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Recent Supreme Court of Pennsylvania Ruling May Impact Interpretation of Force Majeure in Future COVID-19 Disputes  

by Laura Baucus, Peter Grace

Published: April, 2020

Submission: April, 2020

 



A recent decision by the Supreme Court of Pennsylvania concerning a challenge to Governor Tom Wolf’s executive order relating to COVID-19 could impact disputes nationwide that arise out of the pandemic and involve a determination of whether COVID-19 constitutes a “natural disaster” or other like term within the context of force majeure clauses.


In its April 13, 2020, decision inFriends of Devito v. Wolf,[1] the court dismissed statutory and constitutional challenges by several business owners (“Petitioners”) who contended that the Governor lacked statutory authority to issue an executive order that compelled the closure of all non-life-sustaining businesses within the state in order to curb the spread of COVID-19.[2] The Petitioners also argued that even if the Governor had such statutory authority, that the executive order violated their constitutional rights. Petitioners’ arguments required the court to determine whether the COVID-19 pandemic was a “disaster” under the Pennsylvania Emergency Code which granted emergency powers to the Governor.[3]The court noted that “disaster” under the Emergency Code is defined as “[a] man-made disaster, natural disaster or war-caused disaster” and that “natural disaster” is further defined as “any hurricane, tornado, storm, flood, high water, wind-driven water, tidal wave, earthquake, landslide, mudslide, snowstorm, drought, fire, explosion or other catastrophe which results in substantial damage to property, hardship, suffering or possible loss of life.”[4]


Petitioners contended that because a viral illness like COVID-19 was not included in the list of applicable disasters, the court was required to apply the doctrine ofejusdem generis“which prevents the expansion of a list of specific items to include other items not ‘of the same kind’ as those expressly listed.”[5] The court determined that “[i]t is beyond dispute that the COVID-19 pandemic is unquestionably a catastrophe that ‘results in… hardship, suffering or possible loss of life.’”[6] Thus, the question then became whether the COVID-19 pandemic could be classified as a “natural disaster” based on the application of the doctrine ofejusdem generis.[7] The court concluded that it could, including, among other reasons, due to the definition of “natural disaster.”


There is little case law analyzing the language of force majeure clauses related to diseases or pandemics. Further, the manner in which a force majeure clause will be interpreted will vary on a case by case basis and will depend on the specific language used in the contractual provision.


Nevertheless, while the court’s analysis inFriends of Devito v. Wolffocused on how “natural disaster” is defined in the Pennsylvania Emergency Code, the case provides a preview of an issue courts across the country will face when interpreting whether the language of a force majeure clause includes the COVID-19 crises, including whether the crises falls within the term “natural disaster” or similar terms.


For more information on this topic, please contact Laura Baucus (248-203-0796 or [email protected]) or your Dykema relationship attorney.


Stay ahead of emerging issues with Dykema's COVID-19 Legal Resource Center and subscribe to all relevant publications so you can easily leverage information, stay up to date on evolving developments, and better position yourself for success.

 


 

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