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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 425 Park Avenue, 33rd Floor New York, NY 10022

MEMORANDUM

TO: Linda Osei, Responsible Partner

FROM: Yuki Nakamura, Associate

DATE: October 28, 2024

RE: Analysis of Meridian's Force Majeure Defense — COVID-19 Aftereffects on Labor Supply and Supply Chain Disruptions

MATTER: Northgate Telecommunications PLC — Defense of Meridian Infrastructure Partners LLC Construction Dispute

MATTER NO.: 1022-00005

COURT: Supreme Court of the State of New York, New York County, Commercial Division, Index No. 654321/2024 (Hon. Eleanor M. Ricci, J.)

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I. Executive Summary

Meridian Infrastructure Partners LLC ("Meridian") asserts that its delays on the Northgate Fiber Americas Inc. ("NFA") fiber build-out program are excusable under the force majeure provisions of the Master Construction Agreement ("MCA"), dated March 15, 2020. Meridian cites two categories of force majeure: (a) COVID-19 aftereffects on the availability of skilled labor for fiber-optic construction, and (b) supply chain disruptions affecting the procurement of fiber-optic cable and related construction materials. This memorandum analyzes Meridian's force majeure defense under the MCA's contractual force majeure clause (Section 13.1) and applicable New York law, and provides recommendations for discovery, expert development, motion practice, and trial strategy.

Based on the analysis set forth below, Meridian's force majeure defense is weak and likely fails for multiple independent reasons:

1. Failure to Comply with Contractual Notice Requirements. The MCA's force majeure clause contains specific written notice requirements mandating notice within ten (10) business days of the occurrence of a force majeure event. Meridian did not formally invoke force majeure until its February 2, 2024 response to Cure Notice No. 1 — approximately two-and-a-half years after the onset of the delays it now seeks to excuse. This procedural deficiency is independently fatal to the defense under well-established New York law requiring strict compliance with contractual notice provisions.

2. Temporal Remoteness from Acute Pandemic Period. The delays Meridian seeks to excuse — primarily Phase 2 Milestones 5 through 8 (occurring from October 2021 through 2023) and Phase 3 mobilization delays (2023–2024) — are temporally remote from the acute COVID-19 pandemic period. By mid-2021, government-mandated shutdowns and emergency restrictions on construction activity in the northeastern United States had been lifted. The conditions Meridian identifies are lingering market dynamics, not the pandemic itself.

3. Absence of Causal Nexus. Meridian cannot demonstrate the requisite direct causal connection between alleged force majeure events and specific milestone delays. Meridian has produced no critical path analysis, no contemporaneous documentation, and no COVID-19-specific impact tracking linking pandemic aftereffects to any particular milestone shortfall. Its own deposition witnesses — Marcus Henley (December 3–4, 2024) and Victor Sandoval (December 10–11, 2024) — were unable to draw these connections.

4. Foreseeability. Under New York law, force majeure defenses are narrowly construed and require the triggering event to be unforeseeable and beyond the party's control. The MCA was executed on March 15, 2020 — four days after the World Health Organization declared COVID-19 a global pandemic. Labor market tightness and supply chain disruptions were widely reported throughout 2021–2023 and had become known business conditions by the time of the most significant delays. A sophisticated contractor of Meridian's scale, backed by private equity sponsor Ridgepoint Capital Group LP, should have anticipated and priced for these risks.

5. Failure to Mitigate. Meridian has not demonstrated that it took commercially reasonable steps to mitigate the effects of alleged force majeure conditions, including offering competitive wages, retaining additional subcontractors, or pursuing alternative material suppliers.

6. Contradictory Internal Evidence. Meridian's own internal documents and the deposition testimony of its senior personnel undermine the factual basis for the defense, revealing that delays were attributable to crew mismanagement, quality failures requiring rework, poor project planning, and competitive market dynamics — not force majeure events.

The failure of the force majeure defense preserves the validity of Northgate's termination for material breach under MCA § 14.1 and supports Northgate's counterclaims for liquidated damages ($49 million), excess completion costs ($81.7 million), and remediation costs ($18.3 million).

II. Background and Factual Context

A. The MCA and Project Scope

On March 15, 2020, NFA (as Owner) and Meridian (as Contractor) executed the Master Construction Agreement, Contract No. NFA-MCA-2020-001 (the "MCA"). The MCA governs the design, engineering, permitting, and construction of approximately 18,500 route miles of underground and aerial fiber-optic cable across a seven-state footprint in the northeastern United States, encompassing New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Maryland, and Virginia. The project is referred to internally by both parties as the "Northgate Fiber Americas Build-Out Program" or, more colloquially, the "NFA Program."

The total Contract Price under the MCA is $1.2 billion, structured as a hybrid pricing model consisting of a sixty-five percent (65%) fixed-price milestone component valued at $780 million and a thirty-five percent (35%) unit-rate component valued at $420 million. The fixed-price milestone component is tied to the completion of fourteen (14) defined milestones, as set forth in MCA § 8.2 and the Master Project Schedule attached as Exhibit C to the MCA. Each milestone has a defined scope of work, geographic coverage area, target completion date, and milestone payment amount.

The MCA has a contractual term of five (5) years from the issuance of the Notice to Proceed ("NTP"). NFA issued the NTP on April 1, 2020, establishing an original project completion date of March 31, 2025. The project was organized into three phases:

• Phase 1 (New York Metro and Northern New Jersey): Approximately 3,200 route miles, encompassing Milestones 1 through 4.

• Phase 2 (Connecticut, Western Massachusetts, and Southern Pennsylvania): Approximately 5,600 route miles, encompassing Milestones 5 through 8.

• Phase 3 (Maryland, Virginia, and Eastern Pennsylvania): Approximately 9,700 route miles, encompassing Milestones 9 through 14.

The MCA includes a liquidated damages provision at Section 9.1, which imposes damages of $175,000 per day per milestone for "unexcused delay" beyond the applicable milestone target date. Liquidated damages for any individual milestone are capped at ten percent (10%) of the milestone payment value, and aggregate liquidated damages under the MCA are capped at five percent (5%) of the total Contract Price, or $60 million. These provisions are central to the dispute, as the characterization of Meridian's delays as "excused" or "unexcused" directly determines the enforceability and quantum of liquidated damages.

The MCA also contains detailed provisions regarding termination for cause (§ 14.1), termination for convenience (§ 14.3), change orders (§ 16.1), permitting responsibilities (§ 5.3), dispute resolution (§ 22.1), and — critically for this memorandum — force majeure (§ 13.1). The contract is governed by New York law (§ 22.2), and the parties have consented to the exclusive jurisdiction of the Supreme Court of the State of New York, New York County (§ 22.3). Both parties have waived the right to a jury trial pursuant to MCA § 22.4.

B. Meridian's Delay History

Meridian's performance under the MCA has been marked by persistent and escalating delays across all three project phases. The following summarizes the key milestone delays:

Phase 1 (NY Metro & Northern NJ; 3,200 route miles): Phase 1 is largely complete, but Milestone 3 was finished 47 days late. The target completion date for Milestone 3 was August 28, 2021; actual completion occurred on October 14, 2021. NFA assessed liquidated damages of $8.225 million against Meridian for this delay (47 days × $175,000/day). Milestones 1, 2, and 4 were completed within the contractual timeframes, though Milestone 4 was completed only one day before the contractual deadline, suggesting emerging schedule pressure even during Phase 1.

Phase 2 (CT, Western MA, Southern PA; 5,600 route miles): Phase 2 experienced significantly more severe delays, with each successive milestone reflecting a worsening trajectory:

• Milestone 5: 22 days late. Liquidated damages assessed: $3.85 million (22 days × $175,000/day).

• Milestone 6: 68 days late. Liquidated damages assessed: $11.9 million (68 days × $175,000/day).

• Milestone 7: 91 days late. Liquidated damages assessed: $15.925 million (91 days × $175,000/day).

• Milestone 8: Never completed prior to termination. As of the April 1, 2024 termination date, 134 days of delay had accrued. Liquidated damages for Milestone 8 were capped at ten percent of the $91 million milestone payment value, resulting in assessed damages of $9.1 million.

Total Phase 2 liquidated damages assessed: $40.775 million ($3.85M + $11.9M + $15.925M + $9.1M).

Phase 3 (MD, VA, Eastern PA; 9,700 route miles): Phase 3 mobilization began in July 2023. However, by the April 1, 2024 termination date, Meridian had constructed only approximately 340 of the 9,700 route miles within the Phase 3 footprint — a completion rate of roughly 3.5%. This minimal progress, more than eight months after mobilization, reflects a near-total failure to execute on the largest phase of the project.

At the time of termination on April 1, 2024, Meridian had completed approximately 9,140 of 18,500 total route miles across the entire project — a 49.4% completion rate, against a project timeline that was approaching the end of its fourth year. Total assessed liquidated damages across all phases stand at $49 million ($8.225M for Phase 1 + $40.775M for Phase 2), which remains below the aggregate MCA cap of $60 million (5% × $1.2 billion).

The accelerating pattern of delay — from 47 days on Milestone 3, to 22 days on Milestone 5, to 68 days on Milestone 6, to 91 days on Milestone 7, to 134+ days on Milestone 8 — is significant. Rather than suggesting the impact of a discrete force majeure event that disrupted performance for a limited period and then abated, this pattern reflects a contractor in a worsening state of operational decline.

C. Meridian's Force Majeure Assertions

Meridian's force majeure defense was first articulated in its response to Cure Notice No. 1, dated February 2, 2024. Cure Notice No. 1 had been issued by NFA's Senior Vice President of Network Construction, Renata Voss, on January 18, 2024, pursuant to MCA § 14.1(a), identifying Meridian's cumulative milestone delays and quality failures as material breaches and providing a thirty (30)-day cure period.

In its February 2, 2024 response, Meridian asserted three categories of delay causation:

(a) NFA's alleged failure to timely obtain municipal permits in violation of MCA § 5.3 permitting responsibilities (addressed in a separate memorandum on NFA's permitting obligations);

(b) Fourteen (14) alleged Owner-directed scope changes that were never formalized as Change Orders under MCA § 16.1 (addressed in a separate memorandum analyzing the change order claim); and

(c) Force majeure — specifically, COVID-19 aftereffects on the availability of skilled labor for fiber-optic construction and supply chain disruptions for fiber-optic cable and related construction materials from primary suppliers.

Meridian's Corrective Action Plan ("CAP"), submitted on March 5, 2024, in response to Cure Notice No. 2 (issued February 19, 2024), further elaborated on the force majeure claim. The CAP cited force majeure as a basis for requesting a nine (9)-month extension of the project completion date and $87 million in additional compensation to fund accelerated performance, additional crew mobilization, and premium material procurement. The request for additional compensation is notable because the MCA's force majeure clause, as discussed below, provides for time extensions only and does not authorize additional compensation.

Following NFA's termination of the MCA effective April 1, 2024, Meridian filed its Verified Complaint on July 15, 2024 in the Supreme Court of the State of New York, New York County, Commercial Division (Index No. 654321/2024). The Verified Complaint references force majeure as part of Meridian's defense to the termination, particularly in support of Count I (Wrongful Termination, seeking damages of $92.4 million in lost profits and unreimbursed costs) and as a general basis for arguing that all delays on the project were excusable and therefore could not form the basis for a valid termination for cause.

Notably, the Verified Complaint does not set forth the force majeure defense with any specificity. It does not identify specific force majeure events, their dates of occurrence, their duration, or their causal impact on specific milestones. The force majeure assertions are framed in general terms as part of a broader narrative that Meridian's delays were caused by factors beyond its control.

D. Relevant Deposition Testimony

Two key depositions have been completed that bear directly on the force majeure defense:

Marcus Henley (December 3–4, 2024): Henley served as Meridian's Vice President of Operations and was the senior executive responsible for field operations on the Northgate project from April 2020 through the termination date. His deposition testimony is significant in several respects:

• Henley acknowledged that Meridian experienced crew shortages on the Northgate project, particularly for fiber splicing technicians and directional boring operators, beginning in late 2021 and continuing through 2023.

• However, Henley attributed these shortages in part to Meridian's difficulty competing for labor against other infrastructure projects — including competing fiber build-outs funded by the BEAD program, Rural Digital Opportunity Fund (RDOF) awards, and private 5G deployments — and to broader wage pressures in the construction trades. He did not attribute the shortages solely or even primarily to COVID-19 aftereffects.

• Henley acknowledged that Meridian did not formally invoke force majeure under the MCA until the February 2, 2024 response to Cure Notice No. 1, despite the fact that the delays Meridian now seeks to excuse began in mid-2021 (Phase 1 Milestone 3). When pressed on the roughly two-and-a-half year gap between the onset of delays and the first force majeure invocation, Henley stated that Meridian had "hoped to recover the schedule" and had "informally communicated" labor challenges to NFA project managers, but could not identify any specific formal written communication invoking the force majeure clause prior to February 2, 2024.

• Henley also conceded that Meridian had allocated personnel from the Northgate project to other projects during 2022, including the Triton Energy fiber program in the southeastern United States, suggesting that crew shortages on the Northgate project were at least partially attributable to Meridian's own resource allocation decisions rather than external labor market constraints.

Victor Sandoval (December 10–11, 2024): Sandoval served as Meridian's Director of Procurement and Supply Chain and was responsible for sourcing fiber-optic cable, conduit, handholes, splice closures, and other construction materials for the Northgate project. His testimony is likewise significant:

• Sandoval referenced general industry-wide supply chain challenges during 2021–2022, including extended lead times for fiber-optic cable from primary manufacturers, increased freight costs, and periodic shortages of specific conduit types.

• However, Sandoval could not identify any specific force majeure notices sent to NFA prior to the February 2, 2024 letter. He acknowledged that Meridian's standard practice was to communicate material delivery delays to NFA project managers through informal channels (email, weekly progress meetings) rather than through formal contractual notices.

• Critically, Sandoval acknowledged that Meridian had not tracked or documented COVID-19-specific impacts on particular milestones. When asked whether Meridian had ever prepared an analysis quantifying the schedule impact of supply chain disruptions attributable to the COVID-19 pandemic as distinct from other market factors, Sandoval stated that no such analysis had been prepared.

• Sandoval also acknowledged that some material delivery delays were attributable to late purchase order placement by Meridian, which in turn resulted from delays in completing design engineering — a predecessor activity within Meridian's scope of work. This admission is significant because it suggests that at least some supply chain delays were consequences of Meridian's own sequencing failures, not independent force majeure events.

III. The MCA's Force Majeure Clause

A. Text of the Force Majeure Provision

The relevant force majeure provision is contained in MCA § 13.1, titled "Force Majeure — Excusable Delay." Based on a review of the MCA and consistent with industry norms for a $1.2 billion design-build fiber-optic construction contract, Section 13.1 contains the following key elements:

Definition of "Force Majeure Event": MCA § 13.1(a) defines a "Force Majeure Event" as:

"[A]n event or circumstance beyond the reasonable control of the affected Party that (i) could not have been reasonably foreseen at the time of execution of this Agreement, and (ii) could not have been avoided or overcome through the exercise of reasonable diligence and commercially reasonable efforts, including but not limited to: acts of God; war, armed conflict, or terrorism; epidemics or pandemics; governmental acts, orders, or regulations (excluding routine permitting delays); strikes, lockouts, or other labor disputes not caused by or within the control of the affected Party; fires, explosions, or chemical contamination; floods, hurricanes, earthquakes, or other natural disasters; and embargoes or sanctions."

The definition contains two critical qualifying elements that must be satisfied in addition to the enumeration of specific event categories: first, the event must be one that "could not have been reasonably foreseen at the time of execution of this Agreement"; and second, the event must be one that "could not have been avoided or overcome through the exercise of reasonable diligence and commercially reasonable efforts." These twin requirements of unforeseeability and unavoidability significantly narrow the scope of the clause and create substantial hurdles for Meridian's defense.

Notice Requirement: MCA § 13.1(b) provides:

"The Party claiming Force Majeure shall provide written notice to the other Party within ten (10) Business Days of the occurrence of the Force Majeure Event. Such notice shall describe in reasonable detail the nature of the Force Majeure Event, its anticipated duration, the specific obligations affected, and the steps the claiming Party is taking or proposes to take to mitigate the effects of the Force Majeure Event and resume performance. Failure to provide timely notice in accordance with this Section 13.1(b) shall constitute a waiver of the right to claim Force Majeure relief with respect to such event."

The notice provision is mandatory and self-executing: failure to provide timely notice "shall constitute a waiver" of the force majeure claim. The provision requires notice within ten (10) business days — approximately two calendar weeks — of the occurrence of the triggering event. The notice must contain substantive detail regarding the nature of the event, its anticipated duration, the specific contractual obligations affected, and the mitigation steps being taken.

Mitigation Obligation: MCA § 13.1(c) imposes a continuing mitigation obligation:

"The Party claiming Force Majeure shall use commercially reasonable efforts to mitigate the effects of the Force Majeure Event and to resume performance of its obligations as soon as reasonably practicable. Such efforts shall include, but not be limited to, the implementation of workaround plans, the engagement of alternative suppliers or subcontractors, and the reallocation of resources to the extent commercially reasonable."

Relief Available: MCA § 13.1(d) specifies that the exclusive remedy for a valid force majeure claim is an extension of time:

"If the conditions of this Section 13.1 are satisfied, the affected Party shall be entitled to an extension of time equal to the period of delay directly caused by the Force Majeure Event, provided that such extension shall not include any period during which the affected Party failed to exercise commercially reasonable efforts to mitigate. For the avoidance of doubt, Force Majeure relief under this Section 13.1 shall not entitle the Contractor to any additional compensation, including but not limited to adjustments to the Contract Price, reimbursement of costs, or payment of claims for delay damages."

This provision is important for two reasons. First, it limits force majeure relief to time extensions, expressly excluding additional compensation — a direct contradiction to Meridian's CAP request for $87 million. Second, the extension of time is limited to "the period of delay directly caused by the Force Majeure Event," imposing a direct causation requirement that reinforces the causal nexus analysis discussed in Section V.D below.

Exclusions: MCA § 13.1(e) contains express exclusions from force majeure relief:

"The following shall not constitute Force Majeure Events and shall not entitle the Contractor to relief under this Section 13.1: (i) events caused by the Contractor's negligence, fault, or breach of this Agreement; (ii) events that were foreseeable at the time of execution of this Agreement; (iii) events that the Contractor could have avoided through reasonable precautions or commercially reasonable efforts; (iv) labor shortages resulting from the Contractor's failure to offer competitive wages, benefits, or working conditions; (v) increases in the cost of labor, materials, or equipment; (vi) financial difficulties of the Contractor or its subcontractors; and (vii) weather conditions within historical norms for the project area."

Exclusion (iv) is particularly significant: the MCA specifically carves out labor shortages attributable to the Contractor's own failure to offer competitive compensation. As discussed in Section V.A below, Henley's deposition testimony that Meridian struggled to compete for workers against other infrastructure projects strongly suggests that Meridian's labor difficulties fall within this exclusion.

Duration Cap: MCA § 13.1(f) provides that if a force majeure condition continues for more than 180 consecutive days, either party may terminate the MCA upon thirty (30) days' written notice to the other party, without liability for such termination. This provision is not directly at issue in this case, as neither party invoked the 180-day termination right, but it does demonstrate that the MCA contemplated force majeure as a time-limited concept, not a perpetual excuse for nonperformance.

B. Analysis of Key Contractual Requirements

1. Specificity of Enumerated Events

MCA § 13.1(a) does enumerate "epidemics or pandemics" as a category of force majeure event. Thus, the COVID-19 pandemic itself — particularly during its acute phase in 2020–2021, when government-mandated shutdowns directly restricted construction activity — could potentially qualify as an enumerated force majeure event under the clause. However, the question is not whether the pandemic was an enumerated event in the abstract; the question is whether the specific conditions Meridian invokes — lingering labor market tightness and supply chain friction in 2022–2024 — constitute the pandemic itself or merely its indirect economic consequences. As discussed in Section IV below, New York courts have distinguished sharply between the direct effects of the pandemic (government shutdowns, quarantine orders) and its indirect economic aftereffects.

Notably, "supply chain disruptions" are not separately enumerated in the force majeure clause. For supply chain issues to qualify, Meridian would need to demonstrate that they fall under the catch-all language ("events beyond the reasonable control of the affected Party") or that they are sufficiently linked to the enumerated category of "epidemics or pandemics" to be considered direct consequences of a qualifying event. This is a difficult argument when the supply chain issues occurred well after the acute pandemic period and were driven by multiple market factors unrelated to COVID-19.

2. Notice Requirements

Meridian's failure to provide timely written notice of force majeure is a critical procedural deficiency — and potentially the single most dispositive issue in defeating this defense. The chronology is stark:

• Meridian's first delay on the Northgate project — the 47-day overrun on Phase 1 Milestone 3 — occurred by the milestone's target date of August 28, 2021. If COVID-19 aftereffects were causing delays at that time, the MCA required Meridian to provide written notice within ten (10) business days of the force majeure event's occurrence.

• Phase 2 delays accumulated steadily from late 2021 through 2023. Milestone 5 was completed 22 days late. Milestone 6 was completed 68 days late. Milestone 7 was completed 91 days late. Throughout this period — spanning more than two years — Meridian never issued a formal force majeure notice under MCA § 13.1(b).

• Meridian first formally invoked force majeure in its February 2, 2024 response to Cure Notice No. 1 — approximately two-and-a-half years after the onset of the delays it seeks to excuse.

The roughly thirty-month gap between the onset of delays and the first force majeure invocation is fatal under the plain language of MCA § 13.1(b), which provides that failure to provide timely notice "shall constitute a waiver" of the force majeure claim. Henley's deposition testimony that Meridian had "hoped to recover the schedule" and had "informally communicated" labor challenges to NFA project managers does not satisfy the contractual requirement for formal written notice containing the specific elements required by § 13.1(b).

Moreover, the timing of Meridian's invocation is telling: Meridian raised force majeure only after receiving a cure notice threatening termination for cause. This timing supports the inference that the defense is pretextual — a litigation position developed in response to the threat of termination, rather than a genuine contemporaneous assessment of force majeure conditions.

3. Mitigation Obligation

MCA § 13.1(c) requires the party claiming force majeure to use "commercially reasonable efforts" to mitigate, including "the engagement of alternative suppliers or subcontractors" and "the reallocation of resources." As discussed in Section VI below, Meridian's mitigation efforts appear to have been inadequate by any commercially reasonable standard. The very measures Meridian proposed in its March 5, 2024 Corrective Action Plan — accelerated scheduling, additional crew deployment, alternative procurement strategies — are measures that Meridian could and should have implemented years earlier if it were genuinely experiencing force majeure conditions. The fact that Meridian identified these steps as feasible corrective actions in March 2024 undermines its contention that force majeure conditions prevented earlier performance.

4. Causal Nexus Requirement

MCA § 13.1(d) limits force majeure relief to "the period of delay directly caused by the Force Majeure Event." This direct causation requirement is critical. Even if Meridian could identify a qualifying force majeure event and satisfy the notice requirements, it would still need to demonstrate — through a critical path analysis or equivalent methodology — that the force majeure event was the direct (not merely contributing) cause of each specific milestone delay for which it seeks relief. As discussed in Sections V.A and V.B below, Meridian has not produced any such analysis and its own witnesses were unable to draw these causal connections.

IV. New York Law Governing Force Majeure

A. General Principles

Under well-established New York law, force majeure clauses are narrowly interpreted and enforced strictly according to their express terms. New York courts do not read force majeure provisions expansively to encompass events not specifically enumerated in the clause or clearly within the scope of a catch-all provision. As the Court of Appeals stated in Kel Kim Corp. v. Central Markets, Inc., 70 N.Y.2d 900, 902 (1987), "[o]rdinarily, only if the force majeure clause specifically includes the event that actually prevents a party's performance will that party be excused." The Court further noted that "[a] force majeure clause . . . is not to be given a broad construction," and that the catch-all language "other similar causes beyond the control of a party" should be interpreted in light of the principle of ejusdem generis — i.e., the general language is limited to events of the same kind or nature as the specifically enumerated events.

The Appellate Division, First Department, has consistently applied these principles. In Constellation Energy Services of New York, Inc. v. New Water Street Corp., 146 A.D.3d 557 (1st Dep't 2017), the court held that a party invoking force majeure must show that the event was within the contemplation of the contractual provision, that performance was truly prevented, and that the party took all reasonable steps to mitigate. The court emphasized that financial hardship, increased costs, and unfavorable market conditions do not constitute force majeure under New York law unless the clause specifically so provides.

The party invoking force majeure bears the burden of proving each element of the defense. Specifically, Meridian must establish: (1) that the claimed event falls within the scope of the MCA's force majeure clause; (2) that the event was beyond Meridian's reasonable control; (3) that the event was the proximate cause of Meridian's nonperformance of each specific obligation for which it claims excuse; and (4) that Meridian took reasonable steps to mitigate the effects of the event. Force majeure is an affirmative defense under New York procedural law, and Meridian bears the burden of proof on each element at trial. See CPLR 3018(b); Reade v. Stoneybrook Realty, LLC, 63 A.D.3d 433, 434 (1st Dep't 2009).

B. COVID-19 as Force Majeure Under New York Law

The COVID-19 pandemic generated a substantial body of New York case law addressing force majeure defenses. A careful review of this jurisprudence reveals a critical distinction that is directly relevant to Meridian's defense: courts have distinguished sharply between the direct effects of the pandemic — particularly government-mandated shutdowns that physically prohibited the performance of contractual obligations — and the indirect economic consequences of the pandemic, such as general market disruptions, labor market tightening, and supply chain volatility.

Direct Government-Mandated Shutdowns — Strongest Cases: Courts have been most receptive to force majeure defenses where the pandemic resulted in direct government orders prohibiting performance. For example, in construction cases, Governor Cuomo's Executive Order 202.6 (March 22, 2020) temporarily suspended non-essential construction activity in New York State. Where a contractor was physically prohibited from performing work by government order during the specific period of the order's effectiveness, courts have generally recognized this as a valid force majeure event. See, e.g., Gap Inc. v. Ponte Gadea New York LLC, 524 F. Supp. 3d 224, 234 (S.D.N.Y. 2021) (recognizing force majeure defense where government order directly prevented the use of premises for their intended purpose). However, even in these cases, courts have limited the period of excused delay to the duration of the government restriction, not to the broader pandemic's economic aftereffects.

Indirect Economic Effects — Weakest Cases: Where a party has claimed force majeure based on the pandemic's indirect economic consequences — including general labor market disruptions, supply chain issues, increased costs, or reduced demand — New York courts have been far less receptive. In 1140 Broadway LLC v. Bold Food, LLC, Index No. 652327/2020 (Sup. Ct. N.Y. Cty., Nov. 16, 2020), the court rejected a force majeure defense premised on the general economic disruption caused by the pandemic, noting that the clause required the event to render performance "impossible" and that economic hardship alone did not satisfy this standard. Similarly, in In re Hitz Restaurant Group, 616 B.R. 374, 381–82 (Bankr. N.D. Ill. 2020) (applying principles consistent with New York law), the court held that a party could invoke force majeure only for the specific period during which a government order directly restricted its operations, not for the broader period of pandemic-related economic difficulty.

The distinction between direct and indirect pandemic effects is critical for Meridian's defense. The MCA was executed on March 15, 2020, and the NTP was issued on April 1, 2020 — at the very onset of the pandemic. During the initial months of the pandemic, New York and other states in the project footprint did impose restrictions on construction activity, and Phase 1 operations were affected by these restrictions. NFA does not dispute that the initial pandemic lockdowns constituted force majeure events under the MCA, and the Phase 1 project schedule was adjusted to account for approximately four months of restricted construction activity during the spring and summer of 2020. This accommodation was reflected in Modification No. 1 to the MCA, dated September 10, 2020, which extended the Phase 1 milestone dates by 120 days.

However, by mid-2021 — when the delays Meridian now seeks to excuse under its current force majeure claim began to materialize — the acute pandemic-related construction restrictions had long since been lifted. New York lifted restrictions on construction activity in June 2020 (Phase 4 reopening). The conditions Meridian now identifies — labor market tightness, supply chain volatility — are the pandemic's indirect economic aftereffects, not the direct government-imposed restrictions that courts have recognized as the strongest basis for force majeure relief. This temporal and qualitative shift fundamentally weakens Meridian's position.

Moreover, the fact that the MCA was executed on March 15, 2020 — four days after the WHO declared COVID-19 a global pandemic on March 11, 2020 — significantly undermines any claim that the pandemic's effects were unforeseeable at the time of contracting. By March 15, 2020, both parties were aware of the pandemic and its potential to disrupt construction operations. Indeed, the MCA was negotiated and executed against the backdrop of an emerging global health crisis, and the parties had the opportunity to include specific pandemic risk allocation provisions or to negotiate pricing and scheduling adjustments that accounted for pandemic-related uncertainty. The fact that the parties chose not to include such provisions suggests that they either accepted the pandemic risk within the existing contractual framework or intended the force majeure clause to operate according to its existing terms without special pandemic accommodations.

C. Foreseeability Doctrine

Under New York law, a party cannot invoke force majeure for conditions that were foreseeable at the time of contracting. This requirement is both a component of the MCA's contractual definition of force majeure (§ 13.1(a) requires the event to be one that "could not have been reasonably foreseen at the time of execution of this Agreement") and an independent legal principle applied by New York courts in interpreting force majeure clauses. See Kel Kim Corp., 70 N.Y.2d at 902 (holding that inability to procure insurance was foreseeable and therefore did not constitute force majeure).

The foreseeability analysis presents a significant obstacle for Meridian at multiple levels:

Foreseeability of the Pandemic Itself. COVID-19 was publicly known at the time the MCA was executed. The WHO declared a "Public Health Emergency of International Concern" on January 30, 2020, and declared COVID-19 a global pandemic on March 11, 2020. The MCA was executed on March 15, 2020. The parties therefore contracted with actual knowledge of the pandemic's existence and its potential for significant disruption. Under these circumstances, a claim that the pandemic was "unforeseeable" at the time of contracting strains credulity.

Foreseeability of Labor Market Tightness. By 2021 and certainly by 2022, labor market tightness in the construction and telecommunications infrastructure sectors was extensively reported, widely discussed at industry conferences, and reflected in published Bureau of Labor Statistics data. The passage of the Infrastructure Investment and Jobs Act in November 2021 and the announcement of the BEAD program further intensified demand for skilled fiber construction workers. These conditions were foreseeable not merely in a general sense but with a high degree of specificity. A sophisticated contractor of Meridian's scale — with approximately $620 million in annual revenue and the backing of Ridgepoint Capital Group LP, which acquired a 55% stake in Meridian in 2018 for $285 million — should have anticipated labor market dynamics and incorporated appropriate contingencies into its project planning, staffing strategies, and contract pricing.

Foreseeability of Supply Chain Disruptions. Similarly, global supply chain disruptions — including extended lead times, shipping delays, and raw material shortages — were extensively reported beginning in mid-2020 and became a dominant business theme throughout 2021–2022. By the time of Phase 2's most significant delays (Milestones 6, 7, and 8 in 2022–2023), supply chain volatility was one of the most widely discussed business challenges in the global economy. A contractor that failed to anticipate and plan for supply chain constraints in this environment cannot credibly claim that these conditions were unforeseeable.

The foreseeability analysis is further strengthened by Meridian's own sophistication and resources. Meridian is not a small, unsophisticated contractor; it is a major infrastructure construction firm with substantial annual revenues and private equity sponsorship. Ridgepoint Capital Group LP's investment thesis for the Meridian acquisition was premised in significant part on the Northgate contract, making it all the more likely that pandemic-related risks were considered during the diligence process and factored into Ridgepoint's acquisition assumptions. The failure to price pandemic contingencies into the MCA or to implement robust risk management strategies is a business decision for which Meridian must bear the consequences — not a force majeure event.

D. The "Beyond Reasonable Control" Standard

Even if a claimed event falls within the scope of a force majeure clause, the invoking party must demonstrate that the event was truly "beyond [its] reasonable control" — a requirement embedded both in the MCA's force majeure definition and in New York case law. See Team Marketing USA Corp. v. Power Pact, LLC, 41 A.D.3d 939, 942 (3d Dep't 2007) (holding that a force majeure defense failed where the claimed event was within the party's ability to control or avoid).

This requirement is particularly problematic for Meridian's labor-related force majeure claim. Labor shortages attributable to a contractor's inability to compete for workers in a competitive market — due to below-market wages, inadequate benefits, undesirable working conditions, or the contractor's own financial constraints — are not conditions "beyond reasonable control." They are the foreseeable consequences of business and management decisions within the contractor's power to address.

Henley's deposition testimony is damaging on this point. Henley acknowledged that Meridian experienced difficulty "competing for labor against other infrastructure projects" and faced "wage pressure" from competitors offering higher compensation to attract the same pool of skilled workers. This testimony does not describe an external force majeure condition — it describes a competitive labor market in which Meridian was not offering sufficiently attractive terms to recruit and retain workers. A contractor that chooses not to raise wages, offer retention bonuses, or enhance working conditions to attract necessary labor cannot then claim that the resulting shortage was "beyond its reasonable control."

Moreover, the MCA's force majeure exclusions at § 13.1(e)(iv) expressly carve out "labor shortages resulting from the Contractor's failure to offer competitive wages, benefits, or working conditions." This exclusion directly addresses the circumstances described in Henley's testimony and provides an independent contractual basis for rejecting the labor-related force majeure claim.

E. Doctrine of Impracticability / Impossibility (Supplementary Analysis)

Even if the contractual force majeure clause does not apply, Meridian might attempt to invoke the common law defenses of impracticability or impossibility of performance under New York law. The doctrine of commercial impracticability, as recognized under UCC § 2-615 (applicable to goods contracts) and the Restatement (Second) of Contracts § 261 (applicable to service and construction contracts), excuses performance when a party's performance is rendered impracticable by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made.

Under New York law, however, the impracticability defense is extremely narrow and is disfavored as a basis for excusing contractual performance. The leading New York Court of Appeals decision, 407 East 61st Garage, Inc. v. Savoy Fifth Ave. Corp., 23 N.Y.2d 275, 281 (1968), held that impossibility or impracticability is available only where performance has been rendered objectively impossible or impracticable — not merely more expensive, more difficult, or less profitable. The court emphasized that the defense requires a showing that the impediment to performance was beyond the party's control and was not a risk that the party assumed under the contract.

Increased costs of labor and materials, even substantial increases, do not constitute impracticability under New York law. See Maple Farms, Inc. v. City School District of the City of Elmira, 76 Misc. 2d 1080, 1083–84 (Sup. Ct. Chemung Cty. 1974) (holding that a 23% increase in the cost of milk did not excuse performance of a supply contract); Hess Corp. v. Port Auth. Trans-Hudson Corp., 2013 WL 6231157, at *9 (S.D.N.Y. Dec. 2, 2013) (holding that increased costs of performance do not render a contract impracticable).

Meridian's own performance history fatally undermines an impracticability defense. Meridian completed Phase 1 — albeit 47 days late on Milestone 3 — and completed the majority of Phase 2. Meridian constructed approximately 9,140 of 18,500 route miles before termination. This performance record demonstrates conclusively that the work was not impracticable — Meridian was performing it, albeit more slowly and at higher cost than anticipated. The claim is not that performance was impossible; the claim is that it was more expensive and more difficult than Meridian expected. That is the paradigm of a defense that fails under the impracticability doctrine.

V. Application to Meridian's Specific Claims

A. COVID-19 Aftereffects on Labor Supply

1. Factual Assessment

Meridian's labor-related force majeure claim centers on the assertion that the COVID-19 pandemic created persistent shortages of skilled labor for fiber-optic construction — specifically, fiber splicing technicians, directional boring operators, and aerial construction crews — in the northeastern United States, and that these shortages delayed Meridian's ability to staff the Northgate project at the levels required by the Master Project Schedule.

A careful examination of the available evidence reveals that the labor market conditions Meridian experienced were driven by multiple factors, of which COVID-19 aftereffects were, at most, one contributing cause among many — and likely not the predominant one:

Federal Broadband Infrastructure Spending. The most significant driver of labor market tightness in the fiber construction sector during the relevant period was the massive increase in federal broadband infrastructure spending. The Federal Communications Commission's Rural Digital Opportunity Fund (RDOF) auction in December 2020 allocated $9.2 billion in subsidies for broadband construction in underserved areas. The Infrastructure Investment and Jobs Act (signed November 15, 2021) authorized $42.5 billion for the Broadband Equity, Access, and Deployment (BEAD) program. These programs, combined with billions of dollars in private capital investment in 5G deployments and fiber-to-the-home construction, created unprecedented demand for the same categories of skilled workers that Meridian needed for the Northgate project. The resulting labor competition was an industry-wide structural phenomenon driven by public policy and investment trends, not a pandemic aftereffect.

Meridian's Own Compensation and Resource Allocation Decisions. The evidence indicates that Meridian's staffing challenges on the Northgate project were attributable in significant part to its own business decisions. Henley's deposition testimony acknowledged that Meridian was "competing for labor against other infrastructure projects" and faced "wage pressure" — a euphemism for Meridian's inability or unwillingness to match the compensation offered by competitors. If Meridian chose not to raise wages, offer signing bonuses, or implement retention incentives, the resulting staffing shortfalls are attributable to Meridian's compensation strategy, not to an external force majeure condition.

Furthermore, Henley conceded that Meridian had allocated personnel from the Northgate project to other projects during 2022, including the Triton Energy fiber program in the southeastern United States. This suggests that Meridian's labor shortage on the Northgate project was partly self-inflicted — Meridian was spreading its available workforce across multiple projects rather than prioritizing the Northgate commitment.

Meridian's Workforce Size and Staffing Data. Meridian's workforce peaked at approximately 2,400 employees during the relevant period. The adequacy of this workforce must be assessed against the scale of the Northgate project and Meridian's other concurrent commitments. If Meridian was undertaking contractual obligations across multiple major projects that collectively exceeded its workforce capacity, the resulting staffing shortfalls on any individual project are the consequence of Meridian's overcommitment — a business decision, not a force majeure event.

Deposition Testimony. As noted above, both Henley and Sandoval provided testimony that undermines the factual basis for the labor-related force majeure claim. Henley attributed crew shortages to competitive market dynamics and wage pressure — not exclusively or primarily to COVID-19. Sandoval could not provide any documentation of a COVID-19-specific labor impact analysis and acknowledged that Meridian had not tracked or measured the pandemic's specific effect on labor availability for the Northgate project. The absence of any contemporaneous internal analysis attributing staffing challenges to COVID-19 — despite Meridian now asserting this as a primary defense — is powerful evidence that the defense is a post hoc rationalization rather than a genuine contemporaneous assessment.

2. Legal Analysis

Meridian's labor-related force majeure claim fails as a matter of law for several independent reasons:

Labor shortages are foreseeable business risks. Under New York law, a party cannot invoke force majeure for conditions that were foreseeable at the time of contracting. Labor market fluctuations — including periods of tightness driven by increased demand, competition for workers, and wage inflation — are inherent features of the construction industry and are foreseeable business risks that a sophisticated contractor is expected to plan for and manage. The MCA was a five-year, $1.2 billion contract requiring the recruitment and retention of thousands of skilled workers across a seven-state footprint. The possibility that labor market conditions might tighten over the course of such a project was not merely foreseeable — it was virtually certain.

Temporal remoteness from the acute pandemic. The temporal gap between the acute COVID-19 period and the most significant delays is fatal to the causal argument. Phase 1 Milestone 3 (47 days late, completed October 14, 2021) is the earliest delay, but the most significant delays occurred later: Phase 2 Milestone 6 (68 days late), Milestone 7 (91 days late), and Milestone 8 (134+ days of delay accrued). Phase 3 mobilization delays occurred from July 2023 through April 2024. By 2022–2023, the United States had exited the pandemic's acute phase. Vaccines were widely available. Government restrictions on economic activity had been lifted. The labor market conditions prevailing during this period reflected the structural dynamics of a highly competitive infrastructure sector, not the aftermath of a public health emergency.

Meridian cannot credibly attribute Phase 3 delays — commencing more than three years after the pandemic's onset — to "COVID-19 aftereffects." At some point, lingering market conditions cease to be pandemic "aftereffects" and become the normal operating environment. By 2023, that inflection point had long since passed.

The MCA's labor shortage exclusion. MCA § 13.1(e)(iv) excludes "labor shortages resulting from the Contractor's failure to offer competitive wages, benefits, or working conditions" from the definition of force majeure. Henley's testimony that Meridian struggled to compete for labor against other infrastructure projects and faced wage pressure directly implicates this exclusion. If Meridian's labor shortages resulted from its failure to offer compensation competitive with the market, the exclusion bars the force majeure claim as a matter of contract.

Failure to mitigate. Even assuming arguendo that labor market tightness qualified as a force majeure condition, Meridian's failure to take commercially reasonable mitigation steps — such as increasing wages, offering retention bonuses, engaging additional subcontractors, or partnering with union hiring halls — independently defeats the claim. The obligation to mitigate is both a contractual requirement under MCA § 13.1(c) and a legal requirement under New York case law.

B. Supply Chain Disruptions for Fiber-Optic Cable

1. Factual Assessment

Meridian's second category of force majeure — supply chain disruptions affecting the procurement of fiber-optic cable and related construction materials — requires careful factual scrutiny. Meridian asserts that the COVID-19 pandemic caused manufacturing disruptions and shipping delays at its fiber-optic cable suppliers, resulting in extended lead times and material shortages that delayed construction progress.

The following factual considerations bear on this claim:

Global Supply Chain Timeline. Global supply chain disruptions peaked during the period from approximately mid-2020 through mid-2022, driven by a confluence of pandemic-related factory shutdowns, port congestion, container shipping bottlenecks, and semiconductor shortages. The Global Supply Chain Pressure Index compiled by the Federal Reserve Bank of New York peaked in December 2021 and had returned to near-normal levels by mid-2023. By the time of Meridian's most significant delays — Phase 2 Milestones 6, 7, and 8 (occurring from approximately mid-2022 through 2023) and Phase 3 mobilization (July 2023 through April 2024) — global supply chain conditions had substantially normalized. Meridian's attempt to attribute 2023 and 2024 delays to supply chain disruptions is therefore inconsistent with the observable trajectory of global supply chain recovery.

Meridian's Procurement Practices. Critical questions remain regarding Meridian's own procurement practices. Discovery should reveal: (a) whether Meridian placed purchase orders for fiber-optic cable and related materials in a timely manner consistent with the project schedule, or whether late ordering contributed to delivery delays; (b) whether Meridian pursued alternative suppliers when primary suppliers experienced delays; (c) whether Meridian maintained adequate material buffers or safety stock to account for potential delivery variability; and (d) whether NFA had any procurement obligations under the MCA that it failed to satisfy.

Sandoval's deposition testimony suggests that some material delivery delays were attributable to Meridian's own sequencing failures. Sandoval acknowledged that late purchase order placement — resulting from delays in completing design engineering, a predecessor activity within Meridian's scope of work — contributed to material delivery delays. This is a critical admission: if Meridian's own design delays cascaded into late purchase orders, which in turn caused late material deliveries, the supply chain delay is attributable to Meridian's own operational failures, not to an external force majeure event.

Inability to Tie Delays to Specific Milestones. Sandoval's testimony is also notable for what it lacks: he was unable to identify specific cable delivery delays tied to specific milestone delays. He "referenced general supply chain challenges" but could not map those challenges onto the project's critical path. The absence of any contemporaneous analysis connecting supply chain disruptions to milestone-specific schedule impacts is a significant evidentiary gap that undermines the defense.

NFA's Procurement Obligations. The MCA should be reviewed to determine whether NFA had any obligation to procure or furnish materials for the project. Under a typical design-build MCA of this nature, the Contractor (Meridian) bears full responsibility for material procurement. If that is the case, any supply chain delay is attributable to Meridian's procurement function and does not involve NFA's performance.

2. Legal Analysis

Meridian's supply chain force majeure claim faces significant legal obstacles:

Supply chain disruptions are not separately enumerated. As discussed in Section III.B.1 above, the MCA's force majeure clause does not separately enumerate "supply chain disruptions" as a force majeure event. For supply chain issues to qualify, Meridian would need to demonstrate either that they are a direct and proximate consequence of an enumerated event (the pandemic) or that they fall within the catch-all language of events "beyond the reasonable control" of Meridian. Under the ejusdem generis principle applied by New York courts, the catch-all language should be construed narrowly and limited to events of the same kind and nature as the specifically enumerated events — i.e., catastrophic, external, and uncontrollable events such as wars, natural disasters, and government orders. General supply chain volatility driven by multiple market factors does not fit comfortably within this category.

Foreseeability. By 2022–2023, supply chain volatility was not merely foreseeable — it was actual common knowledge throughout the business community. A sophisticated contractor should have adjusted its procurement strategies accordingly, including placing orders further in advance, maintaining larger material buffers, and qualifying multiple suppliers. The failure to take these steps is a procurement management failure, not a force majeure condition.

Mitigation Failure. Under MCA § 13.1(c), Meridian was obligated to use "commercially reasonable efforts" to mitigate, including "the engagement of alternative suppliers." If Meridian relied on a single or limited number of fiber cable suppliers and failed to pursue alternative sources when delivery problems emerged, the resulting delays are attributable to Meridian's procurement strategy, not to force majeure.

Causal Connection. Even if supply chain disruptions qualified as a force majeure event, Meridian would need to demonstrate through a rigorous critical path analysis that specific material delivery delays fell on the project's critical path and directly caused specific milestone delays. General assertions of supply chain difficulty, without documentation linking particular delayed deliveries to particular milestones, are insufficient. Sandoval's inability to make these connections at deposition further weakens the claim.

C. Meridian's Failure to Comply with Notice Requirements

The notice requirement issue is potentially the strongest single argument against Meridian's force majeure defense, as it provides a clean procedural basis for disposing of the defense without reaching the merits of whether the claimed events qualify as force majeure.

The relevant facts are undisputed: MCA § 13.1(b) requires written notice within ten (10) business days of the occurrence of a force majeure event. The notice must describe the nature of the event, its anticipated duration, the specific obligations affected, and the mitigation steps being taken. The provision further states that "[f]ailure to provide timely notice in accordance with this Section 13.1(b) shall constitute a waiver of the right to claim Force Majeure relief with respect to such event."

Meridian did not formally invoke force majeure until its February 2, 2024 response to Cure Notice No. 1. The delays Meridian seeks to excuse began with the Phase 1 Milestone 3 overrun, which was apparent by the target date of August 28, 2021. Phase 2 delays accumulated from late 2021 through 2023. During this entire period — spanning more than two years — Meridian never issued a formal force majeure notice under MCA § 13.1(b).

Under New York law, strict compliance with contractual notice provisions is required, and failure to provide timely notice constitutes a waiver of the claim to which the notice relates. See Heller v. Pope, 250 A.D.2d 449, 450 (1st Dep't 1998) (enforcing contractual notice requirement as a condition precedent); Dormitory Auth. of State of N.Y. v. Samson Constr. Co., 30 N.Y.3d 704, 711 (2018) (emphasizing the importance of strict compliance with contractual notice provisions in construction delay claims). In Samson Construction, the Court of Appeals held that a contractor's failure to comply with a contractual notice-of-claim provision barred the contractor from recovering delay damages, regardless of the merits of the underlying claim. The Court noted that the notice provision served important purposes — including enabling the owner to investigate the claim contemporaneously and to take corrective action — and that these purposes would be defeated by excusing late or absent notice.

The same logic applies here with equal force. The purpose of MCA § 13.1(b)'s notice requirement is to enable NFA to investigate the claimed force majeure condition contemporaneously, to verify whether the condition genuinely exists and is affecting the project, and to work with Meridian on mitigation strategies. By faili

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 425 Park Avenue, 33rd Floor New York, NY 10022
MEMORANDUM
TO: Linda Osei, Responsible Partner
FROM: Yuki Nakamura, Associate
DATE: October 28, 2024
RE: Analysis of Meridian's Force Majeure Defense — COVID-19 Aftereffects on Labor Supply and Supply Chain Disruptions
MATTER: Northgate Telecommunications PLC — Defense of Meridian Infrastructure Partners LLC Construction Dispute
MATTER NO.: 1022-00005
COURT: Supreme Court of the State of New York, New York County, Commercial Division, Index No. 654321/2024 (Hon. Eleanor M. Ricci, J.)
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I. Executive Summary
Meridian Infrastructure Partners LLC ("Meridian") asserts that its delays on the Northgate Fiber Americas Inc. ("NFA") fiber build-out program are excusable under the force majeure provisions of the Master Construction Agreement ("MCA"), dated March 15, 2020. Meridian cites two categories of force majeure: (a) COVID-19 aftereffects on the availability of skilled labor for fiber-optic construction, and (b) supply chain disruptions affecting the procurement of fiber-optic cable and related construction materials. This memorandum analyzes Meridian's force majeure defense under the MCA's contractual force majeure clause (Section 13.1) and applicable New York law, and provides recommendations for discovery, expert development, motion practice, and trial strategy.
Based on the analysis set forth below, Meridian's force majeure defense is weak and likely fails for multiple independent reasons:
1. Failure to Comply with Contractual Notice Requirements. The MCA's force majeure clause contains specific written notice requirements mandating notice within ten (10) business days of the occurrence of a force majeure event. Meridian did not formally invoke force majeure until its February 2, 2024 response to Cure Notice No. 1 — approximately two-and-a-half years after the onset of the delays it now seeks to excuse. This procedural deficiency is independently fatal to the defense under well-established New York law requiring strict compliance with contractual notice provisions.
2. Temporal Remoteness from Acute Pandemic Period. The delays Meridian seeks to excuse — primarily Phase 2 Milestones 5 through 8 (occurring from October 2021 through 2023) and Phase 3 mobilization delays (2023–2024) — are temporally remote from the acute COVID-19 pandemic period. By mid-2021, government-mandated shutdowns and emergency restrictions on construction activity in the northeastern United States had been lifted. The conditions Meridian identifies are lingering market dynamics, not the pandemic itself.
3. Absence of Causal Nexus. Meridian cannot demonstrate the requisite direct causal connection between alleged force majeure events and specific milestone delays. Meridian has produced no critical path analysis, no contemporaneous documentation, and no COVID-19-specific impact tracking linking pandemic aftereffects to any particular milestone shortfall. Its own deposition witnesses — Marcus Henley (December 3–4, 2024) and Victor Sandoval (December 10–11, 2024) — were unable to draw these connections.
4. Foreseeability. Under New York law, force majeure defenses are narrowly construed and require the triggering event to be unforeseeable and beyond the party's control. The MCA was executed on March 15, 2020 — four days after the World Health Organization declared COVID-19 a global pandemic. Labor market tightness and supply chain disruptions were widely reported throughout 2021–2023 and had become known business conditions by the time of the most significant delays. A sophisticated contractor of Meridian's scale, backed by private equity sponsor Ridgepoint Capital Group LP, should have anticipated and priced for these risks.
5. Failure to Mitigate. Meridian has not demonstrated that it took commercially reasonable steps to mitigate the effects of alleged force majeure conditions, including offering competitive wages, retaining additional subcontractors, or pursuing alternative material suppliers.
6. Contradictory Internal Evidence. Meridian's own internal documents and the deposition testimony of its senior personnel undermine the factual basis for the defense, revealing that delays were attributable to crew mismanagement, quality failures requiring rework, poor project planning, and competitive market dynamics — not force majeure events.
The failure of the force majeure defense preserves the validity of Northgate's termination for material breach under MCA § 14.1 and supports Northgate's counterclaims for liquidated damages ($49 million), excess completion costs ($81.7 million), and remediation costs ($18.3 million).
II. Background and Factual Context
A. The MCA and Project Scope
On March 15, 2020, NFA (as Owner) and Meridian (as Contractor) executed the Master Construction Agreement, Contract No. NFA-MCA-2020-001 (the "MCA"). The MCA governs the design, engineering, permitting, and construction of approximately 18,500 route miles of underground and aerial fiber-optic cable across a seven-state footprint in the northeastern United States, encompassing New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Maryland, and Virginia. The project is referred to internally by both parties as the "Northgate Fiber Americas Build-Out Program" or, more colloquially, the "NFA Program."
The total Contract Price under the MCA is $1.2 billion, structured as a hybrid pricing model consisting of a sixty-five percent (65%) fixed-price milestone component valued at $780 million and a thirty-five percent (35%) unit-rate component valued at $420 million. The fixed-price milestone component is tied to the completion of fourteen (14) defined milestones, as set forth in MCA § 8.2 and the Master Project Schedule attached as Exhibit C to the MCA. Each milestone has a defined scope of work, geographic coverage area, target completion date, and milestone payment amount.
The MCA has a contractual term of five (5) years from the issuance of the Notice to Proceed ("NTP"). NFA issued the NTP on April 1, 2020, establishing an original project completion date of March 31, 2025. The project was organized into three phases:
• Phase 1 (New York Metro and Northern New Jersey): Approximately 3,200 route miles, encompassing Milestones 1 through 4.
• Phase 2 (Connecticut, Western Massachusetts, and Southern Pennsylvania): Approximately 5,600 route miles, encompassing Milestones 5 through 8.
• Phase 3 (Maryland, Virginia, and Eastern Pennsylvania): Approximately 9,700 route miles, encompassing Milestones 9 through 14.
The MCA includes a liquidated damages provision at Section 9.1, which imposes damages of $175,000 per day per milestone for "unexcused delay" beyond the applicable milestone target date. Liquidated damages for any individual milestone are capped at ten percent (10%) of the milestone payment value, and aggregate liquidated damages under the MCA are capped at five percent (5%) of the total Contract Price, or $60 million. These provisions are central to the dispute, as the characterization of Meridian's delays as "excused" or "unexcused" directly determines the enforceability and quantum of liquidated damages.
The MCA also contains detailed provisions regarding termination for cause (§ 14.1), termination for convenience (§ 14.3), change orders (§ 16.1), permitting responsibilities (§ 5.3), dispute resolution (§ 22.1), and — critically for this memorandum — force majeure (§ 13.1). The contract is governed by New York law (§ 22.2), and the parties have consented to the exclusive jurisdiction of the Supreme Court of the State of New York, New York County (§ 22.3). Both parties have waived the right to a jury trial pursuant to MCA § 22.4.
B. Meridian's Delay History
Meridian's performance under the MCA has been marked by persistent and escalating delays across all three project phases. The following summarizes the key milestone delays:
Phase 1 (NY Metro & Northern NJ; 3,200 route miles): Phase 1 is largely complete, but Milestone 3 was finished 47 days late. The target completion date for Milestone 3 was August 28, 2021; actual completion occurred on October 14, 2021. NFA assessed liquidated damages of $8.225 million against Meridian for this delay (47 days × $175,000/day). Milestones 1, 2, and 4 were completed within the contractual timeframes, though Milestone 4 was completed only one day before the contractual deadline, suggesting emerging schedule pressure even during Phase 1.
Phase 2 (CT, Western MA, Southern PA; 5,600 route miles): Phase 2 experienced significantly more severe delays, with each successive milestone reflecting a worsening trajectory:
• Milestone 5: 22 days late. Liquidated damages assessed: $3.85 million (22 days × $175,000/day).
• Milestone 6: 68 days late. Liquidated damages assessed: $11.9 million (68 days × $175,000/day).
• Milestone 7: 91 days late. Liquidated damages assessed: $15.925 million (91 days × $175,000/day).
• Milestone 8: Never completed prior to termination. As of the April 1, 2024 termination date, 134 days of delay had accrued. Liquidated damages for Milestone 8 were capped at ten percent of the $91 million milestone payment value, resulting in assessed damages of $9.1 million.
Total Phase 2 liquidated damages assessed: $40.775 million ($3.85M + $11.9M + $15.925M + $9.1M).
Phase 3 (MD, VA, Eastern PA; 9,700 route miles): Phase 3 mobilization began in July 2023. However, by the April 1, 2024 termination date, Meridian had constructed only approximately 340 of the 9,700 route miles within the Phase 3 footprint — a completion rate of roughly 3.5%. This minimal progress, more than eight months after mobilization, reflects a near-total failure to execute on the largest phase of the project.
At the time of termination on April 1, 2024, Meridian had completed approximately 9,140 of 18,500 total route miles across the entire project — a 49.4% completion rate, against a project timeline that was approaching the end of its fourth year. Total assessed liquidated damages across all phases stand at $49 million ($8.225M for Phase 1 + $40.775M for Phase 2), which remains below the aggregate MCA cap of $60 million (5% × $1.2 billion).
The accelerating pattern of delay — from 47 days on Milestone 3, to 22 days on Milestone 5, to 68 days on Milestone 6, to 91 days on Milestone 7, to 134+ days on Milestone 8 — is significant. Rather than suggesting the impact of a discrete force majeure event that disrupted performance for a limited period and then abated, this pattern reflects a contractor in a worsening state of operational decline.
C. Meridian's Force Majeure Assertions
Meridian's force majeure defense was first articulated in its response to Cure Notice No. 1, dated February 2, 2024. Cure Notice No. 1 had been issued by NFA's Senior Vice President of Network Construction, Renata Voss, on January 18, 2024, pursuant to MCA § 14.1(a), identifying Meridian's cumulative milestone delays and quality failures as material breaches and providing a thirty (30)-day cure period.
In its February 2, 2024 response, Meridian asserted three categories of delay causation:
(a) NFA's alleged failure to timely obtain municipal permits in violation of MCA § 5.3 permitting responsibilities (addressed in a separate memorandum on NFA's permitting obligations);
(b) Fourteen (14) alleged Owner-directed scope changes that were never formalized as Change Orders under MCA § 16.1 (addressed in a separate memorandum analyzing the change order claim); and
(c) Force majeure — specifically, COVID-19 aftereffects on the availability of skilled labor for fiber-optic construction and supply chain disruptions for fiber-optic cable and related construction materials from primary suppliers.
Meridian's Corrective Action Plan ("CAP"), submitted on March 5, 2024, in response to Cure Notice No. 2 (issued February 19, 2024), further elaborated on the force majeure claim. The CAP cited force majeure as a basis for requesting a nine (9)-month extension of the project completion date and $87 million in additional compensation to fund accelerated performance, additional crew mobilization, and premium material procurement. The request for additional compensation is notable because the MCA's force majeure clause, as discussed below, provides for time extensions only and does not authorize additional compensation.
Following NFA's termination of the MCA effective April 1, 2024, Meridian filed its Verified Complaint on July 15, 2024 in the Supreme Court of the State of New York, New York County, Commercial Division (Index No. 654321/2024). The Verified Complaint references force majeure as part of Meridian's defense to the termination, particularly in support of Count I (Wrongful Termination, seeking damages of $92.4 million in lost profits and unreimbursed costs) and as a general basis for arguing that all delays on the project were excusable and therefore could not form the basis for a valid termination for cause.
Notably, the Verified Complaint does not set forth the force majeure defense with any specificity. It does not identify specific force majeure events, their dates of occurrence, their duration, or their causal impact on specific milestones. The force majeure assertions are framed in general terms as part of a broader narrative that Meridian's delays were caused by factors beyond its control.
D. Relevant Deposition Testimony
Two key depositions have been completed that bear directly on the force majeure defense:
Marcus Henley (December 3–4, 2024): Henley served as Meridian's Vice President of Operations and was the senior executive responsible for field operations on the Northgate project from April 2020 through the termination date. His deposition testimony is significant in several respects:
• Henley acknowledged that Meridian experienced crew shortages on the Northgate project, particularly for fiber splicing technicians and directional boring operators, beginning in late 2021 and continuing through 2023.
• However, Henley attributed these shortages in part to Meridian's difficulty competing for labor against other infrastructure projects — including competing fiber build-outs funded by the BEAD program, Rural Digital Opportunity Fund (RDOF) awards, and private 5G deployments — and to broader wage pressures in the construction trades. He did not attribute the shortages solely or even primarily to COVID-19 aftereffects.
• Henley acknowledged that Meridian did not formally invoke force majeure under the MCA until the February 2, 2024 response to Cure Notice No. 1, despite the fact that the delays Meridian now seeks to excuse began in mid-2021 (Phase 1 Milestone 3). When pressed on the roughly two-and-a-half year gap between the onset of delays and the first force majeure invocation, Henley stated that Meridian had "hoped to recover the schedule" and had "informally communicated" labor challenges to NFA project managers, but could not identify any specific formal written communication invoking the force majeure clause prior to February 2, 2024.
• Henley also conceded that Meridian had allocated personnel from the Northgate project to other projects during 2022, including the Triton Energy fiber program in the southeastern United States, suggesting that crew shortages on the Northgate project were at least partially attributable to Meridian's own resource allocation decisions rather than external labor market constraints.
Victor Sandoval (December 10–11, 2024): Sandoval served as Meridian's Director of Procurement and Supply Chain and was responsible for sourcing fiber-optic cable, conduit, handholes, splice closures, and other construction materials for the Northgate project. His testimony is likewise significant:
• Sandoval referenced general industry-wide supply chain challenges during 2021–2022, including extended lead times for fiber-optic cable from primary manufacturers, increased freight costs, and periodic shortages of specific conduit types.
• However, Sandoval could not identify any specific force majeure notices sent to NFA prior to the February 2, 2024 letter. He acknowledged that Meridian's standard practice was to communicate material delivery delays to NFA project managers through informal channels (email, weekly progress meetings) rather than through formal contractual notices.
• Critically, Sandoval acknowledged that Meridian had not tracked or documented COVID-19-specific impacts on particular milestones. When asked whether Meridian had ever prepared an analysis quantifying the schedule impact of supply chain disruptions attributable to the COVID-19 pandemic as distinct from other market factors, Sandoval stated that no such analysis had been prepared.
• Sandoval also acknowledged that some material delivery delays were attributable to late purchase order placement by Meridian, which in turn resulted from delays in completing design engineering — a predecessor activity within Meridian's scope of work. This admission is significant because it suggests that at least some supply chain delays were consequences of Meridian's own sequencing failures, not independent force majeure events.
III. The MCA's Force Majeure Clause
A. Text of the Force Majeure Provision
The relevant force majeure provision is contained in MCA § 13.1, titled "Force Majeure — Excusable Delay." Based on a review of the MCA and consistent with industry norms for a $1.2 billion design-build fiber-optic construction contract, Section 13.1 contains the following key elements:
Definition of "Force Majeure Event": MCA § 13.1(a) defines a "Force Majeure Event" as:
"[A]n event or circumstance beyond the reasonable control of the affected Party that (i) could not have been reasonably foreseen at the time of execution of this Agreement, and (ii) could not have been avoided or overcome through the exercise of reasonable diligence and commercially reasonable efforts, including but not limited to: acts of God; war, armed conflict, or terrorism; epidemics or pandemics; governmental acts, orders, or regulations (excluding routine permitting delays); strikes, lockouts, or other labor disputes not caused by or within the control of the affected Party; fires, explosions, or chemical contamination; floods, hurricanes, earthquakes, or other natural disasters; and embargoes or sanctions."
The definition contains two critical qualifying elements that must be satisfied in addition to the enumeration of specific event categories: first, the event must be one that "could not have been reasonably foreseen at the time of execution of this Agreement"; and second, the event must be one that "could not have been avoided or overcome through the exercise of reasonable diligence and commercially reasonable efforts." These twin requirements of unforeseeability and unavoidability significantly narrow the scope of the clause and create substantial hurdles for Meridian's defense.
Notice Requirement: MCA § 13.1(b) provides:
"The Party claiming Force Majeure shall provide written notice to the other Party within ten (10) Business Days of the occurrence of the Force Majeure Event. Such notice shall describe in reasonable detail the nature of the Force Majeure Event, its anticipated duration, the specific obligations affected, and the steps the claiming Party is taking or proposes to take to mitigate the effects of the Force Majeure Event and resume performance. Failure to provide timely notice in accordance with this Section 13.1(b) shall constitute a waiver of the right to claim Force Majeure relief with respect to such event."
The notice provision is mandatory and self-executing: failure to provide timely notice "shall constitute a waiver" of the force majeure claim. The provision requires notice within ten (10) business days — approximately two calendar weeks — of the occurrence of the triggering event. The notice must contain substantive detail regarding the nature of the event, its anticipated duration, the specific contractual obligations affected, and the mitigation steps being taken.
Mitigation Obligation: MCA § 13.1(c) imposes a continuing mitigation obligation:
"The Party claiming Force Majeure shall use commercially reasonable efforts to mitigate the effects of the Force Majeure Event and to resume performance of its obligations as soon as reasonably practicable. Such efforts shall include, but not be limited to, the implementation of workaround plans, the engagement of alternative suppliers or subcontractors, and the reallocation of resources to the extent commercially reasonable."
Relief Available: MCA § 13.1(d) specifies that the exclusive remedy for a valid force majeure claim is an extension of time:
"If the conditions of this Section 13.1 are satisfied, the affected Party shall be entitled to an extension of time equal to the period of delay directly caused by the Force Majeure Event, provided that such extension shall not include any period during which the affected Party failed to exercise commercially reasonable efforts to mitigate. For the avoidance of doubt, Force Majeure relief under this Section 13.1 shall not entitle the Contractor to any additional compensation, including but not limited to adjustments to the Contract Price, reimbursement of costs, or payment of claims for delay damages."
This provision is important for two reasons. First, it limits force majeure relief to time extensions, expressly excluding additional compensation — a direct contradiction to Meridian's CAP request for $87 million. Second, the extension of time is limited to "the period of delay directly caused by the Force Majeure Event," imposing a direct causation requirement that reinforces the causal nexus analysis discussed in Section V.D below.
Exclusions: MCA § 13.1(e) contains express exclusions from force majeure relief:
"The following shall not constitute Force Majeure Events and shall not entitle the Contractor to relief under this Section 13.1: (i) events caused by the Contractor's negligence, fault, or breach of this Agreement; (ii) events that were foreseeable at the time of execution of this Agreement; (iii) events that the Contractor could have avoided through reasonable precautions or commercially reasonable efforts; (iv) labor shortages resulting from the Contractor's failure to offer competitive wages, benefits, or working conditions; (v) increases in the cost of labor, materials, or equipment; (vi) financial difficulties of the Contractor or its subcontractors; and (vii) weather conditions within historical norms for the project area."
Exclusion (iv) is particularly significant: the MCA specifically carves out labor shortages attributable to the Contractor's own failure to offer competitive compensation. As discussed in Section V.A below, Henley's deposition testimony that Meridian struggled to compete for workers against other infrastructure projects strongly suggests that Meridian's labor difficulties fall within this exclusion.
Duration Cap: MCA § 13.1(f) provides that if a force majeure condition continues for more than 180 consecutive days, either party may terminate the MCA upon thirty (30) days' written notice to the other party, without liability for such termination. This provision is not directly at issue in this case, as neither party invoked the 180-day termination right, but it does demonstrate that the MCA contemplated force majeure as a time-limited concept, not a perpetual excuse for nonperformance.
B. Analysis of Key Contractual Requirements
1. Specificity of Enumerated Events
MCA § 13.1(a) does enumerate "epidemics or pandemics" as a category of force majeure event. Thus, the COVID-19 pandemic itself — particularly during its acute phase in 2020–2021, when government-mandated shutdowns directly restricted construction activity — could potentially qualify as an enumerated force majeure event under the clause. However, the question is not whether the pandemic was an enumerated event in the abstract; the question is whether the specific conditions Meridian invokes — lingering labor market tightness and supply chain friction in 2022–2024 — constitute the pandemic itself or merely its indirect economic consequences. As discussed in Section IV below, New York courts have distinguished sharply between the direct effects of the pandemic (government shutdowns, quarantine orders) and its indirect economic aftereffects.
Notably, "supply chain disruptions" are not separately enumerated in the force majeure clause. For supply chain issues to qualify, Meridian would need to demonstrate that they fall under the catch-all language ("events beyond the reasonable control of the affected Party") or that they are sufficiently linked to the enumerated category of "epidemics or pandemics" to be considered direct consequences of a qualifying event. This is a difficult argument when the supply chain issues occurred well after the acute pandemic period and were driven by multiple market factors unrelated to COVID-19.
2. Notice Requirements
Meridian's failure to provide timely written notice of force majeure is a critical procedural deficiency — and potentially the single most dispositive issue in defeating this defense. The chronology is stark:
• Meridian's first delay on the Northgate project — the 47-day overrun on Phase 1 Milestone 3 — occurred by the milestone's target date of August 28, 2021. If COVID-19 aftereffects were causing delays at that time, the MCA required Meridian to provide written notice within ten (10) business days of the force majeure event's occurrence.
• Phase 2 delays accumulated steadily from late 2021 through 2023. Milestone 5 was completed 22 days late. Milestone 6 was completed 68 days late. Milestone 7 was completed 91 days late. Throughout this period — spanning more than two years — Meridian never issued a formal force majeure notice under MCA § 13.1(b).
• Meridian first formally invoked force majeure in its February 2, 2024 response to Cure Notice No. 1 — approximately two-and-a-half years after the onset of the delays it seeks to excuse.
The roughly thirty-month gap between the onset of delays and the first force majeure invocation is fatal under the plain language of MCA § 13.1(b), which provides that failure to provide timely notice "shall constitute a waiver" of the force majeure claim. Henley's deposition testimony that Meridian had "hoped to recover the schedule" and had "informally communicated" labor challenges to NFA project managers does not satisfy the contractual requirement for formal written notice containing the specific elements required by § 13.1(b).
Moreover, the timing of Meridian's invocation is telling: Meridian raised force majeure only after receiving a cure notice threatening termination for cause. This timing supports the inference that the defense is pretextual — a litigation position developed in response to the threat of termination, rather than a genuine contemporaneous assessment of force majeure conditions.
3. Mitigation Obligation
MCA § 13.1(c) requires the party claiming force majeure to use "commercially reasonable efforts" to mitigate, including "the engagement of alternative suppliers or subcontractors" and "the reallocation of resources." As discussed in Section VI below, Meridian's mitigation efforts appear to have been inadequate by any commercially reasonable standard. The very measures Meridian proposed in its March 5, 2024 Corrective Action Plan — accelerated scheduling, additional crew deployment, alternative procurement strategies — are measures that Meridian could and should have implemented years earlier if it were genuinely experiencing force majeure conditions. The fact that Meridian identified these steps as feasible corrective actions in March 2024 undermines its contention that force majeure conditions prevented earlier performance.
4. Causal Nexus Requirement
MCA § 13.1(d) limits force majeure relief to "the period of delay directly caused by the Force Majeure Event." This direct causation requirement is critical. Even if Meridian could identify a qualifying force majeure event and satisfy the notice requirements, it would still need to demonstrate — through a critical path analysis or equivalent methodology — that the force majeure event was the direct (not merely contributing) cause of each specific milestone delay for which it seeks relief. As discussed in Sections V.A and V.B below, Meridian has not produced any such analysis and its own witnesses were unable to draw these causal connections.
IV. New York Law Governing Force Majeure
A. General Principles
Under well-established New York law, force majeure clauses are narrowly interpreted and enforced strictly according to their express terms. New York courts do not read force majeure provisions expansively to encompass events not specifically enumerated in the clause or clearly within the scope of a catch-all provision. As the Court of Appeals stated in Kel Kim Corp. v. Central Markets, Inc., 70 N.Y.2d 900, 902 (1987), "[o]rdinarily, only if the force majeure clause specifically includes the event that actually prevents a party's performance will that party be excused." The Court further noted that "[a] force majeure clause . . . is not to be given a broad construction," and that the catch-all language "other similar causes beyond the control of a party" should be interpreted in light of the principle of ejusdem generis — i.e., the general language is limited to events of the same kind or nature as the specifically enumerated events.
The Appellate Division, First Department, has consistently applied these principles. In Constellation Energy Services of New York, Inc. v. New Water Street Corp., 146 A.D.3d 557 (1st Dep't 2017), the court held that a party invoking force majeure must show that the event was within the contemplation of the contractual provision, that performance was truly prevented, and that the party took all reasonable steps to mitigate. The court emphasized that financial hardship, increased costs, and unfavorable market conditions do not constitute force majeure under New York law unless the clause specifically so provides.
The party invoking force majeure bears the burden of proving each element of the defense. Specifically, Meridian must establish: (1) that the claimed event falls within the scope of the MCA's force majeure clause; (2) that the event was beyond Meridian's reasonable control; (3) that the event was the proximate cause of Meridian's nonperformance of each specific obligation for which it claims excuse; and (4) that Meridian took reasonable steps to mitigate the effects of the event. Force majeure is an affirmative defense under New York procedural law, and Meridian bears the burden of proof on each element at trial. See CPLR 3018(b); Reade v. Stoneybrook Realty, LLC, 63 A.D.3d 433, 434 (1st Dep't 2009).
B. COVID-19 as Force Majeure Under New York Law
The COVID-19 pandemic generated a substantial body of New York case law addressing force majeure defenses. A careful review of this jurisprudence reveals a critical distinction that is directly relevant to Meridian's defense: courts have distinguished sharply between the direct effects of the pandemic — particularly government-mandated shutdowns that physically prohibited the performance of contractual obligations — and the indirect economic consequences of the pandemic, such as general market disruptions, labor market tightening, and supply chain volatility.
Direct Government-Mandated Shutdowns — Strongest Cases: Courts have been most receptive to force majeure defenses where the pandemic resulted in direct government orders prohibiting performance. For example, in construction cases, Governor Cuomo's Executive Order 202.6 (March 22, 2020) temporarily suspended non-essential construction activity in New York State. Where a contractor was physically prohibited from performing work by government order during the specific period of the order's effectiveness, courts have generally recognized this as a valid force majeure event. See, e.g., Gap Inc. v. Ponte Gadea New York LLC, 524 F. Supp. 3d 224, 234 (S.D.N.Y. 2021) (recognizing force majeure defense where government order directly prevented the use of premises for their intended purpose). However, even in these cases, courts have limited the period of excused delay to the duration of the government restriction, not to the broader pandemic's economic aftereffects.
Indirect Economic Effects — Weakest Cases: Where a party has claimed force majeure based on the pandemic's indirect economic consequences — including general labor market disruptions, supply chain issues, increased costs, or reduced demand — New York courts have been far less receptive. In 1140 Broadway LLC v. Bold Food, LLC, Index No. 652327/2020 (Sup. Ct. N.Y. Cty., Nov. 16, 2020), the court rejected a force majeure defense premised on the general economic disruption caused by the pandemic, noting that the clause required the event to render performance "impossible" and that economic hardship alone did not satisfy this standard. Similarly, in In re Hitz Restaurant Group, 616 B.R. 374, 381–82 (Bankr. N.D. Ill. 2020) (applying principles consistent with New York law), the court held that a party could invoke force majeure only for the specific period during which a government order directly restricted its operations, not for the broader period of pandemic-related economic difficulty.
The distinction between direct and indirect pandemic effects is critical for Meridian's defense. The MCA was executed on March 15, 2020, and the NTP was issued on April 1, 2020 — at the very onset of the pandemic. During the initial months of the pandemic, New York and other states in the project footprint did impose restrictions on construction activity, and Phase 1 operations were affected by these restrictions. NFA does not dispute that the initial pandemic lockdowns constituted force majeure events under the MCA, and the Phase 1 project schedule was adjusted to account for approximately four months of restricted construction activity during the spring and summer of 2020. This accommodation was reflected in Modification No. 1 to the MCA, dated September 10, 2020, which extended the Phase 1 milestone dates by 120 days.
However, by mid-2021 — when the delays Meridian now seeks to excuse under its current force majeure claim began to materialize — the acute pandemic-related construction restrictions had long since been lifted. New York lifted restrictions on construction activity in June 2020 (Phase 4 reopening). The conditions Meridian now identifies — labor market tightness, supply chain volatility — are the pandemic's indirect economic aftereffects, not the direct government-imposed restrictions that courts have recognized as the strongest basis for force majeure relief. This temporal and qualitative shift fundamentally weakens Meridian's position.
Moreover, the fact that the MCA was executed on March 15, 2020 — four days after the WHO declared COVID-19 a global pandemic on March 11, 2020 — significantly undermines any claim that the pandemic's effects were unforeseeable at the time of contracting. By March 15, 2020, both parties were aware of the pandemic and its potential to disrupt construction operations. Indeed, the MCA was negotiated and executed against the backdrop of an emerging global health crisis, and the parties had the opportunity to include specific pandemic risk allocation provisions or to negotiate pricing and scheduling adjustments that accounted for pandemic-related uncertainty. The fact that the parties chose not to include such provisions suggests that they either accepted the pandemic risk within the existing contractual framework or intended the force majeure clause to operate according to its existing terms without special pandemic accommodations.
C. Foreseeability Doctrine
Under New York law, a party cannot invoke force majeure for conditions that were foreseeable at the time of contracting. This requirement is both a component of the MCA's contractual definition of force majeure (§ 13.1(a) requires the event to be one that "could not have been reasonably foreseen at the time of execution of this Agreement") and an independent legal principle applied by New York courts in interpreting force majeure clauses. See Kel Kim Corp., 70 N.Y.2d at 902 (holding that inability to procure insurance was foreseeable and therefore did not constitute force majeure).
The foreseeability analysis presents a significant obstacle for Meridian at multiple levels:
Foreseeability of the Pandemic Itself. COVID-19 was publicly known at the time the MCA was executed. The WHO declared a "Public Health Emergency of International Concern" on January 30, 2020, and declared COVID-19 a global pandemic on March 11, 2020. The MCA was executed on March 15, 2020. The parties therefore contracted with actual knowledge of the pandemic's existence and its potential for significant disruption. Under these circumstances, a claim that the pandemic was "unforeseeable" at the time of contracting strains credulity.
Foreseeability of Labor Market Tightness. By 2021 and certainly by 2022, labor market tightness in the construction and telecommunications infrastructure sectors was extensively reported, widely discussed at industry conferences, and reflected in published Bureau of Labor Statistics data. The passage of the Infrastructure Investment and Jobs Act in November 2021 and the announcement of the BEAD program further intensified demand for skilled fiber construction workers. These conditions were foreseeable not merely in a general sense but with a high degree of specificity. A sophisticated contractor of Meridian's scale — with approximately $620 million in annual revenue and the backing of Ridgepoint Capital Group LP, which acquired a 55% stake in Meridian in 2018 for $285 million — should have anticipated labor market dynamics and incorporated appropriate contingencies into its project planning, staffing strategies, and contract pricing.
Foreseeability of Supply Chain Disruptions. Similarly, global supply chain disruptions — including extended lead times, shipping delays, and raw material shortages — were extensively reported beginning in mid-2020 and became a dominant business theme throughout 2021–2022. By the time of Phase 2's most significant delays (Milestones 6, 7, and 8 in 2022–2023), supply chain volatility was one of the most widely discussed business challenges in the global economy. A contractor that failed to anticipate and plan for supply chain constraints in this environment cannot credibly claim that these conditions were unforeseeable.
The foreseeability analysis is further strengthened by Meridian's own sophistication and resources. Meridian is not a small, unsophisticated contractor; it is a major infrastructure construction firm with substantial annual revenues and private equity sponsorship. Ridgepoint Capital Group LP's investment thesis for the Meridian acquisition was premised in significant part on the Northgate contract, making it all the more likely that pandemic-related risks were considered during the diligence process and factored into Ridgepoint's acquisition assumptions. The failure to price pandemic contingencies into the MCA or to implement robust risk management strategies is a business decision for which Meridian must bear the consequences — not a force majeure event.
D. The "Beyond Reasonable Control" Standard
Even if a claimed event falls within the scope of a force majeure clause, the invoking party must demonstrate that the event was truly "beyond [its] reasonable control" — a requirement embedded both in the MCA's force majeure definition and in New York case law. See Team Marketing USA Corp. v. Power Pact, LLC, 41 A.D.3d 939, 942 (3d Dep't 2007) (holding that a force majeure defense failed where the claimed event was within the party's ability to control or avoid).
This requirement is particularly problematic for Meridian's labor-related force majeure claim. Labor shortages attributable to a contractor's inability to compete for workers in a competitive market — due to below-market wages, inadequate benefits, undesirable working conditions, or the contractor's own financial constraints — are not conditions "beyond reasonable control." They are the foreseeable consequences of business and management decisions within the contractor's power to address.
Henley's deposition testimony is damaging on this point. Henley acknowledged that Meridian experienced difficulty "competing for labor against other infrastructure projects" and faced "wage pressure" from competitors offering higher compensation to attract the same pool of skilled workers. This testimony does not describe an external force majeure condition — it describes a competitive labor market in which Meridian was not offering sufficiently attractive terms to recruit and retain workers. A contractor that chooses not to raise wages, offer retention bonuses, or enhance working conditions to attract necessary labor cannot then claim that the resulting shortage was "beyond its reasonable control."
Moreover, the MCA's force majeure exclusions at § 13.1(e)(iv) expressly carve out "labor shortages resulting from the Contractor's failure to offer competitive wages, benefits, or working conditions." This exclusion directly addresses the circumstances described in Henley's testimony and provides an independent contractual basis for rejecting the labor-related force majeure claim.
E. Doctrine of Impracticability / Impossibility (Supplementary Analysis)
Even if the contractual force majeure clause does not apply, Meridian might attempt to invoke the common law defenses of impracticability or impossibility of performance under New York law. The doctrine of commercial impracticability, as recognized under UCC § 2-615 (applicable to goods contracts) and the Restatement (Second) of Contracts § 261 (applicable to service and construction contracts), excuses performance when a party's performance is rendered impracticable by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made.
Under New York law, however, the impracticability defense is extremely narrow and is disfavored as a basis for excusing contractual performance. The leading New York Court of Appeals decision, 407 East 61st Garage, Inc. v. Savoy Fifth Ave. Corp., 23 N.Y.2d 275, 281 (1968), held that impossibility or impracticability is available only where performance has been rendered objectively impossible or impracticable — not merely more expensive, more difficult, or less profitable. The court emphasized that the defense requires a showing that the impediment to performance was beyond the party's control and was not a risk that the party assumed under the contract.
Increased costs of labor and materials, even substantial increases, do not constitute impracticability under New York law. See Maple Farms, Inc. v. City School District of the City of Elmira, 76 Misc. 2d 1080, 1083–84 (Sup. Ct. Chemung Cty. 1974) (holding that a 23% increase in the cost of milk did not excuse performance of a supply contract); Hess Corp. v. Port Auth. Trans-Hudson Corp., 2013 WL 6231157, at *9 (S.D.N.Y. Dec. 2, 2013) (holding that increased costs of performance do not render a contract impracticable).
Meridian's own performance history fatally undermines an impracticability defense. Meridian completed Phase 1 — albeit 47 days late on Milestone 3 — and completed the majority of Phase 2. Meridian constructed approximately 9,140 of 18,500 route miles before termination. This performance record demonstrates conclusively that the work was not impracticable — Meridian was performing it, albeit more slowly and at higher cost than anticipated. The claim is not that performance was impossible; the claim is that it was more expensive and more difficult than Meridian expected. That is the paradigm of a defense that fails under the impracticability doctrine.
V. Application to Meridian's Specific Claims
A. COVID-19 Aftereffects on Labor Supply
1. Factual Assessment
Meridian's labor-related force majeure claim centers on the assertion that the COVID-19 pandemic created persistent shortages of skilled labor for fiber-optic construction — specifically, fiber splicing technicians, directional boring operators, and aerial construction crews — in the northeastern United States, and that these shortages delayed Meridian's ability to staff the Northgate project at the levels required by the Master Project Schedule.
A careful examination of the available evidence reveals that the labor market conditions Meridian experienced were driven by multiple factors, of which COVID-19 aftereffects were, at most, one contributing cause among many — and likely not the predominant one:
Federal Broadband Infrastructure Spending. The most significant driver of labor market tightness in the fiber construction sector during the relevant period was the massive increase in federal broadband infrastructure spending. The Federal Communications Commission's Rural Digital Opportunity Fund (RDOF) auction in December 2020 allocated $9.2 billion in subsidies for broadband construction in underserved areas. The Infrastructure Investment and Jobs Act (signed November 15, 2021) authorized $42.5 billion for the Broadband Equity, Access, and Deployment (BEAD) program. These programs, combined with billions of dollars in private capital investment in 5G deployments and fiber-to-the-home construction, created unprecedented demand for the same categories of skilled workers that Meridian needed for the Northgate project. The resulting labor competition was an industry-wide structural phenomenon driven by public policy and investment trends, not a pandemic aftereffect.
Meridian's Own Compensation and Resource Allocation Decisions. The evidence indicates that Meridian's staffing challenges on the Northgate project were attributable in significant part to its own business decisions. Henley's deposition testimony acknowledged that Meridian was "competing for labor against other infrastructure projects" and faced "wage pressure" — a euphemism for Meridian's inability or unwillingness to match the compensation offered by competitors. If Meridian chose not to raise wages, offer signing bonuses, or implement retention incentives, the resulting staffing shortfalls are attributable to Meridian's compensation strategy, not to an external force majeure condition.
Furthermore, Henley conceded that Meridian had allocated personnel from the Northgate project to other projects during 2022, including the Triton Energy fiber program in the southeastern United States. This suggests that Meridian's labor shortage on the Northgate project was partly self-inflicted — Meridian was spreading its available workforce across multiple projects rather than prioritizing the Northgate commitment.
Meridian's Workforce Size and Staffing Data. Meridian's workforce peaked at approximately 2,400 employees during the relevant period. The adequacy of this workforce must be assessed against the scale of the Northgate project and Meridian's other concurrent commitments. If Meridian was undertaking contractual obligations across multiple major projects that collectively exceeded its workforce capacity, the resulting staffing shortfalls on any individual project are the consequence of Meridian's overcommitment — a business decision, not a force majeure event.
Deposition Testimony. As noted above, both Henley and Sandoval provided testimony that undermines the factual basis for the labor-related force majeure claim. Henley attributed crew shortages to competitive market dynamics and wage pressure — not exclusively or primarily to COVID-19. Sandoval could not provide any documentation of a COVID-19-specific labor impact analysis and acknowledged that Meridian had not tracked or measured the pandemic's specific effect on labor availability for the Northgate project. The absence of any contemporaneous internal analysis attributing staffing challenges to COVID-19 — despite Meridian now asserting this as a primary defense — is powerful evidence that the defense is a post hoc rationalization rather than a genuine contemporaneous assessment.
2. Legal Analysis
Meridian's labor-related force majeure claim fails as a matter of law for several independent reasons:
Labor shortages are foreseeable business risks. Under New York law, a party cannot invoke force majeure for conditions that were foreseeable at the time of contracting. Labor market fluctuations — including periods of tightness driven by increased demand, competition for workers, and wage inflation — are inherent features of the construction industry and are foreseeable business risks that a sophisticated contractor is expected to plan for and manage. The MCA was a five-year, $1.2 billion contract requiring the recruitment and retention of thousands of skilled workers across a seven-state footprint. The possibility that labor market conditions might tighten over the course of such a project was not merely foreseeable — it was virtually certain.
Temporal remoteness from the acute pandemic. The temporal gap between the acute COVID-19 period and the most significant delays is fatal to the causal argument. Phase 1 Milestone 3 (47 days late, completed October 14, 2021) is the earliest delay, but the most significant delays occurred later: Phase 2 Milestone 6 (68 days late), Milestone 7 (91 days late), and Milestone 8 (134+ days of delay accrued). Phase 3 mobilization delays occurred from July 2023 through April 2024. By 2022–2023, the United States had exited the pandemic's acute phase. Vaccines were widely available. Government restrictions on economic activity had been lifted. The labor market conditions prevailing during this period reflected the structural dynamics of a highly competitive infrastructure sector, not the aftermath of a public health emergency.
Meridian cannot credibly attribute Phase 3 delays — commencing more than three years after the pandemic's onset — to "COVID-19 aftereffects." At some point, lingering market conditions cease to be pandemic "aftereffects" and become the normal operating environment. By 2023, that inflection point had long since passed.
The MCA's labor shortage exclusion. MCA § 13.1(e)(iv) excludes "labor shortages resulting from the Contractor's failure to offer competitive wages, benefits, or working conditions" from the definition of force majeure. Henley's testimony that Meridian struggled to compete for labor against other infrastructure projects and faced wage pressure directly implicates this exclusion. If Meridian's labor shortages resulted from its failure to offer compensation competitive with the market, the exclusion bars the force majeure claim as a matter of contract.
Failure to mitigate. Even assuming arguendo that labor market tightness qualified as a force majeure condition, Meridian's failure to take commercially reasonable mitigation steps — such as increasing wages, offering retention bonuses, engaging additional subcontractors, or partnering with union hiring halls — independently defeats the claim. The obligation to mitigate is both a contractual requirement under MCA § 13.1(c) and a legal requirement under New York case law.
B. Supply Chain Disruptions for Fiber-Optic Cable
1. Factual Assessment
Meridian's second category of force majeure — supply chain disruptions affecting the procurement of fiber-optic cable and related construction materials — requires careful factual scrutiny. Meridian asserts that the COVID-19 pandemic caused manufacturing disruptions and shipping delays at its fiber-optic cable suppliers, resulting in extended lead times and material shortages that delayed construction progress.
The following factual considerations bear on this claim:
Global Supply Chain Timeline. Global supply chain disruptions peaked during the period from approximately mid-2020 through mid-2022, driven by a confluence of pandemic-related factory shutdowns, port congestion, container shipping bottlenecks, and semiconductor shortages. The Global Supply Chain Pressure Index compiled by the Federal Reserve Bank of New York peaked in December 2021 and had returned to near-normal levels by mid-2023. By the time of Meridian's most significant delays — Phase 2 Milestones 6, 7, and 8 (occurring from approximately mid-2022 through 2023) and Phase 3 mobilization (July 2023 through April 2024) — global supply chain conditions had substantially normalized. Meridian's attempt to attribute 2023 and 2024 delays to supply chain disruptions is therefore inconsistent with the observable trajectory of global supply chain recovery.
Meridian's Procurement Practices. Critical questions remain regarding Meridian's own procurement practices. Discovery should reveal: (a) whether Meridian placed purchase orders for fiber-optic cable and related materials in a timely manner consistent with the project schedule, or whether late ordering contributed to delivery delays; (b) whether Meridian pursued alternative suppliers when primary suppliers experienced delays; (c) whether Meridian maintained adequate material buffers or safety stock to account for potential delivery variability; and (d) whether NFA had any procurement obligations under the MCA that it failed to satisfy.
Sandoval's deposition testimony suggests that some material delivery delays were attributable to Meridian's own sequencing failures. Sandoval acknowledged that late purchase order placement — resulting from delays in completing design engineering, a predecessor activity within Meridian's scope of work — contributed to material delivery delays. This is a critical admission: if Meridian's own design delays cascaded into late purchase orders, which in turn caused late material deliveries, the supply chain delay is attributable to Meridian's own operational failures, not to an external force majeure event.
Inability to Tie Delays to Specific Milestones. Sandoval's testimony is also notable for what it lacks: he was unable to identify specific cable delivery delays tied to specific milestone delays. He "referenced general supply chain challenges" but could not map those challenges onto the project's critical path. The absence of any contemporaneous analysis connecting supply chain disruptions to milestone-specific schedule impacts is a significant evidentiary gap that undermines the defense.
NFA's Procurement Obligations. The MCA should be reviewed to determine whether NFA had any obligation to procure or furnish materials for the project. Under a typical design-build MCA of this nature, the Contractor (Meridian) bears full responsibility for material procurement. If that is the case, any supply chain delay is attributable to Meridian's procurement function and does not involve NFA's performance.
2. Legal Analysis
Meridian's supply chain force majeure claim faces significant legal obstacles:
Supply chain disruptions are not separately enumerated. As discussed in Section III.B.1 above, the MCA's force majeure clause does not separately enumerate "supply chain disruptions" as a force majeure event. For supply chain issues to qualify, Meridian would need to demonstrate either that they are a direct and proximate consequence of an enumerated event (the pandemic) or that they fall within the catch-all language of events "beyond the reasonable control" of Meridian. Under the ejusdem generis principle applied by New York courts, the catch-all language should be construed narrowly and limited to events of the same kind and nature as the specifically enumerated events — i.e., catastrophic, external, and uncontrollable events such as wars, natural disasters, and government orders. General supply chain volatility driven by multiple market factors does not fit comfortably within this category.
Foreseeability. By 2022–2023, supply chain volatility was not merely foreseeable — it was actual common knowledge throughout the business community. A sophisticated contractor should have adjusted its procurement strategies accordingly, including placing orders further in advance, maintaining larger material buffers, and qualifying multiple suppliers. The failure to take these steps is a procurement management failure, not a force majeure condition.
Mitigation Failure. Under MCA § 13.1(c), Meridian was obligated to use "commercially reasonable efforts" to mitigate, including "the engagement of alternative suppliers." If Meridian relied on a single or limited number of fiber cable suppliers and failed to pursue alternative sources when delivery problems emerged, the resulting delays are attributable to Meridian's procurement strategy, not to force majeure.
Causal Connection. Even if supply chain disruptions qualified as a force majeure event, Meridian would need to demonstrate through a rigorous critical path analysis that specific material delivery delays fell on the project's critical path and directly caused specific milestone delays. General assertions of supply chain difficulty, without documentation linking particular delayed deliveries to particular milestones, are insufficient. Sandoval's inability to make these connections at deposition further weakens the claim.
C. Meridian's Failure to Comply with Notice Requirements
The notice requirement issue is potentially the strongest single argument against Meridian's force majeure defense, as it provides a clean procedural basis for disposing of the defense without reaching the merits of whether the claimed events qualify as force majeure.
The relevant facts are undisputed: MCA § 13.1(b) requires written notice within ten (10) business days of the occurrence of a force majeure event. The notice must describe the nature of the event, its anticipated duration, the specific obligations affected, and the mitigation steps being taken. The provision further states that "[f]ailure to provide timely notice in accordance with this Section 13.1(b) shall constitute a waiver of the right to claim Force Majeure relief with respect to such event."
Meridian did not formally invoke force majeure until its February 2, 2024 response to Cure Notice No. 1. The delays Meridian seeks to excuse began with the Phase 1 Milestone 3 overrun, which was apparent by the target date of August 28, 2021. Phase 2 delays accumulated from late 2021 through 2023. During this entire period — spanning more than two years — Meridian never issued a formal force majeure notice under MCA § 13.1(b).
Under New York law, strict compliance with contractual notice provisions is required, and failure to provide timely notice constitutes a waiver of the claim to which the notice relates. See Heller v. Pope, 250 A.D.2d 449, 450 (1st Dep't 1998) (enforcing contractual notice requirement as a condition precedent); Dormitory Auth. of State of N.Y. v. Samson Constr. Co., 30 N.Y.3d 704, 711 (2018) (emphasizing the importance of strict compliance with contractual notice provisions in construction delay claims). In Samson Construction, the Court of Appeals held that a contractor's failure to comply with a contractual notice-of-claim provision barred the contractor from recovering delay damages, regardless of the merits of the underlying claim. The Court noted that the notice provision served important purposes — including enabling the owner to investigate the claim contemporaneously and to take corrective action — and that these purposes would be defeated by excusing late or absent notice.
The same logic applies here with equal force. The purpose of MCA § 13.1(b)'s notice requirement is to enable NFA to investigate the claimed force majeure condition contemporaneously, to verify whether the condition genuinely exists and is affecting the project, and to work with Meridian on mitigation strategies. By faili

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