Members of the Senate preliminarily approved a long-awaited proposal to protect businesses from liability in the event that a customer contracts COVID-19 after a four hour-long hearing Monday evening that stretched past midnight.

The bill, which is likely to be the last piece of legislation introduced during the special session, cleared the Senate Committee of the Whole early Tuesday morning, 18-3, with Republican Sens. Ira Hansen, Joe Hardy and Pete Goicoechea in opposition. The legislation, SB4, has dominated the behind-the-scenes conversations during the session and is the culmination of a deal between some of the state’s most powerful political interests, including casinos, business groups and the Culinary Union.

But the bill also attracted the ire of other powerful interests in the state, including trial attorneys and progressive groups, who generally bemoaned the bill’s liability protections; teacher unions, who wanted a set of worker protections in the bill afforded to hotel workers extended to educators; and hospitals, who felt they were unfairly excluded from the bill’s liability protections.

“My main concern is about all of the workers, and not just the Culinary,” said Sen. Marcia Washington. “What about the other essential workers and the school district and the hospitals, construction, etc.?”

In opening remarks, gubernatorial Chief of Staff Michelle White reiterated the dire economic situation facing the state amid decreased business demand among Nevada’s casino and tourism industry, saying the bill was a desire to strike a balance between protecting business from “those seeking to capitalize on our current situation” without granting total immunity from lawsuits related to spread of the disease.

“I want to be clear, the bill being presented tonight does not provide total immunity to all businesses, under all circumstances, far from it. These inevitable bad actors that have ignored and continue to ignore executive branch directives and published health and safety protocols will not be protected from liability for those failures,” White said. “Those bad actors will continue to face legal consequences.”

While there was general agreement among lawmakers on the general liability and worker protections, several senators raised concerns during a lengthy question and answer session about the decision to exclude hospitals and other health care facilities from the legislation. 

Brin Gibson, Gov. Steve Sisolak’s interim general counsel, said during the hearing that the legislation was the byproduct of conversations between “some of the most important members of Nevada’s economy” and suggested that the decision was theirs.

“They struck this language, and they decided that based on how the various weights and balances that are out there, that these elements should be included in here in this way, and what I would say is that based on that yield, this is where we ended up,” Gibson said. “There's potential that this deal falls apart if we start amending out certain provisions. They’re there for reasons that aren't— may not be obvious, some are messaging related, some are optical, some are substantive. There are various reasons why.”

But that answer didn’t satisfy all lawmakers. Hansen, one of the three “no” votes out of committee, suggested that health care facilities were being asked to be the “sacrificial lamb” so that “the other guys can get protection.”

“That is just unacceptable,” Hansen said. “We cannot have our entire medical community being subjected to lawsuits while we give exemptions.”

Cleaning standards and worker safety

The bill, which was released in full on Monday, covers three topics: creating an outline of enhanced cleaning policies for large casinos and hotels in Las Vegas and Reno; enhanced protections for workers at those casinos and hotels; and, most controversially, broad immunity from COVID-19 related litigation for businesses, government agencies including schools, and nonprofits, but not hospitals or health care facilities.

First, the legislation directs the director of the Department of Health and Human Services, Richard Whitley, to promulgate regulations on cleaning standards for casino resort or hotels, including regular cleaning of high-touch areas used by the public such as fixtures, door handles, countertops, keycards, elevator buttons and other objects.

The bill requires Whitley to adopt another set of regulations to limit transmission of COVID-19, including protocols on social distancing, access to hand cleaning, sinks and soap, hand sanitizer and personal protective equipment, such as gloves or masks, at no cost to the employee.

The bill mandates that local and state health officials regularly inspect resort hotels every two months and hotels with more than 200 rooms every three months for compliance with the health standards. It also authorizes them to administer fines of $500 for an initial violation and $1,000 for each subsequent violation.

It  also allocates $2 million to the Southern Nevada Health District and $500,000 to the Washoe County Health District to implement and enforce requirements in the bill.

The legislation also includes requirements that employees at casino hotels receive paid time off while awaiting COVID-19 test results if they are in close contact with a guest or other employee who tested positive for the virus. Any employee who tests positive will be allowed a minimum of 14 days off, including 10 paid days.

Those provisions were hard won by the politically powerful Culinary Union, which represents about 60,000 workers in Las Vegas and Reno. The union has been pushing for many of the same worker protections — including enhanced safety and cleaning standards, free COVID-19 testing and detailed processes for when a worker contracts the virus or is exposed to someone who has it — after Adolfo Fernandez, a Caesars Palace utility porter, died after contracting the virus in June.

In her testimony, Culinary Union Secretary-Treasurer Geoconda Arguello-Kline voiced the union’s support for the legislation.

“This Special Session is important for all workers and the hospitality industry,” she said in written testimony. “We hope today that we will ensure workers and their families are protected from the spread of COVID-19 in the workplace.”

Liability protections

But much of the attention on the bill has centered around the sections on liability protections for businesses, nonprofits and government agencies, with hospitals and other health care facilities excluded.

Essentially, the bill sets up a higher standard before a COVID-19-related personal injury or death lawsuit against a business or entity can be filed. It requires any claim to be pled with “particularly,” meaning the plaintiffs have to meet a higher standard of proof than normal before even filing the case.

The bill states that all entities covered under the bill — including businesses, certain nonprofits and government agencies — are immune from such litigation if they are in “substantial compliance with controlling health standards,” unless the plaintiffs can prove that the entity violated those standards with gross negligence, causing personal injury or death.

The legislation defines “controlling health standards” as any federal, state or local law or regulation, or any written order by a governmental body, that “prescribed the manner in which a business must operate at the time the person allegedly failed to comply.”

That includes existing mask-wearing mandates and limits on gatherings of more than 50 people, but would not encompass many of the technically nonbinding recommendations made by the governor’s office and health officials over the many months of the pandemic. 

That controlling health standard language was tightened from an original draft of the bill obtained by The Nevada Independent, which referred to any state, local or federal health policies, laws or ordinances that were “clearly and conspicuously related to COVID-19 and which were in effect at the time of the alleged exposure.”

But the other part of the liability equation is determining whether or not the business is in “substantial compliance” with those controlling health standards. 

That term (“substantial compliance”) is also defined in the bill — as “good faith efforts” to help control spread of COVID-19, including establishing policies to enforce and implement controlling health standards in a “reasonable matter.” It also excludes “isolated or unforeseen events of noncompliance,” meaning that one-off contracting of the virus would not meet that standard required to bring a lawsuit.

The legal liability sections of the bill are set to expire whenever the governor lifts his declaration of emergency related to the pandemic, or by July 2023.

Multiple business and casino companies testified in support of the bill, citing the liability protections in particular. Sasha Stephenson, a lobbyist with MGM Resorts, said the casino company believed the litigation protections were necessary to help with the state’s economic recovery. 

“Unfounded litigation has the potential to cripple Nevada's businesses, leading to more closures and greater economic difficulties,” she said. “The targeted liability protection itself will have the opposite effect. It will allow good actors to stay open as long as they remain vigilant in keeping employees and guests safe.”

But the bill met staunch opposition from left-leaning groups, teacher unions and the state’s trade association for trial attorneys. Both the Nevada State Education Association and Clark County Education Association opposed the bill, citing concerns that it would incentivize schools to cut corners and not take full safety measures thanks to the lifted threat of litigation.

“While it is encouraging that kids don’t get sick and die in the same numbers as adults from COVID-19, evidence is mounting that they can be significant vectors,” NSEA lobbyist Chris Daly said. “Now, as thousands of educators and families prepare to go back to school, we believe essential school supplies should mean pencils and paper or Chromebooks and wifi, not wills and trusts.”

Nevada Justice Association board member Matthew Sharp, a trial attorney, said that supporters had provided no “coherent explanation” for what “controlling health standards” would include, and that there had been few if any such COVID-19 related personal injury lawsuits filed in the state thus far. 

“This Legislature, convening literally at the dead of night, is considering giving essentially complete immunity to certain businesses,” he said. “This isn't what a special session is for. And what we are looking at is a solution looking for our problem.”

Hospital exclusions

The legislation also came under heavy fire during the hearing from hospitals and other health care facilities, which argued that they were being treated unequally by being excluded from the liability protections. Hospitals also argued that if they were not extended the liability protections, they would have to make significant changes to hospital operations, including restricting visitors, students and vendors.

Bill Welch, CEO of the Nevada Hospital Association, also said that the legislation would hinder the ability of hospitals to be able to discharge their patients to long-term care and hospice facilities, limiting bed space to treat COVID-19 patients.

“Throughout this pandemic, we have worked closely with Governor Sisolak and his office to fully support his goals to flatten the curve and protect hospital capacity. As written, this bill puts that capacity at risk, and undermines our efforts to protect Nevadans’ health,” Welch said. “Nevada hospitals are the frontline of this pandemic. Hospital capacity is critical for providers to treat this fast-spreading virus.”

Gibson, during the hearing, argued that hospitals are already afforded certain immunities and protections under an emergency directive exempting them from liability “except in cases of willful misconduct or gross negligence” because of their role in responding to the pandemic.

Later, he acknowledged that the decision to exclude health care facilities was a byproduct of conversations with stakeholders and suggested that the deal between casinos, the business community and the Culinary Union might fall apart if legislators were to propose an amendment.

Gibson then backtracked slightly, after he was pressed by Sen. Keith Pickard about who exactly was involved in drafting the legislation, with the governor’s counsel saying that he may have “oversimplified” his response. He suggested that health care facilities are already held to a higher standard because of the type of business they run.

“They're able to manage illness in a way that other businesses are not because they're experts in these spaces,” Gibson. “Our role was to try to not overburden the bill, but at the same time to extend it into every possible business that we could, with limitations.”

However, not all health care facilities will be treated equally under the bill. Legislative legal staff confirmed that University Medical Center, the county-run hospital in Clark County, would qualify for the liability protections since it is a government entity, and any county-run rural hospitals would be eligible as well.