Hurricanes And Act Of God Defenses

Hurricanes do not show favoritism to business owners on land or sea in in its destruction and disruption. Following a major hurricane or other extreme weather event businesses and vendors including, vessel owners and operators may face liability for failure to perform their agreed contracts or liability arising from an allision or collision. In such a situation, to escape liability, vessel owners and operators may take advantage of two doctrines: (1)force majeureand (2) the "inevitable accident"/ "Act of God" defense. Below we explain those doctrines and the burden of proof for each.

Contractual Defenses —Force MajeureClauses

Force Majeureis an unavoidable and extreme event beyond a party's control. Maritime contracts for services generally include clauses for performance, demurrage, delay, deviation, termination, and suspension.In addition, most contracts include aforce majeureclause (the term roughly translates to "superior force") or Act of God defense designed to excuse one or all of the parties from liabilities or obligations when an extraordinary and unforeseeable event occurs that is beyond the control of the parties. A typicalforce majeureclause reads as follows:

Moreover, suchclauses, especially in contracts performed in the Gulf of Mexico and along the Atlantic Coast, typically include hurricanes in the exhaustive list of potentialforce majeureevents. If hurricanes are not specifically contemplated, such weather events, like a winter freeze, may also qualify under Acts of God, as discussed below.

When aforce majeureevent occurs, the party seeking to invoke the clause bears the burden of proof in showing its application. Generally speaking, the party would need to present evidence proving that (1) the alleged event constituted aforce majeureevent; (2) the event adversely affected the party's ability to perform; (3) the party's inability to perform was beyond its control; and (4) there existed no reasonable steps the party could have taken to avoid the event or its consequences. Using the aftermath of a major hurricane such as Katrina or Ida as an example, the parties should face little to no difficulty in proving that the hurricane qualified as aforce majeureevent and that their performance had been affected. In 2024 the Fifth Circuit inMieco, LLC v Pioneer Natural Resources USA Increviewed a gas supply contract following a devastating freeze. The court focused in part of the due diligence obligation to prevent harm and damages in aforce majeureclaim

Even if a maritime contract does not contain aforce majeureprovision, parties may still look to common law principles to escape liability for nonperformance, but their burden of proof is greater if the event was not enumerated in the contract.

All in all, following a major disaster, parties should first look to the language of the contract to determine the viability of such defenses and the parties' next steps.

Defenses to Tort Liability — Act of God

The maritime doctrine of Act of God or inevitable accident serves as an affirmative defense to the element of causation. In other words, the loss was caused not by any action of the vessel owner or any human intervention, but by an unpredictable and inevitable Act of God that could not have been prevented by reasonable care. The US Supreme Court has defined "Act of God" as "a loss happening in spite of all human effort and sagacity."This defense has also been widely defined as "any accident, due directly and exclusively to natural causes without human intervention, which by no amount of foresight, pains, or care, reasonably to have been expected could have been prevented;" and/or "a disturbance ... of such unanticipated force and severity as would fairly preclude charging ... [defendant] with responsibility for damage occasioned by the [defendant's] failure to guard against it in the protection of property committed to its custody."With respect to major weather events such as hurricanes, the doctrine acts as a defense to tort liability for breakaways resulting in collisions and allisions.That said, such hurricanes must be "so extraordinary that the history of climatic variations and other conditions in the particular locality affords no reasonable warning of them."

Before even considering the Act of God defense, however, three important maritime presumptions come into play: (1) thePennsylvaniaRule, (2) theLouisianaRule, and (3) theOregonRule — named after the respective cases in which they arose. Under thePennsylvaniaRule, a party that violates a safety regulation, such as the COLREGS,will be presumed at fault for a maritime incident. ThePennsylvaniaRule may be overcome, but case law notes that "a party who fails to observe a safety regulation [must meet] the burden of showing not merely that [its] fault might not have been one of the causes [of the loss], or that it probably was not, but that it could not have been."TheLouisianaandOregonrules together "[create] a presumption of fault that shifts the burden of production and persuasion to a moving vessel who, under her own power, allides with a stationary object."The moving vessel may rebut the presumption by showing, by a preponderance of the evidence, that (1) the collision was the fault of the stationary object (or other vessel), (2) the moving ship acted with reasonable care, or (3) the collision was anunavoidable accident.

When one of these principles applies, the presumption shifts the burden of proof to the vessel owner — both the burden of producing evidence and the burden of persuasion — which must show that it was without fault or that the collision was the result of an inevitable accident, i.e., an Act of God. Where a party invokes the Act of God defense and alleges that suchvis major(also "superior force") event caused the accident (i.e., no fault of the vessel owner), the vessel owner bears a heavy burden to demonstrate that its "drifting was the result of an inevitable accident, or avis major, that human skill and precaution and a proper display of nautical skill could not have prevented."In addition, a party that invokes Act of God with respect to inclement weather must prove not only that the weather was heavy, "but also that it took reasonable precautions under the circumstances as known or reasonably to be anticipated."In other words, the party must show that it took reasonable precautions under the circumstances to prevent the breakaway, collision, or allision.If any human negligence was a contributing cause of the incident, the Act of God defense will be defeated.This is because an Act of God is such a catastrophic event that the exercise of reasonable care or reasonable precautions could not have prevented the loss.

Hurricanes are generally regarded as Acts of God, but we also know that COVID and unexpected ice storms in the deep south and west may qualify. Even though storms are not unusual for the Gulf of Mexico, courts recognize that a hurricane or other weather event that causes unexpected and unforeseeable devastation with unprecedented wind velocity, storm surges, flooding, etc., is a classic case of an Act of God. For example, following Hurricane Katrina, the US District Court for the Eastern District of Louisiana held in one case that a Category 4 or 5 hurricane was an Act of God sufficient to bar a claim by a marina owner against the owner of a vessel that broke away from her berth, drifted, and hit another vessel. The Act of God defense applied because (1) the accident was due exclusively to natural events without human negligence and (2) there was no negligent behavior. In another case, the same district court held that hurricanes are considered in law to be an Act of God unless there is an intervening and contributing act of individual negligence — which presumes the parties having taken reasonable precautions based on the available information. In 2024 Hurricanne Beryl a category 1 hurricane caused devastating and unexpected flooding.The relevant inquiry always revolves around what reasonable precautionary steps the vessel owner took ahead of the storm (or should have taken).

For example, in a 2010 case, the Eastern District of Louisiana court considered whether reasonable precautions had been taken by a marina to protect a sailboat in Hurricane Katrina under both Louisiana and maritime law,reviewing several other Katrina cases in the process.Inone,the district court was asked to review a contract of affreightment for a cargo of wheat aboard a barge that sunk.The defendant was found not negligent in delivering its barge of cargo several days before the weather forecast accurately predicted the landfall of Katrina.In another, the court affirmed that the Act of God defense applied to the loss of a vessel properly moored well before it became apparent that Hurricane Betsy would strike.

Regardless of whether such cases are brought in federal court or state court, the Act of God doctrine will apply. For example, following Hurricane Rita, Jones Walker successfully defended its client in a Louisiana state court by invoking the Act of God defense in response to a barge breakaway in Lake Charles that struck and destroyed a bridge. Following a trial, the jury exonerated the defendant vessel owner, finding that Hurricane Rita caused the loss, not any alleged act of the barge owner. Act of God defenses were also raised during COVID because of its disruption of services and the provision of goods.

Contractual Performance Clauses — Act of God

Clauses regarding demurrage, detention, or laytime usually involve delays in the loading or unloading of cargo or the delivery of goods and materials.Laytimeis the period of time allowed for loading and unloading.Demurrageanddetentionare sums paid to compensate for time lost related to the delivery of equipment or cargo.Demurrage begins to run after the passage of laytime or the agreed time of delivery and performance.Damages are awarded for failure to perform.Clauses on deviation address the obligation to maintain a proper course in ordinary trade and to timely arrive at the agreed destination.All deviation clauses are subject to certain liberties.Any deviation may affect insurance and hire.

Typically a contract for maritime services can be terminated for cause or for convenience. Similarly, parties may negotiate terms to suspend performance, which would suspend payment of hire and performance of services.Asuspension clauseis typically an off-hire clause in which the contract terms remain, but no hire is paid.Usually a vessel owner will be compensated and reimbursed for certain additional expenses if a contract is terminated for convenience.An Act of God clause excuses delays in performance, but in most cases it serves to either suspend performance or terminate the contract for cause as between the parties.

Conclusion

Following major hurricanes like Katrina, Laura, Ida, Beryl and other storms, vessel owners and operators may invoke the Act of God defense (with respect to both tort liability and contractual obligations). But to successfully invoke the defense, the vessel owner faces a high burden in proving that human negligence did not cause the loss. Such a burden requires certain evidence, testimony, and other proof.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.