Braedon B. Morrow

I. Introduction

Since its inception in 1906, the National Collegiate Athletic Association (NCAA) has prohibited student-athletes from promoting or endorsing a commercial product or service, even if they are not paid to do so.[1] Put simply, this means that student-athletes may not profit off of their name, image, and likeness (NIL) if they wish to maintain their NCAA eligibility.[2] For decades the system made sense; however, the current modernization of college athletics has given rise to the need for change. In its 2018–2019 fiscal year, the NCAA earned $1.12 billion in revenue, most of which was generated from its Division I Men’s Basketball Tournament.[3] In 2018, all Division I Football Bowl Subdivision schools earned revenues totaling $8.78 billion.[4] College athletics is no longer all about amateurism. Plainly put, it is now a multi-billion-dollar business that allows everyone to make money but the student-athletes themselves. Make no mistake, student-athletes receive several valuable benefits such as a full scholarship, room, board, healthcare, and a stage to showcase their talents to professional scouts, but a blanket restriction on the ability of student-athletes to make money from third parties is outdated and archaic. The issue ultimately boils down to fairness: all non-athlete college students can profit from their name, image, and likeness, but the students who are actually in the public eye, the student-athletes, cannot do so without losing their eligibility to compete.[5]

The realities of modern college athletics have led to growing public support for compensating student-athletes beyond a scholarship and the “full cost of attendance.”[6] Although the NCAA has resisted this change for many years, it is now beginning to embrace the notion that student-athletes should be able to profit from third parties for use of their NIL.[7] The idea stems from one’s general right to publicity.[8] Name, image, and likeness is a subset of the right to publicity, which is something that all people may capitalize on.[9] Leading this change are three states that have passed laws that prohibit a university from upholding any rule that prevents a student-athlete from earning compensation as a result of the use of the student’s name, image, and likeness.[10] Specifically, California’s and Colorado’s name, image, and likeness laws go into effect in 2023,[11] and a similar law in Florida becomes effective in July of 2021.[12]

As states begin to pass differing laws regarding name, image, and likeness, their lack of uniformity will create problems for the NCAA and universities.[13] For example, Florida’s law becomes effective in 2021, two years before any other state’s.[14] This law gives the State of Florida and its universities a huge recruiting advantage. In deciding which school to attend, top athletes will consider the money that they can make from their name, image, and likeness at Florida universities that they cannot make anywhere else.[15] Moreover, state legislatures are incentivized to create more lucrative NIL laws that give their universities a recruiting advantage.[16] To avoid these aforementioned recruiting disparities, the solution to this problem must come from Congress. Congress should pass legislation that creates uniform NIL laws across the country to ensure a fair and level playing field for college athletics.

II. State Laws Set to Go into Effect

California, Colorado, and Florida have each passed NIL laws, and many other states have proposed similar legislation. The California law, the “Fair Pay to Play Act,” is not about directly paying athletes; rather, it expressly forbids directly paying student-athletes.[17] Specifically, the Act allows an athlete to profit from their own image and to hire agents to navigate endorsement deals with third parties.[18] The Fair Pay to Play Act prohibits a college, university, or the NCAA from revoking scholarships or upholding a rule that prevents a student from receiving compensation relating to a student-athlete’s name, image, or likeness.[19]  This directly conflicts with what is allowed under NCAA rules, but as state law, it will supersede the NCAA rules, allowing compensation for name, image, and likeness in California.[20]

Similarly, the Colorado NIL law prohibits the prevention of a student-athlete from earning compensation for the student’s name, image, or likeness.[21] The Colorado law, however, requires that all NIL contracts be disclosed to the athletic director and that such contracts not conflict with any contract of the team for which the student-athlete competes.[22] Both the California and Colorado bills are set to go into effect on January 1, 2023.[23]

The Florida bill, by contrast, is set to go into effect July 1, 2021.[24] The Florida bill differs from the other two because it requires compensation to be consistent with market value to “preserve the integrity, quality, character, and amateur nature of intercollegiate athletics.”[25] It further restricts compensation in that it may not be provided in exchange for athletic performance or attendance at a particular institution, hindering the ability for boosters to promise large sums of money to recruits for endorsement deals.[26] Like the Colorado bill, it prohibits brand conflicts and requires disclosure of the contract with the university.[27]

III. Power 5 and NCAA Proposals for Reform

The NCAA recognizes the problems that 50 different NIL laws present.[28] In response, an NCAA subcommittee urged the NCAA to immediately engage Congress to ensure federal preemption of state NIL laws, to establish an antitrust exemption, to safeguard the non-employment status of student-athletes, to maintain the distinction between student-athletes and professional athletes, and to uphold NCAA values.[29]

In April of 2020, the NCAA released its working group’s recommendations for the creation of NIL legislation.[30] The NCAA’s main points were as follows: (1) NIL compensation should represent genuine payment for use of the NIL and not simply a form of payment for participation in athletics; (2) schools and conferences should play no role in a student-athlete’s NIL activities; (3) student-athletes should not be compensated for their NIL in situations in which they have no legal right to demand compensation; (4) schools or boosters should not use NIL opportunities as a recruiting inducement; (5) the role of third parties in NIL activities should be legislated; and (6) the modernization of NIL rules should not interfere with NCAA members’ efforts in the areas of diversity, inclusion, or gender equity.[31] Provided that these boundaries are established, the NCAA indicated that it would support NIL payments through third-party endorsements, including activities akin to social media influencers.[32] Ultimately, the working group recommended that the board permit student-athletes to receive compensation related to NIL, reject any approach to NIL compensation that would make student-athletes employees of their schools, and reaffirm the integrity of the student-athlete recruitment process so that the prospect of receiving NIL compensation does not exert undue influence on a student’s choice of college.[33]

In the same document, the NCAA addressed the issues raised by the players’ right of publicity.[34] Courts have repeatedly held that the broadcasting of sports does not violate one’s right to publicity; therefore, student-athletes have no legal right to demand NIL payment from universities for broadcasting the sport that they play.[35] Any NIL payments for broadcasting an athlete’s sport would be the equivalent of “pay for play,” which is something the NCAA continues to vehemently condemn.[36]

In addition to states, NCAA conferences have proposed NIL rules. In July of 2020, the Power 5[37] proposed its legislation governing NIL. This proposed legislation would not allow athletes to sign endorsement deals until they complete their first semester of college.[38] It would allow schools to bar student-athletes from entering into certain NIL ventures, and it would force student-athletes to make NIL contracts public.[39] The bar on certain endorsement deals exists to prevent violations of university standards or ones that conflict with institutional sponsorship agreements.[40] Disclosure is required to “prevent athletes from acting without sufficient information while also ensuring that deals are not recruiting inducements.”[41]

IV. A Congressional Call to Action

Stemming from a congressional bipartisan working group, Senator Marco Rubio introduced NIL legislation in June that has not garnered much support.[42] The proposed legislation requires any intercollegiate athletic association to establish, no later than June 30, 2021, “a policy that permits any student-athlete to earn compensation from a third party as a result of the use of the name, image or likeness of such student-athlete; and . . . obtain professional representation.”[43] The bill also requires that student-athletes disclose compensation to the institution of higher education in which they are enrolled and the related  intercollegiate athletic association.[44] The reasoning behind this mandatory disclosure is that it is necessary to preserve the amateur status of student-athletes, ensure appropriate recruitment of student-athletes, and prevent illegitimate activity concerning any third party.[45] Violations of the law would be treated as violations of a rule defining an unfair or deceptive act or practice prescribed under § 18(a)(1)(B) of the Federal Trade Commission Act, bringing enforcement of the bill under the jurisdiction of the Federal Trade Commission (FTC).[46] Potentially, the part of the bill with the greatest future implications is that “no cause of action shall lie or be maintained in any court against any intercollegiate athletic association.”[47] This clause gives the NCAA the blanket antitrust exception that it is asking for, and it even takes it a step further by even precluding all suit against the NCAA.[48] Finally, the bill expressly preempts all state laws relating to student-athletes’ ability to receive compensation from third parties for their name, image, or likeness.[49]

The bill has been criticized for many reasons, including its exemption of athletes from junior colleges (JUCO) and the National Association of Intercollegiate Athletics (NAIA), its enforcement procedures, its allowance of the NCAA to set its own NIL rules, and its near absolute bar on suits against the NCAA for infringements on NIL rights.[50] First, in the definitions section of the bill, JUCO and NAIA athletes are specifically exempted from the definition of “intercollegiate athletic association.”[51] Although athletics at these schools do not garner the same attention as NCAA schools, this lack of national exposure should not restrict a student-athlete from profiting off of their name, image, or likeness if a third party is willing to do business with them.[52] If a federal NIL law is passed, it should include all student-athletes, not just the student-athletes who attend major NCAA schools.[53]

Second, questions surround how the FTC will enforce the proposed legislation.[54] Currently, sports agents are regulated by state governments, not the federal government.[55] There is no national licensing structure for sports agents, and if the federal government cannot regulate the field effectively, the NCAA will end up policing the proposed law with no redress available to student-athletes.[56] Third, although the proposed legislation requires the NCAA to grant college athletes limited rights to their NIL, the bill leaves it to the NCAA to determine what types of deals it will allow.[57]

Lastly, the bill gives the NCAA an antitrust exemption for nothing in return.[58] Additionally, the bill’s provision under § 4(B) would prevent student-athletes from filing suit against the NCAA, ending one of the most powerful ways for college athletes to push for change.[59] As stated above, if the FTC is unable to properly regulate and the NCAA is the sole regulator of the NIL law, the NCAA may establish unfair limits on an athlete’s ability to profit from their name, image, or likeness with no form of redress for the players.[60]

On September 24, 2020, Representatives Anthony Gonzales and Emanuel Cleaver submitted the bipartisan “Student Athlete Level Playing Field Act.”[61] First, the bill includes express federal preemption of all state NIL laws.[62] The main reason for congressional action is to establish uniformity across the country, making this clause essential.[63]

Next, the bill will not affect the employment status of a student-athlete; therefore, college players will be unable to form a union and demand collective bargaining or direct payments from their universities.[64] In reality, however, the bill cannot preclude employment recognition, as student-athletes at private colleges are governed by the National Labor Relations Act, and student-athletes at public universities are governed by their state law.[65] Furthermore, under the bill, student-athletes are required to notify schools of an agreement within 72 hours after consummation of the agreement.[66] Like Senator Rubio’s bill, the FTC would be in charge of enforcing all aspects of the new law, raising some of the same issues discussed above of whether the FTC will prioritize enforcement of sports-related matters.[67]

The bill does not include any restriction on athletes signing deals with the competitors of sponsors of their school’s athletics, but it does allow for a school to prohibit an athlete from wearing clothing or gear with the insignia of any entity during athletic competition or at a university-sponsored event.[68] The bill not only prohibits boosters from directly or indirectly paying athletes as an inducement to enroll, but it also makes such payments unlawful, exposing the booster to civil, but not criminal, penalties.[69] Importantly, although the bill does not prohibit suit against the NCAA relating to NIL issues, it does specifically state that it does not provide for new causes of action under the Sherman Antitrust Act.[70] It is important to note that the proposed bill does not fully foreclose and exclude antitrust litigation; therefore, it maintains an antitrust cause of action against the NCAA.[71] By not fully excluding all causes of action, student-athletes will maintain some form of recourse for violations of the NIL rights.[72]

The Gonzales and Cleaver bill would create a 13-member commission tasked with the role of recommending legislative changes as the marketplace for college athletes becomes clearer and any unintended consequences emerge.[73] The drafters recognize that the bill wades into uncharted territory; therefore, the bill leaves enough room for trial and error. The commission would file annual progress reports to commerce committees in both the Senate and House of Representatives so that Congress could rewrite the law if necessary.[74]

Admittedly, one potential issue is setting a market rate for endorsement deals.[75] The bill does not make it clear how the FTC would distinguish between payments for an athlete’s value as an endorser versus their value as a recruit.[76] Gonzales believes that it would be impossible to legislate and determine the fair market value on every deal and that the market will establish itself over time.[77] Those individuals who value the idea of a free market can appreciate this idea; however, it is not hard to imagine a booster paying a top recruit an outrageous sum of money for a minor endorsement deal.[78] Although the possibility for abuse is present, the bill’s trial and error approach allows for prompt amendment.[79]

V. Conclusion: The Future of NIL Legislation

Currently, Senator Rubio’s bill does not have a co-sponsor.[80] There is no clear indication as to whether the bill will be revised, but as Representative Gonzales put it, a bill with a blanket antitrust exemption is “legislatively impossible right now.”[81] Put frankly, Senator Rubio’s bill needs improvements. Specifically, Congress will not likely pass a bill that contains a blanket antitrust exemption. In the day and age where professional athletes have the most bargaining power they have ever had, an NIL bill that gives all of the power to the NCAA is simply an insufficient solution. Senator Rubio’s legislative proposal does not empower student-athletes; rather, it helps the NCAA maintain their control.

Although many states and conferences have made their own strides to create fair NIL legislation, the Gonzales and Cleaver bill is the best balance of empowerment and enforceability.[82] It takes the Rubio bill and improves upon it drastically by giving more power and freedom to student-athletes. In the coming months, the bill will likely garner support, and hopefully, even greater improvements will be made. NIL legislation is long overdue, and it is refreshing to see real federal action to create nationwide uniformity.

 

 

 

[1] Rachel Stark-Mason, What name, image and likeness means for college sports. And how the NCAA is turning to student-athletes to navigate a path forward, NCAA, http://www.ncaa.org/champion/name-image-likeness (last visited Oct. 4, 2020) [https://perma.cc/AC8S-QRZ7].

[2] See id.

[3] National Collegiate Athletic Association, Consolidated Financial Statements (2019), https://ncaaorg.s3.amazonaws.com/ncaa/finance/2018-19NCAAFin_NCAAFinancials.pdf [https://perma.cc/GA7X-E7ED].

[4] Where the Money Goes, Knight Comm’n on Intercollegiate Athletics, http://cafidatabase.knightcommission.org/fbs?qt-where_the_money=0 (last visited Oct. 4, 2020) [https://perma.cc/4BYL-TPJ8].

[5] Chip Scoggins, It’s about time college athletes get paid for use of their name, image, or likeness, StarTribune (May 3, 2020), https://www.startribune.com/it-s-about-time-college-athletes-get-paid-for-use-of-their-name-image-or-likeness/570149061/ [https://perma.cc/E7MW-R83X].

[6] See S.B. 206, 2019 Leg., Reg. Sess. (Cal. 2019) (entitled “Fair Pay to Play Act”); S.B. 123, 2019 Leg., Reg. Sess. (Colo. 2019); S.B. 646, 2020 Leg., Reg. Sess. (Fla. 2020). Full cost of attendance is a new concept that allows for schools to pay student-athletes $2,000–$5,000 per year to account for miscellaneous expenses. Eric Prisbell, What is full cost of attendance for NCAA athletes?, USA Today (Aug. 17, 2014), https://www.usatoday.com/story/sports/college/2014/08/17/ncaa-full-cost-of-attendance/14200387/ [https://perma.cc/9BUZ-RHFL].

[7] NCAA Board of Governors, Federal and State Legislation Working Group Final Report and Recommendations (2020), https://ncaaorg.s3.amazonaws.com/committees/ncaa/wrkgrps/fslwg/Apr2020FSLWG_Report.pdf [https://perma.cc/BFC4-W8NS].

[8] Id.

[9] See id.

[10] S.B. 206, 2019 Leg., Reg. Sess. (Cal. 2019) (entitled “Fair Pay to Play Act”).

[11] Id.; S.B. 123, 2019 Leg., Reg. Sess. (Colo. 2019).

[12] S.B. 646, 2020 Leg., Reg. Sess. (Fla. 2020).

[13] Curt Weiler, NIL rules could give Florida schools recruiting edge, News Herald (May 5, 2020), https://www.newsherald.com/story/sports/2020/05/05/nil-rules-could-give-florida-schools-recruiting-edge/112599884/ [https://perma.cc/U2MY-E5YB}.

[14] S.B. 646, 2020 Leg., Reg. Sess. (Fla. 2020).

[15] Weiler, supra note 13.

[16] See id.

[17] S.B. 206, 2019 Leg., Reg. Sess. (Cal. 2019).

[18] Id.

[19] Id.

[20] See id.

[21] S.B. 123, 2019 Leg., Reg. Sess. (Colo. 2019).

[22] Id. By restricting whom the student-athlete may do business with, the bill seeks to avoid brand conflicts. See infra note 34.

[23] S.B. 123, 2019 Leg., Reg. Sess. (Colo. 2019); S.B. 206, 2019 Leg., Reg. Sess. (Cal. 2019).

[24] S.B. 646, 2020 Leg., Reg. Sess. (Fla. 2020).

[25] Id.

[26] Id.

[27] Id.

[28] NCAA Board of Governors, supra note 7.

[29] Id.

[30] Id.

[31] Id.

[32] Id. A social media influencer is someone who uses their social media following to generate ad-based revenue. For example, Clemson quarterback Trevor Lawrence has over 500,000 Instagram followers. This translates to a value of approximately $16,000 per sponsored post. Matt Hladik, How Much Trevor Lawrence Could Make For A Sponsored Instagram Post, The Spun (Apr. 30, 2020), https://thespun.com/acc/clemson-tigers/how-much-trevor-lawrence-could-make-for-a-sponsored-instagram-post [https://perma.cc/X6QS-H7EQ].

[33] NCAA Board of Governors, supra note 7.

[34] Id. A right of publicity requires third parties to obtain permission from an individual before making commercial use of that individual’s NIL. Id.

[35] Marshall v. ESPN, 111 F. Supp. 3d 815 (M.D. Tenn. 2015), aff’d, 668 Fed. Appx. 155 (6th Cir. 2016); Baltimore Orioles v. MLB Players Ass’n, 805 F.2d 663 (7th Cir. 1986); Dryer v. NFL, 55 F. Supp. 3d 1181 (D. Minn. 2014), aff’d, 814 F.3d 938 (8th Cir. 2016).

[36] NCAA Board of Governors, supra note 7.

[37] “Power 5” is a term for the five biggest NCAA conferences, in terms of revenue and national exposure, which includes the SEC, Big 12, Big 10, PAC 12, and ACC. Dennis Dodd, Power Five, NCAA are now officially adversaries, and a breakaway may only be a matter of time, CBS Sports (Aug. 3, 2020), https://www.cbssports.com/college-football/news/power-five-ncaa-are-now-officially-adversaries-and-a-breakaway-may-only-be-a-matter-of-time/ [https://perma.cc/FDL3-VYBT].

[38] Summary of “Student-Athlete Equity Act of 2020” (2020), https://www.keepandshare.com/doc5/27533/a5-summary-of-draft-legislative-language-21-pdf-178k?da=y [https://perma.cc/M2P8-P6CP].

[39] Id.

[40] Id.

[41] Id.

[42] Fairness in Collegiate Athletics Act, S. 4004, 116th Cong. (2020).

[43] Id.

[44] Id.

[45] Id.

[46] Id.

[47] Id.

[48] See supra Part II.

[49] Fairness in Collegiate Athletics Act, S. 4004, 116th Cong. (2020).

[50] Matt Brown, Marco Rubio’s NIL Bill Sucks, Extra Points (June 23, 2020), https://extrapoints.substack.com/p/marco-rubios-nil-bill-sucks [https://perma.cc/QVF6-62LN].

[51] Id.

[52] See id.

[53] Id.

[54] Id.

[55] Id.

[56] Id.

[57] Marc Edelman, Marco Rubio’s Fairness in Collegiate Athletics Act is Anything But What Its Name Implies, Forbes (June 22, 2020), https://www.forbes.com/sites/marcedelman/2020/06/22/marco-rubios-fairness-in-collegiate-athletics-act-is-anything-but-what-its-name-implies/#48187b6f4776 [https://perma.cc/29TW-M7KY].

[58] Id.

[59] Id.

[60] Brown, supra note 50.

[61] Student Athlete Level Playing Field Act, H.R. 8382, 116th Cong. § 2 (2020).

[62] Id.

[63] Michael Mccann, Latest NIL Bill Overrides States but Leaves Tax and Labor Questions Behind, Sportico (Sept. 29, 2020) https://www.sportico.com/law/analysis/2020/latest-nil-bill-overrides-states-1234613887/ [https://perma.cc/7UJJ-LDWG].

[64] Id.

[65] Id.

[66] Student Athlete Level Playing Field Act, H.R. 8382, 116th Cong. § 2 (2020).

[67] Id.

[68] Id.

[69] Id.

[70] Id.

[71] Mccann, supra note 63.

[72] See Student Athlete Level Playing Field Act, H.R. 8382, 116th Cong. § 2 (2020).

[73] Id.

[74] Dan Murphy, Bipartisan federal NIL bill introduced for college sports, ESPN (Sept. 24, 2020), https://www.espn.com/college-sports/story/_/id/29961059/bipartisan-federal-nil-bill-introduced-college-sports [https://perma.cc/9HDR-F5LY].

[75] Id.

[76] Id.

[77] Id.

[78] See id.

[79] See id.

[80] Brown, supra note 50.

[81] Eric Olson, Congressman: No NCAA antitrust exemption in athlete pay bill, The San Diego Union-Tribune (June 4, 2020), https://www.sandiegouniontribune.com/sports/national/story/2020-06-04/congressman-no-ncaa-antitrust-exemption-in-athlete-pay-bill [https://perma.cc/G8AH-4E9B].

[82] Murphy, supra note 74.

Virginia Stewart

I. Introduction

On March 1, 2020, President Trump proclaimed that the outbreak of coronavirus, or COVID-19, in the United States constituted a national emergency.[1] In response, several states took legislative action in order to protect businesses, among other things, against tort claims related to  COVID-19.[2] The Louisiana Legislature followed other states by enacting Louisiana Revised Statutes § 9:2800.25, which grants to certain types of entities protection from liability for claims related to COVID-19.[3] Although effective June 13, 2020, the law is retroactive to March 11, 2020, when Louisiana declared its state of emergency related to COVID-19.[4] In relevant part, the statute provides:

No natural or juridical person, state or local government, or political subdivision thereof shall be liable for any civil damages for injury or death resulting from or related to actual or alleged exposure to COVID-19 in the course of or through the performance or provision of the person’s, government’s, or political subdivision’s business operations unless the person, government, or political subdivision failed to substantially comply with the applicable COVID-19 procedures established by the federal, state, or local agency which governs the business operations and the injury or death was caused by the person’s, government’s, or political subdivision’s gross negligence or wanton or reckless misconduct. If two or more sources of procedures are applicable to the business operations at the time of the actual or alleged exposure, the person, government, or political subdivision shall substantially comply with any one applicable set of procedures.[5]

Notably, the state immunizes four groups addressed in paragraphs A through D.[6] Paragraph A of the statute expands the immunity to those conducting business in Louisiana, paragraph B grants immunity to event planners, paragraph C addresses employer immunization, and paragraph D covers workers’ compensation under the statute.[7] Based on the liberal wording of Louisiana Revised Statutes § 9:2800.25, it appears the Louisiana Legislature intended to create an incentive for businesses to reopen in the midst of COVID-19 by broadly extending immunity against COVID-19 transmission claims so long as the business complies with the statute.[8] This article’s analysis of the statute focuses specifically on paragraph A and the liability coverage extended to businesses in their course and conduct during this “new normal.”

While Louisiana Revised Statutes § 9:2800.25 (hereinafter referred to as the “immunity statute”) appears to give business owners security from the initial fear of reopening their doors and the resultant potential for liability exposure, since lawsuits claiming that businesses were negligent in their duties to protect the public from the virus will likely be highly litigated. Courts in different jurisdictions have already begun to address COVID-19 disputes, such as business interruptions and the availability of insurance payouts for COVID-19 claims under existing policies.[9] Despite the passage of state legislation, businesses have also adopted protective procedures and protocols, such as requiring customers to sign liability waivers, in order to limit liability exposure.[10]

The issue of whether a waiver of liability is enforceable to bar subsequent negligence claims varies significantly by state.[11] Liability waivers are generally unenforceable in Louisiana, Montana, and Virginia.[12] Specifically, Louisiana nullifies contracts that attempt to limit future liability for physical injuries under Louisiana Civil Code article 2004.[13] Louisiana Civil Code article 2004 provides, “Any clause is null that, in advance, excludes or limits the liability of one party for causing physical injury to the other party.”[14] Generally, it is undecided whether someone who allegedly contracted or was exposed to COVID-19 from an establishment has suffered a physical injury within the meaning of article 2004.[15]

The interaction between the newly enacted immunity statute and Louisiana Civil Code article 2004 remains unclear. A business may want to use a liability waiver given the presence of the immunity statute because a person may allege a business was not doing enough to comply with the relevant guidelines, and the business may wish to protect itself to cover gross or reckless conduct.[16]

Further, it seems unlikely that a Louisiana court, considering the legislature’s liberal grant of immunization for businesses under the immunity statute, would enforce a liability waiver in favor of a business in a COVID-19 suit. The Louisiana Legislature has provided a means to limit liability for businesses during COVID-19.[17] Granting protection from liability through a COVID-19 waiver, beyond what the immunity statute already liberally provides, could be considered excessive.[18] Conversely, because the Louisiana Legislature was willing to make broad limitations of liability available, public policy may lead a Louisiana court to favor specific waivers when appropriate, specifically for businesses that comply with relevant guidelines.[19]

The grant of immunization under § 9:2800.25 is broad, whereas the waiver provision under Louisiana Civil Code article 2004 has been interpreted narrowly.[20] While a Louisiana court may not enforce a COVID-19 waiver, businesses already have the statutory grant of immunity from this new law.[21] Therefore, businesses should not rely on liability waivers due to the uncertainty of the interplay between the immunity statute and Louisiana Civil Code article 2004 but should instead follow the relevant CDC guidelines that afford businesses protection under the new law.

II. COVID-19 and Waivers of Liability

In the wake of COVID-19 and the implementation of guidelines on public health and social distancing, businesses cautiously reopened while complying with local, state, and federal regulations.[22] As people slowly begin to reemerge in society under the “new normal” standard, businesses are looking at new tactics and protocols to implement in order to protect themselves from potential liability.[23] In addition to taking preventative steps such as requiring customers to take a wellness survey before entering an establishment, taking a person’s temperature at the door, encouraging use of hand sanitizer, mandating face coverings upon entry, and other measures, some businesses have also required customers to sign waivers of liability for COVID-19 exposure.[24] Businesses can easily access sample COVID-19 waivers online and require clients to sign off on liability before entering an establishment.[25] As noted earlier, these waivers can vary in the wording and language used, and the enforceability of these waivers varies significantly by state.[26]

For example, in May 2020 the Mississippi Supreme Court adopted a plan put forth by the Board of Bar Admissions to proceed with an in-person bar examination in July that included a requirement that test-takers sign liability waivers, among other public health measures.[27] Philip McIntosh, a professor at Mississippi College School of Law, stated, “It would be hard to prove negligence on the state, if it’s operating under appropriate guidelines with separation, wearing masks and keeping people as safe as possible.” As a general rule, the Mississippi Supreme Court has not been in favor of waivers.[28] McIntosh noted that Mississippi applicants may be less likely to challenge the waiver than those in other states.[29] If a law student sat for the Mississippi bar exam and subsequently contracted COVID-19, the validity of the waiver could be called into question. If this issue ever made its way to the Mississippi Supreme Court, it is likely the court would strike down its own waiver given its general prohibition toward such liability waivers.[30]

Louisiana presents a unique question on the enforceability of COVID-19 liability waivers for personal injury due to its statutory prohibition for such waivers in Louisiana Civil Code article 2004.[31] Although the newly enacted immunity statute reflects the Louisiana Legislature’s intent to encourage businesses to reopen by providing them with immunity from liability due to COVID-19, the enforceability of a COVID-19 waiver under Louisiana Civil Code article 2004 remains unclear.

III. The Interplay between Louisiana Revised Statutes § 9:2800.25 and Louisiana Civil Code Article 2004

As previously noted, the Louisiana Legislature enacted reforms during the COVID-19 pandemic in order to address limits on liability due to COVID-19 exposure.[32] Paragraph A of § 9:2800.25 limits the potential liability for a natural or juridical person, state or local government, or political subdivision for injury or death related to COVID-19 exposure or contraction.[33] The law provides certain exceptions to the liability limitations and protections that it creates.[34] For example, the immunity statute provides protection from liability “unless the person, government, or political subdivision failed to substantially comply with the applicable COVID-19 procedures established by the federal, state, or local agency.”[35] Therefore, if a business fails to comply with the relevant COVID-19 procedures, the statute will not provide immunity to the business or entity.[36] Further, the statute does not provide immunity for an entity’s “gross negligence or wanton or reckless misconduct.”[37] Thus, gross fault invalidates the immunity provided by the statute.[38] Waivers will not provide protection to businesses because waivers are not enforceable to cover reckless conduct or gross fault.[39] Arguably, if a business required a person to sign a COVID-19 waiver, and that business acted grossly negligent or recklessly, then the statute and the waiver will not provide protection to the business.[40]

If a business did comply with the relevant COVID-19 procedures and an individual filed suit for contracting COVID-19, then § 9:2800.25 would arguably apply, and the business should be protected.[41] Assuming the statutory immunity does not apply because of a business’s failure to comply with the guidelines, then the question becomes whether or not a business could rely on a limitation of liability waiver is raised.

Importantly, it is unclear whether the actual or alleged exposure to COVID-19 is a physical injury within the meaning of Louisiana Civil Code article 2004.[42] Louisiana Revised Statutes § 9:2800.25 provides liability protection for “any civil damages for injury or death resulting from or related to actual or alleged exposure to COVID-19.”[43] This new law prioritizes economics by encouraging business operations, except in the case of businesses’ negligent or wrongful conduct related to a physical injury.[44] In contrast, Louisiana Civil Code article 2004 nullifies any clause that in advance excludes or limits the liability of one party for causing “physical injury” to the other party.[45]

In the ongoing outbreak of COVID-19, courts may face the question of whether actual or alleged exposure to or contraction of COVID-19 is a “physical injury” within the meaning of Louisiana Civil Code article 2004.[46] While COVID-19 can produce a variety of symptoms, and even death, a Louisiana court may not deem the alleged exposure or contraction of COVID-19 a “physical injury” that fits within the legislative intent behind Louisiana Civil Code article 2004.[47] While actual contraction of COVID-19 may be considered a physical injury when it results in severe symptoms and even death, asymptomatic carriers or individuals with very mild symptoms may not suffer a physical injury as referenced in the immunity statute.[48] Similarly, alleged exposure to COVID-19 is much less injurious.[49] While the immunity statute references injury from or related to COVID-19, the meaning of physical injury may be different than Louisiana Civil Code article 2004.[50] The immunity statute seems to presuppose COVID-19 exposure as injurious, but the standard of physical injury under Louisiana Civil Code article 2004 is likely different.[51]

If COVID-19 exposure or contraction qualifies as a physical injury, then the waivers will likely be deemed null because of the statutory prohibition against such waivers and in light of the legislature’s generous protection afforded under the immunization statute.[52] Because the Louisiana Legislature gave liberal protections to businesses under the immunity statute if they complied with the relevant guidelines and did not act recklessly or negligently, then a court will likely not expand other areas of law—here Louisiana Civil Code article 2004—that are traditionally narrowly interpreted.[53]

As a result, businesses should not rely on COVID-19 waivers for protection in Louisiana because of the general prohibition against such waivers under Louisiana Civil Code article 2004.[54] Instead, businesses should find comfort in and rely on the provisions of § 9:2800.25.[55] However, businesses will not be provided the protection of the statute if they do not follow the guidelines set forth in the newly enacted law.[56]

IV. Conclusion

In conclusion, the Louisiana Legislature provides immunity for businesses against liability claims due to COVID-19 exposure through § 9:2800.25.[57] However, even if a company or business failed to comply with the COVID-19 regulations or acted recklessly, that organization will not likely be afforded the protection of a liability waiver because of its nullity with respect to physical injuries under Louisiana Civil Code article 2004.[58] Therefore, businesses in Louisiana should be wary of reliance on a COVID-19 liability waiver and should attempt to comply with Louisiana Revised Statutes § 9:2800.25.

 

 

[1] Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (Covid-19) Outbreak, The White House (Mar. 13, 2020), https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/ [https://perma.cc/Y66F-4NHU].

[2] Christina Hull Eikhoff, Jane B. Lucas & Melissa Quintana, Litigation/Legislative & Public Policy Advisory: What is Government Doing to Protect Businesses Against COVID-19-Related Tort Liability? A National Overview, Alston & Bird (Sept. 17, 2020), https://www.alston.com/en/insights/publications/2020/09/what-is-government-doing-to-protect-businesses/ [https://perma.cc/DX3H-YAMN].

[3] La. Rev. Stat. § 9:2800.25 (2020).

[4] Id.

[5] Id. (emphasis added). The statute goes on to state;

B. No natural or juridical person, state or local government, or political subdivision thereof, nor specifically a business event strategist, association meeting planner, corporate meeting planner, independent trade show organizer or owner, or any other entity hosting, promoting, producing or otherwise organizing an event of any kind, shall be held liable for any civil damages for injury or death resulting from or related to actual or alleged exposure to COVID-19 in the course of or through the performance of hosting, promoting, producing or otherwise organizing, planning or owning a tradeshow, convention, meeting, association produced event, corporate event, sporting event, or exhibition of any kind, unless such damages were caused by the gross negligence or willful or wanton misconduct.

C. An employee whose contraction of COVID-19 is determined to be compensable under the Louisiana Workers’ Compensation Law shall have no remedy based in tort for such exposure against his employer, joint employer, borrowed employer, statutory employer, any other person or entity listed in R.S. 23:1032(A)(1)(b), and any other person or entity potentially liable pursuant to the Louisiana Workers’ Compensation Law unless the exposure was intentional as provided by R.S. 23:1032(B).

D. Notwithstanding the rights of employees as provided by R.S. 23:1032(B), employees who contract COVID-19 and are not covered by the Louisiana Workers’ Compensation Law shall have no remedy in tort for such exposure against their employer, joint employer, borrowed employer, statutory employer, any other person or entity listed in R.S. 23:1032(A)(1)(b), and any other person or entity potentially liable pursuant to the Louisiana Workers’ Compensation Law unless the exposure was caused by intentional act.

Id.

[6] Id.

[7] Id.

[8] Id.

[9] For example, a District of Columbia court recently ruled that a property insurance policy does not offer business interruption insurance coverage for losses related to the COVID-19 pandemic. Rose’s 1, LLC v. Erie Ins. Exch., No. 2020 CA 002424 B, 2020 WL 4589206 (D.C. Super. Ct. Aug. 6, 2020). In Rose’s 1, LLC v. Erie Ins. Exch., the court found that the insureds could not show a “direct physical loss” under their insurance contracts from the closure of their businesses due to the COVID-19 pandemic. Id.

[10] See generally COVID-19 liability waivers and minors – reopening considerations, JDSupra, https://www.jdsupra.com/legalnews/covid-19-liability-waivers-and-minors-86945/ (last visited Sept. 27, 2020) [https://perma.cc/3YL4-M6GJ].

[11] How Courts May Interpret COVID-19 Waivers of Liability, Goldfinch Winslow, https://goldfinchwinslow.com/how-courts-may-interpret-covid-19-waivers-of-liability/ (last visited Sept. 20, 2020) [https://perma.cc/YT3A-YS5A].

[12] COVID-19 liability waivers and minors – reopening considerations, supra note 10.

[13] La. Civ. Code art. 2004 (2020).

[14] Id.

[15] Id.

[16] Compare La. Rev. Stat. § 9:2800.25 (2020), with La. Civ. Code art. 2004.

[17] See generally La. Rev. Stat. § 9:2800.25.

[18] Id.

[19] Id.

[20] Compare La. Rev. Stat. § 9:2800.25, with La. Civ. Code art. 2004.

[21] La. Rev. Stat. § 9:2800.25.

[22] Coronavirus reopening: Map of COVID-19 case trends, reopening status and mobility, USAToday (Oct. 15, 2020), https://www.usatoday.com/storytelling/coronavirus-reopening-america-map/ [https://perma.cc/7XV3-MWBP].

[23] Eikhoff, Lucas & Quintana, supra note 2.

[24] Guidance on Preparing Workplaces for COVID-19, OSHA, https://www.osha.gov/Publications/OSHA3990.pdf (last visited Oct. 15, 2020) [https://perma.cc/6UB6-V3GD].

[25] For example, in a sample release and waiver of liability agreement, businesses require clients to verify, “I understand that [the company] cannot be liable for any exposure to the COVID-19 virus caused by misinformation on this form or the health history provided by each client. By signing below, I agree to each statement above and release [the company] from all liability for the unintentional exposure or harm due to COVID-19.” Covid-19 Waivers, Waiverfile, https://www.waiverfile.com/Covid-Waivers/ (last visited Sept. 28, 2020) [https://perma.cc/GQD8-FRTY].

[26] See generally COVID-19 liability waivers and minors – reopening considerations, supra note 10.

[27] Alex Andonovska, More Bar Exam Delays Announced – Updated 5/7/20, JDJournal (May 7, 2020), https://www.jdjournal.com/2020/05/07/more-bar-exam-delays-announced-law-students-push-for-emergency-diploma-privilege/ [https://perma.cc/8E2S-73BP].

[28] Id.

[29] Id.

[30] Id.

[31] See generally La. Civ. Code art. 2004 (2020).

[32] Mark N. Mallery & Javier Jalice, Louisiana Enacts Reforms During the COVID-19 Pandemic: Limits on Liability, Damages, and Changes to Evidentiary Rules, Ogletree (July 30, 2020), https://ogletree.com/insights/louisiana-enacts-reforms-during-the-covid-19-pandemic-limits-on-liability-damages-and-changes-to-evidentiary-rules/ [https://perma.cc/VX4M-J26F].

[33] La. Rev. Stat. § 9:2800.25 (2020).

[34] Id.

[35] Id.

[36] Id.

[37] Id.

[38] Id.

[39] See generally La. Civ. Code art. 2004 (2020).

[40] La. Rev. Stat. § 9:2800.25.

[41] Id.

[42] See generally La. Civ. Code art. 2004.

[43] See generally La. Rev. Stat. § 9:2800.25.

[44] Id.

[45] La. Civ. Code art. 2004.

[46] Id.

[47] Id.

[48] See generally, La. Rev. Stat. § 9:2800.25.

[49] Id.

[50] Compare La. Rev. Stat. § 9:2800.25, with La. Civ. Code art. 2004.

[51] Compare La. Rev. Stat. § 9:2800.25, with La. Civ. Code art. 2004.

[52] Compare La. Rev. Stat. § 9:2800.25, with La. Civ. Code art. 2004.

[53] La. Civ. Code art. 2004.

[54] Id.

[55] La. Rev. Stat. § 9:2800.25.

[56] Id.

[57] Id.

[58] La. Civ. Code art. 2004.

by Braxton Duhon

I. Introduction: An Explosive Case

Angela Bolger, like many Amazon Prime[1] customers, often used Amazon to order items that she needed.[2] On one such occasion, Bolger searched the internet for a replacement laptop battery and ultimately ordered one from Amazon.[3] Amazon then shipped Bolger a Lenoge[4] laptop battery, which she received a few days later.[5] After opening the Amazon-branded box, wrapped in Amazon-branded shipping tape, Bolger installed and began to use her new laptop battery.[6] The laptop battery exploded within the first few months of use, placing Bolger in the hospital for two weeks because of serious burns.[7] Bolger then filed suit against Amazon seeking compensation for her injuries under the theory of strict products liability.[8]

The Bolger case is not as straightforward as it initially appears because Lenoge––the original manufacturer––is a third-party seller that utilizes Amazon to sell its product and fulfill such sales.[9] Ultimately, the California Court of Appeal held that Amazon was potentially liable under strict products liability for the sale of a defective third-party laptop battery on its site when the original manufacturer was part of the “Fulfillment by Amazon” (FBA) program and Amazon played an integral role in the overall production and marketing process.[10] Because of Amazon’s unique distribution structure under the FBA program, other courts have struggled to apply traditional strict products liability laws.[11] Continue reading →

by M. Max Sternberg

1. Introduction

On August 11, 2020, and after months of speculation, the Big Ten Conference canceled all fall sports, including football, due to safety concerns in light of the COVID-19 pandemic.[1] Later that same day, the Pac-12 Conference followed suit and also canceled all fall sports.[2] However, on September 16, the Big Ten reversed course and announced that it will in fact have a football season starting October 24, 2020.[3] Furthermore, on September 24, the Pac-12 decided to play a seven game conference only football season starting November 6.[4] As a result, only three (3) schools in the Division 1 Football Bowl Subdivision have canceled the season outright.[5] Canceling the college football season presents new and unique legal questions for those conferences and schools that do not play football, and for the NCAA as well.[6] Alternatively, the conferences and schools that do play football will face their own set of challenges. What’s more, the situation surrounding the decision to play or not to play is constantly changing. Since the first draft of this post, the Big Ten and the Pac-12 have both reinstated football.[7] In light of this evolving situation, and in hopes of providing some clarity, this blog post will address some of the new legal issues raised by either playing or not playing college sports this fall, particularly college football. Continue reading →

by Hunter Hewell, Senior Associate 

I. Introduction

Much like in the federal court system, Texas courts require each party in a suit to pay for their own attorney’s fees.[1] Some circumstances, however, allow for fee-shifting, in which the prevailing party may recover its attorney’s fees from the opposing party.[2] This fee-shifting arrangement is subject to certain requirements: (1) it must be authorized by statute or contract and (2) the party seeking its attorney’s fees must prove the reasonableness of the fee.[3] Although these requirements seem straightforward, courts throughout Texas have struggled with what methodology must be used and what facts the party seeking its attorney’s fees must present to determine the reasonableness of attorney’s fees once a fee-shifting authorization statute is invoked.[4] In 2019, the Texas Supreme Court passed down the Rohrmoos ruling, which specifically addressed what methodology courts and attorneys must use to determine how attorneys’ fees should be apportioned under these circumstances.[5]

Continue reading →