The Garamendi Amendment: How Four Words Changed the Entire Offshore Wind Industry in America - American Bar Association

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The Garamendi Amendment: How Four Words Changed the Entire Offshore Wind Industry in America - American Bar Association
Summer 2021

COMMITTEE NEWS
Admiralty and Maritime Law
The Garamendi Amendment: How Four
Words Changed the Entire Offshore Wind
Industry in America
In January of 2021, four words, including non-mineral energy resources, flipped
the entire offshore renewable energy market on its head.1 Offshore wind will be
a significant part of the future of American energy, and it has the potential to
harness almost double the power needed to feed the nation’s electricity grid. 2
America has one operational wind farm off the coast of Rhode Island, powering
the 1000 resident community of Block Island.3 This lone wind farm should morph
                                                                                        Jessie Elizabeth Shifalo
into a $70 billion industry in the United States by 2030.4 If companies are not
required to use American supplies, shipyards, and workers to make that happen,          Jessie Elizabeth Shifalo is a student
                                                                                        at Tulane Law School, Class of 2022.
it becomes a $70 billion industry that offers its benefits abroad. While offshore oil
                                                                                        Jessie Elizabeth can be reached at
exploration in the U.S. is currently at a standstill, and our economy struggles to      jessie.elizabeth.shifalo@gmail.com.
survive a pandemic, the country’s offshore industry could certainly use the boost
from this developing market.                                                            Editor’s Note: Jessie’s article was
                                                                                        selected as the winner of the 2021
America’s lawmakers addressed this by requiring offshore renewable energy               ABA TIPS AMLC law student writing
installations to be constructed and serviced by American-built and crewed ships         competition held in conjunction with
                                                               Read more on page 26     Gard N.A.

                                                                                          In This Issue
                                                                                          • The Garamendi Amendment:
                                                                                            How Four Words Changed
                                                                                            the Entire Offshore... 1
                                                                                          • Chair Message 4
                                                                                          • Editor Message 6
                                                                                          • The Domino Effect: the
                                                                                            Dutch Shell Ruling and the
                                                                                            Rest of the World 8
                                                                                          • Trade Talk – Colleen
                                                                                            Patterson 9
                                                                                          • The Jones Act: An Obstacle
                                                                                            to Offshore Wind Production
                                                                                            in the U.S. 13
                                                                                          • Expect the Unexpected:
                                                                                            An Analysis of Whether
                                                                                            COVID-19 is a... 14

       Uniting Plaintiff, Defense, Insurance, and Corporate Counsel to Advance the Civil Justice System
The Garamendi Amendment: How Four Words Changed the Entire Offshore Wind Industry in America - American Bar Association
Admiralty and Maritime Law                                                   Summer 2021

Leadership Roster

Chair                           Membership                      Daniel Bentson               Christopher Hamilton
Aaron Greenbaum                 Vice-Chair                      Bullivant Houser Bailey PC   Shutts & Bowen
Pusateri Johnston Guillot &                                     925 4th Ave, Ste 3800        4301 W Boy Scout Blvd, Ste 300
                                Chase Jansson                   Seattle, WA 98104-1129       Tampa, FL 33607
Greenbaum                       Campbell Johnston Clark LLP
1100 Poydras St, Ste 2250                                       (206) 292-8930               (813) 229-8900
                                2600 Douglas Road, Ste 508      dan.bentson@bullivant.com    Fax: (813) 227-8211
New Orleans, LA 70163-2300      Miami, FL 33134
(504) 620-2500                                                                               chamilton@shutts.com
                                (786) 473-0810
aaron.greenbaum@pjgglaw.com     Chase@CJCLaw.com                Peter Black
                                                                Mills Black LLP              Grady Hurley
Chair-Elect                                                     1215 19th St NW              Jones Walker LLP
                                Plaintiff                       Washington, DC 20036         201 Saint Charles Ave, 48th Fl
Juliette McCullough             Vice-Chair                      (646) 902-1773               New Orleans, LA 70170-1000
Peacock Piper Tong + Voss LLP                                   pblack@millsblack.com        (504) 582-8224
100 West Broadway, Ste 610      Jessica Ibert
                                Lewis Kullman Sterbcow                                       Fax: (504) 589-8224
Long Beach, CA 90802                                                                         ghurley@joneswalker.com
(415) 398-6000                  & Abramson                      David Boyajian
Juliettebwhite@gmail.com        601 Poydras St, Ste 2615        Schwabe Williamson & Wyatt
                                New Orleans, LA 70130           1211 SW 5th Ave, Ste 1900    James Koelzer
                                (504) 262-8345                  Portland, OR 97204           Clyde & Co LLP
Immediate                       Fax: (504) 588-1514             (503) 796-2943               355 S Grand Ave, Ste 1400
Past Chair                      jibert@lksalaw.com              Fax: (415) 227-4255          Los Angeles, CA 90071
Stephanie Penninger                                             dboyajian@schwabe.com        (213) 358-7620
XPO Logistics Inc               Scope Liaison                                                Fax: (310) 229-5800
11215 N Cmnity Hse Rd, Fl 9                                     Philip Brickman              James.Koelzer@clydeco.us
                                Zachary Rubinich
Charlotte, NC 28277-4960        Rawle & Henderson LLP           Degan Blanchard & Nash
(704) 323-7647                  1339 Chestnut St, 16th Fl       400 Poydras St, Fl 26        Max Malvin
Fax: (312) 767-9192             Philadelphia, PA 19107          New Orleans, LA 70130-3245   643 Magazine St, Ste 405
Stephanie.Penninger@xpo.com     (215) 575-4340                  (504) 529-3333               New Orleans, LA 70130-3433
                                Fax: (215) 563-2583             Fax: (504) 529-3337          (504) 323-5885
Council                         zrubinich@rawle.com             pbrickman@degan.com          maxmalvin@gmail.com
Representative,                                                 Michael Daly                 Jessica Martyn
Newsletter Editor               Social Media                    Pierce Atwood LLP            Link Martyn PLLC
Christopher Nolan               Vice-Chair,                     1 Financial Plz, Fl 16       1407 S Leithgow Terrace
Holland & Knight LLP            Technology                      Providence, RI 02903-2485    Philadelphia, PA 19147
31 W 52nd St, Fl 11             Vice-Chair                      (401) 588-5113               (757) 6154753
New York, NY 10019-6111                                                                      jmartyn@linkmartyn.com
(212) 513-3307                  Allison Skopec
                                Winston & Strawn LLP            Robert Gardana
Fax: (212) 341-7237                                             Robert L Gardana PA          David McNeal
chris.nolan@hklaw.com           200 Park Ave, #40
                                New York, NY 10166-0005         12350 SW 132nd Ct, Ste 204   McNeal Law Group PLLC
                                (212) 294-3278                  Miami, FL 33186-6458         2950 North Loop W, Ste 500
Diversity                       askopec@winston.com             (305) 358-0000               Houston, TX 77092-8830
Vice-Chair                                                      Fax: (305) 358-1680          (832) 819-3281
                                                                robert@gardanalaw.com        dmcneal@mcneallawgroup.com
Jeanne Amy                      Vice-Chairs
Jones Walker LLP                Kirby Aarsheim
201 Saint Charles Ave, Fl 48                                    Danielle Gauer               Matthew Moeller
                                Farrell Smith O’Connell LLP     M G & M Law Firm             Moeller Firm LLC
New Orleans, LA 70170-1000      27 Congress St, Ste 109
(713) 437-1800                                                  600 Brickell Ave, Ste 1400   650 Poydras St, Ste 1207
                                Salem, MA 01970                 Miami, FL 33131-3068         New Orleans, LA 70130-7215
jamy@joneswalker.com            (617) 508-9891                  (305) 537-3422               (504) 702-6794
                                kirbyaarsheim@gmail.com         dgauer@mgmlaw.com            matthew@moellerfirm.com
Law Student
Vice-Chair                      Yaakov Adler                    Sarah Gayer                  Jeanne Noonan
Holli Packer                    Freehill Hogan & Mahar Llp      Thompson Bowie & Hatch LLC   Willcox & Savage
2301 Joseph St                  80 Pine Street, 25 Fl           PO Box 4630                  440 Monticello Ave, Ste 2200
New Orleans, LA 70115-6513      New York, NY 10005-1759         Portland, ME 04112-4630      Norfolk, VA 23510
(201) 873-4244                  (212) 381-3026                  (207) 774-2500               (757) 628-5554
hpacker@tulane.edu              Fax: (212) 425-1901             Fax: (207) 774-3591          jnoonan@wilsav.com
                                adler@freehill.com              sgayer@thompsonbowie.com

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The Garamendi Amendment: How Four Words Changed the Entire Offshore Wind Industry in America - American Bar Association
Admiralty and Maritime Law                                                       Summer 2021

  Leadership Roster | continued

  Pamela Palmer                   Catherine Saylor                Sarah Sweet                      Christine Walker
  Clark Hill PLC                  Munch & Munch, P.A.             Borden Ladner Gervais LLP        Fowler White Burnett PA
  1055 W 7th St, Ste 2400         600 S Magnolia Ave Ste 325,     Bay Adelaide Centre East Tower   1395 Brickell Ave, Fl 14
  Los Angeles, CA 90017-2550      Tampa, FL 33606-2764            22 Adelaide St W                 Miami, FL 33131
  (213) 417-5168                  (813) 2541557                   Toronto, ON M5H4E3               (305) 789-9217
  Fax: (213) 488-1178             casey@munchandmunch.com         (416) 367-6590                   cwalker@fowler-white.com
  ppalmer@clarkhill.com                                           ssweet@blg.com
                                  Kelly Scalise
  Stephanie Propsom               Liskow & Lewis                  Douglas Truxillo                 *Former Chairs of TIPS AMLC
  826 N Duluth Pl                 701 Poydras St, Ste 5000        Onebane Law Firm
  Sturgeon Bay, WI 54235-2959     1 Shell Sq                      PO Box 3507
  (920) 743-5020                  New Orleans, LA 70139           Lafayette, LA 70502
  stephanie.propsom@hotmail.com   (504) 299-6110                  (337) 2372660
                                  Fax: (504) 556-4108             Fax: (337) 266-1232
  Ann-Marie Roach                 ktscalise@liskow.com            truxillod@onebane.com
  Gard (North America) Inc.
  40 Fulton Street, 16th Floor    Katriel Statman                 Raymond Waid
  New York, NY 10038              Baker Donelson                  Liskow & Lewis
  (646) 8125644                   1301 McKinney St, Ste 3700      701 Poydras St, Ste 5000
  ann.marie.roach@gard.no         Houston, TX 77010               New Orleans, LA 70139-5000
                                  (713) 210-7443                  (504) 581-7979
                                  kstatman@bakerdonelson.com      rwaid@liskow.com

                                                                                                     ©2021 American Bar Association, Tort
                                                                                                     Trial & Insurance Practice Section,
                                                                                                     321 North Clark Street, Chicago,
                                                                                                     Illinois 60654; (312) 988-5607. All
                                                                                                     rights reserved.
                                                                                                     The opinions herein are the authors’
                                                                                                     and do not necessarily represent
                                                                                                     the views or policies of the ABA,
                                                                                                     TIPS or the Admiralty and Maritime
                                                                                                     Law Committee. Articles should
                                                                                                     not be reproduced without written
                                                                                                     permission from the Copyrights
                                                                                                     & Contracts office (copyright@
Connect with                                                                                         americanbar.org).

Admiralty & Maritime Law                                                                             Editorial Policy: This Newsletter
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                                                                                                     Law Committee of the Tort Trial &
                                                                                                     Insurance Practice Section of the
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Stay Connected                                                                                       reports, personal opinions, practice
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with TIPS                                                                                            of interest by nonmembers. Neither the
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We encourage you to stay up-to-date on important Section news, TIPS meetings                         Editors endorse the content or accuracy
                                                                                                     of any specific legal, personal, or other
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of the links.
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Admiralty and Maritime Law                                           Summer 2021

  Chair Message

While some organizations hit the pause button over the past year, this committee
pressed forward. No one lamented that many of us have not seen in each in person
since October 2019. Rather, we created new opportunities for connecting and
learning, relying on the strength of our diverse membership. As always we strive to
become a more diverse group and to include new members in productive committee
roles immediately.

Our success over the past year is owed to the foundation laid by our former chairs.
Stephanie Penninger of XPO Logistics, Charlotte, NC, faced the beginning of the
Covid-19 pandemic head on and positioned us to thrive during a “virtual” year.
Through the hard work of former chair, Robert Gardana, Miami, FL, this committee          Aaron Greenbaum
                                                                                          Pusateri, Johnston, Guillot &
recently published through the ABA, the book Damages Recoverable in Maritime
                                                                                          Greenbaum, LLC
Matters (2nd Edition). Each month during our Zoom business meeting, we have
featured a chapter from the book presented by that chapter’s author or authors. This
monthly effort has been spearheaded by our incoming chair-elect, Doug Truxillo,
Onebane Law Firm, Lafayette, LA. Former Chair, Christopher Nolan, Holland
& Knight, NYC, has led our committee’s effort to introduce an ABA resolution in
support of ratification of the United Nations Convention on the Law of the Seas.

The work and planning of our incoming chair, Juliette McCollough, Peacock Piper
Tong + Voss LLP, San Francisco, CA, has been crucial to our committee having
some amazing and groundbreaking accomplishments over the past year.

     •   On November 10, 2020, Jeanne Amy of Jones Walker, New Orleans, LA,
         introduced and Christopher Nolan moderated our first ever Diversity and
         Inclusivity Webinar Roundtable, focusing on racial diversity with a fantastic
         panel of practitioners and in-house counsel. The panelists addressed their
         paths into the maritime industry, their career experience in different sectors
         of legal practice, and how the maritime industry should take meaningful
         steps to encourage greater racial diversity and equality.

     •   On November 17, 2020, Christopher Hamilton of Shutts & Bowen LLP,
         Tampa, FL, moderated a Hurricane Loss Happy Hour Webinar, addressing
         the “Do’s and Don’ts” of handling hurricane related claims and featuring
         a diverse panel of practitioners, claims managers, marina experts, and
         surveyors.

     •   On December 3, 2020, AMLC teamed up with the International Animal
         Law Committee of the ABA International Law Section to present a webinar
         on Wildlife Trafficking in the Maritime Industry: Risks for Your and Your
         Maritime Client to be Aware Of. The panel provided background on how

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    wildlife traffickers use maritime supply chains to facilitate the illegal trade of
    wildlife and wildlife products globally and what tools are at the disposal of
    the government to detect and enforce anti-trafficking laws.

•   In January 2021, Christopher Hamilton and Michael Amy, Deutsch Kerrigan,
    New Orleans, LA, submitted the AMLC’s annual Recent Developments
    contribution to the ABA Tort Trial & Insurance Practice Law Journal.

•   On February 25, 2021, our committee conducted a second Diversity and
    Inclusivity Roundtable Webinar — Pathways to Practice - Recognizing the
    Value of Veterans in Private Practice and Public Service. Introduced by
    Jeanne Amy and moderated by Sean Pribyl, Holland & Knight, Washington,
    D.C., the program focused on veterans who bring unique attributes to
    the public and private legal sectors, such as leadership, discipline, and
    dependability, although a pathway to practice is not always clear. To this
    end, the amazing group of panelists provided their experiences in finding
    opportunities in the public and private sector after transitioning from a
    military career of active duty service.

•   On March 12, 2021, we held our virtual, standalone CLE program, Admiralty
    Disruption 2021. Demonstrating our commitment to diversity, every panel
    and discussion was woman led with a majority of women panelists. Past-
    chair, Jessica Link Martyn of Link Martyn, PLLC, moderated the panel The
    Changing Face of Maritime Shipping in the 21st Century: It’s a Woman’s
    World. Incoming chair, Juliette McCollough, moderated the panel The
    Business of Shipping in the Next Decade from In-House Counsels’ View:
    Vaccine or Bust. With an introduction by past-chair, Pam Palmer, Clark
    Hill LLP, Los Angeles, CA, the keynote address, Marine Insurance at
    the Tipping Point, was given by Leanne O’Loughlin, Regional Director at
    Thomas Miller Americas/UK P&I. During social hour, our Social Media/
    Tech Vice-Chair, Allison Skopec, Winston & Strawn, NYC, led us through a
    mixology masterclass where we learned to make “The Disrupter” cocktail.

•   On June 25, 2021, Allison Skopec proudly announced the winners of
    the ABA TIPS AMLC + Gard annual Student Writing Competition. First
    place went to Jessie Shifalo of Tulane University School Law, who wrote
    a riveting piece on the offshore wind industry in the U.S., with a focus
    on the Garamendi Amendment. Second place went to Alyssa Lemire of
    Roger Williams University School of Law, who wrote an engaging piece on
    offshore wind with a focus on the Jones Act. Third place went to Jean Smith

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Admiralty and Maritime Law                                        Summer 2021

        of Tulane University School of law, who wrote a very topical piece analyzing
        COVID-19 as a force majeure event in maritime contracts.

I can truly say I am honored to have served as the AMLC Chair for the 2020-2021
year. Although the past year has provided us with many challenges, I believe those
challenges have only made the bonds among our committee members stronger.
I look forward to seeing some of you in Dallas in October 2021 for the TIPS Fall
Leadership Meeting, many of you in Baltimore for the TIPS Section Conference in
April 2022, and all of you in New Orleans for Admiralty Disruption 2023.

  Editors Message

It is our pleasure to present the TIPS AMLC Spring / Summer 2021 Newsletter.
This is a double issue due to the packed content we have. The law student writing
competition winner and runners-up pieces are worthy of your time. Separately, an
important look at a foreign court ruling that can have impact in the US is presented
by new member Cynthia Olawu. Our Trade Talk piece features Colleen Patterson
at Liberty Mutual for a wide ranging discussion.

We are currently looking for submissions for the next newsletter, and encourage
                                                                                       Chris Nolan
committee members and non-members alike to submit article proposals directly to        Managing Editor
us at chris.nolan@hklaw.com; CHamilton@shutts.com; and Laura B. Knoll LKnoll@
amrl.com. Thank you to the authors who have contributed to this newsletter, and        Holland & Knight LLP
to the section members for their ongoing efforts in supporting this publication.       Phone 212.513.3307
                                                                                       www.hklaw.com

                                                                                       Chris Hamilton
                                                                                       Laura Beck Knoll
                                                                                       Associate Editors

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The Tort Trial &
Insurance Practice
Section Introduces
a New Advertising
Opportunity!

The rates for advertising in this publication are:
AD SIZE OPTIONS           DIMENSIONS                  COST

1/4 PAGE                 3.625” × 4.625”            $650.00
1/3 PAGE                 3.625” × 3.0625”           $850.00
1/2 PAGE                 7.375” × 4.625”           $1,250.00
1/2 PAGE ISLAND          3.625” × 9.375”           $1,500.00
2/3 PAGE                  3.625” × 6.25”           $1,800.00
FULL PAGE                8.375” × 10.875”         $2,400.00
INSIDE BACK COVER        8.375” × 10.875”         $2,750.00
INSIDE FRONT COVER       8.375” × 10.875”         $3000.00
BACK COVER               8.375” × 10.875”         $3,500.00

Additional information and print/online advertisement opportunities including
discount options and complete media kits can be found by reaching out to M.J.
Mrvica Associates, Inc., mjmrvica@mrvica.com

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The Domino Effect: the Dutch Shell Ruling
and the Rest of the World
Introduction
The decisions of the Dutch Courts in State of the Netherlands v. Stichting Urgenda
(2019) (Urgenda Climate Case) and Friends of the Earth Netherlands v. Royal Dutch
Shell Plc. (2021) have made Europe the first continent to respond, judicially, to the
ensuing global conversation on Climate change.1 By these decisions, their response
is that both Government and Private citizens are responsible for the reduction of
carbon and greenhouse gas emissions, in line with the Paris Agreement of 2015.
                                                                                          Cynthia Tenilola Olowu
From the Intergovernmental Panel on Climate Change (IPCC) report of 1990 to the
Kyoto Protocol and its Doha Amendment of 1997 and 2012 respectively, to the Paris         Cynthia is an Admiralty and Maritime
Agreement of 2015, major nations of the world have come together to try to set            LLM Candidate at Tulane University
                                                                                          Law School, with 3 years’ experience
parameters for this concept mankind is gradually starting to get familiar with.           as a Maritime Attorney in Lagos,
                                                                                          Nigeria. She can be reached
As with the creation of any rule of law, several factors play a role. According to        at colowu@tulane.edu and on
the United Nations2, the rule of law requires measures to ensure adherence to             504.505.4282.
the principles of supremacy of the law, equality before the law, accountability to
the law, fairness in the application of the law, separation of powers, participation
in decision-making, legal certainty, avoidance of arbitrariness, and procedural and
legal transparency. The United Nations contend that the Paris Agreement is a legally
binding international treaty on climate change, following its adoption by state parties
and its entry into force on November 4, 20163. Thus, is it fair to connote that as a
legally binding treaty, the provisions of the Paris Agreement be subject to the same
parameters of the rule of law?

The Suit
According to Article 6:162 of the Dutch Civil Code, one of the categories for a
claim arise from torts, includes acts/omissions that violate a rule of unwritten law
pertaining to proper social conduct. In view of this, variants of the duty of care can
arise in this instance – and this was the basis upon which the Friends of the Earth
(“Milieudefensie”4) filed this claim against Royal Dutch Shell (“Shell”). In its claim,
Milieudefensie contended that Shell had a duty of care, not to negligently endanger
the claimants – which consisted of not only the Friends of the Earth, but over 17,000
individual complainants – affected by the current carbon emissions of Shell. The
claimants also relied on the fundamental human rights guaranteed by the European
Convention on Human Rights and other international conventions, and finally on
the provisions of the Paris Agreement and its limits on carbon emissions. In a novel
                                                                Read more on page 39

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                             TRADETALK
     Our quarterly Trade Talk piece features Colleen Patterson, Marine Claims
                       Manager at Liberty Mutual Insurance.

Q. Colleen, tell us how you got into                                                        or claims handling, it took quite
the marine insurance industry?                                                              a few interviews and some
A. My entrance into the maritime                                                            convincing that I was the right
field was a funny one, because I did                                                        person for the job. Eventually
not practice maritime law while in                                                          I was offered the position and
private practice! I practiced at smaller                                                    have been at Liberty Mutual for
firms in New Jersey. My specialty                                                           over 12 years now working with
was representing public entities. I                                                         Chris.
had some experience with insurance
defense, but not a whole lot, mostly in the realm of            Q. How was your introduction into claims handling?
workers’ compensation defense. Defending public entities
                                                                A. I still remember it to this day. On my first day as a claims
gave me a ton of experience with trial preparation, time
                                                                handler, I was handed a claims adjuster book (something
in the courtroom, and proceeding through trial. However,
                                                                like “How to Handle Claims”), a form P&I policy, and a form
private practice started to wear me out, particularly billing
                                                                Hull Policy. I said to myself, what the heck is Restraints
and constant travel to attend public meetings for my
                                                                of Princes? I went from knowing nothing about the Jones
clients. After 9 years of private practice, I started to look
                                                                Act to taking a deep dive into learning. The fact that I had
around for different types of jobs and one day I received
                                                                experience in private practice gave me a great perspective
a call from Christopher Frick, an attorney who left the
                                                                on the claims handling process. I would ask why we were
firm about a year before. I honestly had no idea what he
                                                                spending defense costs on filing certain motions, whether
was doing after leaving private practice, but he called
                                                                they were necessary, and why defense costs seemed
and asked if I wanted to interview with Liberty Mutual
                                                                to be exceeding the value of certain claims. I would ask,
in its marine claims department. Liberty was looking for
                                                                “what is the goal?”
claims handlers with law degrees. Since I did not have
any prior knowledge of marine insurance, maritime law,

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Q. Was it difficult to go from private practice to claims handling?
A. I had a huge identity crisis when I went from being a practicing litigator to a non-
practicing claims handler. I was used to being “out front” defending my clients and I
took a lot of pride in that. Now my law licensed is inactive. I still really miss being in
the courtroom. The hardest part going from litigating to insurance is the mindset of
“is their coverage?” I must remind myself, I am not the attorney and I must rely on
my counsel concerning coverage if I question coverage. Although the one thing that
did translate well was building a relationship with the brokers and insureds, even
though we are getting them on their worst day. Since I worked at a small firm, I was
used to being hands on with clients and now get to do the same with claims. Having
a good rapport with an insured is probably the most important thing we do as claims
handlers, other than adjusting claims.

Q. What are some of the biggest differences you have encountered going
from private practice at a smaller firm to a corporate setting?
A. I had only worked at two small law firms – ten attorneys maximum. When I walked
into Liberty Mutual, it was intimidating because I was no longer one of ten, but one
of ten thousand. I went from having a secretary and an office to no secretary and
a cubicle. As opposed to private practice, I was now in a 9-to-5 job. Nobody cared
if I worked past 5 pm, but I had to be present, and at my desk, during those hours.
Conversely, in private practice I was rarely at my desk and was rewarded for working
long hours. I would say it was 2 to 3 years before I became fully comfortable in a
corporate setting. This was also when knowledge of the insurance industry started
to click for me. Plus, did I mention that I actually get vacation time now?

Q. Can you tell us about some of the biggest challenges you are facing now?
A. The business of our insureds seems to be ever-changing. Companies that
only performed marine-related contracting work are now doing work on land. For
instance, a marine contractor is now dredging inland and laying fiber optic lines.
This type of work is really changing the scope of handling claims. Another example
is that general liability policies are beginning to cover many different aspects of our
insureds’ businesses, like company vehicles and motor vehicle accidents. This is
big departure from strictly focusing on marine claims. So we seem to be moving a
little bit away from solely marine, and marine general liability policies are becoming
a sort of “catch all.” I find that I can’t always be sure what an insured truly does until
we get a claim from them. Then I go to our underwriters and say, did you even know
they were doing this work?! Another challenge I face is that I still think like a lawyer
sometimes and I can’t help but do 2 hours of work on a Sunday.

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Admiralty and Maritime Law                                                      Summer 2021

Q. What are your favorite aspects of the marine insurance industry?
A. Truly, no two days are ever alike. This keeps my job very interesting. There is
such a big difference between a Jones Act claim and marine general liability claim.
I believe people stay in marine claims (and maritime legal practice) because this
is a vast, complex, and constantly evolving field. We are still defining terms like
“seaman” and “vessel.”

Q. What do you look for in outside legal counsel?
A. I look for firm that is not going to give us the run around. I ask, what do you
think? What is plan? Don’t sugarcoat liability and damages issues. I would rather
know we have questionable defenses at the beginning of a matter then find out
2 years later. We have a list of counsel that we use, but not all counsel are great
for the same case. Some may be good for a Jones Act personal injury defense,
whereas another may be better at handling action-over claims. Overall, I want clear
and concise recommendations, as well as education throughout the claim. One of
my biggest complaints is when attorneys don’t provide the Motions they have filed. I
want to understand the legal aspects of the claim and our arguments. In sum, what
did we file and why? Having worked in a law firm, I know this is important.

Q. What organizations do you find most useful?
A. Other than the TIPS Admiralty and Maritime Law Committee, I find myself
always attending seminars put on by the American Institute of Marine Underwriters
(AIMU). It is a great source of information for those who work in the marine
insurance industry.

       Benefits of AMLC Membership

       Opportunities To Become Involved
       ■ Publication in the AMLC Newsletter                          ■ Leadership Positions
         or TIPS Law Journal                                         ■ Mentoring Relationships
       ■ Networking Opportunities                                    ■ Young Lawyers and Law Student Writing
       ■ CLE and Webinar Opportunities                                 Competition

       Additional Information
       For more information regarding the benefits that membership in the AMLC can provide to you, check out our webpage at
       http://ambar.org/tipsadmiralty and join our group on LinkedIn. The Committee is open to all, including non-lawyer maritime
       professionals, law students and lawyers in every practice area who want to keep abreast of developments in the field.

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Admiralty and Maritime Law                          Summer 2021

F   I   N   D    Y   O   U   R       C    O   M    M    U   N   I    T   Y

                                     a m b a r. o r g / t i p s c o n n e c t

                                         ambar.org/tipsconnect

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Admiralty and Maritime Law                                              Summer 2021

The Jones Act: An Obstacle to Offshore
Wind Production in the U.S.
I. Introduction
With the increased call to address climate change, and create energy independence
in the U.S., interest in offshore wind has grown. As of December 2020, the Bureau
of Ocean Energy Management had issued sixteen commercial leases in the U.S. to
offshore wind developers for projects in federal waters.1 Offshore wind energy has
the potential to be a significant source of energy for the United States. The wind
power in these leases alone totals over 21 gigawatts of potential capacity.2
                                                                                            Alyssa Lauren Lemire,
However, construction of offshore wind farms in the U.S. faces a regulatory obstacle.       J.D., M.M.A.
Specially designed ships called wind turbine installation vessels (“WTIVs”) are
                                                                                            Alyssa is a graduate of Roger Williams
required for efficient installation.3 Ideally, a WTIV could load wind turbine parts from    University School of Law, Class of
a port on the U.S. mainland and transport the parts to the location of the offshore         2021. She also holds a Master of
wind farm site. Then, the WTIV could construct the wind turbines.4 Unfortunately,           Marine Affairs from the University of
                                                                                            Rhode Island and a Bachelor of the
the Jones Act, a federal law, makes this ideal scenario impossible.5 The Jones
                                                                                            Arts in Environmental Studies from
Act requires the transportation of merchandise between two points in the U.S. be            the University of Rochester. She may
transported by vessels which (1) are owned by a U.S. citizen,6 (2) are flagged in           be contacted at alemire365@g.rwu.
the U.S.,7 (3) were built in the U.S.,8 and (4) seventy-five percent of the seamen on       edu.” Editor’s Note: Alyssa’s article
                                                                                            was selected as the first runner-up
the vessel are U.S.’ citizens.9 The Jones Act specifically prohibits non-Jones Act
                                                                                            of the 2021 ABA TIPS AMLC law
qualified vessels from transporting “merchandise” between points in U.S. waters.10          student writing competition held in
Any WTIV which transports materials for the construction of offshore wind turbines          conjunction with Gard N.A.
between two points within the U.S. must meet these four requirements.11 There are
only fifteen WTIVs in the entire world.12 Out of these fifteen, none meet any of the
Jones Act requirements.13

The Jones Act applies to points within the territorial sea of the U.S.14 The territorial
sea includes waters adjacent to the U.S. and three miles seaward from the U.S.
territorial sea baseline.15 Offshore wind turbines within the territorial sea are “points
in the United States” and therefore, the Jones Act applies.16 Whether the Jones
Act applied to offshore wind projects outside the territorial seas, e.g., on the outer
continental shelf, remained unanswered. On January 1, 2021, the National Defense
Authorization Act (“NDAA”) of 2021 was passed into law.17 The NDAA amended
Section 4(a)(1) of the Outer Continental Shelf Lands Act of 1953 (“OCSLA”) to
extend “United States jurisdiction to devices attached to the seabed of the outer
continental shelf (“OCS”) for the purpose of producing non-mineral energy such
as wind energy.”18 As a result, it is clear that wind turbines on the OCS qualify as
                                                                  Read more on page 42

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Expect the Unexpected: An Analysis of
Whether COVID-19 is a Force Majeure Event
in Maritime Contracts and Marine Insurance
Policies
I. Introduction
With over thirty million positive cases in the United States alone,1 and over two million
deaths worldwide,2 Coronavirus, or COVID-19, has indisputably made an impact on
everyday life. From the introduction of Zoom technology, to travel restrictions, to
waiting in line at the grocery store – nothing has been the same since the virus            Jean M. Smith
spread at the beginning of 2020. The adjustments made to recreational activities
also coincide with economic and financial hardships that many individuals have              Jean is a student at Tulane University
                                                                                            School of Law. She can be reached
faced over the past few months. This overall disruption, however, is not exclusive to       at jsmith103@tulane.edu. Editor’s
one person or industry. The maritime sector has also been affected by COVID-19              Note: Jean’s article was selected as
and its subsequent repercussions.3                                                          the second runner-up of the 2021
                                                                                            ABA TIPS AMLC law student writing
As more uncertainties spurred by COVID-19 arise, so do the number of claims for             competition held in conjunction with
contractual non-performance and marine insurance coverage. These claims can                 Gard N.A.

involve shipping delays, warehouse overflow, availability of personnel, and other
business interruptions.4 Due to the unprecedented nature of COVID-19, many
maritime contracts and marine insurance policies do not account for such claims
caused by the pandemic. However, parties, insurers, and policyholders are not
totally defenseless, as force majeure and exclusion clauses exist as a performance
or coverage “safety net.” Yet, there is some question as to whether COVID-19 is
considered a force majeure event in maritime contracts. The answer to this question
depends on the interpretation of the clause at hand.

In Part II, there will be a discussion of how force majeure and exclusion clauses
are interpreted within maritime contracts and marine insurance policies.5 Part
III will then discuss whether COVID-19 is a force majeure event and how it has
impacted drafting and interpretation of maritime contracts and marine insurance
policies. Finally, Part IV will discuss the implications surrounding COVID-19 and its
contractual interpretation on the maritime industry.

II. Force Majeure and Exclusion Clause Interpretation
Both maritime contracts and marine insurance policies comes in many forms.
Yet, there is no entrenched federal maritime law regarding contract interpretation.
Unless legislation provides otherwise, general maritime contracts as well as marine
insurance policies are subject to the same rules that govern contracts generally.6

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Admiralty and Maritime Law                                Summer 2021

Thus, “[a]bsent a specific federal rule, federal courts look to state law for principles
governing maritime [contracts and] insurance policies. . .and apply federal maritime
choice of law rules to determine which state’s law to apply.”7

A. Force Majeure Clauses
Although there are varying descriptions of force majeure depending on the
jurisdiction, it is commonly used to refer to an event that is so extraordinary and
outside of the parties’ control that performance cannot be rendered.8 “While some
courts use ‘act of God’ to refer to the harm caused by natural forces, a larger number
seem to use the expression to refer to the natural forces themselves.”9 For instance,
severe weather conditions, such as hurricanes, can be classified as “acts of God”
and are prevalent examples of a potential force majeure event in the maritime
industry. Thus, the damage caused by hurricanes, as well as the hurricane itself,
can both be considered force majeure events, depending on the court.10 Regardless
of the interpretation of what a force majeure event includes, force majeure clauses
can range from “. . .providing for cancellation of the contract in the event that
performance is prevented by circumstances comprehended within the term force
majeure, to clauses. . .containing. . .a list of excusing events.”11

Courts have often considered force majeure and similar “acts of Gods” when
deciding marine contract cases.12 In Lord & Taylor LLC v. Zim Integrated Shipping
Services, Hurricane Sandy was held to be both figuratively and legally an “act of
God” by the United States District Court for the Southern District of New York.13
There, Lord & Taylor, a known department store chain, contracted with Zim, “a
licensed ocean liner carrier,” to transport sweaters and cardigans from Hong Kong
to New York.14 Zim leased space aboard another vessel to store the sweaters and
cardigans in containers for transport.15 When the containers departed from Hong
Kong, they were scheduled to arrive at the New York City container terminal (NYCT)
on a weekend, but since the terminal was closed on the weekends, it would be
delivered to Lord & Taylor officially on the next week/business day.16 The container
terminal was closed on the following business day due to a storm surge linked to
Hurricane Sandy.17 A few days later, truckers picked up the containers and delivered
them to Lord & Taylor.18 Several hundred cartons of sweaters in the containers
were water damaged and consequently destroyed, leaving Lord & Taylor with a
loss of over $200,000 in merchandise.19 Deducting the Carriage of Goods by the
Sea Act (COGSA) package limitation provision, which was agreed to by the parties,
Lord & Taylor’s net loss was approximately $105,000.20 Lord & Taylor sought action
against Zim for this remaining amount in damages under COGSA, alleging that the
Hurricane was foreseeable and that reasonable precautions were not taken by the
container terminal to protect their merchandise.21

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The United States District Court first determined that, in order to “prevail on an Act of
God defense under COGSA, a carrier must show that ‘the damage from the natural
event could not have been prevented by the exercise of reasonable care by the
carrier’.”22 The district court then determined that hurricanes (including Hurricane
Sandy), as well as the “unexpected and unforeseeable devastation” that occurs as
a result of hurricanes, are “classic case[s] of an ‘Act of God.’”23 However, being an
“Act of God” is not sufficient to invoke a force majeure defense, as it must also be
determined whether the “weather conditions were foreseeable at the given time
and location.”24 Further, there must be an absence of negligence on the part of Zim,
determined by whether Zim took “reasonable precautions under the circumstances
as known or reasonably anticipated.”25

The district court evaluated the exercise of reasonable care during Hurricane Sandy
under three measures. First, the container terminal should have foreseen the effects
of Hurricane Sandy, in particular the storm surge, the night before it occurred, as
weather forecasts suggested that the storm was incoming, and historically, such
hurricanes have had such aftershocks.26 Since the storm surge was foreseeable,
the court next looked at whether Zim (and the container terminal) acted reasonably
in response to Hurricane Sandy by reviewing multiple proposed options for flood
barriers and alternative storage of the containers.27 Finally, the court looked at
Hurricane Sandy’s severity, finding that it “exceeded worst-case expectations.”28
The district court ultimately determined that Zim was not liable for Lord & Taylor’s
merchandise, as Hurricane Sandy was an “Act of God” with “not reasonably
foreseeable” severity and aftereffects.29

Since an unprecedented event needs to be foreseen in some capacity, perhaps the
inclusion of a general “catch-all” clause would suffice. However, a drafter must be
wary of such a thought. In TEC Olmos, LLC v. ConocoPhillips Co., the First Circuit
Court of Appeals held that general “catch-all” provisions included in force majeure
clauses must be limited to the other types of force majeure events also listed in the
clause.30 There, TEC Olmos and ConocoPhillips Company entered into a farmout
agreement31 “to test-drill land leased by ConocoPhillips in search of oil and gas.”32
The agreement established a drilling deadline for TEC Olmos with a consequence
of paying $500,000 in liquidated damages to ConocoPhillips if drilling had not
begun by that deadline.33 In addition to these terms, the contract included a force
majeure clause “list[ing] several events that would suspend the drilling deadline,
followed by a ‘catch-all’ provision for events beyond the reasonable control of the
party affected.”34 In particular, a force majeure defense could be invoked “. . .by
reason of fire, flood, storm, act of God, governmental authority, labor disputes, war
or any other cause or any other cause not enumerated herein but which is beyond

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Admiralty and Maritime Law                                 Summer 2021

the reasonable control of the Party whose performance is affected. . . .”35 After the
execution of the agreement, there were changes in the global supply and demand
of oil due to oil price fluctuations.36 As a result, TEC Olmos was unable to meet the
drilling deadline due to lack of funding and raised a force majeure defense based on
the language in the agreement.37

Following the rules of contract interpretation, the First Circuit held that a force
majeure defense could not be invoked because gas market fluctuation was not
listed as a force majeure event in the agreement, nor could it be included in the
general “catch-all” provision.38 The Court of Appeals reasoned that a general “catch-
all” provision would be “meaningless” if every unforeseen event or circumstance
could be considered a force majeure event, as the clause would always permit
nonperformance.39 Further, the Court of Appeals explained that such “catch-all”
provisions require some degree of foreseeability, at least in accordance with the
other circumstances listed as force majeure events, under the doctrine of “ejusdem
generis.”40 “When more specific items in a list are followed by a catch-all “other,” the
doctrine of ejusdem generis teaches that the latter must be limited to things like the
former.”41 By the doctrine of ejusdem generis, fluctuations in oil market prices are not
like any of the other events listed in the force majeure event (e.g., “fire, flood, storm,
act of God, governmental authority, labor disputes, [&] war.”)42 Therefore, general
“catch-all” provisions following force majeure clauses are not acceptable to permit
non-performance alone.

Similarly, in Tug Blarney, LLC v. Ridge Contracting, Inc., the United States District
Court for the District of Alaska denied a charterer’s motion to dismiss a breach of
contract claim due to the constrictive nature of the contract’s force majeure clause.43
There, C&K, a charterer, agreed to transport cargo to various locations throughout
Alaska on behalf of Ridge Contracting.44 C&K already had one tug available but
purchased another to better carry the cargo across rivers.45 During the voyage,
the tug began listing and eventually sunk.46 C&K called the other barge that they
had available to perform a salvage mission for the crew and the barge.47 Ridge
Contracting asserted that C&K breached their contract by not maintaining the tug
properly, while C&K alleged their performance is excused under force majeure.48
The district court reasoned that the force majeure clause found in the Charter
Agreement is “limited to specific events” and cannot be read more broadly because
the language of the agreement does not imply events beyond what is listed.49 Thus,
the “unexplained sinking” of the tow does not “qualif[y] as an act of God under the
force majeure clause” in the agreement.50 Although the events that occurred were
certainly unexpected, the nature of the act, or its classification as “an act of God,”
was not the decisive factor. Instead, the language of the clause, specifically what

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Admiralty and Maritime Law                                  Summer 2021

was listed as a force majeure event within the agreement, determined whether a
force majeure event could be invoked.51

A force majeure event will always be unforeseen, unexpected, and outside of
the parties’ control. However, the foreseeability factor, although essential to the
concept, is not determinative of the legal outcome.52 Instead, the language of the
contract or agreement determines whether the force majeure event is excusable.
An event can be unexpected and beyond the parties’ control, but if it was not listed
within the language of the force majeure clause in the agreement, it does not excuse
non-performance.53 Moreover, a general “catch-all” provision cannot be included
in a force majeure clause, as that defeats the purpose of listing specific force
majeure events and would provide for an excuse of non-performance in almost any
circumstance.54 Finally, a force majeure event itself cannot just be unexpected, as
the foreseeability of the severity of its aftereffects must also be taken into account.55

B. Exclusion Clauses
Exclusion clauses are similar to force majeure clauses as both define risks that
permit nonperformance.56 These exclusions are not necessarily force majeure
events. An exclusion clause could include any event, foreseen or otherwise, so long
as it was agreed to while drafting the contract. For example, in a charter party, there
are a variety of possible exclusions, including trading limits and permitted cargo
aboard a vessel.57 In marine insurance policies, “wear and tear” and an inherent
vice of particular cargo are possible exclusions that would exempt the insurer from
liability.58 None of these exclusions would be considered “acts of God.”

In general, exclusion clauses are more likely to be found in the marine insurance
context, as they “define the risk which the insurer is prepared to accept by way of the
insurance contract.”59 The scope of the clause will be defined to some degree, as
insurers would likely not agree to the coverage otherwise.60 In general, “[e]xclusion
clauses appear in all the main Institute clauses,” in “both the general clauses and
the war and strikes clauses.” 61 In American Institute Hull Clauses Form No. 1.16-1,
for example, under the “War, Strikes, and Related Exclusions” section, the policy
outlines specific events when the insurer will not cover loss or damage. Such events
include “[c]apture, seizure, arrest,” “Civil war, revolution, rebellion,” and “[h]ositilies
or warlike operations.”62 Thus, exclusion clauses, though drafted with specificity, can
cover a broader range of events than force majeure clauses.

III. COVID-19 as a Force Majeure Event
COVID-19 is unquestionably a figurative force majeure event. This particular
pandemic was unforeseeable and beyond anyone’s control, let alone parties to a

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contract. There was no warning nor preparation for this pandemic, especially since
the last pandemic occurred over one hundred years ago.63 In general, pandemics
are arguably more foreseeable or “known,” just because there have been pandemics
and similar communicative diseases in this past. However, this is a very distant
past, and COVID-19 is of a much different magnitude. Despite this classification of
whether COVID-19 is a figurative force majeure event, the main inquiry is whether it
is legally a force majeure event that excuses non-performance or coverage.

Courts are generally unwilling to add outside or supplementary language while
interpreting a maritime contract, thus encouraging strict interpretation of the
contract.64 Understandably, there is a need for the strict interpretation of maritime
contracts and marine insurance policies. The courts do not want to write contracts
on behalf of the parties and parties should not be able to avoid liability for lack of
performance based on an overly broad clauses.65 However, the problem with strict
interpretation (and the need for “some” foreseeability concerning force majeure) is
that some events, such as COVID-19, fall into an ambiguous “in-between.” There
are certain events that no one can expect or foresee, hence the need for force
majeure (and certain exclusion clauses). However, for a force majeure clause to be
invoked (and an excuse of non-performance to be granted), the listed events in the
force majeure clause need to be foreseen and specified to some degree. Otherwise,
courts will not “read in” the unexpected event, consequently refusing to excuse non-
performance or grant coverage.

COVID-19 should be an excused force majeure event, at least in its “early stages.”
When the COVID-19 outbreak began, no one anticipated that a yearlong lockdown
and quarantine period would follow. It was perceived as another international news
headline, “far away” from those in the United States. For the first few months of
2020, with social distancing, mask mandates, government shutdowns, and travel
restrictions, there was no option for most maritime contracts to proceed as planned.
It could not have been a foreseen event, nor presented known risks. However,
COVID-19 became more “anticipated” a few months into 2021. The subsequent
risks associated with COVID-19, being social-distancing, travel restrictions, etc.,
are now known and even expected. There was a global adjustment to COVID-19.
This adjustment does not mean that the disease cannot mutate, or another wave
of increased cases could not happen, but just that COVID-19 and its aftereffects
are more established now than they were in 2020. COVID-19 as a figurative force
majeure event still stands. However, COVID-19 presents more “known” risks now
and would unlikely be considered an excusable force majeure event, especially as
the year progresses.

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Even if COVID-19 is declared a figurative force majeure event, courts will likely
compare interpretation of the pandemic to that of hurricanes. Hurricanes, although
much more frequent than pandemics, are similar in the sense that they are
unforeseen and produce unanticipated consequences (such as damage, flooding,
delay, etc.). In Lord & Taylor, the United States District Court for the Southern District
of New York emphasized that, when determining a force majeure event, it is not only
about whether an event is figuratively a force majeure event. Since hurricanes are
obviously force majeure events, the district court looked further, considering if the
hurricane’s “weather conditions were foreseeable at the given time and location,”
and if “reasonable precautions” were undertaken and anticipated.66 If the severity
of the hurricane “exceeded worst-case expectations,” then it was an excusable
force majeure event.67 Despite there being no “weather conditions” associated with
pandemics, the analysis can still be likened to COVID-19. Unlike hurricanes, which
involve standard practices and preparation techniques, such protocol did not exist
for pandemics, let alone COVID-19. Moreover, even if there was some semblance
of a pandemic plan, individual governments and countries also made decisions as a
result of COVID-19 that impacted performance, far beyond the control of individual
parties. The severity of COVID-19, especially for the first few months of the outbreak,
far exceeded any “worst-case expectations.”

Accordingly, there is a temptation for COVID-19 to be considered an excusable
force majeure event. It seems unfair to any party or insured person seeking
coverage to be denied excuse on account of something this vast and unpredictable.
COVID-19 grossly impacted all facets of maritime life and industry. However, beyond
the beginning stages of the outbreak, it is now a more established pandemic, with
more anticipated risks. Thus, COVID-19, except for its inception, and its subsequent
repercussions, are not considered excusable force majeure events, as courts are
not inclined to “read” pandemic into the language of a contract or clause. Moreover,
even if the beginning of COVID-19 falls within the definition, there would still be
problems posed if the language of the force majeure clause did not allude to or
include the term “pandemic.”68

With respect to exclusion clauses, a pandemic could be excluded, mainly because
any event can be so long as it is specifically written in the clause. There is less of a
foreseeability component with exclusion clauses due to this intentional specificity.
Yet, the current interpretation of force majeure in case law as an “unforeseen event”
that has to be foreseen in some way begs the question of whether there is a true
difference between force majeure and exclusion clauses. Both are interpreted the
same way by the courts, within the confines of the language of the clause in the
contract. If everything needs to be predicted to some degree, little will qualify as a
true force majeure event. No exclusion clause prior to 2020 excluded “COVID-19,”

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but perhaps, some exclusion clauses discussed pandemics or other communicative
diseases. Nonetheless, exclusion clauses are read even more strictly than force
majeure clauses because they are intended to be hyper-specific and explicitly
drafted by the parties.

IV. Implications on the Maritime Industry
Regardless of whether COVID-19 is interpreted as an excusable force majeure event,
this pandemic has undeniably impacted the maritime industry.69 It has hindered
shipping practices, halted trade business, and interfered with crew safety and the
general maintenance of vessels.70 Since COVID-19 has made such a significant
impression, maritime contract and marine insurance policy drafting will evolve,
especially since “[t]his will not be the last pandemic that renders performance more
difficult than anticipated.”71 Even if the next pandemic is a hundred years from now,
the aftereffects of COVID-19 have certainly shocked individuals and businesses into
extensive preparation for the future. In forthcoming maritime contracts, for example,
the term “pandemic” will likely be included either in a force majeure or exclusion
clause.72 Further, any general “catch-all” provisions following a specified list of force
majeure events (especially a list including the term “pandemic”) will be interpreted
within the meaning of the list, allowing for other communicable diseases, such as
epidemics, to also excuse non-performance.73 These changes in future contractual
language will broaden coverage or excuse for non-performance under a force
majeure clause. However, this broadening only extends so far as the language of
the clause itself.

Moreover, if pandemics begin to be compared with natural disasters, such as
hurricanes, in terms of contractual interpretation, the foreseeability of the actual
event will matter less than the foreseeability of the repercussions of said event.74 In
the beginning stages of COVID-19, many subsequent decisions regarding quarantine
and government shutdowns were completely new. However, as time progressed,
more aftereffects related to COVID-19 were anticipated, especially to prevent the
spread of the disease. Thus, these unprecedented, successive circumstances will
also contribute to the creation and interpretation of new or revised force majeure
and exclusion clauses.

In addition to adding “pandemic” to certain maritime contracts, some marine insurance
providers have already drafted clauses, or “wordings,” reacting to COVID-19. For
example, Lloyd’s Market Association has recently published two exclusion clauses
specific to COVID-19, LM5391 and LM5392.75 LM5391, drafted in March of 2020,
states that the insurance policy in question “does not cover any claim in any way
caused by or resulting from: a) Coronavirus disease (COVID-19); b) Severe acute

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respiratory syndrome coronavirus 2 (SARS-CoV-2); c) any mutation or variation of
SARS-CoV-2; d) any fear or threat of a), b) or c) above.”76 This is a tailor-made
exclusion drafted to not only minimize loss from COVID-19, but any subsequent
mutation of the disease as well as “threats” caused by the disease. As an exclusion
clause, this encompasses specific language pertaining to COVID-19 coverage.
It also manages to be broad enough to include any subsequent repercussions of
COVID-19. Unlike a force majeure clause, this exclusion clause can be drafted in
such a manner.

The loss-minimization in LM5391, however, benefits the insurer. A similar decision
was made in response to Hurricane Katrina, as insurance companies paid a
significant amount of money to cover their clients and wanted to limit their liability to
avoid future costs related to hurricanes.77 Insurers will want to cover, or pay, less,
therefore, will agree that COVID-19 is an inexcusable force majeure event. However,
it would be unwise if insurers suddenly excluded COVID-19 and its subsequent
repercussions from marine insurance policies altogether. Marine insurance can best
be compared to a marketplace, where the insurers are the sellers and the insured
are the buyers. As with any business, the sellers must appeal to the buyers in order
to earn a profit, thus, market a saleable product. If the sellers suddenly begin to
become too exclusive or produce an unsaleable product, this will make their product
unattractive to buyers. One of the main selling points of insurance generally is to
protect the insured from the impossible and unknown.78 No one will buy protection if
it is not there. Insurers need to take some risks if they want to get business, let alone
make a profit. Thus, if insurers chose to use LM5391 without alteration, for example,
they may lose potential customers who desire more guaranteed coverage.

This marketplace analogy works more for commercial insurers than it does for P&I
Clubs. Unlike standard homeowner’s insurance, there is more “diversity” in marine
insurance in terms of choosing between commercial insurers and P&I Clubs. Although
P&I Clubs only offer protection and indemnity coverage (unlike commercial insurers),
the Clubs have more freedom when adjusting their Rules. Commercial insurers have
more to face with adjusting policy language than P&I Clubs do. Regardless of the
insurer or the type of insurance, COVID-19, or pandemics generally, will certainly be
added to future marine insurance policies and club rules.

V. Conclusion
Force majeure and exclusion clauses add a necessary level of assurance to any
maritime contract. However, this assurance is restrained. The interpretation of
force majeure events has evolved from considerations of foreseeability to strict

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