Earlier this year, I provided our 2021 Corporate Compliance and Litigation Outlook for Manufacturers. I noted that even though we had been counseling a lot of manufacturers on force majeure events (i.e., the ability to suspend performance) “there has not been a lot of litigation outside of what you hear about in the commercial real estate space.”

Five days after my outlook, a lawsuit was filed in California federal court by a metal manufacturer (G&H Diversified Manufacturing LP) against a “green technology” firm (Regreen Technologies, Inc.) that sells industrial machines. The facts alleged in the lawsuit are complex, but essentially, they involve a manufacturing relationship wherein G&H had to purchase a $1.6 million machine from a third party, “reverse engineer it,” and construct a master 3D drawing for Regreen. Once that was done, G&H would be paid.

In short, G&H claims that it was never paid and that Regreen now argues that it should not have to pay pursuant to a force majeure clause in the contract. In its complaint, G&H argues that the clause is not applicable because it “does not address epidemics or pandemics, ‘only acts of God, acts of war, riot, fire, explosion, flood or sabotage.'”

We will be following this lawsuit closely because one of the common issues facing manufacturers before COVID-19 was that their force majeure clauses did not expressly state that they applied to epidemics or pandemics. There are arguments to be made on both sides, and a lot depends on the law of the jurisdiction that governs the contract.  Stay tuned for further developments.

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Photo of Jeffrey White Jeffrey White

I am a partner at Robinson+Cole who handles corporate compliance and litigation matters for both domestic and international manufacturers and distributors that make and ship products around the world. My clients have ranged from publicly traded Fortune 500 companies to privately held and/or…

I am a partner at Robinson+Cole who handles corporate compliance and litigation matters for both domestic and international manufacturers and distributors that make and ship products around the world. My clients have ranged from publicly traded Fortune 500 companies to privately held and/or family owned manufacturers. For those looking for my detailed law firm bio, click here.

I am often asked why I have focused a large part of my law practice on counseling manufacturers and distributors. As with most things in life, the answer to that question is tied back to experiences I had well before I became a lawyer. My grandfather spent over 30 years working at a steel mill (Detroit Steel Company), including several years in its maintenance department. One of my grandfather’s prime job duties was to make sure that the equipment being used was safe. In his later years, he would apply those lessons learned in every project we did together as he passed on to me his great respect and pride for the manufacturing industry.

Because of these experiences, I not only feel comfortable advising executives in a boardroom, but also can easily transition to the factory floor. My experience has involved a range of industries, including aerospace and defense, chemicals, energy, pharmaceuticals and life sciences, nutritional and dietary supplements, and retail and consumer products. While I have extensive experience in litigation (including product liability and class actions), I am extremely proactive about trying to keep my clients out of the courtroom if at all possible. Specifically, I have counseled manufacturers and distributors on issues such as product labeling and warranties, product recalls, workplace safety/OSHA, anti-trust, and vendor relations, among other things. I always look for the business-friendly solution to a problem that may face a manufacturer or distributor and I hope this blog will help advance those efforts.