A ruling by the United States Court of Appeals in July upheld a group's right to apply a hotel contract’s force-majeure clause and cancel a 1,200-attendee meeting without penalty. While the specifics of the case relate to COVID-pandemic restrictions, the ramifications could be broader.

“Not only was this a federal case, but it went to the Court of Appeals for the area, one rung below the U.S. Supreme Court,” said Joshua Grimes, Esq., Grimes Law Offices. “The next time there's a force-majeure cancellation lawsuit, other federal courts and even some state courts will look to this case. It serves as a precedent because a high-level court reviewed the case.”

The facts of the suit echo the experiences of many event organizers and meeting venues faced with difficult choices during the pandemic.  

In 2019, Avantax Wealth Management booked Marriott’s Gaylord Opryland Resort & Convention Center in Nashville to host its June 18-24, 2021, annual conference. The contract included a standard force-majeure clause allowing termination if circumstances made it “illegal or impossible” to provide or use the hotel facilities.

Then along came COVID. Nashville’s Metropolitan Board of Health declared a public-health emergency in March 2020, and in the year that followed, issued various public-health orders regarding hosting events. On March 10, 2021, it announced that it anticipated reaching 40 percent vaccination by July 1, and at that point “expected there would be a cap of 300 attendees for very high-risk events, 750 attendees for high-risk events, 1,250 attendees for low-risk events, and 5,000 attendees for very low-risk events.”

On March 25, Avantax canceled the conference, pointing to the March 10 letter. Its education and networking event had many social and celebratory elements that put it in the “very high-risk” category, with an anticipated 300-attendee cap. This was well below the 1,200 attendees contemplated in the hotel contract.

However, on April 27, the board of health updated its COVID orders significantly, announcing that all event capacity limits would be lifted in mid-May.  Marriott sent Advantax a $1.3 million cancellation bill because there were no COVID restrictions actually in place over the dates of the meeting. Advantax sued to avoid paying Marriott’s damages.

Read this article in its entirety on our sister publication, MeetingsNet, here.

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