Can Businesses Rely on Asa’s Immunity Proclamation? Don’t count on it.

Governor Asa Hutchinson issued an executive order EC 20-33 proclaiming Arkansas businesses now have immunity from lawsuits arising from alleged exposure to COVID-19 on their premises or during activities that they manage.  A closer look at the proclamation shows that it is not really an attempt to grant immunity, but an attempt to set a standard of care which requires the plaintiff to prove something more than the negligence by the business.  It requires the lawsuit be based on recklessness or willful or intentional misconduct.

Many liberals dislike the idea of protecting businesses. But as a pro-small business and conservative organization we are for giving some protection to businesses from such lawsuits in order to encourage the businesses to reopen.

We want to protect small business but have serious concerns that the Governor may lack the authority to issue such an executive order. We are concerned that business may rely on something that is not worth the paper it is written on. And we think time is being wasted by not calling the Arkansas General Assembly into special session to do it right.

His proclamation cites the law upon which he is claiming authority but after reading the lengthy law we did not find any such authority. If the Governor still thinks he has the authority, he needs to cite the specific language of the law so businesses can consult their attorneys and ask, “Is this proclamation any good?

Again, after reading the law, we were unable to find any authority for the executive order granting limited liability. We don’t want some poor business owner to get sued and find out the order couldn’t be relied on.

Also, it makes no sense to rely on questionable or no authority when a majority of the Arkansas General Assembly appears to be onboard to pass such a protection, if the Governor would only call a special session, which could be over in three days of only meeting briefly.

Passing a law avoids the question of whether the Governor’s proclamation is invalid. In addition, even if the Governor’s proclamation were to be valid, it can only apply during the duration of the declaration of emergency and that means the proclamation gives no protection for an occurrence immediately after the emergency declaration ends.

SOURCE OF AUTHORITY CITED BY THE GOVERNOR?

In the proclamation the Governor cites as his authority ACA. § 12-75-101 et seq. (“Et. seq.” means “and the following sections.”)  The law he cited is a chapter known as the “Arkansas Emergency Services Act of 1973.” The only other authority he cites is merely his earlier proclamation declaring an emergency to trigger the Emergency Services Act.

The Emergency Services Act is about fifteen pages of law. We were unable to locate anything in the law granting broad enough authority for the executive order on limited liability.

OUR GUESS AS TO THE LANGUAGE BEING USED – AND USED WRONGLY

Since the Governor gave only a general reference to a law of about fifteen pages, we were left to search and search and search some more within those pages.  Finding nothing specifically on point, we are left to guess at what he might be attempting to use as authority.

Our guess (and this is just a guess) is someone must have advised the Governor that he can hang his hat on a broad sounding statement in § 12-75-114 (b). If so, he has been badly misinformed on the meaning of the subsection. Subsection (b) says:

(1) Under this chapter, the Governor may issue executive orders, proclamations, and rules and amend or rescind them.
(2) Executive orders, proclamations, and regulations have the force and effect of law.

Do those two sentences mean during an emergency Governor Hutchinson can assume the power of the legislature and make his own laws by merely issuing an executive order during the declared emergency? No, this is not a kingmaker statute.

To claim the two sentences as a broad grant of power, you would have to ignore the words “Under this chapter.” The phrase tells you that the orders and proclamations of the Governor must be within the powers and limitations of the fifteen page chapter. The two sentences describe a way the Governor may take action and what force those orders will have, but the Governor’s orders must still be based on the specific powers given to the governor under the chapter (the Emergency Services Act) and within the limitations placed on those powers.

Could “Under this chapter” be given a broad interpretation meaning the Governor can issue any executive order, “if related to a declared emergency”? No, such an interpretation conflicts with the powers and limitation of the fifteen-page law. Even within that section of law, § 12-75-114, such a wild interpretation would also make meaningless the other paragraphs of the section which give the Governor specific powers within limitations.

For an illustration of why the two sentenced cannot be interpreted as a grant of power to issue executive orders on anything as long as it has to do with a declared emergency lets look another provision in the section.  Consider subsection (e) which says the Governor may:

(1) Suspend the provisions of any regulatory statutes prescribing the procedures for conduct of state business, or the orders or rules of any state agency, if strict compliance with the provisions of any statute, order, or rule would in any way prevent, hinder, or delay necessary action in coping with the emergency;

Notice while this item “(1)” gives broad power to the Governor, it also includes significant limitations on that power. In giving the governor the authority to suspend a law, it limits that authority to suspending only “regulatory statutes prescribing the procedures for conduct of state business.” In other words the grant is only a red tape cutter, nothing more.  Knowing the Emergency Services Act limits the Governor’s power to this way, shows his power certainly does not extend to suspending laws and the constitution on standards of liability.

One more thing, even if the Emergency Services Act had given the Governor the broad powers he is attempting to exert, we think the law would violate the Arkansas Constitution as an unconstitutional delegation of legislative authority.

WHAT THE EMERGENCY SERVICES ACT ACTUALLY SAYS ABOUT IMMUNITY AND LIMITED LIABILITY

The Emergency Services Act only refers to immunity or liability in three instances and none of them are a grant of authority to the Governor to extend or deny protection. ACA § 12-75-125 gives limited liability to people who donate real property or equipment for use in a declared emergency. ACA §§ 12-75-119 and 12-75-128 limits the liability of emergency responders in a declared emergency. That is it…. there is nothing else in the Emergency Services Act about immunity or limited liability.

AND ANOTHER THING….. ASA’S COMPLIANCE STICK

The way Governor Hutchinson worded his proclamation shows his goal was not just to limit liability. He also wanted to use the carrot of limited liability as a stick to get businesses to comply with every jot and tittle of his orders on how to operate a business during the pandemic.

Governor started out by saying a business could not be sued over Covid-19 exposure unless the business acted recklessly, willfully, or intentionally in causing damage. He could have stopped there, but he had something else in mind. He wanted to use limited liability as a stick to get businesses to follow his rules, even rules that don’t make sense for the particular business. The stick for compliance is his requiring substantial compliance as a requirement for limited liability.

It is presumed that a person and person’s employees, agents, and officers are not committing willful, reckless, or intentional misconduct under this order if the person and the person’s, agents, and officers are (a) substantially complying with health and safety directives or guidelines issued by the Governor or the Secretary of the Department of Health; or (b) acting in good faith while attempting to comply with health and safety directives or guidelines issued by the Governor or the Secretary of the Department of Health.

If you don’t have a problem with that requirement, think of this – this additional requirement invites plaintiffs to sue saying the business failed to follow every edict of the Governor, and it amounts to failure to substantially comply, and therefore not protected from suits based on mere negligence or even less.

We thought we should mention the Governor’s carefully crafted language to get businesses to comply. We mention it even though it appears to be a non-issue considering we have not found any authority for his proclamation in the first place.

Business owners who read this should be demanding the Governor call a special session to pass liability limitations that can actually be relied on by businesses trying to reopen.

Legislators who read this should consider the consequences of letting businesses rely on a proclamation that may not be worth the paper it is written on. Legislators who want to encourage businesses to open should be demanding a special session to pass a law that will provide that protection.

 

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