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The 'Act of God' defense in freight claims disputes

By DC Velocity Staff / / August 31st, 2017

In 2004, an attorney at the Benesch transport law firm wrote an article on the parameters of a successful "Act of God" defense in freight claims disputes. The commentary is especially pertinent given the events of the past week.

(Editor's Note: An "Act of God" is generally defined as a sudden, unexpected, and unavoidable manifestation of the forces of nature. Federal and state law establish that a shipper cannot prevail in a freight claim against a carrier if an "Act of God" caused the loss, damage, or delay at issue. The defense is available to carriers of all modes in both domestic and international transportation.

In April 2004, Marc S. Blubaugh, attorney at the Cleveland-based transport law firm of Benesch, Friedlander, Coplan & Aronoff, published an article entitled, "The Perfect Storm: The Parameters of a Successful 'Act Of God' Defense in Freight Claims." In light of events of the past week, and the impact they will have for months to come, we have published excerpts from the article as it addressed the "Act of God" defense in claims cases involving hurricanes.)

The quintessential example of a successful "Act of God" defense arises in the context of weather: hurricanes, tornadoes, blizzards, floods, lightning storms, etc. These are generally considered to be "pure" events of nature. For instance, no amount of human ingenuity (or diabolical cunning) has yet succeeded in creating a hurricane, causing a tornado, or generating a blizzard. As a result, extraordinarily severe weather has often given rise to a valid "Act of God" defense. However, determining whether or not the defense is available in a particular case demands a much more nuanced analysis.

Of all severe weather phenomena, the hurricane distinguishes itself as perhaps the most intimidating of natural disasters. A hurricane can extend at any given time over hundreds of miles, contain winds upwards of 150 miles per hour, and deposit enormous amounts of precipitation in a very short period of time. One need only think of storms such as Hurricane Mitch, which killed more than 9,000 people in October 1998, to recall the truly devastating scope of a hurricane. Property damage, including damage to freight, accompanies every hurricane. Not surprisingly, the "Act of God" defense has been most heavily litigated in this context.

The case of "In the Matter of the Complaint and Petition of International Marine Development Corp." describes one of the clearest examples of a successful "Act of God" defense in the transportation arena. In this case, a variety of plaintiffs made claims for property damage and catastrophic personal injuries caused by Hurricane Camille. The court described the singular nature of the storm:

"Hurricane Camille, which was the greatest natural disaster in the history of the North American continent and caused more devastation and destruction to the Mississippi Gulf Coast and to the North American continent than any hurricane of record, with unprecedented wind velocity in excess of 200 miles per hour, a tide rise of 30 feet or more, and a tidal surge of at least 22 feet, is the most classic case and striking example of what is characterized as an Act of God. This freak of nature was of sufficient velocity and destructiveness to overcome all reasonable preparations..."

As a result, the court found that none of the claimants established liability as against the various defendants. The defendants prevailed as a matter of law on the facts at hand. In other words, the unique characteristics of this storm made this an easy case.

Similarly, in 1998 Hurricane Georges struck Mississippi, Alabama, and other nearby areas, causing a wide variety of property damage. In the case Skandia Insurance Co., Ltd. v. Star Shipping, a shipper brought a freight claim relating to several containerized, large rolls of paper that it owned which were damaged by the hurricane's floods. The court found that Hurricane Georges was a storm of such matchlessness and magnitude that it constituted an "Act of God":

"Notably, hurricanes, such as Hurricane Georges, are considered in law to be an "Act of God." Even though storms that are usual for waters and the time of year are not "Acts of God," a hurricane that causes unexpected and unforeseeable devastation with unprecedented wind velocity, tidal rise, and upriver tidal surge, is a classic case of an "Act of God."

The court found that the defendants in the case were protected by the "Act of God" defense in that they could not have prevented the loss with the application of reasonable foresight. The court gave particular significance to the timing and substance of weather advisories and the lack of prior floods in the geographic area. It should likewise come as no surprise that tornadoes often satisfy many of the factors relevant to a successful "Act of God" defense.

...The successful application of the defense turns on the severity of the event, the reasonable predictability of the event, the lack of human agency in the event, and the reasonableness of the carrier's precautions. One must perform the necessary historical research as well in order to have a context by which to judge the significance of the particular event in question.

Future developments in the application of this defense will undoubtedly occur as scientific understanding increases regarding the events that have historically constituted "Acts of God". However, as Albert Einstein once wrote "When the number of factors coming into play ... is too large, scientific method in most cases fails. One need only think of the weather, in which the prediction even for a few days ahead is impossible." In short, no matter how far science progresses, one can be certain that God will continue to serve up unforeseeable events. - 24/7 Support including Chat
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