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Category: Class Action

  • Louisiana Courts Take Firm Stance Against Misleading Health-Related Materials

    Both trial and appellate courts found Janssen Pharmaceutica liable for damages under the Louisiana’s Medical Assistance Programs Integrity Law (MAPIL). The issue was whether the Attorney General could bring this action without alleging actual damages, as MAPIL requires. The courts considered the legislative intent behind the law to determine that Janssen was still liable.

    The Attorney General of Louisiana filed suit against Janssen Pharmaceutica for violating the MAPIL, which prohibits people from presenting false or fraudulent claims or misrepresentations to the state medical assistance program funds. The jury concluded that Janssen had violated the law over 35,000 times, resulting in a fee of over $257 million.

    The appellate court upheld the trial court’s decision. It would only be able to overturn the trial court if it found the trial court had abused its discretion. In other words, if the trial court’s interpretation of the statute was not reasonable, the appellate court could reverse it. However, this is a very high standard. Previous Louisiana case law required the court to read the relevant subsection of the statute in the context of the remainder of the MAPIL legislation, and the appellate court found that the trial court had done this, and its interpretation was reasonable. Thus, it was reasonable to interpret the statute to mean that if the Attorney General could prove false, misleading, deceitful statements, Janssen would be liable for civil penalties.

    Jannsen’s argument was that the Attorney General failed to satisfy the statute’s requirement of alleging damages of $1,000. In contrast, the Attorney General argued that MAPIL is a broader statute. The trial court sided with the Attorney General in large part based on a West Virginia case, where the court stated that when determining an appropriate civil penalty, whenever false or misleading promotional materials concerning health are transmitted to the public or its healthcare providers, those promotional materials cause harm and injury, as a matter of law. Moreover, the Supreme Court of Louisiana emphasized consideration of the legislative intent of statutes. Considering the legislative intent here, the trial court interpreted the statute to mean that not only private citizens, but also the Attorney General, should be able to protect the integrity of medical assistance programs, and the deceptive, misleading materials constituted damage.

    Statutory Interpretation is rarely simple. Considering not just the words of the statute and its requirements but also the legislative intent behind it can be crucial. It’s important to make sure you have the best lawyers to present arguments that courts can use when the case may be a bit more simple but impacts you rather than a major company.

  • Louisiana and Fifth Circuit Reaffirm the Necessity of Personal Jurisdiction

    The “New York Convention” (9 U.S.C. §§ 201 et seq.) gives a U.S. court the ability to enforce a foreign arbitration award if there is personal jurisdiction over the defendant. Personal jurisdiction is when the defendant can expect to appear in a foreign country’s court because the defendant has minimum contacts with the country. First Inv. Corp. v. Fujian Mawei Shipbuilding, Ltd. reaffirms that personal jurisdiction is necessary when a plaintiff is trying to confirm an arbitration award.

    In First Inv. Corp., a Marshall Islands corporation and Chinese shipbuilding company entered into a contract that had an arbitration clause. The Marshall Islands is a presidential republic of the United States. The U.S. provides defense, funding, social services, and its currency for use to the republic. The arbitration clause required all disputes to be resolved in neutral territory under the London Maritime Arbitrators Association rules. The English arbitration panel found for the Marshall Islands corporation, but China refused to enforce the award against the defendant because not all the arbitrators on the panel had seen the final draft of the decision. Instead of resolving the matter in either the country of arbitration or the defendant’s country, First Inv. Corp. commenced action in the U.S. District Court for the Eastern District of Louisiana. The case eventually appeared before the Fifth Circuit Court of Appeals.

    The Fifth Circuit affirmed the district court’s decision that the U.S. lacks personal jurisdiction over a Chinese shipbuilding company that has no contacts with the U.S. The Chinese company did not distribute products, conduct any transactions, or maintain property on American soil. However, the Marshall Islands plaintiff argued that since the defendant did not have any contacts with the U.S., the defendant should not be afforded the right of due process stemming from personal jurisdiction. The Fourteenth Amendment of the U.S. Constitution forbids states from depriving “any person of life, liberty, or property, without due process.” In the district court trial, the plaintiff argued that as a corporation controlled by the Chinese government, the defendant was not entitled to due process. Ultimately, the trial court rejected the plaintiff’s argument because it would undermine the “minimum contacts” test set by the U.S. Supreme Court because a confirmation of the award would suggest that a court can exercise personal jurisdiction over a defendant with no contacts in the U.S. The Fifth Circuit followed up by citing cases affirming due process protection for foreign corporations.

    The plaintiff then argued that a confirmation of the arbitration would not affect the defendant’s “substantive rights” or fundamental protections afforded by the U.S. Constitution. The Fifth Circuit disagreed because a confirmation of the arbitration award would allow the plaintiff to enforce the judgment in Britain.

    First Inv. Corp. shows how significant it is for parties to understand U.S. legal procedures when seeking to enforce foreign arbitration awards.

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  • Insurance Company Lawsuit Involving Healthcare Providers Illustrates Class Certification Rules

    A group of healthcare providers sued a number of insurance companies alleging that their worker’s compensation bills were discounted under a preferred provider agreement without notice as required by Louisiana state law. When the judge was deciding whether or not to certify the group of healthcare providers as a class, allowing them to bring one lawsuit all together instead of each having to pursue a suit individually, the insurance companies claimed the providers had no right to bring the case at all. The judge did not address the issue and certified the class. The insurers appealed the decision.

    The insurers argued that healthcare providers are barred by Louisiana law from directly suing insurance companies because the law does not allow contract claims and the claim the healthcare providers brought was a contract case. The healthcare providers argued that their claim was not contractual but of a breach of a statutory duty, which is a duty created by a specific law. A party has standing, which means they are allowed to bring a case, when they have a legally protectable stake in a litigated matter. This case stems from a case against a party insured by the insurance companies. The healthcare providers settled with the insured party but retained the right to sue the insurance companies.

    Louisiana law does not allow the providers to sue the insurance companies independently but they do have a right to sue the insurance companies if they have a substantive case against the insured party. The fact that the healthcare providers settled with the insured party does not automatically mean they can no longer sue the insurance companies. The appeals court decided that the healthcare providers could sue the insurance companies because their claim was a violation of a statutory duty, not a contract dispute, and because they had specifically retained their right to sue the insurance companies in their settlement agreement with the insured party.

    The appeals court then went on to review whether the class certification was proper. An appeals court is always deferential to a trial court’s decision to certify a class and will only overturn the decision if there was manifest error, or the decision was obviously wrong. In order to be certified as a class the group of plaintiffs must meet these requirements: 1) The group must be so large that treating each plaintiff as an individual would be too complicated 2) The questions of law and fact in the case must be the same for all the plaintiffs 3) the plaintiffs who take the lead in the case must have claims typical of all the class members 4) the plaintiffs who take the lead, and their lawyers, must adequately and fairly represent the interests of everyone in the class. If these requirements are met the case can go forward as a class action.

    The trial court found that the class representative was adequate to represent the class and the appeals court agreed. The trial and appeals court also agreed that common issues predominated over individual issues. The defendant insurance companies insured the same insured party on which the claims were based, the claim for all the providers was the same, that their bills were illegally discounted, this is definitely enough commonality and typicality for a class certification. The appeals court upheld the trial courts decision and sent the case back to the trial court to continue the case.

    Even preliminary legal issues, such as standing to sue, are highly complicated and very important aspects of a case.

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  • Louisiana Supreme Court Finds Binding Arbitration Clause Fair and Reasonable to the Client

    The Louisiana Supreme Court has recently undertaken a case deciding whether arbitration clauses in attorney-client retainer agreements are appropriate. In the past, Louisiana has favored the enforcement of arbitration clauses in written contracts. Arbitration avoids taking a case to trial and is a thrifty and efficient way to conduct the resolution of disputes outside of the courts. During arbitration, each party refers its dispute to an arbitrator, who then imposes a decision that is legally binding for both sides. However, Louisiana law also imposes a fiduciary duty requiring attorneys to act with the utmost fidelity and forthrightness in their dealings with clients and any contractual clause, which may limit the client’s rights against the attorney is subject to the upmost scrutiny.

    According to the Louisiana Supreme Court in Hodges v. Reasonover, there is no per se rule against such binding arbitration clauses, provided that they are fair and reasonable to the client. In Hodges v. Reasonover, Jacqueline Hodges, the founder, sole shareholder, and CEO of Med-Data Management, Inc., hired Kirk Reasonover of the law firm of Reasonover & Olinde to sue a company known as MedAssets, Inc. in federal court in Atlanta, Georgia. In the retainer agreement between Hodges and Reasonover there was an arbitration clause, which essentially provided that any dispute shall be submitted to arbitration in New Orleans, Louisiana and that such arbitration shall be submitted to the American Arbitration Association (AAA).

    Hodges was ultimately unsuccessful on her suit against MedAssets, Inc., which led her to file suit for legal malpractice against Reasonover. According to the Louisiana Supreme Court, Courts must closely scrutinize attorney-client agreements for signs of unfairness or overreaching by the attorney. Further, Louisiana Rule of Professional Conduct 1.8(h)(1) prohibits a lawyer from “prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement.”

    According to the state of Louisiana as well as the American Bar Association (ABA), an arbitration clause does not violate Rule 1.8(h)(1) unless some aspect of the arbitration clause limits the lawyer’s substantive liability. According to ABA Formal Ethics Opinion 02-425:

    [M]andatory arbitration provisions are proper unless the retainer agreement insulates the lawyer from liability or limits the liability to which she otherwise would be exposed under common or statutory law. For example, if the law of the jurisdiction precludes an award of punitive damages in arbitration but permits punitive damages in malpractice lawsuits, the provision would violate Rule 1.8(h) unless that client is independently representing in making the agreement.

    The Louisiana Supreme Court agrees with the aforementioned opinion by the ABA and states that an arbitration clause which does not inherently limit or alter either party’s substantive rights, but rather it simply provides for an alternative venue for the resolution of disputes is enforceable. In the case of Jacqueline Hodges, the Court found that there is no evidence that arbitration conducted in accordance with AAA rules and before AAA-approved arbitrators would in any way be presumptively unfair or biased. Thus, the Court said that arbitration provides a neutral decision maker and is otherwise fair and reasonable to the client.

    For clients, the word “binding” can have an intimidating effect. At the Berniard Law Firm, our lawyers do not take arbitration matters lightly and understand the gravity of such situations, particularly in personal injury and insurance disputes. Our attorneys are here to provide experience and quality representation from the beginning of our time with clients until the very end. We will explain and discuss contracts, such as retainer agreements, in great detail so that you as the client can feel comfortable with your signature on the dotted line. The Berniard Law Firm always has your best interests in mind and we are happy to counsel you if you have legal questions regarding arbitration.

  • High/Low Agreement Proves Fatal to Plaintiff’s Cause of Action

    Settling with an insurance company out of court is commonplace in the legal world. However, entering into a “High/Low” agreement prior to trial can come back to hurt a plaintiff and should be carefully worded and considered before executed. The cost of this kind of failure is exemplified in Soileau v. Smith True Value and Rental.

    In November 2007, plaintiff Mary Solieau sustained serious injuries when a John Deere front-end loader detached from a John Deere tractor and shattered her leg while she was supervising the cleaning out of canals for the Town of Mamou. The tractor was rented from Smith’s Hardward, insured by Defendant Hartford Insurance Company.

    Before proceeding to trial, Solieau entered into a “high/low” agreement with Hartford, capping Hartford’s liability at its policy limit of $2,500,000 and further releasing the Smiths of any personal obligation. At trial, Solieau moved to dismiss the Smiths, which led to Hartford filing for a directed verdict based on the language of its policy, which obligated Hartford to pay only those sums that its insured becomes legally obligated to pay. The trial court denied the motion.

    After trial, the jury found in favor of the plaintiff, placing 15% of fault upon the Smiths. The trial court entered judgment against Hartford for $1,074,462.82. Hartford and Soileau then appealed the decision, addressing the issue of whether Louisiana Revised Statute 22: 1269 (La.R.S. 22:1269) barred Soileau from pursuing Hartford alone once its insured parties were dismissed from litigation.

    In overturning the decision of the trial court, the appellate court determined that the direct action statute, La.R.S. 22:1269, did in fact bar Ms. Soileau from recovery from Hartford. The relevant statutory language ensures an injured person a “right of direct against the insurer within the terms and limits of the policy.” The court relies on the language of the “high/low” agreement, which released the Smiths of personal liability, but nowhere mentioned Hartford agreeing to waive its rights under the direct action statute.

    The court went on to shoot down the plaintiff’s contention that the direct action statute only governed the initial filling of an action, not the maintenance of an action against an insurer once the insured is dismissed. The court sided with Hartford, positing that “the legislative intent behind the direct action statute would be defeated if a plaintiff could circumvent the statute’s requirements simply by filing the action against the insured and the insurer then dismissing the insured.”

    In the end, the “high/low” agreement entered into by the plaintiff turned out to be fatal to the cause of action since the dismissal of the insured barred the defendant insurance company from liability towards the injured party. Knowing how to navigate a settlement opportunity is incredibly difficult and comes from years of experience. The Berniard Law Firm has significant experience in settlements, especially with insurance companies, which provides a wealth of information and quality advice from our attorneys. Contact us today for more information on your rights before you make a settlement that could hurt your ability to be compensated for your injury.

  • Understanding the Federal National Flood Insurance Program as Hurricane Season Approaches

    The Federal National Flood Insurance Program (“NFIP”) is a federal program that allows homeowners to protect against flooding because most homeowners insurance does not cover flooding (You can check out their website here). It is offered to homeowners, renters and some business owners. The federal government works with private insurance companies to encourage them to offer insurance. The government sets a standard rate and then the insurance is actually through the private insurance company, but involves the federal government to a great degree. The federal government underwrites, or supports the insurance company, but the private insurance company does all of the related administrative tasks.

    Because of the federal government’s involvement, when there are issues with the insurance company, you must follow unique litigation paths in order to recover for any damages in many occasions. For example, the federal government will normally cover any litigation costs for the private insurance company. As such, some procedures that would normally be acceptable at the state level may not be allowed in the federal court.

    A case in Mississippi that was appealed to the Fifth Circuit Court of Appeals helps explain these differences. In that case, Grissom, the insured individual, had insurance under the NFIP through Liberty Mutual. He was eligible for a preferred risk insurance policy, but did not know he was eligible. After Hurricane Katrina, he argued that he would have purchased the preferred risk insurance policy if he had known about his eligibility.

    When Hurricane Katrina completely destroyed Grissom’s home, the insurance paid $121,000, which was the policy maximum. Grissom sued arguing that he should be awarded the difference between his current policy maximum and the amount he would have gotten if he were under the preferred risk insurance policy. Grissom won at a jury trial on the state level. Under normal circumstances, this case could be resolved easily under state law. However, because federal money may be involved, the court had different questions to consider.

    First, the Court considered whether federal law preempted the case. If federal law preempted, then the state court should not have heard the case and Grissom should have brought the case directly to federal court. The court has ruled on this issue several times before and decided that federal law controls when there are “tort claims arising from claims handling” Wright v. Allstate Ins. Co., 415 F.3d 384, 390 (5th Cir. 2005). However, federal law does not control when the individual is getting insurance as a new customer. Campo v. Allstate Ins. Co., 562 F.3d 751 (5th Cir. 2009). That is, only if the individual is getting insurance as a first time customer does state law control. Therefore, the question in this case became whether Grissom was getting insurance for the first time. Grissom was renewing his policy when he became eligible for the preferred risk insurance policy. As such, the court concluded that he was renewing, and not a new customer, so federal law controlled. See Borden v. Allstate Ins. Co., 589 F.3d 168, 173 n.2 (5th Cir. 2009) (explaining that claim renewal is considered claims handling).

    Next, since there was a jury in the lower court, the Court considered whether a jury would have been proper. Normally, if federal funds are involved, a jury trial is not appropriate. Under the NFIP, “[t]he federal government pays flood insurance claims and reimburses costs, including defense costs, for adjustment and payment of claims by private insurers.” Therefore, since the government pays for litigation directly, a jury trial is not appropriate.

    Lastly, the Court considered whether Grissom’s claim would have won even under state law. Grissom’s argument was that the insurance providers had a duty to inform him of his preferred status when he renewed. He argued that failure to inform him amounted to a negligent misrepresentation. In Mississippi, there is a five-factor test for negligent misrepresentation. The Court concluded that it should not have won at the state level because it failed one of the tests for liability. In fact, Mississippi law explains that there is no affirmative duty to inform buyers of other insurance policies that may be more beneficial to them given their unique circumstances.

    Programs such as NFIP create unique litigation situations that mesh federal and state law. Experienced attorneys should be employed to deal with these complicated issues. Call The Berniard Law Firm today and we would be happy to discuss your legal needs with you.

  • Attorney Jeffrey Berniard makes New Orleans Magazine top lawyers list

    Licensed attorneys in New Orleans were asked which attorney they would recommend to residents in the New Orleans area. Attorney Jeffrey Berniard, of the New Orleans-based Berniard Law Firm, LLC, was named one of the best mass litigation and class action attorneys in New Orleans in the November 2012 issue of the magazine. Propelled into success by holding insurance companies accountable in the wake of Hurricane Katrina, Berniard has built the Berniard Law Firm into one of the premiere personal injury law practices in not only New Orleans, but the entire state of Louisiana. Since Hurricane Katrina, Berniard Law Firm has focused on insurance disputes and class action litigation.

    Jeffrey Berniard has been involved in several high-profile cases, solidifying his expertise in complex high risk litigation. He worked on the highly publicized Deep Water Horizon oil rig case in the Gulf Coast, representing a very large group of individuals affected by the sinking oil rig. In 2008, Berniard Law Firm secured a $35 million dollar settlement for a class of 70,000 members seeking bad faith penalties for tardy payments by a Louisiana insurance company in the wake of Hurricane Katrina and Hurricane Rita. In 2009, the Berniard Law Firm participated in five class actions against insurance companies and corporations. In the process of these major claims, the firm also helped many residents of the Gulf Coast with their personal injury concerns, insurance claims and business disputes.

    – What is Mass Tort Litigation? –
    Mass tort litigation involves a class of civil actions involving multiple plaintiffs who are injured by a defective product, a hazardous substance or some type of disaster. Mass tort actions can be against one or many defendants in either state or federal court. This type of litigation allows several attorneys or even a group of attorneys to represent several injured parties within an individual case. This becomes a much more effective form of litigation that allows for the pooling of resources and ideas.

    Mass tort typically involves a smaller group of individuals typically limited to a certain geographic area. This differs from the class action, which is one lawsuit that is filed by an individual or a small group acting on the behalf of a large group. Class actions tend to be much larger suits and are represented by one class representative who represents the entire class. In mass tort, each individual is treated as such–as individuals. In a class actions, the entire class is treated as one individual. Attorney Jeffrey Berniard and the Berniard Law Firm have extensive experience with both class action and mass tort litigation.

    Contact the Berniard Law Firm today at (888) 550 5000 if you feel that your rights have been violated.

  • What is a Class Action? Who is the “Class?”

    In Jane Doe v. Southern Gyms, LLC arising out of Baton Rouge, Louisiana, a class action suit was filed involving a local branch of the national gym, Anytime Fitness, was accused of taking pictures of 250-300 women changing in a locker room. The plaintiffs filed on behalf of all women who’d used the gym during the time period and the class was certified to proceed to trial.

    To understand what “the class was certified” means, it is important to understand what a class action suit is the reasons why we allow class actions in the first place. Class action suits are a useful tool in litigation in that it can bring together large numbers of substantially similar or identical claims into a single proceeding. This contributes to judicial efficiency as often times the type of cases litigated as class actions can have as many as thousands of plaintiffs. Assuming each of these cases was large enough to be worth bringing to court individually, there would be substantial amounts of duplicated effort by each party. However, the real value of class actions is in allowing cases that normally would be too small to litigate individually to have their day in court. If a case involves a real injustice to thousands of people, but the actual per person damages is relatively small it would be too costly to vindicate their claims.

    In this case, the class proposed was:

    all females who physically entered the women’s restroom/locker room/ changing room at Anytime Fitness, 200 Government Street, Baton Rouge, LA 70802 from November 1, 2009, through and including April 5 2010.

    The rules that govern class actions require that several hurdles be met before a class can be certified (allowed) to proceed: there must be enough members that litigating separately is impractical; the questions of law and facts in the case common to the parties; the class representative’s claims must be typical of the claims of the class; they are able to protect the interests of the entire class, and finally the class must be able to be adequately defined so the court can be satisfied that the suit will end the dispute.

    This case is noteworthy because the actual size of the class is fairly small. The gym operator admitted to videotaping on only 10-15 occasions. While any number of women may have been victims during these periods, the class itself was certified for any woman using the gym during a nearly 6 month period. There is no rule that states the minimum number of plaintiffs required for a class action, but the appeals court did not give a rousing endorsement for the “numerosity” (size) of the class in this case, they merely deferred to the trial court judgment on the matter. What was particularly noteworthy was the court weighed concerns beyond just the actual numbers of women involved. An additional factor was evidence that the gym allowed members from around the country to use it and thus the plaintiffs might not all have been locals which would have substantially increased the burden to litigate separately. Had all the women been locals, it is possible the court would have required “joinder” or just combining separate cases rather than allowing a representative in a class action suit.

    Most people have been involved in a class action suit and may not have even been aware of it. Generally, each member of the class is required to be notified to give them the opportunity to opt-out of (or into) the class. This will typically be done via a postcard by mail. Thousands of these cards are thrown away without being read yearly but they can entitle plaintiffs to small to moderate cash settlements without ever setting foot in a courtroom, as you are being represented by the person bringing the suit!

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  • Mandeville, Louisiana, Couple Fights Installers of Chinese Drywall

    Jason and Renee Niemann, a couple from Mandeville, Louisiana, purchased a home in 2007 in the Lakeside Village Subdivision in Mandeville, Louisiana. Unbeknownst to them, a subcontractor, Calmar Construction Company, installed Chinese drywall in the home during construction in 2006, and the Niemanns have been fighting the builder, subcontractor, and subdivision developer in court since discovering the defect in 2010.

    Chinese drywall became popular amongt builders during the housing boom in 2004 because it was inexpensive and available in mass quantities. However, the defective drywall is infamous for emitting carbon disulfide, carbonyl sulfide, and hydrogen sulfide. These three sulfurous gases cause both irreparable damage to houses and severe health problems. Copper piping in the home begins to erode, taking on a black and powdery look, and residents begin experiencing respiratory issues and headaches. As a result, the house becomes uninhabitable and loses its value.

    When the Niemanns signed the sales contract in 2007, they had no idea that Chinese drywall had been installed in their new home. On May 24, 2010, they filed an action in Louisiana state court, alleging breach of warranties and negligence and seeking damages from the builder, subcontractor, and subdivision developer, as well as the respective commercial general liability (CGL) insurance providers. The Niemanns argued that all three companies had been aware (or should have been) of the defects yet failed to disclose them at time of sale. As a result, they stated they had made a home purchase they would not have otherwise made, resulting in damages, economic loss, and a defective home that was unfit for its intended purpose.

    During an appeal of a summary judgment order by the trial court, the appellate court asked the parties to submit briefs on whether the Niemanns had a right of action against both Calmar and Calmar’s CGL insurer, American Empire, for non-apparent damages inflicted on the house prior to sale. According to a recent Louisiana Supreme Court case, Eagle Pipe and Supply, Inc. v. Amerada Hess Corp., a plaintiff only has a right of action (or right to sue) for non-apparent damages inflicted pre-sale when there was an assignment of or subrogation of that right from the previous owner to the plaintiff. In plain English, the appellate court wanted to know if the subdivision developer and seller, Lakeside Village Development, had assigned the Niemanns its rights of remedies against Calmar and Calmar’s insurer. These rights only pass on to the new owner if specifically designated in the sale documents.

    Because an appellate court can only review what is already in the record on appeal and not any documents not yet submitted into evidence, the court was unable to consider documents the Niemanns had obtained post-summary judgment that allegedly prove subrogation. As such, the court was unable to find any evidence in the facts that showed evidence of such subrogation and therefore affirmed dismissal of the Niemanns’ claims against American Empire.

    With that said, there is light at the end of the tunnel. The Louisiana Code of Civil Procedure affords plaintiffs the right to amend their petitions. As such, the Niemanns will have the ability to amend their complaint and submit the evidence of subrogation they have found.

    If you suspect your home was built with Chinese drywall, contact the Berniard Law Firm. Providing the best experts in construction and diagnosing the cause of damages, our law firm is fully capable of meeting your litigation needs.

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  • Supreme Court Required to Rule on Discrepancies in Results of Louisiana Code

    Kevin and Corliss Stenson, Et Al. v. City of Oberlin and Meyer, Meyer, LaCroix and Hixson, Inc. is a very interesting and very important case to come out of the Parish of Allen. The case resulted in divergent opinions between the trial and appelate courts of the Allen Parish, ultimately requiring the Supreme Court to settle the matter. The Supreme Court accepted the case on a Writ of Certiorari, not just to resolve the conflicting results of the trial and appelate courts, but to “resolve a split in the circuits as to whether Louisiana Code of Civil Procedure article 1153, the so called ‘relation back’ doctrine, controls the Fuseliers (the plaintiff in the present case) intervening action or whether Louisiana Code of Civil Procedure 1067, providing the time limitation exception for incidental demands, governs.” The results of this Supreme Court decision will significantly impact future jurisprudence by setting a controlling precedent not just for the Allen Parish, but statewide in decision involving a choice between these two statutes. Before the Louisiana Supreme Court granted Certiorari in this matter, the Second, Third, Fourth and Fifth Circuits confronted similar situations requiring a decision between which of these two statutes to apply.

    In the present case the residents of the City of Oberlin brought claims for “property damage and personal injury caused by sewerage overflow” against the City of Oberlin. They later decided to join Meyer, Meyer, LaCroix and Hixson (MMLH) as defendants. For present purposes, the important events to note in the procedural history of this case are the filings of a Second Supplemental Petition for recognition of class status on March 11, 2005, and the service of this petition on the defendant MMLH on March 17, 2005.

    On July 20, 2006 Silton and Robin Fuselier filed a petition to intervene as plaintiffs. To intervene means to “become a party to a legal prceding begun by others in order to protect an alleged interest in the subject matter of the proceeding.” The Fuseliers claimed that they too had been damaged by the sewerage overflow.

    MMLH responded by filing a peremptory exception of prescription. Specifically MMLH “maintained the Fuseliers petition of intervention is an ‘incidental demand’ under Louisiana Code of Civil Procedure article 1031 and that it was untimely filed pursuant to Louisiana Code of Civil Procedure article 1076. Article 1067 is as follows: “An incidental demand is not barred by prescription or peremption if it was not barred at the time the main demand was filed and is filed within ninety days of date of service of main demand or in the case of a third party defendant within ninety days from service of process of the third party demand.” “MMLH argued the Fuseliers’ July 20, 2006 petition was untimely because it was barred by prescription when the ‘main demand’ or Second Supplemental Petition of the Stinson plaintiffs, was filed on March 11, 2005 and furthermore, was not timely filed within the ninety days of service of the supplemental petition upon MMLH on March 17, 2005”. The Fuseliers did not file their petition to intervene until July 20, 2006.

    The Fuseliers argued that the intervention could relate back to the original petition filed by the Stenson plaintiffs under Louisiana Code of Civil Procedure article 1153. Article 1153 is as follows: “When the action or defense asserted in the amended petition or answer arises out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of filing the original pleading.” Essentially the Fuseliers believe that because their claim is based on the same kind of damages arising out of the same occurence of sewerage overflow, their claim should be allowed to exist and accompany those of the Stenson plaintiffs.

    Relation back is an important feature of the Louisiana Code of Civil Procedure the rules of civil procedure of other states, and the Federal Rules of Civil Procedure because it is a means of permitting claims that would otherwise be barred by statues of limitation or statutes of prescription. Relation back usually applies to amendments to pleadings, and in fact is described in terms of amendments. It is analagous to second chance for plaintiffs to make a claim that would otherwise not be permitted because it is being made too late.

    Relation back is literally defined as “the principle that an act done at a later time is deemed by law to have occurred at an earlier time”. However, the relation back principle requires that the defendant not be prejudiced or unfairly disadvantaged by the late amended claim. A possible disadvantage is prevented by the requirements of the relation back doctrine that the amended claim arise “out of the conduct, transaction, or occurrence set out–or attempted to be set out–in the original pleading” and that the “defendant received such notice of the action that it will not be prejudiced in defending on the merits; and knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party’s identity” (the latter in a situation where the amendment is made to replace or add a plaintiff not included in the original pleading). Generally the feature of notice is a key priniciple in preventing the defendant from being prejudiced by the amendment.

    The Fuseliers claim satisfies the notice requirement of the relation back doctrine because their claim arises out of the “same conduct, transaction, or occurence” of the main claim made by the Stenson plaintiffs, namely, the sewerage overflow. The Fuseliers reinforced their argument by citing the case of Giroir v South Louisiana Medical Center Division of Hospitals, 475 So.2d 1040 (La. 1985), in which the Supreme Court articulated “four factors to consider in applying La. Code Civ. Proc. art. 1153 to the addition or substitution of a plaintiff or claim. These four factors are as follows: “(1) the amended claim arises out of the same conduct, transaction, or occurrence set forth in the original pleading; (2) the defendant either knew or should have known of the existence and involvement of the new plaintiff; (3) the new and the old plaintiffs are sufficiently related so that the added or substituted party is not wholly new or unrelated; (4) the defendant will not be prejudiced in preparing and conducting his defense.”

    Relaying on article 1067, the trial court “maintained the defendants exception of prescription”, while the appeals court determined that the Fuselier’s claim related back to the original petition brought by the Stenson plaintiffs. The appeals couurt relied on both artilce 1153 and the factors set forth in Giroir. The Second, Third, Fourth and Fifth Circuits also confronted the choice between these two articles, although of course, in different cases. A very cursory description of those cases will follow in order to illuminate the confusion that has manifested as a result of having to choose between these two statutes.

    The Second Circuit relying on Riddle v. Simmons, 626 So.2d 811 (La. App. 2d Cir. 1993) found that the “timely filing of the main demand interrupted prescription with respect to the challenged intervention,” and that “prescriptive statutes are strictly construed in favor of maintaining rather than barring actions.” They followed up the latter with the statement that “consistent with that precept, recent decisions have tended to allow interventions, or claims by or against additional parties, to relate back to the filing of the original demand, so that, in effect, prescription is interrupted.” Furthermore, “the fundamental purpose of prescription is only to afford a defendant security of mind and affairs if no claim is made timely, and to protect against stale claims and non-preservation of relevant proof.”

    The Third Circuit relied on Calbert v. Batiste, 09-514 (La. App. 3 Cir. 11/4/09), 23 So.3d1031, that appled the factors in Giroir to determine ” that the intervening petition related back to the date of the original filing..” The Fifth Circuit was confronted with the issue of whether “article 1067 governed an incidental demand asserted in a cross claim”. The court decided not to apply the factors in Giroir because Giroir involved amended petitions, and concluded that the cross claim was a permitted incidental demand and was “governed by 1067”. According to the appelate court, “Article 1067 allows the filing of an ‘incidental demand” after the prescriptive period if that demand was not barred at the time the ‘main demand’ was filed, whereas, article 1153 relates to the amendment of pleadings in the main demand”
    The Fourth Circuit also held that 1153 “only applies to amending petitions.” Specifically “the appelate court found the petition of intervention was an incidental demand to the original suit and, furthermore, it was barred by prescription because it was not timely filed pursuant to Article 1067, which applies to incidental demand.” Curiously a different panel of the Fourth Circuit applied the factors in Giroir to a different case and concluded that the intervening petition related back to the filing of the original petition.

    It is clear that there has been significant “confusion” and conflicting jurisprudence surrounding the choice between these two statutes. In additon to deciding the issue for the Fuseliers in the present case, the Supreme Court of Louisiana intends to resolve this confusion. The Supreme Court decided that Article 1067 is the appropriate statute to apply in Stetson. Given the facts of this case they found “the action of the intervening plaintiffs was not timely filed within the 90 days of the date of service on the last added defendant.”

    In addition to resolving the issue in Stetson, the Supreme Court made the following observation that will be the precedent for similar cases: “Given the plain language of the articles, we find the cases deciding to apply Article 1067, rather than Article 1153 and/or the Giroir factors, to incidental demands such as the petition to intervene in the main demand have adopted the correct approach. The Supreme Court arived at this conclusion by looking at the plain language of each of the articles. Because the Fuseliers claim is an intervention, and an intervention is an “incidental demand” according to Article 1031, then Article 1067 is the applicable statute: Article 1067 “clearly provides an exception to prescription or preemption for incidental demands.”

    The Court articulated that 1153 “provides a means for determining when an amendment (and they emphasized “amendment” in the opinion by underlining it) adding a plaintiff, claim, or defendant relates back to the date of an earlier filed pleading for prescriptive purposes.” The Court was considering the strict legislative intent of these statutes. They summarized in the following: “In sum we find that applying Article 1153 and the factors enunciated in Giroir to petitions seeking to intervene in the main demand would expand Article 1153 beyond its scope intended by the legislature.

    In the future, interventions like that of the Fuselier’s, as incidental demands, will be subject to the Louisiana Code of Civil Procedure 1067 and not 1153.