As we discussed in Part One of this blog post, “force majeure” clauses are commonplace in business contracts, and virtually every force-majeure clause includes express provision for some or all natural disasters, along with civic, bureaucratic, and military disruptions.

But the pandemic has caused many disruptions that cannot be attributed to an act of government; as the nation reopens, it is likely that those disruptions will continue for some time.  One of a two common catch-all provisions in force-majeure clauses may extend to cover a pandemic.

In a prior post, this blog explored a range of defenses to contract claims brought in the wake of nonperformance caused by the ongoing novel coronavirus (COVID-19) pandemic.  This post examines one such defense in detail—the force majeure defense—and how the unique circumstances of the pandemic may impact attempts to assert or defeat such a defense.

We are proud that all our firm's partners -- David Bruce, James Savitt, Michele Stephen, Stephen Willey, Miles Yanick, and Duncan Manville have been voted to the 2020 Super Lawyers list, including two to the list of the 2020 Top 100 Washington Super Lawyers.  We also congratulate Duffy Graham, named again to Washington ...

Court systems across the country are on indefinite hold.  The U.S. District Court for the Western District of Washington has continued all in-person civil and criminal proceedings scheduled to occur before August 3, 2020 pending further order of the Court.[1]  In Washington state courts, all civil and criminal jury trials are suspended until at least July 6, 2020.[2]  The King County Superior Court plans – tentatively – to resume jury trials in sometime in July.

Although much pretrial lawyering can be done remotely, jury trials require public participation, and historically have been conducted in-person.  But while Washington has flattened the curve, public health professionals unanimously agree that premature resumption of pre-pandemic life would pose a grave threat to the public health.  Life will not go back to “normal” all at once.

Forty years ago, on May 18, 1980, Washington’s once-conical Mount St. Helens erupted, killing approximately 57 people, and causing millions, if not billions, in damages.  Writers in both the Seattle Times[1] and the New York Times[2] recently have argued that tensions between science, politics, and economics that came to the fore with the Mount St. Helens eruption teach something pertinent to the policy-making challenges presented by a pandemic.

That may be true, but it is above our pay grade.  Our more limited point today is that governmental policymakers should be immune from liability in tort for their policy judgments in response to a natural disaster – like Mount St. Helens, or like a pandemic.

Virtually all businesses, and not least the professional sports leagues, are looking to cut costs in the era of coronavirus.  Major League Baseball has decided to cut its 2020 draft of amateur players, usually either high school seniors or college juniors, from 40 rounds to 5.  See https://www.cbssports.com/mlb/news/mlb-agrees-to-reduce-2020-draft-to-five-rounds-with-unlimited-undrafted-signings-for-20k-reports-say/.

Eliminating part or all of Baseball’s amateur draft is one thing, even if this results in economic harm to the potential draftees.  E.g. https://theathletic.com/1804221/2020/05/09/law-how-the-five-round-draft-hurts-players-and-pro-baseball-as-a-whole/.  It is another thing altogether for baseball teams to agree – outside of a collective bargaining agreement – that they won’t pay any undrafted player more than $20,000 to sign.  But that, in fact, is part of the plan reported on May 8.

The impact of the novel coronavirus disease 2019 (COVID-19) has been felt across all industries.  Government-ordered shutdowns of non-essential work closed many businesses.  Those that continue (and perhaps even grow) nonetheless suffer from COVID-19 related disruptions.  As a result, many companies and individuals are struggling or unable to fulfill their contractual obligations.

Lawyers have written extensively about the force majeure provisions in some contracts that explicitly excuse performance when extraordinary events within their scope preclude performance.[1]  Depending on the specific language, a force-majeure clause may permit a party to suspend or terminate performance.  Even absent a force majeure clause, however, under Washington law a contracting party may still be able to invoke defenses to claims of breach in the context of the current pandemic.

Earlier this week, Governor Inslee issued a proclamation (akin to an executive order) that imposed a temporary moratorium on garnishments of wages and other income to collect judgments for consumer debt throughout Washington.  The proclamation temporarily prohibits garnishments of wages and other income to collect judgments for consumer debt until 11:50 PM on May 14, 2020.  Violation of the proclamation ...

The U.S. District Court for the Western District of Washington has revised its Local Civil Rules effective January 1, 2020.  The changes to the rules themselves are modest; perhaps more important to the Western District bar are the changes to the District’s Model Agreement Regarding Discovery of Electronically Stored Information and Proposed Order (the “Model Order”).  In many federal cases involving discovery of electronically stored information (“ESI”), the Model Order is the starting point for the parties’ negotiation of the nature, scope, and scale of discovery—and parties often adopt the Model Order wholesale.  The Model Order thus sets the ground rules in the Western District for one of the most expensive and fraught aspects of American litigation.

Ordinarily, in a dispute over the breach or performance of a contract where the aggrieved party is seeking a monetary award as compensation, the measure of those damages is the party’s “actual damages.”  Actual damages are just that—the measure of the aggrieved party’s actual loss, measured as the difference between the current circumstances and the circumstances that would have obtained had the contract not been breached.  The idea is to give the aggrieved party the “benefit of the bargain.”