By: Michael J. deBarros and Mary Kathryn Gimber

Businesses are scouring their insurance policies for coverage for COVID-19 losses.  Among the insurance policies that may provide coverage for such losses are commercial property policies, pollution liability policies, general liability policies, workers’ compensation policies, and employment practices liability policies.

Coverage Under Property Policies (Business Interruption)

Commercial property insurance policies often provide coverage for lost business income. For business interruption losses, however, there will likely be two main hurdles to coverage.

The first hurdle will be the requirement in most property policies of “direct physical damage to covered property.” Typically, to trigger business interruption coverage under a property policy, there must be a “direct physical loss of or damage to property” at a location covered by the policy.

If a property has been shuttered merely due to fears, but the building remains habitable, the direct physical loss requirement is likely not satisfied.  However, if there is a demonstrable presence of COVID-19 in your business location – or in one the locations of your suppliers – the requirement of “direct physical loss of or damage to” a location covered by the policy may be satisfied.  Furthermore, if a location covered by your policy has sustained some physical damage as a result of a lack of office maintenance or a lack of power or other utilities to the office as a result of COVID-19, the requirement of “direct physical loss of or damage to” a location covered by the policy may be satisfied by that as well.

With respect to whether the presence of COVID-19 in a covered location is a “direct physical loss of or damage to” covered property, the following cases are helpful for policyholders:

  • Gregory Packaging, Inc. v. Travelers Property and Casualty Company of America, No. 12-cv-04418, 2014 U.S. Dist. LEXIS 165232 (D.N.J. Nov. 25, 2014) (a release of ammonia from a refrigeration system which rendered Gregory Packaging’s buildings uninhabitable constituted a “direct physical loss” sufficient to trigger business interruption coverage under that policy);
  • Yale University v. Cigna Ins. Co., 224 F. Supp. 2d 402, 413 (D. Conn. 2002) (lead emissions constitute a direct physical loss);
  • Matzner v. Seaco Ins. Co., 9 Mass. L. Rptr. 41,1998 WL 566658 (Mass. Super. Aug. 12, 1998) (“direct physical loss” was ambiguous; thus carbon monoxide exposure would come under that definition);
  • Columbiaknit, Inc. v. Affiliated FM Ins. Co., 1999 WL 619100 (D. Or. Aug.4, 1999) (mildew exposure was direct physical loss);
  • Farmers Ins. Co. of Oregon v. Trutanich, 123 Or. App. 6, 858 P.2d 1332 (1993) (losses caused by odors from illegal methamphetamine cooking were direct physical loss); and
  • Murray v. State Farm Fire & Cas. Co., 203 W. Va. 477,509 S.E.2d 1, 16-17 (1998) (“Losses covered by the policy, including those rendering the insured property unusable or uninhabitable, may exist in the absence of structural damage to the property”).

On the other end of the spectrum, however, are the following cases:

  • Universal Image Prods. v. Chubb Corp., 703 F. Supp. 2d 705 (E.D. Mich. 2010) (holding that intangible harms such as odors or the presence of mold and bacteria in an HVAC system did not constitute physical damage to property); and
  • Great N. Ins. Co. v. Benjamin Franklin Fed. Sav. & Loan Ass’n, 793 F. Supp. 259 (D. Or. 1990) (opining that asbestos contamination was not a physical loss, as the building remained unchanged), aff’d, 953 F.2d 1387 (9th Cir. 1992).

Because insurance law is almost exclusively an issue of state law, the answer to the question of whether the presence of COVID-19 in your office or the offices of your suppliers constitutes a “direct physical loss or damage” to covered property will likely vary from jurisdiction to jurisdiction.

Some specialized insurance policies and extensions of coverage added to standard property insurance policies—including those sold to businesses in the hospitality and health care industries—expressly provide insurance coverage for losses caused by “communicable or infectious diseases” without requiring physical damage to insured property. Therefore, the language of your policy is key in determining whether you may have coverage.

Additionally, many commercial property insurance policies provide coverage for business income losses sustained when a “civil authority” prohibits or impairs access to a location covered by the policy. Depending on its specific wording, a policy’s “civil authority” coverage may or may not require physical damage to covered property. Accordingly, in the event that a federal, state, or local governmental authority limits or prohibits access to or from locations covered by your policy, your business may have “civil authority” coverage for income losses.

Finally, some forms of political risk insurance could afford coverage for business interruption losses suffered by a foreign entity’s operations in the host country resulting from local government regulatory actions. While disruptions resulting from a health edict such as that regarding COVID-19 may not constitute “expropriation” or contract frustration, political risk policies often afford coverage for business interruption loss, even when there is no physical damage to a covered location for actions taken by the host country’s government.

Even if you can show direct physical damage to covered property, or your policy does not require it as a trigger for some of its coverages, the second major hurdle to business interruption coverage will likely be whether your policy has a specific exclusion for virus-related losses.

In 2006, the “Insurance Services Office” (better known in the insurance industry as ISO), adopted an exclusion for its members to use to eliminate coverage for virus-related losses, including business interruption losses.  That exclusion is often titled “Exclusion for Loss Due To Virus Or Bacteria” or something similar, and it typically provides as follows:

“We [the insurance company] will not pay for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”

These exclusions often specifically state that they apply to “business income” and other types of losses.  Even further, some of the exclusions provide illustrative lists of viruses, such as rotavirus, SARS, avian flu, legionella, anthrax, etc. that are not covered.

On Monday of this week, the New Jersey legislature began considering a bill to force insurers to pay COVID-19 business interruption claims expressly excluded by ISO’s “virus” exclusion.  Whether the bill will pass is unclear, and whether the law, in its ultimate form, will eliminate only the “virus” exclusion in the policies, or also the requirement for direct physical loss or damage to covered property is unknown.

It’s also unclear whether the law will apply to currently-existing insurance policies, or merely renewals and new policies.  If the intent is to apply the law to currently-existing insurance policies, constitutional issues will likely arise.  Specifically, Article I, Section 10, Clause 1 of the U.S. Constitution provides, in pertinent part, that “No State shall … pass any … ex post facto Law, or Law impairing the Obligation of Contracts.”  We will be watching legislation closely to see if any other states follow New Jersey’s lead.

Coverage Under General Liability and Pollution Liability Policies

Beyond a loss of income, your business could also face lawsuits by infected guests alleging that your company failed to exercise reasonable care in guarding against, or warning of, the risk of exposure to COVID-19.

General liability policies (“CGL”) often cover property damage or bodily injury claims filed by third-parties (who are not your employees) against your company.  They also often cover your company for personal injury offenses such as false detention and imprisonment.

Some examples of CGL claims in the context of viruses include the following:

  1. Product liability suits against airline companies for failing to install high-efficiency particulate air-recirculation filters in their aircrafts.  These carriers transported someone infected with a virus and other passengers on the plane contracted the virus.  The other passengers filed suit against the airlines.
  2. A negligence suit against a childcare or day-care facility when one infected child in their care gets other children sick.  The parents of the infected other children sued the day-care facilities.
  3. Very recently, a South Florida couple filed suit against Princess Cruise Lines claiming the cruise company acted with gross negligence by failing to take precautions to prevent a coronavirus outbreak on one of its ships.
  4. If a third-party alleges they were improperly detained or quarantined by your company, the personal injury coverage under your CGL policy could also apply.

For these types of cases, a business would typically look to its general liability policies for coverage, and it might also find coverage under pollution liability policies or other types of specialty policies.

One of the first hurdles under a typical general liability policy will be whether there’s an “occurrence” sufficient to trigger the policy’s coverage.  Depending on which state’s laws govern the question of coverage under your policy, this hurdle may or may not be substantial.  Because occurrence is often defined in the policy as an “accident,” and the term “accident” is often left undefined, the “occurrence” hurdle will often be surmountable in a majority of jurisdictions.

In addition to the “occurrence” hurdle, some insurers will likely invoke standard “pollution” exclusions; and those may be valid arguments depending on the jurisdiction, as some courts may read those terms broadly enough to encompass bodily injury or property damage caused by COVID-19.

Although it’s rare, some of the general liability policies have “communicable disease” exclusions.  So, again, the language of your policy is key in determining whether you may have coverage.

Many CGL policies contain Fungi or Bacteria exclusions; however, coronavirus is a viral infection and not bacterial, therefore, it would likely be a stretch for typical Fungi or Bacteria exclusions to apply.  However, it’s worth looking to your policy language to determine how broadly worded those exclusions are because sometimes insurers have expanded the typical Fungi or Bacteria exclusions in special endorsements (for instance, “Pathogenic Organisms Exclusionary” endorsements, which exclude coverage for damage or injury resulting from any bacteria, yeasts, mildew, virus, fungi, mold or their spores, mycotoxins or other metabolic products).

Coverage Under Worker’s Compensation Policies

Worker’s compensation policies typically cover claims for bodily injury brought against a company by its own employees.

The major hurdle here is that most states’ workers’ compensation statutes provide that employees are entitled to benefits for “occupational diseases” (typically meaning diseases contracted primarily as a result of an exposure to risk factors arising from work activity), but are NOT entitled to benefits for “ordinary diseases of life” (typically meaning those to which the general public is equally exposed).

Therefore, coverage for workers’ compensation claims will largely depend on whether the employees’ exposure to the virus was sufficiently tied to their work.  If an employee can demonstrate that their illness results directly from conditions of their employment, and such exposure is in excess of those found in the general public, there’s likely going to be a valid argument for workers’ compensation insurance coverage.

As a quick example, employees in hospitals are more likely to be covered by workers’ compensation insurance for COVID-19 injuries than employees in a bank’s IT department because the added risk of COVID-19 exposures are often inherent to employment in the medical profession.

Employment practices liability policies

Lastly, there can be significant liability to an employer under various laws designed to protect employees from wrongful termination, harassment, discrimination, invasion of privacy, false imprisonment, and wage and hour law violations.

For instance, discrimination claims or suits could arise under the ADA or various state laws if employers pursue medical testing in a manner found to be too aggressive.  Employer policies requiring medical clearances from employees returning from travel may also create potential liability.

Additionally, OSHA requires that employers provide employees with a workplace free from “recognized hazards” that cause or are likely to cause death or serious physical harm.  As a result, there may be some claims there that the employer failed to keep its employees protected from the coronavirus.

There could also be some liability under wage and hour laws if employers are inconsistent in their implementation or enforcement of their federal and state wage-and-hour requirements.  This could occur if an employer takes a particular action in response to some employees who refuse to work because of flu-related or coronavirus concerns, but apply a different rule with respect to other employees.

Arguably, employees exhibiting flu-like or coronavirus symptoms or those who have a child, spouse, or parent with flu-like or coronavirus symptoms may be eligible for leave under the Family and Medical Leave Act or state law equivalents.  There is a potential for liability regarding how an employer handles a situation where an affected employee has exceeded permitted leave or is not eligible for FMLA leave.

The route to determining possible coverage for these various types of claims under your employment practices liability (“EPLI”) policy varies depending on the type of claim.

As for OSHA claims, most EPLI policies provide a “retaliation” carveback to the OSHA exclusion which specifically permits coverage for claims alleging retaliation (such as wrongful termination) in connection with an employee exercising their rights under OSHA. Therefore, if an employee refuses to come to work, or insists they must work from home citing an unsafe workplace with imminent danger, and is then terminated by their employer, the employer’s EPLI policy could provide coverage for a resulting wrongful termination claim. Of course, not all policies are created equal and the specific policy language must be examined to determine coverage.

EPLI policies vary greatly on the scope of coverage provided for wage and hour claims.  Policy terms and conditions can range from no coverage at all, to heavily sub-limited coverage for defense costs only, to full coverage for defense costs and settlements.  This area is particularly policy specific, so you must refer to your policy for the answer to this question.

EPLI policies specifically exclude claims alleging FMLA violations – meaning coverage is precluded for both defense costs and loss or settlements in connection with an FMLA claim. Most insurers will, however, include a carveback which specifically permits coverage for “retaliation” if an employee was retaliated against for exercising rights under law.

Coverage for COVID-19 losses is complex, state-specific, fact-specific, and policy-specific. Because coverage varies greatly from policy to policy, and from state to state, we recommend a review of your insurance coverages to determine whether or not you may be covered for COVID-19 losses.

By: Brian R. CarnieChelsea G. CaswellA. Edward Hardin, Jr.Scott D. HuffstetlerErin L. KilgoreMichael D. LoweZoe W. Vermeulen, and David M. Whitaker

Employees who experience a “COBRA-qualifying event” and would otherwise lose group health coverage are entitled to elect to continue their group health coverage under federal law – COBRA.  For those employers not covered by COBRA (who have fewer than 20 employees), Louisiana has a group health insurance continuation statute that also allows employees to continue group health coverage, but for a shorter period of time than under COBRA.  Many employers recognize a termination of employment as a triggering event under COBRA (or the Louisiana statute), but a reduction in hours, extended leave, or furlough (for example) may also be such a trigger.  This can be true even if the employee is paid during the leave or furlough, as employees who are not actually working may not satisfy the eligibility requirements set forth in the group health plan documents.  This will depend on the terms of the plan.  Under federal law, an FMLA leave of absence is not considered a COBRA-qualifying event.  However, if an employee needs extended leave for issues related to the coronavirus that is unrelated to FMLA leave, that absence from work (and the reduction in hours worked) could be a COBRA-qualifying event under the terms of the employer’s group health plan.  Again, the group health plan will dictate when an employee must be provided notice of the opportunity to continue coverage, and the terms of the plan govern.  Each group plan will vary, so employers must know what their plans say regarding (i) employees who are still employed, but not actively working, and (ii) those employees’ rights to continue group health insurance.

If you have questions, please contact Kean Miller labor and employment attorneys, Brian R. Carnie (318.562.2652), Chelsea G. Caswell (225.382.3405), A. Edward Hardin, Jr. (225.382.3458), Scott D. Huffstetler (225.389.3747), Erin L. Kilgore (225.389.3712), Michael D. Lowe (318.562.2653), Zoe W. Vermeulen (504.620.3367), and David M. Whitaker (504.620.3358).

By: J. Eric Lockridge and Katie M. Hollowell

The recent OPEC/COVID-19-related drop in energy prices may soon set off a tidal wave of energy-related bankruptcies. Funding for exploration and production (“E&P”) companies is much harder to find, and much more expensive, than it was just a few weeks ago.  Reserve reports that might have been at “concern” status at year end will be at “Big Red Flag” status at the close of this quarter, absent a dramatic uptick in prices.  Low prices and high volatility are having a major impact on the cost of capital—and even access to capital—for energy companies across the board, but especially for E&P companies and private equity companies looking to acquire E&P-focused assets.

The Alta Mesa bankruptcy case pending in Houston provides a good example of how quickly and thoroughly the credit markets have tightened for E&P companies in a matter of weeks.  Alta Mesa is an E&P company focused on oil and gas reserves in the eastern portion of the Anadarko Basin referred to as the STACK.  For a host of reasons, Alta Mesa filed a Chapter 11 bankruptcy in Houston to sell its assets and to use the proceeds to pay creditors.

On December 30, 2019 (when WTI closed at $61.68), a special purpose entity led by a former member of Alta Mesa’s board (“Buyer”) signed an agreement to purchase essentially all of Alta Mesa’s E&P assets for $225,000,000.00. The purchase agreement did not have a financing contingency.  Some creditors complained that the sale price was too low and sought to squeeze additional money from Buyer or to extend the bidding deadline.  After an extensive hearing, on January 24, 2020 (WTI: $54.19), Bankruptcy Judge Marvin Isgur approved the sale of Alta Mesa’s E&P assets to Buyer at a price of $232,000,000.00.  The purchase agreement required the sale to close by February 12, 2020 (WTI: $51.17).  Buyer asked to postpone the closing to the end of February for administrative reasons, but failed to close by month end.  On March 2, 2020 (WTI: $46.75), Buyer advised Alta Mesa that its new target closing date would be March 9, 2020 because it needed time to negotiate definitive agreements under a loan commitment.  By March 9, 2020 (WTI: $31.13), however, oil prices had fallen roughly 50% from the day the purchase agreement was signed, and Buyer disclosed that it was no longer able to obtain the financing it anticipated using for the purchase.  At March 9 values, Alta Mesa’s to-be-acquired assets were worth less than the loan needed to purchase them just a few weeks earlier.

We are expecting to see an increase in energy-related loan defaults and bankruptcy filings in 2020 due to the recent price drops and high volatility. This will create good buying opportunities for those with access to capital, a strategic plan, and a longer-term view on assets in Texas, Louisiana, and the Gulf of Mexico in particular.

By: Jill A. Gautreaux

UPDATE:  All casinos, bars, and movie theaters in the entire state are ordered closed and restaurants are limited to delivery, take-out, and drive thru.  The change takes effect at midnight tonight and remains in effect until April 13.

Yesterday, Mayor LaToya Cantrell of the City of New Orleans issued restrictions concerning bar and restaurant operations in response to the COVID-19 outbreak, which is spreading rapidly in New Orleans.  The following restrictions will be enforced by the New Orleans Police Department and Louisiana Office of Alcohol and Tobacco Control.  Both agencies have indicated that the restrictions will be strictly enforced and violations could result in the suspension of the licensee’s liquor license.  The following is the current list of the restrictions:

  • All full-service restaurants with seating cease operations at 9 p.m. daily. Further they will work to limit their seating capacity for social distancing whether it is removing tables/chairs or using a checkerboard type seating pattern to provide more guest spacing. The goal is to reduce seating by up to 50 percent. Employers will continue to monitor employees and ask employees to regularly take their own temperature. As supplies allow, employers will also assist. This goes for beverage/bar servers. Employers will continue to post signs for enhanced cleaning processes and how to maintain good health.
  • Once the dining room closes, a restaurant can still offer delivery until its usual closing time.
  • The quick-service or fast-casual establishments can only offer “drive-thru” service but can be extended to 24 hours if they so choose.
  • Bars and nightclubs will cease service at 12 a.m. daily. They will limit their capacity to up to 50 percent of posted patron limit. Last call will be at 11:15 pm. Everyone must be out and headed home by 12 am.
  • Hotel operations will adhere to above operating times for their restaurants and bar operations as well as limiting capacity.
  • Operators will post notice to patrons that when they depart to please consider returning home.
  • Operators will not allow gathering for waiting for seating, or access purposes. They will implement use of text messaging to advise if the table is ready.
  • Operators will encourage no public gatherings in any area.
  • Once patrons exit the premises of restaurants or bars, they may not loiter in the street or congregate in groups outside. This will be enforced city-wide.
  • Tour groups will be limited to groups of no more than seven (7) at a time.

I will keep everyone posted as to any updates concerning restrictions on operations.  In the meantime, if you have any questions, please do not hesitate to contact Jill Gautreaux at (504) 620-3366.

By Brian Carnie, Chelsea Caswell, Ed Hardin, Scott Huffstetler, Erin Kilgore, Michael Lowe, Zoe Vermeulen, and David Whitaker

After midnight on March 14, 2020, the U.S. House of Representatives passed H.R. 6201, a 110 page, bipartisan coronavirus response bill.  The House approved the bill on a 363-40 vote and has President Trump’s support.  Included in the bill are comprehensive mandated paid leave provisions related to the coronavirus outbreak.  The Senate is expected to take up the bill next week.  In its current form, the bill amends the FMLA to expand employer coverage and employee eligibility, adds paid leave entitlements, and provides for employment protections for employees.  The current bill attempts to offset employer costs for the mandated paid leave with a 100% tax credit equal to the paid leave provided to employees.  When the bill reaches the Senate, it is likely to undergo some changes.  More regarding the bill can be found at this story from The Washington Post.

By: Brian R. Carnie, Chelsea G. Caswell, A. Edward Hardin, Jr., Scott D. Huffstetler, Erin L. Kilgore, Michael D. Lowe, Zoe W. Vermeulen, and David M. Whitaker

Responses to the coronavirus that directly impact employers are making their way through Congress.  CBS and other news outlets are reporting on Congressional leaders’ negotiations regarding various measures that will directly impact employers.  These measures include paid emergency sick leave and disaster unemployment assistance.  See the attached link from CBS News regarding the Congressional response to the coronavirus.  From the ADA to the FMLA to GINA, from OSHA to Title VII and the WARN Act (and even the NLRA), employers face a myriad of employment issues related to the coronavirus.  The situation is dynamic and fluid one, and the Kean Miller employment team is actively advising clients on a wide variety of both practical and legal issues related to the coronavirus and employers’ responses.  When questions arise, do not hesitate to reach out to us for assistance as we collectively navigate through these uncharted waters.

Read the full article here:


By: R. Chauvin Kean and Mary Kathryn Gimber

On March 11, 2020, the World Health Organization (“WHO”), officially declared COVID-19, commonly known as coronavirus, a pandemic with nearly 120,000 confirmed cases in 114 countries and over 4,000 deaths. With the number of cases, deaths, and countries affected expected to climb in the coming days and weeks, the virus’ global impact is extremely uncertain and far from over. As numbers rise across the globe, governments, businesses, and individual persons will react and address this increasing threat to commerce differently.

While most people have been taking personal precautions, there are other precautions regarding business and contractual relationships that are worth your concern. Mandated quarantine, supply chain disruptions, and office closures attributable to COVID-19 are just a few of the many ways that the virus may prevent a party from upholding its contractual obligations.

As businesses prepare for impending spread of the coronavirus, this is an excellent time to review their respective contracts with clients, vendors, partners, and others alike to determine how their contracts’ terms or Louisiana’s commercial law may affect the contractual rights in light of the coronavirus.


Each contract and its terms will be different, but many agreements may contain certain provisions that state if and how a parties’ obligation might change in the event of pandemic or fortuitous event. In order to determine the extent to which your obligation may change, it is best to turn to the agreement in question and determine whether it contains a force majeure provision. These provisions may provide guidance or determine how (if at all) a party’s obligations might change in the event of certain circumstances.

If the contract does provide for such circumstances, then a party should follow the terms provided in the contract. For example, certain force majeure provisions may provide that if performance or:

such delay or hindrance [in performance] is due to strikes, lockouts, acts of God, governmental restriction, enemy act, civil commotion, unavoidable fire or other casualty, or other cause of a like nature beyond the reasonable control of Landlord or Tenant, then performance of such work, service or other act shall be excused for the period of such delay, and the period for the performance of such work, service or other act shall be extended for a period equivalent to the period of such delay.

If a party to that agreement is unwilling or unable to abide by the contract’s original terms, that party should contact the other parties as soon as possible, which may require a formal notice declaring force majeure. However, if the terms do not provide for a force majeure situation, a simple contractual amendment between the parties may avoid potential liability for breach.


In Louisiana, businesses often look to the Louisiana Civil Code article 1873-1878 (the “Articles”) for guidance and how they might apply in a particular situation when certain situations are not provided for in contract. These Articles are the default rules about how contractual obligations may be modified, suspended, or extinguished due to a “fortuitous event” that renders performance of a contract “impossible” either in part of in whole. However, these Articles only apply if the parties themselves have not addressed a pandemic or relative force majeure event in their respective agreement.


A fortuitous event is one that could not have been reasonably foreseen at the time the contract was entered into. Foreseeability is the key; a conflict may occur if the contract was recently entered into or negotiated such that notice of an impending pandemic or wide-spread virus may negate a party’s ability to invoke these Articles or force majeure terms. However, a specific determination of what may constitute a fortuitous event will be based on the facts specific to the contract and circumstances surrounding performance. Commonly, contracts will define an “event of force majeure” to include: an act of God; war, hostilities, invasion, act of foreign enemies; earthquakes, lightning, cyclones, hurricanes, floods, drought, or such other extreme weather events; and, epidemic, famine, plague, or other natural calamities.

When a “fortuitous event” makes a party’s obligation to perform impossible, either in whole or part, a court may either reduce the counterperformance proportionally (e.g., a reduction in the contract price) or declare the contract dissolved. However, the court will attempt to uphold the contract with partial performance if possible.


A fortuitous event will only relieve a party’s obligation if performance is truly impossible. Increased difficulty or burdens on the obligor will not qualify; the circumstances must be preventative in nature to the extent that a party cannot complete its obligations. If a party cannot satisfy an obligation due to a fortuitous event, the party should seek substitute goods or services to render performance. These substitute measures should be documented to use as evidence to bolster any defenses should the obligee demand performance or assert a claim for breach. In sum, if a party does not at least attempt to locate a substitute good or service that could fulfill its contractual obligation, it may be unable to prove that a fortuitous event made performance of the obligation impossible.


An obligor is typically liable for its failures to perform; however, when a failure to perform is due to a “fortuitous event,” which has made performance impossible, an obligor is not liable. If the entire performance owed is impossible, the contract is dissolved by operation of law. If the contract is dissolved, but a party has already partially performed, that party is entitled to recover any performance that has already been rendered.


Businesses should review any contracts that may be affected by COVID-19 to determine what their respective rights and obligations are in light of this pandemic. If a contract does not contain a force majeure or other clause addressing the given situation, then the Articles discussed above will apply. Whether the COVID-19 pandemic is a “fortuitous event” will be contract specific, and whether performance of a contractual obligation is truly “impossible” will vary based on the circumstances.  In many instances, the appropriate course of conduct may not be clear and we recommend that you consult counsel.

By: Maureen N. Harbourt and Lauren J. Rucinski

Starting March 23, 2020, facilities must add one more agency to the list of those that may need to be notified in the event of an accidental release: The U.S. Chemical Safety Board (“CSB”).The CSB was established by the 1990 Clean Air Act (“CAA”) Amendments.[1] The CAA directs the CSB, among other things, to investigate and report to the public any accidental release resulting in a fatality, serious injury, or substantial property damages.[2] The enabling legislation specified that the CSB must establish by regulation reporting requirements for accidental releases subject to the CSB’s investigatory jurisdiction.[3] Because the CSB had not complied with this requirement, the CSB was sued in federal court and ultimately was ordered to promulgate a final release reporting rule within 12 months of the decision.[4]

In line with this directive, the CSB issued a final rule on February 21, 2020 to require an owner/operator of a facility to submit an accidental release report to the CSB.[5] Key facts from this new CSB reporting rule are:

  1. the requirements take effect on March 23, 2020;
  2. the rule has a “consequence-based” reporting standard: facilities must report accidental releases of regulated substances and extremely hazardous substances to ambient air that result in a fatality, serious injury, or substantial property damage to the CSB within 8 hours;
  3. there are no reportable quantity (“RQ”) thresholds; and
  4. NRC reports may satisfy the rule if the NRC ID number is provided to CSB within 30 minutes of submitting the NRC report.

What is a Covered Release?

Under the new CSB rule, the owner/operator must report any unanticipated emission of a regulated substance or other extremely hazardous substance into the ambient air from a stationary source resulting in a fatality, serious injury, or substantial property damage.[6] The rule provides definitions of “regulated substance” and “extremely hazardous substance (‘EHS’)”; however, the definition of EHS is different than the definition of that term under EPCRA.[7]  The gist is that if the substance is regulated under the CAA section 112(r) or has the potential to cause a fatality, serious injury, or substantial property damage, then it is covered.

Another important note: the definition of the term ambient air is different in the CSB rule than it is in other sections of the CAA. CSB’s definition is not limited to external buildings or to general public access: ambient air under the CSB rule means any portion of the atmosphere inside or outside a stationary source.

What are the Procedures for Reporting?

The owner/operator has two means of reporting a covered release: (1) if applicable, submit the NRC identification number to the CSB within 30 minutes of submitting the report to the NRC or (2) submit a report directly to the CSB within eight hours of the accidental release by email to, or by telephone at 202-261-7600.[8] If choosing the second option (i.e. not reporting using an NRC identification number), the report to the CSB requires contact information and a basic description of the accidental release; the relevant Chemical Abstract Service (“CAS”) Registry Number associated with the chemical(s) involved in the accidental release; and “if known” the amount of the release, number of fatalities, number of serious injuries, estimated property damage, and any evacuation information. See § 1604.4. for a full list of all required information.

The owner/operator of a stationary source, without penalty, may revise and/or update information reported by sending a notification with revisions by email to:, or by correspondence to: Chemical Safety Board (CSB) 1750 Pennsylvania Ave. NW, Suite 910, Washington, DC 20006, within 30 days following the submission of a report to the CSB (or NRC).[9]

What if I have Lingering Questions?

The CSB acknowledged that this new rule may take some time to work out all of the practicalities and to educate affected sources. Thus, the CSB agreed to provide a one-year grace period for unintentional reporting deficiencies. The Preamble to the final rule stated: “For one year following the effective date of the rule, the CSB will refrain from referring violations for enforcement, unless there is a knowing failure to report.”[10] The CSB indicated that it will use this grace period to establish additional guidance, if necessary.

The CSB notification requirements are in addition to the U.S. Environmental Protection Agency release reporting requirements under 40 CFR § 302.6 (National Response Center, “NRC” notice), any state release reporting requirements under the Louisiana Department of Environmental Quality LAC 33:I.Chapter 39 release reporting requirements; and the Louisiana State Police release reporting requirements under LAC 33:V.Chapter 101.

[1] Public Law 101– 549, 104 Stat. 2399 (November 15, 1990).

[2]  42 U.S.C. 7412(r)(6)(C)(i) and (ii).

[3]  42 U.S.C. 7412(r)(6)(C)(iii).

[4] See Air Alliance of Houston, et al. v. U.S. Chemical Safety and Hazard Investigation Board, 365 F. Supp. 3d 118 (D.D.C. Feb. 4, 2019).

[5] The new regulations and their preamble were published at 85 Fed. Reg. 10074 (Feb. 21, 2020) and will be codified in 40 C.F.R. Part 1604.

[6] See 40 C.F.R. §§ 1604.3; 1604.3. Note that serious injury means any injury or illness that results in death or inpatient hospitalization. The CSB rule definition of inpatient hospitalization is different than the Louisiana State Police rule definition of hospitalization in [insert LSP cite].

[7] 40 CFR § 355.61 (“Extremely hazardous substance (EHS) means a substance listed in Appendices A and B of this part.”).

[8] See 40 C.F.R. § 1604.3(b)(c).

[9] See 40 C.F.R. § 1604.3(e). If applicable, the notification must reference the original NRC identification number. No update or revisions should be sent to the NRC. Also, an extension of 60 additional days may be available for updating information.

[10] 85 Fed. Reg. 10074, at 10092.

By Tyler Moore Kostal

CMS has released a Proposed Rule specifying how and when it must impose penalties on responsible reporting entities (RREs) that fail to meet their Section 111 reporting obligations.  Here are the highlights:

  • The Proposed Rule indicates that the maximum penalty of $1,000.00 per day per claimant would be adjusted annually for inflation.  So for 2020, the maximum potential penalty would be $1,232.00 per day per claimant.
  • The Proposed Rule outlines various situations in which penalties would and would not be imposed against Non-Group Health Plan (NGHP) RREs.  It calls for penalties to be imposed when the RRE “fails to report any beneficiary record within 1 year from the date of the settlement, judgment, award, or other payment.”

The Proposed Rule is scheduled to be published in the Federal Register on February 18, 2020.  It is available here.

By Stephen C. Hanemann

Although the riverboat casino Grand Palais was originally designed to transport people over water, and did so until 2001, and is theoretically capable of navigation, the Louisiana Supreme Court has determined that it is no longer a vessel in navigation. Don Caldwell v. St. Charles Gaming Co., 2019-1238 (La. 1/29/20),             So.3d _____. The Court’s ruling emphasized changes in the riverboat’s physical characteristics, purpose, and function – the craft having been moored for nearly 15 years. Accordingly, the injured riverboat technician employed by the Grand Palais was not entitled to seaman status as he was not employed on a vessel in navigation.

Plaintiff claimed to have sustained injury on April 9, 2015 when the gangway attached to the Grand Palais riverboat casino collapsed. He filed a petition for damages alleging that the riverboat was a vessel under General Maritime Law and that he was a seaman under the Jones Act. The 14th Judicial District Court for the Parish of Calcasieu denied plaintiff’s Motion for Summary Judgment on the issue of seaman status finding that the Grand Palais casino was not a vessel at time of his incident. The Louisiana Third Circuit Court of Appeals reversed,finding the riverboat was a vessel at the time of the incident and conferred seaman status upon plaintiff. Prior to its decision in this case, the Third Circuit had uniformly held that riverboat casinos permanently moored were not vessels. See Breaux v. St. Charles Gaming Co., Inc., 10-1349, 11-128 (La. App. 3 Cir. 6/22/2011), 68 So.3d 684; Lemelle v. St. Charles Gaming Co., 11-255 (La. App. 3 Cir. 1/4/12), 118 So. 3d 1, writ denied, 12-339 (La. 4/27/12); and Benoit v. St. Charles Gaming, Co., LLC, 17-101 (La. App. 3 Cir 11/8/17), 230 So. 3d 997, writ denied, 17-2501 (La. 2/2/18), 233 So.3d 615, cert denied, ___ U.S. , 139 S.Ct. 104, 202 L. Ed 2d 29 (2018). Not only did the appellate court’s decision conflict with three of its prior decisions, but it also contrasted with the U.S. Fifth Circuit’s holding that a moored riverboat casino is not a vessel in navigation under Federal maritime Law. See De La Rosa v. St. Charles Gaming Co., 474 F.3d 185 (5th Cir. 2006).

The Grand Palais was built as a riverboat casino and designed to sail on inland waterways of the United States and the state of Louisiana. At the time of plaintiff’s incident the riverboat was safely afloat, had not been disabled, removed from the water, sunk to the bottom of a waterway, or enclosed in a coffer dam. In fact, the owners of the riverboat casino worked diligently to maintain it in a fully operational condition as required by applicable law. Id. See also, La. R.S. § 27:44. The riverboat casino maintained a valid Certificate of Inspection issued by the United States Coast Guard, which permitted it to carry passengers on designated waterways within the State of Louisiana. Despite this, the Grand Palais had been moored at the same location for over 14 years, and had not navigated since March 24, 2001. The riverboat’s shore-side-utility lines, electrical supply, water, sewerage, cable television, telephone, and internet services had not been disconnected since its last navigation. Plaintiff had worked on the riverboat since 2004, but had never sailed aboard it. His onboard duties included chipping, grinding, and painting. Other responsibilities included fire team and rescue-boat.

Owners of the riverboat argued that its status as a vessel does not determine plaintiff’s status as a seaman for admiralty jurisdiction. Defendants insisted that plaintiff must also prove the vessel is in navigation and that his employment has a substantial connection to navigation, thereby regularly exposing him to the perils of the sea. Plaintiff contended that the riverboat remained capable of navigation and was, therefore, a vessel.

The Louisiana Supreme Court recognized that while the vessel was theoretically capable of navigation, it had been indefinitely moored for a period of over 14 years and was not being used for the purpose of maritime transportation. Focusing on the practical and not theoretical capabilities of navigating, in observance of the U.S. Supreme Court’s decisions in Stewart v. Dutra Const. Co., 543 U.S. 481 (2005) and Lozman v. City of Riviera Beach, Fla., 568 U.S. 115 (2013), the Louisiana Supreme Court agreed that the statutory definition of a vessel may not apply when the craft has some other primary purpose, and found that the riverboat’s primary purpose was dockside gambling. It also found that a side of the riverboat had been integrated into the adjacent land-based pavilion and hotel, and would require some modifications to return to service as a navigable vessel. Consequently, even though the Supreme Court acknowledged that the riverboat was designed to transport people over water and was theoretically capable of navigation, due to its changes in physical characteristics and primary purpose, coupled with the fact that it had been moored for a decade and a half, it determined that the Grand Palais was no longer a vessel used in marine transportation.

In denying plaintiff’s Motion for Summary Judgment and dismissing his claims for seaman status under General Maritime Law, the Louisiana Supreme Court did not precisely say that the riverboat casino, Grand Palais, was not a vessel (statutorily or otherwise), merely that it was no longer a vessel used in maritime transportation.