New Jersey Business Owner Liability in the Age of COVID-19

June 9, 2020Article

In the span of only a few months, the landscape for business owners throughout the world changed dramatically. From virus shutdowns to supply-chain disruptions to economic calamity, there is not a business in the nation that hasn’t been affected in one way or another as a result of the global pandemic. One area that will likely see litigation in the near future involves business owners and patrons who may get infected while on the owners’ premises. New Jersey has a very well-developed case law on the issue of business proprietors and their duty to the public. Although much remains to be seen, we attempt to analyze the law of New Jersey in the context of this global virus and the potential pitfalls that may await business owners when they begin to re-open their establishments.

Traditionally under New Jersey law, three basic categories of people exist who might be present on a business owner’s property: invitees, licensees and trespassers. Although the lines among these categories have been blurred somewhat in recent years, the basic descriptions are still very useful in analyzing New Jersey premises law.

TRESPASSERS: Legally, this is probably the easiest to define and generally involves the smallest group. New Jersey defines a trespasser as an individual who is “neither invited nor suffered” to be on a landowner's property. Lordi v. Spiotta, 45 A.2d 491, 494 (Sup.Ct. 1946). This category of people is not reasonably expected to be on a business owner’s property, nor has the landowner granted permission to be on the property.

Trespassers are owed the least protection under New Jersey law. Generally, “a landowner owed no duty to a trespasser other than to refrain from acts willfully injurious.” Renz v. Penn Central Corp.,87 N.J. 437, 461 (1981). Although landowners need to warn trespassers about any “artificial conditions on the property that pose a risk of death or serious bodily harm to a trespasser,” Hopkins v. Fox & Lazo Realtors,132 N.J. 426, 434 (1993), in all other cases, the landowner has no duty to protect trespassers.

LICENSEES: A limited and seldom-seen category involves licensees. This category would include a person “permitted to come upon the property, and [who] does so for his own purposes.” Rowe v. Mazel Thirty, LLC,34 A.3d 1248, 1253 (2012). Key to analyzing a licensee is the purpose of the individual’s presence on the property as it relates to the property owner. For example, a social guest would be considered a licensee. Visiting friends or family members are the typical example, but a licensee could also include sales representatives who visit businesses to sell their products. Property owners in New Jersey still owe a legal duty to warn licensees of any dangerous conditions on the property of which the owner is aware and which the licensee is unlikely to noticeBerger v. Shapiro,152 A.2d 20 (1959). One critical difference between a licensee and invitee is the owner’s duty to inspect and seek to discover defects that may be on the property. For licensees, no such duty exists, whereas for invitees the duty to inspect is an integral component.

INVITEES: Finally, invitees are people who are on the property “by invitation, express or implied, generally for some business purpose of the owner.” Rowe v. Mazel Thirty, LLC,34 A.3d 1248, 1253 (2012). Invitees are usually customers who are present on the business owner’s premises for the purpose of the financial benefit of the owner. Accordingly, the law imposes a much stricter standard on a landowner as it relates to invitees. “Only to the invitee or business guest does a landowner owe a duty of reasonable care to guard against any dangerous conditions on his or her property that the owner either knows about or should have discovered. That standard of care encompasses the duty to conduct a reasonable inspection to discover latent dangerous conditions.” Hopkins v. Fox & Lazo Realtors,132 N.J. 426, 434 (1993). Accordingly, the business owner must conduct frequent and regular inspections of the property to ensure that it is safe for the intended purpose – for customers or clients to be safely present on the property to transact business.

It is this final category that we analyze under the specter of the global pandemic. New Jersey, like other states with high density, issued very stringent policies for business closures and restrictions. This included the mandatory closures of all “non-essential” businesses, including salons, boutiques, clothing stores, bowling alleys, bars and auto dealerships. Gatherings of more than 10 people were prohibited. This naturally included stadiums, carnivals, theme parks and beaches. As New Jersey’s virus numbers began to improve, in large part due to the extraordinary measures taken, the government moved into less restrictive phases. On June 15, New Jersey will enter Stage 2, which allows most businesses to re-open, albeit with significant restrictions.

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These new guidelines allow outside dining, with social distancing implemented, as well as limited in-person retail. This will allow shoppers to enter businesses in a limited capacity. The question, of course, is how this impacts a business owner’s duty to invitees under current New Jersey law.

The following are virus-related questions that a business owner in New Jersey will likely have to answer after re-opening:

  1. Has anyone in my employ been diagnosed with the virus?
  2. Have my employees been tested regularly to ensure they are not exposing customers to the virus?
  3. Have I planned sufficiently to “socially distance” my customers/clients within the parameters of my business?
  4. Have I set up my cash registers and packaging procedures to ensure they comply with the State requirements?
  5. If I find out one of my customers or employees has the virus, what is my obligation to contact other customers who have been on my premises?
  6. Do I need to conduct temperature checks on incoming customers/clients?

Under the Phase 2 scenario, a business owner in New Jersey would reasonably be expected to clean the entire client/sales area multiple times per day, ensure that all employees who come into contact with invitees are tested regularly and ensure that every customer/client who enters the premises wears a mask. Linking a particular infection to a particular business may be difficult, but to the extent such a connection can be made, creative arguments will likely emerge that are similar to a situation where a tripping hazard or some other dangerous condition exists on the property. The duty imposed on landowners relative to invitees is very high, and the public is aware of its existence. In New Jersey, the law imposes enough of a burden on business owners that COVID-19 litigation is certainly a foreseeable consequence of these extraordinary times.

Author: Roy F. Viola, Jr. (Partner, New York) Editor: S. Christopher Collier (Senior Partner, Atlanta)

Hawkins Parnell & Young's national litigation team is helping businesses across the United States navigate unprecedented legal challenges arising from the COVID-19 pandemic. Visit our COVID-19 Resource Center for the latest insights and guidance.