United States: HHS Has Undertaken An Unprecedented Expansion Of The PREP Act Over The Past Year To Combat COVID-19, But Will Litigants, And The Courts, Get The Message?

Executive Summary

The Public Readiness and Emergency Preparedness Act (PREP Act) is a dramatic and wideranging grant of liability and suit immunity to private entities that the government wishes to enlist in the battle against COVID-19. Its goal is clear: to shift the costs away from those wishing to engage in the fight and grant them certainty and protection against lawsuits for negligence. However, as of this writing, very few organizations have been successful in invoking its protections in the waves of litigation surrounding harm arising from the disease.

Meanwhile, the federal government's guidance regarding the PREP Act has evolved dramatically since the pandemic began rapidly spreading across the United States in March 2020. On March 10, 2020, the Secretary for the U.S. Department of Health and Human Services (HHS) issued a declaration applying the liability immunities of the Act to medical countermeasures against COVID-19.

Since then, HHS has issued seven amendments and six advisory opinions clarifying the declaration's scope and enlarging its application. Although the PREP Act became law in 2005, its invocation has been rare and never on a scale so potentially far-reaching. More recently the courts have split on whether the PREP Act is a complete preemption statute conferring federal jurisdiction, with the majority concluding it is not, contrary to guidance from HHS and the U.S. Department of Justice (DOJ).

This article endeavors to summarize these recent developments and raise important questions as to who is, and is not, taking advantage of this powerful statute.

I. Background of PREP Act and Overview of Key Provisions

The PREP Act is invoked when the Secretary of HHS issues a declaration determining that a disease or other health condition constitutes a public health emergency.¹ If that determination is made, the Secretary "may make a declaration, through publication in the Federal Register, recommending . . . the manufacture, testing, development, distribution, administration, or use of one or more covered countermeasures, and stating that [certain liability immunities are] in effect with respect to the activities so recommended."² Once the Secretary has issued a declaration, the PREP Act provides sweeping immunity for certain claims against certain covered individuals. On March 10, 2020, the Secretary invoked his authority under the PREP Act to provide immunity for medical countermeasures against COVID-19 to certain health care professionals tasked with responding to the crisis.

The PREP Act affords broad federal immunity to a "covered person" with respect to claims relating to the authorized administration or use of a "covered countermeasure."⁴ As a general matter, if all the elements of immunity are met, it makes a covered person 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."⁵

The PREP Act further defines the scope of its coverage to apply to "any claim for loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure, including a causal relationship with the design, development, clinical testing or investigation, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, licensing, or use of such countermeasure."⁶ Covered losses include claims for death, physical, mental or emotional injury, illness, disability or condition, fear of such harm or need for medical monitoring, and loss of or damage to property, including business interruption loss.⁷

Because it is a federal immunity, the PREP Act covers claims sounding in tort or contract, as well as claims for loss relating to compliance with local, state, or federal laws, regulations, or other legal requirements.⁸ The PREP Act also preempts "any provision of law or legal requirement that . . . is different from, or is in conflict with, any requirement applicable under this section" and that is "relate[d] to" those countermeasures.⁹

In place of tort remedies, Congress created the Covered Countermeasure Process Fund to compensate eligible individuals for serious physical injuries or deaths from countermeasures identified in declarations issued by the Secretary.¹⁰ The PREP Act also creates, as "the sole exception to the immunity from suit and liability," an "exclusive Federal cause of action against a covered person for death or serious physical injury proximately caused by willful misconduct" of that person.11 It further establishes an exclusive venue for such excepted claims: "only" before a three-judge panel of the United States District Court for the District of Columbia.¹² Even such excepted claimants, though, must first apply for benefits through the federal Covered Countermeasure Process Fund, which permits individuals to make no-fault benefits claims for certain injuries.¹³

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Footnotes

1 42 U.S.C. § 247d-6d(b).

2 Id.

3 Id. §§ 247d-6d, 247d-6e.

4 Id. § 247d-6(d)(a)(1).

5 Id. § 247d-6d(c)(3).

6 Id. § 247d-6d(a)(2)(B).

7 Id. § 247d-6d(a)(2)(A)(iv).

8 See Id. § 247d-6d(b)(8).

9 Id. § 247d-6d(b)(8).

10 See Id. § 247d-6e.

11 Id. § 247d-6d(d)(1); see also Id. § 247d-6d(c), (e)(1).

12 Id. § 247d-6d(e)(1), (e)(5).

13 See id. § 247d-6e(d)(1).

Originally published byAHLA's In-House Counsel Program 2021

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