Lord & Taylor LLC (Lord & Taylor) contracted with Zim Integrated Shipping Services Ltd (Zim) to ship two containers of sweaters and cardigans from Hong Kong to New York. On 27 October 2012, the containers arrived in New York and were unloaded and stored at the New York Container Terminal (NYCT). Unfortunately, two days later, Hurricane Sandy made landfall in southern New Jersey. As a result, NYCT suffered flooding damage because of the storm surge associated with Hurricane Sandy and plaintiff’s sweaters were ruined. Lord & Taylor thereafter brought an action against Zim and NYCT, seeking damages for its losses. Zim argued that Hurricane Sandy was an act of God that could not have been reasonably prepared for. On the contrary, Lord & Taylor argued that Hurricane Sandy was foreseeable and NYCT did not take reasonable precautions to protect the cargo.

Held: The court acknowledged that '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”’. For an act of God defense to prevail under COGSA/the Hague Rules, the carrier must show that ‘the damage from the natural event could not have been prevented by the exercise of reasonable care by the carrier’. Therefore, courts must decide two issues: (1) whether the weather conditions were foreseeable at the given time and location, and (2) whether Zim or NYCT could have taken any reasonable precautions to prevent the damage.

After review and analysis of several weather reports in the week leading up to Hurricane Sandy, the court concluded that Hurricane Sandy was an Act of God, because that its severity and - in particular - its storm surge, was not reasonably foreseeable, and that no exercise of reasonable care could have prevented the loss. Accordingly, Zim was not liable for the damage to the plaintiff’s cargo.