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Ahead of the Curve Auto Supplier Blog

March 25, 2020

Protections Against Liability for Individuals and Entities Providing COVID-19 Countermeasures

Some suppliers are being asked to contribute and shift their production efforts to help combat the COVID-19 pandemic, and they are wondering what their potential liability could be if they decide to undertake efforts to manufacture products that are not within their typical practice. The short answer is that there is broad immunity under federal law (that likely preempts state law and bars any state law claims) and a rebuttable presumption of immunity under Michigan law. Here is a brief summary of applicable federal and Michigan law and the comprehensive immunities, preemption of state law claims and presumptions against liability.
 
Federal Law
 
The Public Readiness and Emergency Preparedness Act (PREP Act) authorizes the Secretary of Health and Human Services (the “Secretary”) to issue a declaration to provide liability immunity to certain individuals and entities (“Covered Persons”) against any claim of loss caused by, arising out of, relating to or resulting from the manufacture, distribution, administration or use of medical countermeasures (“Covered Countermeasures”), except for claims involving “willful misconduct” as defined in the PREP Act. This declaration is subject to amendment as circumstances warrant.
 
The Pandemic and All-Hazards Preparedness Reauthorization Act (PAHPRA), Public Law 113-5, was enacted on March 13, 2013, and added sections 564A and 564B to the Federal Food, Drug and Cosmetic Act (FDCA) to provide new authorities for the emergency use of approved products in emergencies and products held for emergency use. The PAHPRA accordingly amended the definitions of “Covered Countermeasures” and “qualified pandemic and epidemic products” under the Public Health Service Act so that products made available under these new FDCA authorities could be covered under PREP Act declarations. The PAHPRA also extended the definition of qualified pandemic and epidemic products that may be covered under a PREP Act declaration to include products or technologies intended to enhance the use or effect of a drug, biological product or device used against the pandemic, epidemic or against adverse events from these products.
 
“Covered Persons” has a specific meaning and is defined in the PREP Act to include: manufacturers, distributors, program planners, qualified persons and their officials, agents, employees, the United States and those entities or individuals that administer, prescribe or use Covered Countermeasures. The Secretary has made a “Declaration” under the PREP Act and specifically indicated that Covered Countermeasures are all “in play” for liability protection.
 
Covered Countermeasures must be “qualified pandemic or epidemic products,” “security countermeasures,” or drugs, biological products or devices authorized for investigational or emergency use, as those terms are defined in the PREP Act, the FDCA and the Public Health Service Act.
 
Therefore, there is total immunity for any type of potential damage caused by a Covered Countermeasure related to COVID-19. The immunity is extremely broad and covers essentially any type of loss. The statute applies specifically to manufacturers, suppliers and ultimately the healthcare entities and individuals that administer, prescribe and use the drugs or devices to treat COVID-19 patients and provides immunity under both federal and state law. Anyone that is harmed by a medical device or drug (and anything else that is utilized to help fight COVID-19) that was manufactured as a Covered Countermeasure has a different avenue for recovery (the Countermeasures Injury Compensation Program). The Declaration is effective retroactively to February 4, 2020 and provides immunity through October 1, 2024.
 
Federal Preemption of State Law Claims

The Medical Device Amendments of 1976 (MDA) created a scheme of federal safety oversight for medical devices while sweeping back state oversight schemes. The statute provides that a state shall not “establish or continue in effect with respect to a device intended for human use any requirement— . . . (1) which is different from, or in addition to, any requirement applicable under [federal law] to the device, and . . . (2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under” relevant federal law. 21 U.S.C. §360k(a). The MDA calls for federal oversight of medical devices that varies with the type of device (Class I - III) at issue. The most extensive oversight is reserved for Class III devices that undergo the premarket approval process. These devices may enter the market only if the Food and Drug Administration (FDA) reviews their design, labeling and manufacturing specifications and determines that those specifications provide a reasonable assurance of safety and effectiveness.

The United States Supreme Court has held that the MDA bars (preempts) state common-law claims challenging the safety and effectiveness of a medical device that has received prior pre-market approval by the FDA.
 
Michigan Law
 
Moreover, to the extent that a Covered Person was not eligible for immunity under PAHPR, or a product-liability claim against a manufacturer or seller somehow survived preemption under the MDA, Michigan law creates a rebuttable presumption that provides a manufacturer or seller of a medical device is not liable if, at the time the device was sold, the aspect of the device that allegedly caused harm was in compliance with federal or state regulations or standards promulgated by a federal or state agency responsible for reviewing the safety of the product. MCL 600.2946(4).
 
A manufacturer or seller of a medical device would be afforded a rebuttable presumption that they are not liable for product-defect claims to the extent they are not already afforded immunity against such claims under the PAHPR or the preemption of such state common law claims for negligence, product liability, strict liability, breach of warranty, misrepresentation, etc. under the MDA.
 
If you have further question, please contact Alan Rogalski or Jeffrey Segal.
 

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