Nevada Enacts SB4 - Limiting Liability for Businesses and Imposing Stricter Health Regulations
On August 11, 2020, Nevada Governor Steve Sisolak signed into law Senate Bill 4 of the 32nd Special Session (“SB4”).
SB4 has a number of implications for Nevada businesses, which includes: (1) requiring certain state agencies and the Clark and Washoe County health districts to adopt regulations related to lodging facilities for the duration of the COVID-19 pandemic; (2) limiting civil liability for businesses and other entities that substantially comply with controlling health standards; and (3) granting additional enforcement authority to certain state agencies, including the Nevada Secretary of State (“SOS”).
The new law explicitly requires the Director of the Department of Health and Human Services (“HHS”), the health district boards of Clark and Washoe Counties (“Health Districts”) and the Nevada Gaming Control Board (“GCB”) to enact and enforce additional health standards related to the ongoing COVID-19 pandemic while also limiting potential civil liability for businesses that are in substantial compliance with those health standards. Notably, public-school entities (including preschools, k-12, charter and private schools), as well as hospitals and other healthcare providers, were specifically precluded from liability protections.
Notable effects of SB4 include:
Requirements Affecting Lodging Facilities
- Gaming Control Board and Health Districts Coordination:
- The GCB is authorized to request information concerning public health information related to gaming establishments from the Health Districts. The Health Districts are authorized to enforce any GCB public health regulations against gaming establishments within their jurisdictions.
- HHS and Health Districts to Adopt New Regulations Governing Lodging Facilities:
- The Director of HHS and the Health Districts are required to adopt and enforce regulations related to public accommodation facilities, including, but not limited to, hotels, hotel casinos, resorts, motels, hostels, bed and breakfasts, and other establishments offering lodging (collectively, “Facilities”).
- HHS is further required to adopt regulations requiring Facilities to maintain cleanliness, safety, health and other protocols related to COVID-19.
- These regulations include requirements for Facilities to implement written COVID response plans (“Plans”) providing for testing and time off for employees exposed to COVID or experiencing symptoms.
- HHS, the Health Districts and the GCB may require Facilities to submit their Plans, which are generally to remain confidential.
- Regulations adopted by HHS shall also prohibit retaliation against employees that seek enforcement of the law’s provisions.
- The regulations which HHS must adopt are exempted from the requirements set forth in the Nevada Administrative Procedure Act, but must provide opportunities for public comment.
- The Health Districts shall adopt, amend or repeal regulations that are substantively identical to the regulations adopted, amended or repealed by HHS.
- HHS must adopt the required regulations no later than 20 days after the effective date of this act. The Health Districts must adopt regulations that are substantively identical to the regulations adopted by the Director within 30 days after the effective date of this act or within 10 days after the HHS adopts the regulations.
- Enforcement of Health Regulations Related to Lodging Facilities:
- The Health Districts shall inspect Facilities upon receiving a complaint, and shall inspect all Facilities having more than 200 rooms at least once every three months, and resort hotels (casinos offering a certain number of hotel rooms and other provisions) at least once every two months. Violations shall result in fines, and may result in suspension or revocation of business licenses. Violations by resort hotels shall result in notification to the GCB, which may take further enforcement action.
Civil Liability Immunities for Certain Business
- Limited Immunity from Liability:
- Businesses, governmental entities officers and employees of nonprofit organizations are immune from civil liability for personal injury or death resulting from exposure to COVID, as long as the business, governmental entity or nonprofit organization “substantially complied” with controlling health standards.
- SB4 defines “substantial compliance” as the good faith efforts of an entity to help control the spread of COVID-19 in conformity with controlling health standards. The entity may demonstrate substantial compliance by establishing policies and procedures to enforce and implement the controlling health standards in a reasonable manner. Isolated or unforeseen events of noncompliance with the controlling health standards do not demonstrate noncompliance by the entity.
- Liability May Be Imposed for Gross Negligence:
- Entities may still be found liable for COVID-19 related injuries or death if the business, governmental entity or nonprofit organization violated controlling health standards with gross negligence and the gross negligence was the proximate cause of the personal injury or death.
- Complaint in any such civil action must be pled with particularity.
- Courts shall determine substantial compliance with controlling health standards as a matter of law.
- These procedures apply to any cause of action or claim that accrues before, on or after the effective date of the bill and before the later of either the date on which the Governor terminates the emergency described in the Declaration of Emergency of COVID-19 issued on March 12, 2020 or July 1, 2023.
Nevada SOS Authorized to Suspend Business Licenses for Failure to Comply with Health Standards
- The Nevada SOS is authorized to suspend the state business license of any person found to have failed to comply with controlling health standards, subject to notice requirements. The SOS’s authority to suspend a state business license expires by limitation on the later of either the date on which the Governor terminates the emergency described in the Declaration of Emergency issued on March 12, 2020 or on July 1, 2023.
SB4 became effective on August 11, 2020, and will remain effective until the Governor terminates the state of emergency, or July 1, 2023.