Considerations for Limiting Liability for Manufacturers and Importers of Masks and PPE During the COVID-19 Crisis
Introduction
The demand for personal protective equipment (PPE) across the globe has created a shortage in hospitals and medical facilities for those who need it most. The Federal Emergency Management Agency (FEMA) has begun distributing N95 masks from its strategic reserve, and existing medical device manufacturers, like 3M, have ramped up production. The shortage has become so severe that the Journal of the American Medical Association has published a request for ideas. Non-medical device manufacturers have volunteered to shift their focus to creating PPE. Before engaging in this important endeavor, manufacturers should be aware of federal guidelines, possible regulatory impact, and potential liability issues in manufacturing PPE for healthcare providers and the general public. There are several guidance documents and statutes that potential manufacturers or importers can look to in deciding whether to start manufacturing or importing face masks. [1]
Manufacturing and Importing Guidance from the FDA and CDC
Mask Production
As the coronavirus (COVID-19) pandemic continues, it seems that the Food and Drug Administration is issuing guidance documents daily regarding the manufacture and importation of masks for use by healthcare providers and the general public. To best protect an entity who chooses to begin manufacturing or importing masks, the FDA’s website for Emergency Use Authorizations (EUA) is an excellent resource. At the time of this publication, the FDA has issued several guidance documents regarding which regulatory enforcements will be taken by the FDA against manufacturers of masks during the ongoing pandemic.
FDA’s most recent guidance, issued April 3, sets forth the requirements that manufacturers will need to meet in order to avoid regulatory enforcement by the FDA in manufacturing masks. [2] “Face masks” generally are defined as medical devices that fall within the regulatory enforcement of the FDA “when they are intended for a medical purpose, including for use by health care professionals.” [3] However, given the shortage in masks, the FDA does not intend to object to individual distribution and use of other types of PPE when FDA-cleared masks or respirators are not available.
If manufacturers intend to produce face masks [4] “not intended for a medical purpose,” meaning not “intended for use in the diagnosis of disease or other conditions or in the cure, mitigation, treatment, or prevention of disease,” then the FDA will not require that the manufacturer obtains device marketing authorization prior to production or that all other requirements of the Food, Drug, and Cosmetics Act be applied. In order to meet this requirement, manufacturers must clearly label that the masks are not intended for use by a health care professional or in a health care facility or environment and identify that the masks do not include any drugs, biologics, or anti-microbial/anti-viral agents.
If a manufacturer plans to produce face masks intended for a medical purpose, face shields [5] intended for a medical purpose, or surgical masks [6] intended to provide liquid barrier protection, the FDA likewise has relaxed the requirements that must be met by manufacturers before they bring these products to the market. However, the FDA recommends that health care providers continue to follow the recommendations of the Centers for Disease Control and Prevention and that health care employers continue to meet the standards set forth for PPE by the Occupational Safety and Health Administration (OSHA). Although the requirements for bringing new PPE to market have been reduced by the FDA during the time period of the public health emergency, the best practice for manufacturers looking to begin producing PPE is to engage with the FDA. The FDA makes clear it is “interested in hearing from manufacturers who may be able to help mitigate potential shortages” of PPE “by increasing U.S. availability of such devices.” [7] FDA includes an example form email that manufacturers can send to notify the FDA of their intentions to begin producing PPE and how those products will conform to the FDA’s most recent guidance. Prudent manufacturers will take these steps before manufacturing to ensure that they do not run afoul of the FDA in their mask-making efforts.
Mask Importation
In addition to providing guidance on the manufacturing of new PPE, the FDA has issued guidance documents and EUAs for the importation of foreign masks to be used as PPE when FDA-cleared and National Institute for Occupational Safety and Health-approved filtering facepiece respirators are not available. On March 28, the FDA issued an EUA allowing the importation and use of masks from Australia, Brazil, Europe, Japan, Korea, and Mexico that meet specific product codes. [8] On April 3, the FDA issued an additional EUA to allow for the importation and use of KN95 masks from China if certain criteria are met, including the production of evidence that demonstrates that the respirators are authentic. In issuing these EUAs, the FDA made clear that it intended to follow the CDC’s recommendations as to strategies for optimizing the supply of N95 respirators. [9] If a supplier of masks intends to import masks from another country, then it is prudent to ensure that the masks being imported fall within the foreign masks covered under these EUAs by the FDA and recommended by the CDC in its guidance. Further, importers need to identify and collect evidence to confirm that the masks being imported are authentic.
Limit Liability: Volunteer or Manufacture an Extended-Use Product
One way to protect manufacturers of PPE from liability is to provide volunteer services to a nonprofit organization or hospital. The federal Volunteer Protect Act (VPA) [10] provides protection for harm caused by an uncompensated volunteer’s ordinary negligence committed in the scope of that volunteer’s responsibility on behalf of a nonprofit organization or government entity. The VPA does not apply to willful or gross negligence, harm caused by operating vehicles, volunteers for businesses, or the organization or entity utilizing the volunteer. While nonprofit hospitals occupy a unique position, invoking the VPA in the event of a suit should yield some protection.
Enlisting as a state emergency volunteer offers civil liability protection depending on that state’s emergency statutes. Often, state emergency volunteer protection is limited to uncompensated individuals who are registered with and operate under the control of a state entity or agency. Sometimes these statutes will protect organizations. However, the COVID-19 pandemic is unique and state emergency declarations are increasingly loosening regulations to encourage volunteerism. For example, the State of Connecticut has issued a Request for PPE by donation or, perhaps, sale. It may be that states are willing to extend subcontractor status and additional immunities. Additionally, states may agree to extend coverage pursuant to the Emergency Management Assistance Compact [11] (EMAC), which typically only covers state officers and employees, to non-employee volunteers deployed under EMAC.
States have good Samaritan statutes, but eligibility varies by state as well as the circumstances in which the statute applies. Samaritan statutes generally are intended to protect individuals who spontaneously act to assist where there is no ready access to professional help. Some states extend their statute to encompass additional situations, but many do not. Unless a state has a detailed and broad Samaritan statute, it is difficult to rely solely on this type of protection.
If possible, create products intended to be used in conjunction with FDA approved masks and devices. Products intended to extend the life of these FDA approved PPE have some protection provided by association. Additionally, strong language regarding intended use in an emergency supplies agreement, that draws upon the CDC’s crisis management guidelines, likewise will emphasize the emergent nature of the “extended use” product.
Next, a manufacturer should ask for written instructions and guidance from the organization that is receiving or requesting the PPE. Incorporate these instructions or guidance into the emergency supplies agreement and contract only that the instructions or guidance will be followed using ordinary care. If possible, request particular specifications for materials or ask that those materials be provided. Ensuring that the organization has approved the materials limits possible avenues for future liability.
Limit Liability: Draft a Strong Contract
Whether a manufacturer decides to produce extended use products or more traditional PPE, ensure that the emergency supplies agreement is strong. As mentioned above, if possible, agree to exercise only ordinary care. Waiver of warranties, express or implied, are vital when a non-medical device manufacturer enters this highly regulated space. Similarly, limit the methods of remedy and liability, especially when volunteer services create the foundation for any partnership or agreement.
Most important is strong indemnification language. The organization receiving the PPE should agree to indemnify and immediately assume defense when any claim is initiated at any point prior to litigation and through settlement and/or verdict. Be sure to include protection for individual employees. A novel consideration in drafting for a communicable disease like COVID-19 is how many potential plaintiffs to include. Requiring indemnification for any person who uses the PPE seems clear, perhaps also that person’s household – the causal connection is more apparent. But what about patients of a medical professional who later contract COVID-19 and blame their hospital? Or visitors to the hospital? Over-extending an indemnification clause could lead to it being cut away, or severed, from the contract. Consider what type of PPE a manufacturer plans to produce, the intended user, and what organization will use the PPE and adjust accordingly.
As a final measure, include insurance coverage in the agreement – request that the organization add the manufacturer or supplier as an additional insured. Additionally, contact the manufacturer or supplier’s insurance company to be sure that this particular exposure is covered.
Conclusion
While the pandemic is ongoing, laws and guidance documents have been issued and updated, seemingly daily, to relax and/or clarify standards to meet the growing needs of the public and health care workers. Manufacturers and volunteers who are interested in producing personal protective equipment, whether for health care providers or the public, need to be prepared for changes as time progresses and keep tabs on the continuing updates from the Department of Health and Human Services, FDA, CDC, OSHA, and similar state-based organizations. With contractual, insurance, and regulatory protections in place, entities looking to aid in this crisis can move forward with production from a place of strength when it comes to protection from liability.
[1] This article does not address potential immunity that manufacturers may seek under various federal and state statutes and declarations. For more information on potential immunity from liability that manufacturers may seek under the Public Readiness and Emergency Preparedness Act, see “ HHS Provides Liability Immunity for Coronavirus Countermeasures.”
[2] See FDA, “ Enforcement Policy for Face Masks and Respirators During the Coronavirus Disease (COVID-19) Public Health Emergency (Revised): Guidance for Industry and Food and Drug Administration Staff” at 2 (April 2020).
[3] Id. at 2.
[4] Defined as “[a] mask, with or without a face shield, that covers the user’s nose and mouth and may or may not meet fluid barrier or filtration efficiency levels.” Id. at 4.
[5] Defined as “a device used to protect the user’s eyes and face from bodily fluids, liquid splashes, or potentially infectious materials. Generally, a face shield is situated at the crown of the head and is constructed with plastic to cover the user’s eyes and face.” Id.
[6] Defined as “[a] mask that covers the user’s nose and mouth and provides a physical barrier to fluids and particulate materials. The mask meets certain fluid barrier protection standards and Class I or Class II flammability tests.” Id.
[7] See “ FAQs on Shortages of Surgical Masks and Gowns.”
[8] See “ Imported, Non-NIOSH-Approved Disposable Filtering Facepiece Respirators” (Mar. 28, 2020).
[9] See “ Strategies for Optimizing the Supply of N95 Respirators.”
[10] 42 U.S.C. § 14501.
[11] Additional information regarding EMAC is available at its website.