Civil Matter

November 9, 2011

Oil Company Wins Another Chance to Recover Money It Paid to Clean up Gulf Oil Spill

The case of Jefferson Block 24 Oil and Gas, Inc. v. Aspen Insurance UK Limited highlights an important battle over money set aside for oil spill recovery, an obviously sensitive and important topic in the Gulf Coast. At the federal district court for the Eastern District of Louisiana, the defendants won a motion for summary judgment and the court dismissed the case. The plaintiffs appealed the determination and the United States Court of Appeals for the Fifth Circuit reversed the decision and remanded the case for further hearing.

The plaintiff, Jefferson Block, owned and operated offshore gas leases, pipelines and a platform in the Gulf of Mexico. In November 2007, a drop in pressure in one of the pipelines was discovered that showed that oil was spilling into the Gulf. Jefferson Block cleaned up the oil under the direction of several government agencies and incurred a cleanup cost of approximately $3 million.

At that time, Jefferson Block owned an insurance policy which provided some coverage in the case of a leak, but was limited to the items set out in a “Declaration.” This declaration listed the oil interests that Jefferson Block had in the area but did not specifically reference the 16-inch pipeline that was the cause of the spill.

November 7, 2011

Class Action Plaintiff Has High Bar to Avoiding Federal Courts

by Berniard Law Firm

Under the Class Action Fairness Act (CAFA), federal courts have jurisdiction over class action claims. There are exceptions, however, including what is known as the “local controversy exception.”

The plaintiff, Opelousas General Hospital Authority, sued in state court three defendants, located in Texas, Illinois and Louisiana, for violations of the Louisiana Racketeering Act. The defendants removed the case to a federal district court under the Class Action Fairness Act and diversity of jurisdiction. The defendants were able to claim diversity of jurisdiction because they asserted that joinder of the only in-state defendant, LEMIC, was fraudulent. The plaintiffs then attempted to remand the case back to state court, asserting that the case fit within CAFA’s narrow “local controversy exception.”

The “local controversy exception” of the CAFA allows a plaintiff to bring a class action lawsuit in state court rather than federal court when several requirements are satisfied. These requirements are that: 1) more than 2/3 of the proposed plaintiffs (as a class) are citizens of the state in which the action was originally filed; 2) principal injuries resulting from the alleged or related conduct of each defendant occurred in-state, and 3) at least one defendant falls under a very specific category. This category covers defendants who meet all of the following: 1) significant relief is being sought from that defendant, 2) the defendant’s conduct forms a significant basis for the claims, 3) it is a citizen of the originally-filed state, and 4) the principal injuries the plaintiffs suffered happened in the originally-filed state. In such a case, the federal district court will “decline to exercise its jurisdiction” and the case will go back to state court. Additionally, for the 3 years before the original class action is filed, no other similar class action, alleging similar facts, can have been filed against any of the defendants.

November 5, 2011

Failure to Properly Serve a Personal Injury Lawsuit Does Not Require Dismissal, Louisiana First Circuit Court Rules

by Berniard Law Firm

In a recent Louisiana First Circuit Court of Appeals ruling, a plaintiff successfully appealed an earlier dismissal of his case for failure to properly serve all of the correct parties.

After Hurricane Gustav, Mr, Preston was working on the Southern University campus removing debris, including trimming tree branches, when he slipped and fell into a hole in the ground. He sustained injuries and sued Southern University for negligence, claiming that the campus allowed an unreasonably dangerous condition to exist and it failed to warn him of the dangerous condition.

Under a Louisiana statute (La. R.S. 13:5107), when a plaintiff sues the State of Louisiana or a state agency, he must serve the Louisiana attorney general and the head of the agency. Furthermore, if the suit is a personal injury lawsuit (tort lawsuit), the Office of Risk Management must be notified and served as well, according to La. R.S. 39:1538.

November 3, 2011

Baton Rouge Pedestrian Strike Reminds Drivers of Duty to Keep a Lookout

by Berniard Law Firm

It is well settled in Louisiana law that automobile drivers are required to exercise care to avoid colliding with pedestrians. Motorists are charged with the duty to see what an “ordinarily prudent” driver should see to prevent striking pedestrians in the roadway. In fact, La. R.S. 32:214 requires drivers to

“exercise due care to avoid colliding with any pedestrian upon any roadway and shall give warning by sounding the horn when necessary and shall exercise proper precaution upon observing any child or any confused or incapacitated person upon a highway.”

A driver’s liability for injury to a pedestrian is based on ordinary negligence principles. The traditional duty/risk analysis is used to compare the driver’s behavior to “how a reasonably prudent person [would] have acted or what precautions [he would] have taken if faced with similar circumstances and conditions; the degree of care required is dependent upon the foreseeable dangers facing the driver. It can be particularly challenging for a court to conduct the duty/risk analysis when a victim dies as a result of his injuries and there are no eyewitnesses to the accident other than the defendant himself. The “trier of fact is free to believe in whole or part the testimony of any witness,” which means that the a judge or jury may disregard a defendant’s own testimony about whether he saw–or should have seen–the victim. Scoggins v. Frederick. However, under Louisiana civil procedure, “a court cannot make [such] credibility determinations in ruling on a motion for summary judgment.” This rule of procedure led to the First Circuit Court of Appeals’ reversal of the trial court in Woodward v. Hartford Insurance Co.

November 1, 2011

Third Circuit Court Orders Prevailing Defendants in Class Action Suit to Pay Court Costs

by Berniard Law Firm

In a recently published case, a four-judge panel of the Third Circuit Court of Appeal for the State of Louisiana upheld a trial court’s determination that the defendants pay all of the court costs, even though they prevailed on the merits of the case. This kind of decision is highly unusual; typically, the losing party pays court costs, which can include, for example, filing fees, expert witness fees, and costs of depositions. They can be substantial, especially in a decade-long court case such as this one. Here, the defendants were ordered to pay court costs of $326,307.09, which they promptly appealed.

In order to appeal a judgment of costs, the costs must be substantial and a hearing on the subject must be held after the case has resolved on the merits. Here, the trial judge, Judge Hebert, did in fact hold a hearing where both sides were allowed to present briefs and arguments as so why the opposing party should be forced to bear the costs.

The judge acknowledged that the lawyers for both sides were aggressive advocates and did not fault them for that. Though Judge Hebert took one of the plaintiff’s attorneys to task for losing his temper and throwing a pencil, he also pointed out that the defendants’ attorneys engaged in behavior that was calculated to mislead the court, intimidate and harass witnesses, and impede litigation.

October 29, 2011

Geismar Wrongful Death Action Focuses on Choice of Litigation Forum

by Berniard Law Firm

A common litigation strategy employed by savvy plaintiffs is choosing the most favorable jurisdiction in which to file a complaint. Favorability can turn on a number of factors including geographical convenience, the perception that a “local” jury may be more sympathetic, or that certain judges are more welcoming to the plaintiff’s particular cause of action than others. The choice of forum is governed by a series of procedural rules, but in many instances a plaintiff’s case may be properly filed in more than one parish. Or, in a case involving multiple defendants, there may be a need to decide between filing in state or federal court. Generally, state court is preferred by plaintiffs in tort actions, but federal court may be the only available forum when one or more defendants is not a resident of Louisiana. Accordingly, a critical part of the forum selection strategy is deciding whom to name as a defendant. Federal civil procedure rules seek to limit the parties’ unfair manipulation of defendants to affect forum choice.

The term “complete diversity” refers to the situation where none of the plaintiffs in a case is from the same state as any of the defendants; this results in jurisdiction by the federal court. A plaintiff who prefers to have his case heard in state court may attempt to name a defendant who resides in his own state in order to destroy complete diversity. The concept of “improper joinder,” however, can be employed by a defendant who favors federal court to challenge the plaintiff’s inclusion of the in-state, or “non-diverse,” defendant. To do so, the objecting defendant must demonstrate either

(1) actual fraud in the pleading of jurisdictional facts, or

October 27, 2011

Bossier City House Fire Tragedy Prompts Court’s Review of Landlord’s Duty to Tenants

by Berniard Law Firm

Louisiana law reflects the state legislature’s interest in protecting the health and safety of residents of rental property. For instance, landlords are required to warrant that a house is “suitable for the purpose for which it was leased” and that it is “free of vices or defects that prevent its use for that purpose.” La. C.C. art. 2696. The warranty extends even to problems that are not personally known to the landlord, though there is an obligation on the part of tenants to report any unsafe conditions. La. C.C. art. 2697. Some limited waivers of this warranty are permitted, but only by “clear and unambiguous language that is brought to the

attention of the lessee.” La. C.C. art. 2699. So strong is the state’s intent to protect tenants that the law imposes strict liability on a landlord for damages that arise from defects to the property. To prevail against a landlord, the tenant must only prove that the landlord had control over the thing that caused injury; the thing that caused injury suffered from a condition that created an “unreasonable risk of harm”; and that the condition caused the tenant’s injury. In fact, the landlord’s liability is based entirely on his status as the landlord, not his personal fault. Thus, a landlord’s “lack of knowledge regarding a [particular] defect is inconsequential.”

A case that recently came before the Second Circuit Court of Appeal demonstrates the operation of this statutory warranty. In 2000, Antonio Wells, Sr. signed a lease to rent a house on Julia Avenue in Bossier City from William Norris. Wells’s family, who lived with him in the house, included his wife, Amanda, and three children: Amber, Antinio Jr., and Arquisia. When the family moved in, several electrical outlets were not working. Wells and his wife got into the habit of using extension cords to power lights and other appliances in the home that were not located near working outlets. Discovered later was the fact that many of the 20-amp fuses in the home’s fuse panel had been replaced with 30-amp fuses to prevent overloads; this caused excessive heat to build up in the circuits. Around lunch time on July 1, 2001, the house caught fire when an air conditioner overloaded a circuit with an altered fuse and ignited. The Bossier City Fire Department responded and extinguished the fire, but, tragically, not before Arquisia was killed and both Amber Antonio Jr. were severely injured. Wells filed suit against the landlord, Norris, in June of 2002. Wells alleged that Norris was strictly liable for the damages sustained by him and his family in the fire. A trial was held in March, 2010 in which the trial judge, without oral or written reasoning, ruled in favor of Wells and awarded $207,572.79 in damages. Norris appealed.

October 25, 2011

Medical Malpractice Case in Louisiana Shows Importance of Panels

by Berniard Law Firm

Is the Failure to Observe a “Do-Not-Resuscitate” Order Medical Malpractice?

A common element in medical malpractice cases we have previously examined on this blog is the role of Louisiana’s medical review panel. As a brief review, claims brought against healthcare providers under Louisiana’s Medical Malpractice Act (“MMA”) must be reviewed by a medical review panel before proceeding to court. The panel’s purpose is limited to determining whether the evidence supports the plaintiff’s allegation that the healthcare provider failed to observe the appropriate standard of care. If the board determines the standard was not met, it must then decide whether that failure contributed to the plaintiff’s injury. The panel’s report, though not conclusive, is admissible in any subsequent litigation.

A plaintiff who believes he has been a victim of medical malpractice must first determine whether a particular claim is even subject to the MMA, and therefore whether it must be submitted to a medical review panel prior to litigation. This is an important matter, because a medical malpractice claim against a health care provider is “subject to dismissal on an exception of prematurity if such claim has not first been presented to a medical review panel.” The Louisiana Supreme Court, in the case of Coleman v. Deno, identified six factors which are to be considered when determining whether a claim falls under the medical malpractice umbrella. But even with these factors as a guide, the decision may not necessarily be straightforward. A recent case that demonstrates the “grey area” of medical malpractice claims involved a hospital’s ignoring a patient’s Do-Not-Resuscitate Order (“DNR”). Agnes Liles was admitted to the Northern Louisiana Medical Center (“NLMC”) in Ruston on July 10, 2009. A few days later, he went into cardiac arrest. Despite NLMC’s knowledge of Liles’s DNR, hospital employees resuscitated Liles. The process left him with physical disabilities until his death two months later. Liles’s two daughters filed suit against NLMC for recovery of the medical expenses attributable to Liles’s post-resuscitation care as well as physical and mental pain and suffering, loss of enjoyment of life, and cognitive decline. They also asserted a claim for bystander recovery. NLMC filed an exception of prematurity in the trial court arguing that the plaintiffs’ claims must be reviewed by a medical review panel prior to litigation. The trial judge overruled the exception after a hearing and NMLC filed for supervisory review of the judgment with the Second Circuit Court of Appeal. The court relied primarily on two cases to ultimately conclude that “the actions by the nursing personnel in failing to honor the DNR order were not covered under the MMA as medical malpractice, but instead should be governed by Louisiana negligence principles of law.” The first case contained the Louisiana Supreme Court’s pronouncement that

October 23, 2011

Second Circuit Case Demonstrates Importance of Proper Contracts

by Berniard Law Firm

Our previous post discussed the various principles of contract law at work in the Mendoza case, which can be viewed here. This case involved a dispute between an injured worker’s employer and another company with which that employer had a contract. A provision of this contract provided for indemnification, the assuming by one entity of the liability of another.

Companies often assume the liabilities of other entities with which they hold contracts. This is seen as a cost of doing business. Indemnification makes up part of or the entirety of the consideration for some corporate contracts. Contracting away your liability can be extremely valuable. The dispute in this case was when the contract actually became effective. The court used various principles discussed in its opinion and the previous post on this topic to determine that the trial court was correct in denying summary judgment to one party and granting it to the other. Mid South, Mr. Mendoza’s employer, was to be indemnified and held blameless by EXCO as per their 2008 agreement.

In general, this dispute really came down to an issue of timing. The two companies in question signed an agreement in December 2008. The incident that created Mr. Mendoza’s cause of action occurred in October 2007. He filed suit in August of 2008. Mid South did not file an answer to the complaint until July of 2009. After this filing Mid South demanded defense from EXCO; this defense was promptly denied. Mid South again attempted to illicit indemnification and defense from EXCO in September 2009 based on a 2004 contract that Mid South held with Anadarko, a company whose interests were subsequently absorbed by EXCO. EXCO did not respond until after Mid South filed a cross-claim against EXCO. EXCO filed an exception and answer in April 2010 along with a motion for summary judgment. In July 2010, Mid South filed its cross-motion for summary judgment. The former motion for summary judgment was denied and the latter granted in August of 2010. When the trial court denied EXCO’s motion to designate the judgment as appealable, EXCO sought aid from a higher court. The Court of Appeal for the Second Circuit of Louisiana granted EXCO’s writ application but ultimately sided with the trial court.

October 21, 2011

Texas Contract Law Informs Second Circuit Decision

by Berniard Law Firm

A well-written contract can not only solve most problems, it can prevent most problems from becoming problems in the first place. For a contract to have its maximum problem eliminating effect, however, all parties to the contract must agree as to what it mean. Contract law is filled with cases that could have been avoided if the entities involved had simply expressed their terms more clearly or asked the right questions before, during and after the drafting of the contract. While this ambiguity may be intentional by one side or both in the event they think a benefit can be attained, the truth is the best contract is often the one where both parties are simply looking to achieve the main goal fairly. Those instances where ambiguity dominates, however, cause problems. The case of Mendoza v. Grey Wolf Drilling Co., discussed in an earlier post, is one such case.

The Mendoza case was two-fold. It involved questions as to whether and when one company assumed liability for another company. Several contract law principles were implicated in this dispute from which this opinion resulted. Contracts get drafted under the assumption that the parties have reached an agreement. This alleged agreement is nowhere to be found when there is a dispute over the meaning of a contract. When adverse parties give contradictory interpretations of the same contract language a suit often ensues. It is because of the relative frequency of this occurrence that the courts have come up with various rules for interpreting contracts when the parties themselves cannot.

The Court of Appeal for the Second Circuit of Louisiana applied Texas contract law in this case. This was due to an agreement between the parties which was most likely part of the contract itself; there was no dispute over this portion of the contract. For guidance, Texas law contains several well-established principles for evaluating disputed contracts: