Under the Patient Protection and Affordable Care Act, what w…
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Under the Pаtient Prоtectiоn аnd Affоrdаble Care Act, what will happen to individuals who do not purchase health insurance?
Fоr а number оf yeаrs, Avаntax (Defendant), a financial planning cоmpany, has held an annual conference for company employees. The purpose of the annual conference is to promote the continuing education of the company’s employees and to encourage networking and communication among attendees. The conference has frequently been described as a “family reunion,” as many of the attending employees know each other from having gotten together in prior years. The conference has followed a similar schedule year after year. Over several days, employees attend daily general sessions at which speakers present, breakfasts and lunches, networking opportunities, a hall of exhibit booths, and a closing party. The conference has normally also included an opening reception, with food service and an open bar, which has been designed to encourage people to move about, interact, and socialize. Due to the large number of guests, it was always scheduled at least one year in advance. Defendant’s 2021 annual conference was to be held at the Gaylord Resort & Convention Center (“Gaylord Resort” or “Plaintiff”) in Fresno, CA. In March 2019, Plaintiff and Defendant entered into a contract for Defendant to host the 2021 annual conference from June 18–24, 2021. Reflecting the conference’s usual schedule, the contract for the 2021 conference provided for daily general sessions for an expected 1,200 attendees, as well as an opening reception for an expected 1,200 attendees, each to be held in a single event space. The contract also included placeholder slots for meals and a hall of exhibit booths. Based on these events and the planned attendance, the contract committed Defendant to spend a minimum of $575,000 on food and beverages and to use a minimum of 80% of 3,699 hotel guest room nights, or to pay the difference between each minimum and Defendant’s actual spending in liquidated damages. Ten months later, on January 31, 2020, the United States Department of Health and Human Services declared a public health emergency due to the rapid global spread of COVID-19. The Metropolitan Board of Health of Fresno (“Metro Public Health Department”) followed suit, declaring a public health emergency due to COVID-19 on March 15, 2020. In the year that followed, the Metro Public Health Department issued a series of public health orders that restricted gatherings in Fresno in an effort to limit the spread of COVID-19. At this time, the Metro Public Health Department was also regulating the local hospitality industry directly by requiring hotels to seek Department approval to host events. While the Department initially approved events on a case-by-case basis, during the period relevant to this lawsuit, the Department shifted to categorizing events by risk level and approving an attendance cap based on an event’s risk class. On March 10, 2021, the Department issued a letter to Plaintiff and other local hospitality businesses about future gathering restrictions to help businesses “plan events months from now.” The March 10 letter stated that the Department could “forecast with reasonable confidence that the county would reach 40 percent vaccination by July 1” and that it anticipated reaching “the 30 percent level in April or early May.” The letter noted that at a 40 percent vaccination level, gathering restrictions would be somewhat relaxed, such that the Department 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. Plaintiff forwarded this letter to Defendant on March 15, 2021. On March 25, 2021, Defendant sent a letter to Plaintiff terminating the parties’ agreement. As its basis for cancellation, Defendant pointed to the Metro Public Health Department’s March 10, 2021 letter, which it received on March 15, 2021. According to Defendant, the March 10 letter indicated that through July 1, 2021 very high risk gatherings (which includes celebratory functions such as the event contemplated by Plaintiff in the Agreement) would be limited to a cap of 300 people. Thus, the Gaylord Resort would be unable to hold an event that will allow for a minimum of 1,200 attendees in June 2021, which is the minimum number of expected attendees set forth in the agreement. On April 20, 2021, Plaintiff billed Defendant $1,326,206 for cancelling the contract, reflecting 100% of the planned hotel room costs and 75% of the agreement’s food and beverage minimum. Defendant did not pay this sum. Plaintiff sued Defendant for breach of contract. Defendant raised the affirmative defense of Frustration of Purpose. Please discuss the factual and legal basis of the affirmative defense and its viability.
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