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Crowell & Moring, a law firm based in Washington D.C., has filed a lawsuit against TREA 1001 Pennsylvania Avenue Trust, the owner of its office building, seeking a rent reduction and interest totaling $30 million. The law firm claims that it is entitled to the reduction and interest because of the COVID-19 pandemic and related government orders that interfered with its use of the property, which amounted to a force majeure event.
The lawsuit, filed on March 10, 2023, argues that the executive orders in the District of Columbia restricted public gatherings and directed businesses to enable employees to work from home. As a result, the law firm was forced to cease normal business operations from the premises. Its use was restricted to having specific personnel access the premises minimally, such as collecting mail.
The law firm claims it is entitled to a 98% abatement of rent paid for a little more than one year, which amounts to $30 million in overpaid rent and prejudgment interest. The lawsuit argues that a separate “unavoidable delay” provision in the lease does not apply to the law firm’s rights to a rent reduction. That provision says that when a period is prescribed for action to be taken by the landlord or tenant, other than the payment of money, a party is not responsible for delays because of strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations or restrictions, or any other cause of any kind that is beyond the reasonable control of a party.
The lawsuit states that “the unavoidable delay provision provides only that Crowell & Moring may not cite the provision itself as a basis to avoid rent” and that this is not the case here. The defendant in the suit is the property owner, the TREA 1001 Pennsylvania Avenue Trust.
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A TREA 1001 Pennsylvania Avenue Trust spokesperson told Reuters that it will “vigorously defend against this meritless action.” Other firms, such as Jenner & Block and Schulte Roth & Zabel, have also filed suits seeking COVID-19-related rent abatements. According to Reuters, Jenner settled the rent dispute in September 2021, while a trial in the Schulte case is pending.
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In summary, Crowell & Moring has filed a lawsuit against its landlord seeking a $30 million rent reduction and interest, claiming that the COVID-19 pandemic and related government orders amounted to a force majeure event that interfered with its use of the property. The lawsuit argues that a separate “unavoidable delay” provision in the lease does not apply to the law firm’s rights to a rent reduction. The defendant in the suit is the property owner, the TREA 1001 Pennsylvania Avenue Trust, which said it will “vigorously defend against this meritless action.”
