Thursday, May 28, 2020

The “New Normal” In Litigation Might Not Be That “New”

The COVID-19 pandemic has nearly every industry reconsidering what “normal” actually means. And, as the pandemic continues, attorneys must adapt to the circumstances. While many courts have begun utilizing technology, none have held a virtual trial until now. In Collin County District Court, lawyers picked a jury to hear a case by videoconference.1 This case could set the stage for courts throughout the nation to consider following in Texas’ footsteps. Even the U.S. Supreme Court has begun to hear oral arguments by teleconference. However, it is important to note the differences in these cases versus that of a typical jury trial. Still, “normal” for litigators will soon, if it hasn’t already, include setting up home or office studios in order to hold videoconferences and teleconferences for their clients.

According to the National Center for State Courts, five of the most common efforts state courts are taking to combat the coronavirus include restricting or ending jury trials, generally suspending in-person proceedings, restricting entrance into courthouses, granting extensions for court deadlines, and encouraging or requiring teleconferences and videoconferences in lieu of hearings.2 However, as the country begins to reopen, implementing procedures for jury trials has varied depending on the state.

Most of the courthouses across the country have suspended jury trials. However, each state is dealing with the pandemic differently. In Arizona, in-person proceedings may begin June 1st, but local judges may determine how in-person proceedings should be phased in. Meanwhile, Texas is encouraging the use of videoconferencing to keep cases moving forward. On April 9th, Chief Justice Nathan Hecht of the Supreme Court of Texas held an interview with Thomas Reuters discussing the changes that Texas has implemented.

One of those changes includes utilizing Zoom to conduct jury trials. When asked about how Chief Justice Hecht envisioned a post-pandemic world, Chief Justice Hecht described what many others in the legal profession have expressed:
After the pandemic, lots of hearing will be held remotely. It’s easy to do, you’d get a specific time, if you do have to wait, you could put everything on mute and go on about your business. Trips to the courthouse are definitely going to be affected. We’ll then have to reexamine why we need courthouses. We’ll have to think about that because some things are more intensely in-person than other things, like jury trials, but some things are not. We’ll have to look at working at home…I’m getting memos, draft opinions, draft dissents from my colleagues, from the law clerks, every hour. People are actually working very hard. If they can do that, why shouldn’t they? … I think there’ll be a lot of changes.3
Chief Justice Hecht is not the only one considering practical changes to litigation. On May 14th, New Jersey announced the creation of a new virtual grand jury pilot program.4 The pilot program will be used to determine whether the New Jersey Judiciary expands remote grand juries to additional counties and state grand jury proceedings. The technology will be similar to the formats the New Jersey Judiciary currently uses for virtual hearings but will employ additional security measures to safeguard the rights and privacy of defendants, witnesses, victims, and jurors. As of May, the New Jersey Judiciary has conducted more than 23,000 virtual proceedings involving more than 189,000 participants.5 While states are leading the charge, federal courts are not far behind.

For the first time in U.S. history, the United States Supreme Court allowed the public to listen to oral arguments remotely.6 Historically, the US Supreme Court does not allow cameras or simultaneous audio broadcasts in the courtroom. However, earlier this May, the U.S. Supreme Court heard arguments regarding a trademark dispute case by teleconference. Justices asked questions in order of seniority and only a few technical issues were experienced.7 While the U.S. Supreme Court didn’t go as far as providing live video, as the Texas Supreme Court did earlier this month, it’s difficult to justify not continuing to hold oral arguments through teleconference.

The Second Circuit and the Seventh Circuit courts announced in late March that they would hold all oral arguments by teleconference. And, now that the U.S. Supreme Court has held oral arguments by teleconference, the opportunity to expand this practice to all courts has never been so strong. Still, district courts have been reluctant to hold jury trials through videoconference or teleconference. However, the Collin County District Court case proved that holding video conference jury trials is possible.

The takeaways from the Collin County District Court were as expected.8 First, like all trials, there is a chance for a few hiccups. Here, one of the prospective jurors wandered off-screen and could be heard talking on the phone. Second, walking jurors through how to set up their audio and video correctly was not as difficult of a task as some may have thought. Third, approaching the bench by way of a “breakout room” was mostly a success - minus the wandering prospective juror. And, fourth, and arguably most notable is that this case was a one-day summary jury trial. Yet, the question remains, will video conference trials become future practice beyond the pandemic?

Many law firms are already preparing for post pandemic hearings to remain virtual. As Chief Justice Hecht of the Texas Supreme Court explained, if hearings can be successfully held through video conference or teleconference, then why shouldn’t they? However, video conference jury trials present multiple legal concerns. Some of these difficulties include whether virtual trials would deprive defendants of their constitutional right to confront witnesses, an impartial jury, due process of law, and effective counsel. Moreover, ensuring high-speed internet so defendants and witnesses could appear would be problematic. These issues are difficult to overcome, especially in the face of a pandemic.

While hearings might shift towards video conferences and teleconferences, jury trials still have a long way to go. Although Texas proved that a one-day video conference summary trial was possible, there is little reason to believe that a jury trial that takes place over a week, or longer, would see the same level of success. Moreover, the issues on appeal would pave the way for the U.S. Supreme Court to make the final decision on whether constitutional rights could be upheld through video conference jury trials. Therefore, the “new normal” for litigators might not be that “new” after all. While attorneys might need to begin setting up home or office studios in order to hold videoconferences and teleconferences for their clients, virtual jury trials have many hurdles to overcome before litigators should expect any major changes.

1 Nate Raymond, Texas Tries a Pandemic First: A Jury Trial by Zoom, Thomas Reuters Technology News (May 18, 2020),
2 National Center for State Courts,
3 Meera Gajjar, 'The American Justice System Will Never Be The Same': Texas Supreme Court Chief Justice Nathan Hecht, Thomas Reuters COVID-19 (April 24, 2020),
4 Peter McAleer & Maryann Spoto, Judiciary Launches Virtual Grand Jury Pilot Program, Richard J. Hughes Justice Complex (May 14, 2020),
5 Id.
6 Robert Barnes, Supreme Court Takes Modest But Historic Step With Teleconference Hearings, The Washington Post Courts & Law (May 4, 2020),
7 Id.
8 Angela Morris, Hold Please? Juror Takes Phone Call as Texas Tests First Jury Trial Via Zoom, Legaltech News (May 18, 2020),

Author Christopher M. Wise is an attorney and the Managing Member of Wise Law, LLC in Louisville, Kentucky. He focuses on contractor-subcontractor litigation and property law.

Wednesday, May 20, 2020

Maybe Relief for Public Contractors Should Come from Thoughtful Legislation

With loss, comes suffering; and, when it comes to the coronavirus, loss exists in many forms. Attorneys across the country – particularly those representing contractors on public projects – are asking themselves, generally, “how can my client suffer less?” Or, more pointedly, “is there an argument to support my client’s right to entitlement to compensation for COVID-19-related costs?”

On public projects, the short answer is maybe not until the government steps in. Construction lawyers are faced with the unfortunate reality that public sector contracts appear to preclude contractors from seeking adjustments to the contract price because these contracts commonly include (1) a clear “no-damages-for-delay” provision, (2) time as the sole remedy for “force majeure” delays, and (3) a “compliance with laws” provision that is silent as to which party bears the risk of a change in laws. These provisions help public owners properly protect the interests of the citizens by appropriately allocating their tax dollars to a construction project that follows a carefully thought-out contract. However, as a result of these well-intentioned owner-friendly provisions, public contracts can make it difficult for contractors to receive compensation for COVID-19-related costs.

One can draw a parallel between public contracts and some of the insurance industry’s business interruption coverage policies. Of course, every insurance policy is different and must be analyzed on a case-by-case basis; however, the business interruption policies at issue often (1) have a clear “virus” exclusion, (2) require “property damage” to trigger coverage, and (3) are silent as to the application of the “civil authority” exclusion when it comes to partially mandated shutdowns (i.e. when the case is that construction offices, but not jobsites, may have been required to shut down). As a result, policyholders’ business interruption claims arising from COVID-19 are facing blanket denials from insurance carriers.

However, the denials of claims in both the insurance and construction industries alike can have potentially crippling effects. With respect to insurance, the consensus is becoming somewhat clear: the federal and/or state governments may need to step in. In response, several states (including Massachusetts, Rhode Island, New York, and New Jersey) have sponsored bills to provide long-term reimbursement relief to insurance companies and even to create exceptions to the policies’ strict exclusions, like the “virus” exclusion. As follows, attorneys are advising policyholders to follow the old adage “a claim never made is a claim never paid.” Therefore, attorneys who want to help their clients suffer less should encourage strict compliance with the “prompt” notification mechanisms to preserve claims under their insurance policies.

Similarly, attorneys are encouraging contractors to comply with the claim procedures in their public contracts, despite the currently-present contractual roadblocks. This advice is perhaps motivated with the hope that relief will be provided, whether it comes from the owner or as a part of a government-sponsored relief scheme similar to that of the insurance industry. The good news is: over one-hundred and thirty-five members of Congress agree with this approach, at least when it comes to supporting State Departments of Transportation (DOTs). On May 11, 2020, Representatives Conor Lamb and Bob Gibbs led the House in calling on Speaker Pelosi and Leader McCarthy to support approximately $49.95 billion in federal funding for State DOTs in the next COVID-19 response package.1 The request explained how support of State DOTs can help ensure planned transportation projects proceed as planned, which in turn supports the economy by protecting the jobs of State DOT employees and construction workers. Comparably, the Under Secretary of Defense released a memorandum on March 30, 2020, with the subject “Managing Defense Contracts Impacts of the Novel Coronavirus,” stating that “Where the contracting officer directs changes in the terms of contract performance, which may include recognition of COVID-19 impacts on performance under that contract, the contractor may also be entitled to an equitable adjustment to contract price using the standard FAR changes clauses (e.g., FAR 52.243-1 or FAR 52.243-2).”2 This memorandum suggests that contracting officers may have the authority to treat COVID-19 impacts as compensable delays under the FAR Changes clause.

As a matter of public policy, government intervention in line with the above makes sense. Despite the general rules that deny contractor recovery in the face of (1) a clear “no damages for delay” provision,3 (2) time as the sole remedy,4 and (3) a silent compliance with law provision,5 these rules are unfair (and perhaps unlikely to be upheld) considering the ongoing global pandemic. For example, on lump sum and GMP projects in particular, it would be inequitable for a public owner to completely deny claims for additional costs – like those of COVID-19-required demobilization and remobilization – on the basis of (1) a clear “no damages for delay” provision, (2) time as the sole remedy, and (3) a silent compliance with law provision. What’s more, public contracts are often procured via competitive bidding, which naturally means that contractors cut as many costs as safely as possible, not pricing out a ‘just in case a global pandemic shuts down this project for a couple weeks’ cushion. In fact, because public owners want to ensure that workplaces, including construction jobsites, are operating safely and in full compliance with new COVID-19 safety measures, they have a competing interest when it comes to compensating COVID-19-related costs. Since their competing interest brings with it some additional costs that were in no way contemplated by contractors when they priced their jobs, they ought to have some skin in the efforts for recovery as it would be unfair for public owners to ask contractors to simply absorb COVID-19-related costs.

Indeed, the ramifications of allowing owners (and insurers) to benefit from such harsh claim denials could have detrimental effects on the entire construction industry. Consider the alarming fact that if contractors continue to be denied compensation for COVID-19-related costs, then numerous contractors, subcontractors, and suppliers will inevitably goes out of business, thereby crumbling the industry and, likewise, the economy. While public owners and insurance companies may suffer in the short-term in light of legislation that requires exceptions to their contracts, they are in a much more stable position to weather this storm over the long-term. In other words, at present, they are not the string that will make the sweater unravel. After all, the greater suffering ought to be borne by the owner anyway, even if it is the state. One can reason that even though neither the owner nor the contractor could have ever predicted COVID-19, it is the owner – not the contractor – who remains the ultimate beneficiary of the project. As follows, maybe relief for public contractors should come from thoughtful legislation, like that already pending for the benefit of the insurance industry.



3 Although a contract has a clear “no damages for delay” clause, the contractor is not necessarily foreclosed from recovery if there exist other avenues for recovery within the contract. In fact, in many jurisdictions, “no damages for delay” clauses are not enforced where the delay for which recovery is sought was not reasonably contemplated by both parties at the time of contracting. JWP/Hyre Elec. Co. v. Mentor Village Sch. Dist., 968 F. Supp. 356, 360 (N.D. Ohio 1996); see Corinno Civetta Const. Corp. v. City of New York, 493 N.E.2d 905, 910 (N.Y. 1986). That is not necessarily the case in Massachusetts; however, there exist other ways a contractor can avoid the harsh effects of a “no damage for delay” clause. Joel Lewin & Eric Eisenberg, Delays, Suspensions and interruptions—No damage for delay clauses—Exceptions, Massachusetts Practice Series on Construction Law § 6:22 (2018). For example, a contractor may point to other contract provisions that provide relief. Id. (citing Stone/Congress v. Town of Andover, 6 Mass. L. Rptr. 330, 1997 WL 11737 (Mass. Super. Ct. 1997) (denying a summary judgment motion in favor of a contractor that argued that its damages were not for delays, but rather for changes in the work for which it was entitled to compensation under the changes clauses in the general contract). A closer look into the specific contract language is necessary in order to determine whether there exist other avenues for recovery.

4 Despite the fact that the sole remedy is time, there may still be room for a claim for additional compensation if contractor has a separate delay claim. “Force majeure” events, like abnormally bad weather and presumably the COVID-19-related costs at issue here, normally entitle the contractor to time, but not money. However, similar to the idea above that a contractor can avoid the harsh effects of a “no damage for delay” clause by pointing to other contract provisions, a contractor may recover for “force majeure” events when they are coupled with other compensable delay events. See id.; Philip J. Bruner & Patrick J. O’Connor, Jr., §3.7.2—Contractor’s Compliance with Law, Bruner & O’Connor on Construction Law, § 5:80 (Jan. 2020 Update). For example, in Appeals of Bechtel Environmental, Inc., a contractor was adversely affected by weather when a government-caused design delay pushed toxic waste landfill remediation activities into the hotter summer months, resulting in lower efficiency. Philip J. Bruner & Patrick J. O’Connor, Jr., §—Weather delays, Bruner & O’Connor on Construction Law, § 5:80 (Jan. 2020 Update) (citing Appeals of Bechtel Environmental, Inc., E.N.G.B.C.A. No. 6137, E.N.G.B.C.A. No. 6166, 97-1 B.C.A. (CCH) ¶ 28640, 1996 WL 686423 (Corps Eng'rs B.C.A. 1996)). Perhaps the express language in the AIA A201-2017’s § 8.3.3 provides the support for this: “This Section 8.3 does not preclude recovery of damages for delay by either party under other provisions of the Contract Documents.”

5 As a general rule, if the contractor agrees to perform the work for a stipulated sum and further agrees to comply with all laws and regulations governing the performance of the work, then, in the absence of any contractual provision permitting relief, it bears the risk. Philip J. Bruner & Patrick J. O’Connor, Jr., Bruner & O’Connor on Construction Law, § 5:80 (Jan. 2020 Update) (citing DiCara v. Jomatt Const. Corp., 52 Misc. 2d 543, 276 N.Y.S.2d 11 (Dist. Ct. 1966) (contractor who agreed to sell a house at a specified price bore a responsibility for increased costs due to a 2% sales tax made applicable to the sale after the parties had reached agreement); Edwards v. United States, 19 Cl. Ct. 663 (1990) (government contract's “permits and responsibilities” clause obligated the contractor to comply with all local laws and regulations regardless of whether they became effective before or during the term of the contract and applied to zoning changes affecting the work)).

Author Lexie R. Pereira is a J.D./M.B.A. student at Boston College Law School, studying to become a litigator, with a specialty in construction law. At school, Lexie is the President of the Real Estate Law Society and the President of the Eagle-to-Eagle Mentoring Program. Outside of school, she is a legal intern at Consigli Construction Co., Inc. and is on the Editorial Team of the ABA’s Forum on Construction Law’s Dispute Resolver blog. This summer, she was invited to rejoin Hinckley Allen as a Summer Associate with a focus in the Construction and Public Contracts group. Lexie earned her B.A. and a varsity letter from Boston College in 2017.

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Tuesday, May 19, 2020

Force Majeure Provisions in Construction Contracts and Supply Chain Disruption During the COVID-19 Pandemic

The COVID-19 pandemic is having drastic effects on the construction industry across the United States. Various states have deemed residential and commercial construction work “essential,” and permitted to carry on amidst various business closures and stay-at-home orders. But construction law practitioners are expecting an uptick in various types of claims, and whether force majeure provisions will apply to events related to COVID-19 is a pressing question for clients and counsel.

The ABA Forum on Construction Law held the sixth session in the Leadership Roundtable Series on the impacts of COVID-19 on the construction industry on May 12, 2020, with panelists from different practice areas to discuss force majeure clauses and their application to construction industry clients. The panel was moderated by Chris Beirise, of the Kenrich Group, LLC, in Las Vegas, NV. The panelists included Kristen Sherwin, of Winstead P.C. in Dallas, TX, who represents owners and developers; Tracy Steedman, of Adelberg Rudow Dorf & Handler, LLC in Baltimore, MD, who represents subcontractors and general contractors; Rhonda Caviedes, senior corporate counsel with Jacobs Engineering Group, Inc. in Dallas, TX, and Anthony Gonzales, Managing Principal of Spire Consulting Group in Austin, TX.

A “force majeure” clause is a provision in a contract that excuses a party’s performance under the contract if a failure to perform is due to unforeseen or extreme circumstances outside the party’s control. These clauses are often used in all kinds of commercial contracts to allocate risk. Ms. Caviedes noted that many clients prefer to use custom contracts that they created themselves, but counsel should consider using form contract documents that are well-established in the industry instead. Form documents such as the AIA contracts or ConsensusDOCS can provide uniformity and certainty to clients, without counsel needing to interpret and revise clients’ custom contracts numerous times.
Force majeure provisions vary by contract. Often in construction contracts, a force majeure provision will be included in a delay provision. Some contracts include force majeure provisions, and some do not. Some have incredibly specific force majeure provisions, and some have very broad provisions. Some contracts have provisions that are functional equivalents of force majeure provisions but do not mention the phrase “force majeure.” Some examples of force majeure events are “acts of God,” economic conditions or financial hardship, pandemics or epidemics, floods, hurricanes and other weather-related events, labor strikes and performance delays, and government action.

Force majeure provisions are generally enforceable in all states and typically are narrowly construed. Not all states interpret force majeure provisions the same way, however. In Texas, as Ms. Sherwin noted, a force majeure event must have been unforeseen. The time of contract making is highly relevant to foreseeability. For instance, if a contract was formed in late March 2020, then events related to COVID-19 were almost certainly foreseeable at that time. Under Texas law, only an objective impossibility – that is, a complete inability to perform – will excuse a breach of contract. Ms. Sherwin cautions attorneys to pay close attention to choice of law provisions in contracts, and evaluate the chosen state’s treatment of frustration of purpose, impossibility, and foreseeability.

Ms. Caviedes noted that force majeure provisions are often heavily negotiated, and careful drafting is very important. Often, a force majeure provisions will include a “catch-all” provision, and the placement of the catch-all language is key to the force majeure provision’s interpretation. Courts typically interpret a catch-all provision at the end of the list as being one that relates back to the items that have been identified in the immediately preceding text. Courts find that if a general meaning had been intended, then specific listed events would not have been included. “[W]here the parties have themselves defined the contours of force majeure in their agreement, those contours dictate the application, effect, and scope of force majeure" (Belgium v. Mateo Prods., Inc., 29 N.Y.S.3d 312, 315 (1st Dep't 2016) (quoting Route 6 Outparcels, LLC v. Ruby Tuesday, Inc., 931 N.Y.S.2d 436, 438 (3d Dep't 2011)). Again, numerous jurisdictions have interpreted catch-all language following specific lists, so it is critical to evaluate the chosen state’s case law on this point when drafting contracts and consulting clients during construction and at the claims phase.

On the immediate effects of COVID-19 on clients, the panelists shared their experiences, which offer useful advice to practitioners. Ms. Steedman explained that subcontractors are sending notices to general contractors and submitting requests for change orders, both related to supply chain disruptions. Suppliers are not delivering materials on time. Subcontractors need to acquire more vehicles to comply with social distancing guidelines and to rearrange schedules to ensure that various trades are not working too much at the same time.

Ms. Sherwin offered an owner’s perspective, stating that subcontractor notices should be as specific as possible. Owners pass these notices along to investors or lenders, but owners prefer not a vague notice that a supply chain disruption has occurred or is imminent. Instead, owners desire to know what the actual supply chain impact is, as soon as it is known, so that a large claim for an extreme increase in cost is not a surprise down the road. Owners are also looking for general contractors to work with suppliers directly to find alternatives to obtaining similar supplies. The circumstances related to COVID-19 are sure to cause delays and cost increases, so it is even more important that all parties on projects work together to share relevant information on a timely basis.

Another component of force majeure provisions is mitigation of damages. Mr. Gonzales noted that contractors should itemize all damages related to COVID-19 in notices of claims. Additionally, it is important to analyze whether a duty to mitigate applies, and what mitigation measures should be taken and when. Given the complexity and sophistication of the global supply chain, even under the strain of COVID-19, there are often options to obtain labor, raw materials, or other supplies from alternative sources, as well as other solutions, to avoid time and money impacts.

As always, but especially in the time of COVID-19, it is critical for clients and counsel to understand their construction contracts, to comply strictly with all notice requirements to other parties, lenders, and insurers, and to evaluate whether a force majeure provision might be used offensively or defensively.

Author Megan B. Burnett is an attorney in the Baltimore office of Miles & Stockbridge P.C., with offices in Maryland, Washington, D.C., and Virginia. She practices in the areas of commercial and business litigation, with a focus on construction law and commercial real estate disputes.

Thursday, May 7, 2020

Join The Covid-19 Leadership Roundtable Discussion on Force Majeure, Supply Chain Disruption, Delays and Claims - May 12 at 4 pm EDT


In order to serve and provide resources to our Forum members, the greater ABA, and the general public, the ABA Forum on Construction Law and strategic partners have developed a multi-part webinar series exploring how the COVID-19 pandemic is impacting construction and design and identifying options for response and risk management/mitigation. In these free, non-CLE webinars, industry leaders and attendees will have the opportunity to exchange information, learn from one another, raise questions, and offer options for addressing the deepening effects of the crisis. If you are a company leader or legal counsel, we invite you to join our conversation. 

Developed to help construction stakeholders
manage and prepare for the impact of COVID-19


Format: Webinar, Expert Round Table Panel Discussion

Moderator: Chris Beirise, HKA


Anthony Gonzales, Spire Consulting Group

Kristen Sherwin, Winstead PC

Rhonda Caviedes, Jacobs

Tracy Steedman, Adelburg Rudow

Our panel will address the immediate impacts of the crisis such as, supply chain disruption, excusable delays, suspension, force majeure and adjustments to the project budget and schedule. This session will cover the range of contract and legal remedies and claims that are certain to be features of the construction landscape for the foreseeable future. Join this discussion about how owners and contractors are addressing these impacts.

This program is for information sharing only, and not submitted for CLE.

May 12, 2020 | 4:00 to 5:30 P.M.ET

Multi-part Webinar Series Schedule

• 5/12: Force Majeure, Supply Chain Disruption, Delays And Claims
• 5/19: Post-Crisis Industry Impact – Expediting Use Of Technology; Virtual Depositions, Mediation/Arbitration; and Replacing In-Person Collaboration

Contact or for more information.

Register Now