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January 21, 2022 Articles

Consideration to Remand PREP Act Claims Based on Argument the Act Does Not Preempt State Tort Claims

In October 2021, the Third Circuit became the first federal appellate court to address whether state claims for negligence and wrongful death against those authorized to provide countermeasures were preempted by the PREP Act.

By Mary E. Hershewe and Jim Frederick
Only a few cases at the district court level have agreed the PREP Act provides complete preemption against state tort claims.

Only a few cases at the district court level have agreed the PREP Act provides complete preemption against state tort claims.

Pexels | Karolina Grabowska

The current COVID-19 global pandemic created an urgent need for companies to develop and implement treatments to combat the SARS-CoV-2 virus. As manufacturers, distributors, and healthcare providers work to tackle the public health crisis, courts are considering whether the Public Readiness and Emergency Preparedness Act (PREP Act), Pub. L. No. 109-148, div. C, § 2 (2005), provides liability immunity to these entities and, if so, to what extent.

Dozens of lawsuits have been filed in state courts against nursing homes and long-term care facilities for alleged failure to use countermeasures to protect against COVID-19, and the Third Circuit recently became the first federal appellate court to hear one of these cases. The plaintiffs are arguing that the act does not apply because (1) it does not create a federal cause of action against entities for anything other than willful misconduct and, therefore, it is not a complete preemption statute; or (2) it does not extend immunity to entities when they fail to use a countermeasure. The defendants are arguing that federal-question jurisdiction exists because the PREP Act completely preempts state law.

Even though the Department of Health and Human Services (HHS) has explicitly stated in its advisory opinions that the PREP Act is a complete preemption statute, its statements are not law. The Third Circuit and most district courts have disagreed with the HHS that the PREP Act is a complete preemption statute. Seven more federal circuits are about to hear cases involving state law tort claims where defendants have argued that the act preempts the claims. These decisions will determine the scope of protections under the act and whether the preemptive effect of the act is an issue that will go to the Supreme Court.

Overview of the PREP Act

Congress enacted the PREP Act after the SARS and avian influenza outbreaks, to encourage efficiency and expediency in responding to public health emergencies. By providing “liability immunity” to “covered persons” assisting with “covered countermeasures,” the PREP Act encourages companies and others to respond to public health emergencies. The PREP Act gives the HHS wide authority to lead responses to public health emergencies. Namely, it authorizes the secretary of HHS to determine diseases, threats, and conditions that constitute a public health emergency; when and for how long immunity will remain effective; the population of individuals entitled to receive countermeasures; covered countermeasures and limitations on their distribution (if any); and the persons or entities who will receive liability protection.

“Liability immunity” under the PREP Act includes protections from civil actions for death, serious injury, mental or emotional injury, and property damage or loss (such as business interruption). The act contains only one exception to its limitation to liability—namely, claims for injury caused by willful misconduct. Willful misconduct claims have exclusive jurisdiction in the U.S. District Court for the District of Columbia. Relevant to manufacturers, distributors, and medicine or product developers, the immunities provided by the act extend to any stage of design, development, testing, manufacture, labeling, distribution, formulation, packaging, marketing, promotion, sale, purchase, dispensing, prescribing, administration, licensing, or use of a countermeasure recommended in the declaration.

The PREP Act provides liability immunity to “covered persons.” That term has been expanded several times by advisory opinions and includes, among others,

  • manufacturers, suppliers, or licensers of a product, intellectual property, service, research tool, or component that is used in the design, development, clinical testing, investigation, or manufacturing of a covered countermeasure;
  • distributors of medicines, biologics, or devices; and
  • healthcare professionals prescribing or administering countermeasures.

“Covered countermeasures” refers to the use of medicines, biological products, or devices (including unapproved uses when done under an emergency use authorization issued by the Food & Drug Administration).

To pursue a PREP Act claim, individuals must file a request for benefits to the Countermeasures Injury Compensation Program. If there is “compelling, reliable, valid, medical and scientific evidence,” the individual will receive compensation for the injury. This no-fault, non-adversarial system is what ensures liability protections for those marshalled to assist with “covered countermeasures.”

On March 17, 2020, the HHS secretary issued a declaration to apply the PREP Act to the COVID-19 pandemic. The declaration states that “a covered person shall be immune from suit and liability under federal and state law with respect to all claims” related to a “covered countermeasure.” On April 17, 2020, the HHS secretary issued a nonbinding advisory opinion to further explain the scope of PREP Act immunity and how it preempts state clams. The opinion explained that “immunity covers claims for loss 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.” The opinion clarified that the act “replaces certain damages claims that would normally be brought in court” with the act’s “no-fault compensation system.” On January 8, 2021, the HSS secretary issued another advisory opinion, which explained that the PREP Act is a complete preemption statute because it establishes a federal cause of action (though it is an administrative one).

PREP Act Cases Before the Pandemic

Although there is limited case law interpreting immunity provided by the PREP Act, the cases that were decided before the current pandemic made it seem likely that courts would broadly preempt state law tort claims related to the provision, planning, and administration of COVID-19 countermeasures. For example, in Kehler v. Hood, 2012 WL 1945952 (E.D. Mo. May 30, 2012), the Eastern District of Missouri held that the PREP Act barred claims against a vaccine manufacturer. A patient had sued his physician and employer in state court after he received an H1N1 vaccination without informed consent. The physician and employer filed a third-party complaint against the vaccine manufacturer for lack of informed consent. The vaccine manufacturer removed the case to federal court under the PREP Act, and the federal court agreed the claim was barred.

In another case, Parker v. St. Lawrence County Public Health Department, 102 A.D.3d 140 (N.Y. App. Div. 2012), the appellate division of the New York Supreme Court held that the PREP Act preempted a family’s state tort claims that healthcare workers failed to obtain informed consent before administering the H1N1 vaccine to their young daughter. The family argued that the PREP Act did not bar claims related to the healthcare worker’s failure to use a countermeasure—in that case, failure to obtain informed consent. The court specifically disagreed, finding the act covered acts and omissions.

However, even before the pandemic, some courts disagreed on whether the PREP Act provided complete preemption from state tort claims. For example, in Casabianca v. Mount Sinai Medical Center, Inc., 2014 WL 10413521 (N.Y. Sup. Ct. Dec. 2, 2014), a New York state court held that a hospital’s failure to use a countermeasure—specifically, failure to inoculate the plaintiff for H1N1 influenza—was not a covered countermeasure under the PREP Act because the vaccine was never given.

Where Are Courts Heading?

Now dozens of federal courts are remanding PREP Act cases back to state courts. Unpersuaded by the declaration and advisory opinions, these courts have agreed with plaintiffs that (1) the PREP Act is not a complete preemption statute because it fails to create a federal cause of action for plaintiffs to pursue their claims in federal court for everything except an allegation of willful misconduct, or (2) the PREP Act does not apply because it does not provide immunity for a covered person’s failures to use a countermeasure.

Only a few cases at the district court level have agreed the act provides complete preemption against state tort claims. For example, a federal district court in California held that the PREP Act was a complete preemption statute. Garcia v. Welltower OPCo Grp. LLC, No. SACV 20-02250JVS, 2021 WL 492581 (C.D. Cal. Feb. 10, 2021). Garcia also involved a nursing home that allegedly failed to use a countermeasure.

Last October, the Third Circuit became the first federal appellate court to address whether state claims for negligence and wrongful death against those authorized to provide countermeasures were preempted by the PREP Act. Maglioli v. All. HC Holdings LLC, 16 F.4th 393 (3d Cir. 2021). In Maglioli, families of residents who died at two New Jersey nursing homes filed lawsuits in state court against the nursing homes for allegedly failing to protect against exposure to COVID-19. The complaint asserted negligence, wrongful death, and medical malpractice. The nursing homes removed the case to federal court, in part alleging that PREP Act immunity preempted the state law claims. The federal court disagreed and remanded the case to state court, which prompted the nursing homes to appeal to the Third Circuit.

The nursing homes’ appeal primarily argued that the PREP Act completely preempted the plaintiffs’ claims. The Third Circuit disagreed, holding that the act was not a complete preemption statute and it provided an “exclusive cause of action”—and, therefore, federal jurisdiction—only for wrongful misconduct allegations. Stated another way, the court found there was no way for the plaintiffs to bring their claims in federal court because the claims were not based on willful misconduct.

Importantly, the Maglioli court also addressed the plaintiffs’ allegations that failure to use a countermeasure was not covered by the PREP Act. The court held that liability immunity extends to failures to use countermeasures. The Third Circuit found the plaintiffs’ argument overlooked eight statutory statements that the PREP Act applies to “acts and omissions.”

In some ways, the Third Circuit’s holding may help narrow the issues to be addressed by other federal circuits (and future district courts), because the Third Circuit found that the act provides protection against allegations that an entity failed to use a countermeasure. For example, in Grohmann v. HCP Prairie Village KS OpCo LLC, 516 F. Supp. 3d 1267 (D. Kan. 2021), the court refused to preempt state claims, finding the care facilities’ failure to use a countermeasure was not part of PREP Act immunity. The Third Circuit holding is in clear disagreement with decisions like Grohmann.

Outstanding Issues

An issue courts may eventually need to address (if it is not decided by the Supreme Court first) is whether the PREP Act preempts state medical malpractice and product liability claims against manufacturers, distributors, developers, and administrators for covered countermeasures. So far, all of the pending appeals involve claims brought against a nursing home or long-term care facility for failure to use a countermeasure. Holdings like Kehler suggest the act will preempt state product liability claims. Parker suggests it will preempt state malpractice claims against hospitals or physicians.

It seems unlikely that every federal circuit will find that the act does not provide preemption/immunity for any state claims of negligence or wrongful death against any covered persons, particularly in light of the language contained in the declaration and advisory opinions. But if circuit and district courts do not explain how or why long-term care facilities or a covered person alleged to have failed to use a countermeasure are exempt from the PREP Act, it could cause general confusion about the scope of the act.

Another issue courts may eventually need to address is whether plaintiffs are using the well-pleaded complaint rule to avoid complete preemption. The Third Circuit found that the PREP Act does not preempt all state tort claims because it does not provide a federal cause of action for anything other than willful misconduct. According to the Third Circuit, if a complainant alleges anything other than willful misconduct, that claim is not preempted by the act. Thus, a plaintiff could easily circumvent the PREP Act by simply not bringing a willful misconduct claim. However, the HHS cautioned in its January 8, 2021, advisory opinion that the well-pleaded complaint rule should not be used as a way for plaintiffs to “wiggle [through] to avoid complete preemption.”

Courts will also need to address language and cases cited by the HHS showing it is improper to separate claims by standard of liability (such as willful misconduct) to avoid a statute that is intended to provide complete preemption. For example, in the January 8, 2021, advisory opinion, the HHS cited several Supreme Court cases, including those interpreting the Employee Retirement Income Security Act (another complete preemption statute), to show that the statute is intended to completely preempt state law claims: Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58 (1987); Aetna Health v. Davila, 542 U.S. 200, 215–16 (2004). The opinion stated, “The sine qua non of a statute that completely preempts is that it establishes either a federal cause of action, administrative or judicial, as the only viable claim or vests exclusive jurisdiction in a federal court. The PREP Act does both.” If the circuit courts do not address cases like these cited by the HHS to show the PREP Act is a complete preemption statute, the Supreme Court certainly will.


When companies defend against product liability litigation related to “countermeasures,” the PREP Act and its accompanying declaration and advisory opinions should be raised as a defense as soon as possible.

The scope of these defenses is likely to be addressed over the coming months as several appellate courts weigh in on preemption and whether the act is triggered by allegations that a covered person failed to use a countermeasure. However, clarity may not come until the Supreme Court speaks on the issue. 

Mary E. Hershewe is an associate in the Denver, Colorado, office of Faegre Drinker Biddle & Reath LLP. Jim Frederick is counsel in the firm’s Washington, D.C., office. 

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