Similar steps should be taken by the party who will be defending against the invocation of force majeure:

  • Provide a timely response to any notice, and be sure to keep responses realistic, professional and performance-oriented, keeping in mind that any response will likely be filed with the court should litigation occur;
  • Keep detailed records relating to the nonperformance, including a timeline of events that may provide a counter-narrative, the availability of alternative means for non-performance and, perhaps most importantly, evidence of damages.

Drafting Considerations Going Forward

Parties currently negotiating contracts should also be sure to address the implications of the ongoing pandemic. Drafting considerations amid COVID-19 include:

  • Defining the triggering events to include (or exclude) events such as “disease”, “pandemic”, “epidemic”, “public health crisis” and “state of emergency”;
  • Avoiding overreliance upon “act of God”;
  • Considering the effect of doctrines like ejusdem generis;
  • Crafting language making it clear what will happen at the end of the force majeure event, including whether the event permits termination versus a temporary suspension of performance; and
  • Considering whether to address disruptions to supply chains, labor force and/or access to financing.

[1] Morgan v. Dibble & Seeligson, 29 Tex. 107, 111 (1867).

[2] Prashant Enterprises Inc. v. State, 206 A.D.2d 729, 730 (3d Dep’t 1994).

[3] See, e.g, TEC Olmos, LLC v. ConocoPhillips Co., 555 S.W.3d 176, 182 (Tex. App. 2018); Goldstein v. Orensanz Events LLC, 146 A.D.3d 492, 44 N.Y.S.3d 437 (2017).

[4] Palm Springs Mile Associates, Ltd. v. Kirkland’s Stores, Inc., No 20-21724, 2020 WL 5411353 (S.D. Fla. Sept. 8, 2020).

[5] Future St. Ltd. v. Big Belly Solar, LLC, No. 20-CV-11020-DJC, 2020 WL 4431764, at *6 (D. Mass. July 31, 2020).

[6] Crown IT Servs., Inc. v. Koval-Olsen, 11 A.D.3d 263, 265 (1st Dep’t 2004).

© 2020 Bracewell LLP
For more articles on the pandemic, visit the National Law Review Coronavirus News section.

Executive Summary: COVID-19 Pandemic Spurs Wave of Mega Corporate Bankruptcies

The COVID-19 pandemic has disrupted the global economy and triggered a wave of large corporate bankruptcies. In particular, the number of mega bankruptcies (over $1 billion in reported assets) increased dramatically in the second and third quarters of 2020.

This report examines trends in Chapter 7 and Chapter 11 bankruptcy filings between January 2005 and September 2020 by companies with over $100 million in assets.[i]

In the first three quarters of 2020, 34, 55, and 49 companies with over $100 million in assets filed for bankruptcy, respectively, compared to the quarterly average of 19 for the 2005–2019 period. The 55 bankruptcy filings in Q2 2020 was the second-highest total for any quarter since 2005, only behind the 65 bankruptcies in Q1 2009.

A total of 138 companies with over $100 million in assets filed for bankruptcy in the first three quarters of 2020. This number is 84 percent higher than the number of bankruptcies (75) filed during the same period last year.

There was a substantial increase in the number of “mega bankruptcies” (i.e., those filed by companies with over $1 billion in reported assets) in Q2 2020. In Q2 and Q3 2020, there were 31 and 15 mega bankruptcies or roughly six and three times the quarterly average (five) during the 2005–2019 period, respectively.

Mega bankruptcies were concentrated in two industries: Mining, Oil, and Gas; and Retail Trade. These two industries accounted for 58 percent of the mega bankruptcies in Q1–Q3 2020.

The largest bankruptcy in the first three quarters of 2020 was filed by The Hertz Corporation, which had an estimated $25.84 billion in assets at the time of filing.

Figure 1: Key Trends in Bankruptcy Filings

2005–Q3 2020

2005–2019
Quarterly Average

Q1 2020

Q2 2020

Q3 2020
Chapter 11 Bankruptcy Filings

18

33

54

49
Chapter 11 Mega Bankruptcies

5

6

31

15
Chapter 11 Bankruptcy Filings by Public Companies

11

8

34

26
Chapter 11 Bankruptcy Filings by Private Companies

7

25

20

23
Chapter 7 Bankruptcy Filings

1

1

1

0
Average Asset Value at Time of Filing (Billions)

$2.21

$0.66

$3.01

$1.52

Source: BankruptcyData

Note: Only Chapter 11 and Chapter 7 bankruptcy filings by companies (both public and private) with over $100 million in reported assets are included. For companies where exact assets are not known, the lower bound of the estimated range is used. Asset values are not adjusted for inflation. Mega bankruptcies are defined as those for companies with over $1 billion in reported assets at the time of their bankruptcy filings.

Read COVID-19 Pandemic Spurs Wave of Mega Corporate Bankruptcies

[i]      This report relies on data obtained from BankruptcyData. It focuses on asset values at the time of bankruptcy filings due to the higher prevalence of missing information on liabilities in BankruptcyData. Some other publications have focused on liabilities due to potential concerns over whether book values of assets overstate valuations for bankrupt firms (see, e.g., Edward Altman, “COVID-19 and the Credit Cycle,” Journal of Credit Risk 16, no. 2 (2020): 1–28 at 13–14). Using available data on liabilities in this report would not meaningfully change any of the findings.

Copyright ©2020 Cornerstone Research

ARTICLE BY Allie Schwartz and Joseph B. “J.B.” Doyle of Cornerstone Research
For more articles on bankruptcy, visit the National Law Review Bankruptcy & Restructuring section.

Balancing Hospital Visitations and Religious Freedoms During a Pandemic

On October 20, 2020, the Office for Civil Rights (“OCR”) settled two religious discrimination complaints involving access to clergy during the Public Health Emergency. Both complaints arose from a hospital’s failure to permit visits by religious clergy due to COVID-19 visitor restrictions. In the first complaint, a COVID-19 positive new mother requested that a priest visit her newborn son and baptize him. Due to its restrictive visitor’s policy, the hospital refused. In the second complaint, a priest was denied ICU access in order to provide Catholic religious sacraments to an end-of-life patient. 

In connection with resolution of the complaints, OCR provided technical assistance and guidance to the hospitals in order to strike a balance between protecting the hospital’s staff, visitors, and patients and respecting the patient’s right to religious support. OCR approved the following requirements for visiting clergy:

  • Visiting clergy must follow all safety policies put in place by the hospital, including COVID-19 screening protocols;
  • Visiting clergy must adhere to proper infection prevention practices, such as hand washing, physical distancing and wearing a mask;
  • Visiting clergy must complete infection control training;
  • Visiting clergy must use fit-tested Personal Protective Equipment (“PPE”);
  • Visiting clergy must sign an acknowledgment of the risks associated with visiting a patient who tested positive for COVID-19; and
  • In urgent end-of-life situations, an exception to the controls listed above may be made but visiting clergy must self-quarantine for 14 days following the visit.

Hospitals are encouraged to review their visitation policies for compliance with a patient’s right to religious support.

© Steptoe & Johnson PLLC. All Rights Reserved.
For more articles on civil rights and COVID-19, visit the National Law Review Civil Rights section.

New Legal Duty for Employers and Employees Regarding Self-Isolation in England Comes Into Force

The UK Government has enacted The Health Protection (The Health Protection (Coronavirus, Restrictions) (Self-Isolation) (England) Regulations 2020, which came into force in England on 28 September 2020. Failure to comply with these regulations is a criminal offence, the penalty for which includes a fine of £1,000 for a first offence, with fines increasing up to £10,000 for subsequent breaches.

The new regulations place a legal requirement on employers and employees regarding the enforcement of self-isolation for individuals in England who test positive for coronavirus, or who have been identified as close contacts of someone who has tested positive for the virus. An employee who has been instructed to self-isolate must inform his or her employer (or agency, if the worker is an agency worker) of the obligation to self-isolate as soon as practicable. Failure to do this will amount to a criminal offence.

Once an employer is aware of an employee who has tested positive, it must not permit the employee to attend any place of work other than the place where the employee is self-isolating. (This does not apply if an employee is working from home.) Agencies must notify hirers of workers’ obligations to self-isolate.

An employee who is notified of the requirement to self-isolate whilst at the work premises must return home immediately as the period of self-isolation has commenced directly.

Valid forms of notification of the requirement to self-isolate are not specified in the regulations. The only form of notification that the regulations specifically exclude is the National Health Service’s (NHS) COVID-19 smartphone contact tracing app. Other than this, the regulations merely state that if an individual is notified that he or she—or someone with whom he or she has had recent close contact—has tested positive for coronavirus, the individual must self-isolate (usually for up to 14 days) in accordance with the regulations.

Additionally, the regulations do not specify how the employee should inform his or her employer of the obligation to self-isolate. A commonsense approach may be adopted and employers might need to accept that self-isolation could largely be self-certified, much like regular short-term sickness.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

ARTICLE BY Daniella McGuigan of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
For more articles on labor law, visit the National Law Review Labor & Employment section.