Changes Coming to Louisiana Motions for Summary Judgment

Louisiana Code of Civil Procedure article 966 has been amended. Changes to the briefing schedule are among the most significant changes in the new rule. The new rule provides that in the absence of a case management order, a motion for summary judgment must be filed in accordance with the following:

• The motion must be served on all parties not less than sixty-five days before trial.

• The motion must be set for hearing not less than thirty days from filing (formerly fifteen days).

• An opposition and supporting documents are to be filed not less than fifteen days prior to the hearing date (formerly eight days).

• A reply memorandum, if filed, is required to be filed five days before hearing (formerly two days). Also, no additional documents may be filed with the reply memorandum.

As before, the motion will be set for contradictory hearing. A judgment is required to be issued not less than twenty days prior to trial (formerly 10 days). The new rule goes into effect on January 1, 2016.

Simone H. Yoder
syoder@mblb.com

Girl Power: ABA Elects Two Females to Serve as President and President-Elect

The American Bar Association has elected Paulette Brown, a labor and employment law partner and co-chair of the firm wide Diversity and Inclusion Committee at Locke Lord LLP in Morristown, N.J., as the new ABA President. For the first time in its 136 year-old history, the ABA has elected a woman of color to this position. At the forefront of Ms. Brown’s goals for her term is eliminating bias and enhancing diversity within the justice system.

Ms. Brown was a past member of the ABA House of Delegates and is a former member of the ABA Board of Governors and its Executive Committee. Ms. Brown has an extremely diversified career path sure to contribute to her reign as President. She has served as in-house counsel to a number of Fortune 500 companies and has sat as municipal court judge.

The ABA also appointed Linda Klein, the managing shareholder in Baker Donelson’s Georgia office, as president-elect. In addition to electing Ms. Brown as incoming President, and Ms. Klein as President-Elect, the ABA has taken on two new goals for the upcoming year: assessment of mental health inquiries for bar admissions; and transparency related to law school financing.

Caitlin R. Byars 
cbyars@mblb.com

United States Leads World in Windstorm Damage Claims

On the eve of the tenth anniversary of Hurricane Katrina’s landfall on the U.S. Gulf Coast, insurer Allianz Global Corporate & Specialty (AGCS) has released a report analyzing the impact of windstorm damage worldwide and the effect on business insurance claims. The report shows that windstorms are the fifth leading cause of loss for businesses. From 2009 to 2013, nearly half (49%) of the windstorm claims over $110,000 analyzed for the report were located in the United States. Europe was second with 19%, followed by South East and Far East Asia in a distant third with 6%. Hurricane Katrina accounts for the largest total of insured windstorm losses at $62.2 billion, more than doubling those of Hurricane Sandy, which came in second with $29.5 billion.

The insured losses for the top-10 costliest North American hurricanes combined ($185 billion) is three times that of the top-10 European and top-10 Asian windstorm losses combined. With the effects of global warming and sea level rise having significant impact on future potential losses, AGCS assessed that by 2070 Asian cities would dominate the top-10 list of cities with assets exposed to coastal flooding. In 2005, this exposure list was comprised of cities located in the United States, Netherlands, and Japan. AGCS noted that the lessons learned from Hurricane Katrina such as the impact of storm surge, business continuity, and insurance coverage, have better prepared the Gulf Coast for future storms by improving education, construction, risk-assessment, and claims handling.

Pierce C. Azuma
pazuma@mblb.com

Sanctions Awarded for Failing to Appear for Deposition

Due to injuries allegedly suffered in an automobile accident, plaintiff filed suit against the driver, the driver’s employer and insurance company. During discovery, plaintiff sought the deposition of the driver, and the parties mutually agreed upon a date for the deposition. However, the driver failed to appear on the date of the previously scheduled deposition. As a result, plaintiff filed a motion to compel the driver’s deposition, but again the driver did not appear for the deposition.

Next, plaintiff moved for sanctions against the driver for failing to appear for the deposition. The United States Magistrate Judge denied plaintiff’s motion. On appeal to the District Court, however, the Magistrate’s order denying sanctions was overruled. District Judge Lemmon reasoned that the order denying sanctions erroneously relied upon Rule 37(b) of the Federal Rules of Civil Procedure requiring a “meet and confer” certificate. The Court held that Rule 37(d) permits the imposition of sanctions when a party fails to appear for its deposition, and the “meet and confer” certificate is not required. In the end, the Court granted plaintiff’s motion for sanctions and prevented the driver from testifying at trial.

Steel v. ARI Mut. Ins. Co.

Kirby Paul Blanchard
kblanchard@mblb.com

Jordan G. McFaull

JMcFaull

Expenses Awarded for an Unrelated Medical Condition

Plaintiff filed suit following a head injury that allegedly occurred as a result of an automobile accident. The trial court awarded the plaintiff special damages related to the evaluation and ultimate treatment for seizures. On appeal, however, the Louisiana Third Circuit Court of Appeal disagreed with the trial court and found that plaintiff did not prove by a preponderance of the evidence that his seizures were related to the underlying accident. The court further concluded that special damages were not warranted for non-diagnostic expenses related to the seizures.

Nevertheless, the court did allow plaintiff to recover medical expenses he incurred during the hospital visit four days post-accident wherein he first complained of seizure-related activity. According to the appellate court, it was certainly reasonable for the plaintiff to seek medical consultation and undergo related diagnostic testing to determine the nature and cause of the seizure-related activity, even though it turned out later that the seizure-related activity was not related to the subject automobile accident.

Reed v. LaCombe

Kirby Paul Blanchard
kblanchard@mblb.com

No Reasonable Expectation of Privacy for Pocket-Dials

In Huff et al. v. Spaw, the Sixth Circuit Court of Appeals held that a person who inadvertently “pocket dials” a third party has no reasonable expectation of privacy as to the information that third party happens to overhear. In this case, James Huff and Larry Savage traveled to Italy for a business trip as part of their roles as executives of the Kentucky Airport Board. During the trip, Huff and Savage met on a private hotel balcony to discuss a plan to potentially remove the board’s standing CEO. During this conversation, Huff inadvertently called Carol Spaw, the CEO’s senior assistant. Spaw initially answered the phone call but soon realized the call was un-intentional.

Believing that Huff and Savage were discussing a conspiracy to wrongfully discriminate against the CEO, Spaw remained on the line and took notes of what she heard. The entire call lasted 91 minutes and Spaw actually recorded the last four minutes of the conversation with her phone. Spaw later shared her recording with other members of the airport’s board.

Huff later filed a complaint against Spaw for intentionally intercepting oral communications using an electronic device, and disclosing the content of the intercepted oral communication. The case turned on the court’s interpretation of the term “oral communication.” In general, courts determine whether or not something is an oral communication using a two prong inquiry. First, the person must exhibit an expectation to keep his statements private. Second, the person’s expectation of privacy must be reasonable under the circumstances.

Here, Huff argued that a private conversation on his hotel balcony exhibited his expectation of privacy. The Court disagreed, and found that while Huff likely intended his statements to be private, he did not exhibit an expectation of privacy because Huff exposed his statements –albeit inadvertently – to an outsider. Importantly, the Court noted that exposure does not have to be deliberate, but instead can be the “inadvertent product of neglect.” Further, Huff failed to take any well-known measure to prevent pocket-dials such as locking his phone or setting up a passcode. Because Huff failed to take any precaution to reduce the risk of pocket-dials, the Court likened him to a person who unintentionally exposes his in-home activities to the public by leaving the drapes open or by leaving a live-streaming webcam on.

Because the Court determined that Huff did not meet the first prong of the test, it declined to determine whether the circumstances justified a reasonable expectation of privacy. Ultimately, the Sixth Circuit affirmed in part, reversed in part, and remanded the case to the district court for further proceedings.

Huff et al. v. Spaw

Jordan G. McFaull
jmcfaull@mblb.com

No Cause of Action in Louisiana for Negligent Spoliation of Evidence

The Louisiana Supreme Court recently ruled that no cause of action exists for negligent spoliation of evidence. The lawsuit involved a multi-vehicle accident in which the plaintiff asserted, among other things, a products liability cause of action against the car manufacturer. The plaintiff’s automobile carrier and the custodian of the vehicle post-accident, however, failed to preserve the vehicle for inspection and plaintiff was unable to determine whether any defects existed. As a result of this missing evidence, plaintiff filed a negligent spoliation of evidence claim against the automobile insurer and custodian. The automobile insurer and the custodian both filed Exceptions of No Cause of Action, or alternatively Motions for Summary Judgment. The trial court sustained the exceptions and denied the summary judgment as moot. The Court of Appeal affirmed the trial court’s judgment, finding that no cause of action existed for negligent spoliation of the evidence. The Louisiana Supreme Court granted certiorari to definitively rule on the issue of negligent spoliation of evidence.

The Court considered various public policy issues and ultimately concluded that “the benefits of recognizing a tort cause of action, in order to deter third party spoliation of evidence and compensate victims of such misconduct are outweighed by the burden to litigants, witnesses, and the judicial system that would be imposed by potentially endless litigation over a speculative loss, and by the cost to society of promoting onerous record and evidence retention policies.” The Court noted that while there was no tort cause of action for negligent spoliation of evidence, alternate avenues of recourse were available in the evidentiary, discovery and contract laws of Louisiana.

Reynolds v. Bordelon

Simone H. Yoder
syoder@mblb.com

Department of Labor Issues Interpretive Letter Clarifying Distinctions Between Employees and Independent Contractors

Finding that employers are incorrectly classifying employees as independent contractors, the U.S. Department of Labor (DOL) issued an Interpretive Letter on July 15, 2015 that offers clarification on the issue. The Fair Labor Standards Act (FLSA) defines ‘employ’ as “to suffer or permit to work.” Although many courts rely heavily on the “control test,” the letter advises that under the FLSA the “economic realities test” is the correct inquiry into whether or not a person is an employee or an independent contractor.

In short, the economic realities test asks whether the person is economically dependent on the employer or is in business for him or herself. If dependent, the worker is an employee, and if not, the worker is an independent contractor. Considering the FLSA’s statutory directive that the scope of the employment relationship is “broad,” it appears that the DOL intends to make it easier for courts to designate workers as employees as opposed to independent contractors. All of the following non-exclusive economic realities must be considered when deciding whether a worker is an employee or an independent contractor:

1. Is the work an integral part of the employer’s business? If the work is integral to the employer’s business, the worker is more likely to be an employee. Integral work includes tasks that may represent only one component of a business process, or tasks that can be performed by thousands of other workers. Further, integral work may be performed away from an employer’s premises or even on the premises of the employer’s customers.

2. Does the worker’s managerial skill affect the worker’s opportunity for profit or loss? Importantly, this question does not turn on the worker’s ability to work more hours. Rather, the question is whether or not the worker’s managerial skills can lead to the opportunity for profit or loss beyond the current job. For instance, a workers decision to hire others, purchase materials and equipment, advertise and manage time tables are all managerial skills that will affect the worker’s opportunity for profit or loss.

3. How does the worker’s relative investment compare to the employer’s investment? A worker whose investments support a business enterprise above and beyond any particular project is more likely to be an independent contractor than an employee. If an employee makes an investment, that investment will most likely be for a particular project and will be marginal compared to the employer’s investment. Ultimately, comparing the worker’s investment to the employer’s investment will be the determinate factor.

4. Does the work performed require special skill and initiative? Technical skills or expertise are not definitive hallmarks of an independent contractor. Instead, a worker’s business skills, judgment and initiative demonstrate whether or not someone is using his or her skills for an employer or is in business for him or herself.

5. Is the Relationship between the Worker and the Employer Permanent or Indefinite? Generally, a worker’s schedule that is permanent or indefinite indicates an employee relationship because the worker’s time is largely pre-determined. This schedule represents the typical at-will employment relationship. On the other hand, an independent contractor will typically only work on one project at a time for an employer and does not necessarily work continuously. However, the key is whether the lack of permanence of indefiniteness can be attributed to the “operational characteristics intrinsic to the industry.” For example, part-time workers involved in seasonal industries lack permanence or indefiniteness for the portion of the year their industry is not operating. But, these seasonal workers would be considered employees for all other purposes.

6. What is the nature and degree of the employer’s control? The control factor should be analyzed in light of the ultimate determination of whether the worker is economically dependent on the employer or truly an independent business person. With that in mind, simply because an employer does not look over his workers’ shoulders does not mean that an employer-employee relationship does not exist. For instance, a flexible work schedule and little supervision ¬– alone – are not dispositive characteristics of an employer-employee relationship. Instead, the critical inquiry is the nature and degree of the alleged employer’s control.

In sum, most workers are probably employees under the FLSA’s broad definition of employment, “to suffer or permit to work.” The classification of employment is significant to not only the workers, but also the employers for the rights and protections afforded under the employment relationship.

Jordan G. McFaull
jmcfaull@mblb.com

Throw Me Something, Mister

Following a head injury that allegedly occurred as a result of a bag of beads being thrown during the 2012 Endymion Extravaganza, plaintiff filed suit against the Gentilly Carnival Club, Inc., d/b/a/ Krewe of Endymion (“Krewe”). After conducting discovery, the Krewe filed for summary judgment asserting, among other things, immunity under the Mardi Gras immunity statute, which creates broad immunity for krewes that sponsor parades. The trial court granted the Krewe’s motion and dismissed the suit, plaintiff appealed the case to the Louisiana Fourth Circuit Court of Appeal.

On appeal, plaintiff argued that the Krewe should be vicariously liable for that member’s conduct (i.e. throwing the bag of beads that allegedly struck plaintiff). Plaintiff further argued that the Krewe was grossly negligent for allowing members to throw bags of beads weighing approximately two pounds, which it should have known was dangerous. The Court of Appeal was unpersuaded by plaintiff’s arguments, finding that neither the weight nor any other measurement of the bag of beads that allegedly struck plaintiff had been established by competent evidence. Moreover, “it is common knowledge that there are hundreds of beads and bags of beads thrown towards the tables where the parade viewers watch the parade in the Superdome for the Extravaganza.” As such, the conduct at issue did not constitute unusual circumstances. The judgment of the trial court dismissing plaintiff’s suit was affirmed.

Citron v. Gentilly Carnival Club, Inc.

Adam P. Sanderson
asanderson@mblb.com