Louisiana Supreme Court Provides Guidance on “Going and Coming” Rule

As a general rule of Louisiana law, a plaintiff cannot recover general damages for mental disturbance or distress unless the defendant’s act also causes physical injury, illness, or some other physical consequence. However, in Spencer v. Valero Refining Meraux, LLC, the Louisiana Supreme Court recently reexamined the circumstances under which a limited exception to this general rule may apply.

The Spencer case involved an explosion and fire that occurred shortly after midnight at the Valero refinery in Meraux, Louisiana. The plaintiffs claimed Valero should be liable for negligent infliction of emotional distress. Specifically, the plaintiffs alleged they heard loud sounds, experienced anxiety, and had difficulty sleeping after the event. None of the plaintiffs received any medical treatment or experienced physical injury/symptoms. The defendant argued that the plaintiffs could not recover damages under these circumstances.

The court held that recovery for negligent infliction of emotional distress is not precluded under Louisiana law. However, the court also cautioned that not every act that causes some harm also yields liability and compensatory damages. It held that Louisiana courts must also consider the goal set forth under Louisiana law to prevent “spurious” or false claims when examining these types of actions.

In review of the plaintiffs’ claims, the court cited Moresi v. State Through Dept. of Wildlife & Fisheries, to show that the plaintiffs were required to establish “the especial likelihood of genuine and serious mental distress, arising from the special circumstances, which serves as a guarantee that the claim is not spurious.” The Spencer court held evidence of generalized fear or evidence of mere inconvenience is not enough to show that a plaintiff’s distress is “serious.” The court added that this rule must be “stringently applied,” because these types of cases, though fact intensive, are inherently speculative in nature.

In review of the facts presented in Spencer, the court found that Valero owed a duty to the plaintiffs and breached the “duty it owed, which was a cause-in-fact of plaintiffs’ generalized fear and anxiety.” However, the plaintiffs failed to produce evidence to show that their complaints, which included anxiety and difficulty sleeping, were sufficiently “serious” to support an award for negligent infliction of emotional distress, and their claims were dismissed. Although the result in Spencer may be limited to its facts, the Court’s decision appears to align with the general rule that a plaintiff usually cannot recover general damages for emotional distress in Louisiana absent an accompanying injury.

References:

Spencer v. Valero Refining Meraux, LLC, 2022-00469 (La. 1/27/23), 356 So. 3d 936.

Moresi v. State Through Dept. of Wildlife & Fisheries, 567 So.2d 1801 (La 1990).

Recently, the Louisiana Supreme Court issued a significant ruling in a class action case handled by Keogh Cox partners Chris Jones and Nancy Gilbert. The case involved tax credits for solar panels. The Court’s ruling overturned a lower court decision that held an Act of the Legislature unconstitutional. After the plaintiffs’ Application for Rehearing was denied, the Court’s decision is now final.

In Ulrich, et al. v. Kimberly Robinson, Secretary of the Louisiana Department of Revenue, 2018-0534 (La. 3/26/19), 2019 WL 1395316, the class action plaintiffs were persons who purchased and installed residential solar panel systems in their homes. When they claimed the solar electric system tax credits on their 2015 state tax returns pursuant to La. R.S. 47:6030, the tax credits were denied by the Louisiana Department of Revenue, based on Act 131 of the 2015 legislative session. Act 131 capped the maximum amount of solar panel tax credits to be granted by the Department of Revenue, and the plaintiffs’ claims were made after the cap was exhausted.

When their claims for the tax credits were denied, plaintiffs filed a declaratory judgment action seeking to declare Act 131 unconstitutional. During the pendency of the suit in the district court, the Louisiana Legislature enacted Act 413 which provided additional funding for solar tax credits. Under Act 131, all taxpayers whose solar panel tax credit claims were previously denied would receive the entirety of their tax credits over installments. The district court declared Act 131 unconstitutional and concluded that Act 413 did not moot the controversy.

Because the district court declared Act 131 unconstitutional, the Department directly appealed the decision to the Louisiana Supreme Court. Oral arguments occurred in October of 2018. In the Court’s recent opinion, it concluded that Act 413 mooted the controversy. According to the Court, the plaintiffs no longer maintained a “justiciable controversy” because Act 413 provided for the payment of the entirety of the previously denied tax credits. Accordingly, the Court overruled the district court’s judgment that declared Act 131 unconstitutional. Plaintiffs filed an Application for Rehearing and that request was recently denied, making this decision final.

Chris Jones is a partner with Keogh Cox in Baton Rouge, LA. He focuses his practice on class actions and mass torts, and handles these matters in courts throughout the country. He is a life-long resident of Baton Rouge, where he lives with his wife and four children.

Sometimes in law, the facts of a case may threaten to eclipse the legal issue. However, Louisiana law instructs the fact finder to see through the facts, and their sometimes tragic nature, and apply the law as written. As Aristotle once wisely said, “The Law is reason free from passion.”

In Kazan, et. al. v. Red Lion Hotels Corporation, et. al., 2021-CC-01820 (La. 6/29/22), the Louisiana Supreme Court recently ruled on a case with tragic facts, and its ruling provides an example of Aristotle’s description of law in action. In Kazan, a female patron was in the parking lot of a motel when a male patron approached her and used Kazan’s vehicle to abduct her from the premises. The car was later found submerged in a lake, and Kazan’s body was recovered from the water. The family filed a tort suit against several parties, including the motel’s owner and its insurer, the Great Lakes Insurance Company SE.

Great Lakes filed a motion for summary judgment and asked to be dismissed on grounds that coverage for the event was excluded from its policy. Specifically, the insurer argued that bodily injury caused by an “assault,” “battery,” or “physical altercation” was excluded under the policy’s terms. Great Lakes further argued that the kidnapping and ultimate death of the patron was excluded under the policy as bodily injury caused by an assault, battery, or physical altercation. The Louisiana Supreme Court agreed and reversed the decision of the trial and appellate courts.

Under Louisiana law, “[a]n insurance policy is a contract between the parties and should be construed using the general rules for the interpretation of contracts.” Id. at p. 3. “When the words of an insurance policy are clear and explicit and do not lead to absurd consequences, courts must enforce the language as written.” Id. at p. 3. “Courts lack authority to alter the terms of an insurance policy under the guise of interpretation and should not create an ambiguity where none exists.” Id. at p. 3.

With these basic rules in mind, the Court carefully reviewed the wording of the exclusion in the Great Lakes policy which stated as follows: “This insurance does not apply to ‘bodily injury,’ ‘property damage,’ or ‘personal advertising injury’ arising out of an ‘assault,’ ‘battery,’ or ‘physical altercation.’” “Physical altercation” was defined in the policy as “a dispute between individual [sic] in which one or more persons sustain bodily injury arising out of the dispute.” Citing Merriam-Webster’s dictionary, the Court defined the term “dispute” as “verbal controversy” or “quarrel.”

Based upon the evidence in the case, the Court found the female patron was involved in a “dispute” with her male attacker, and ultimately sustained bodily injury as a result of the dispute. Therefore, the patron was injured in a physical altercation, as defined under the specific terms of the Policy, and coverage for the event was excluded under the policy’s terms.

The Court noted as follows: “The facts of this case are undoubtedly tragic. Nonetheless, absent a conflict with statutory provisions or public policy, insurers are entitled to limit their liability by imposing reasonable conditions upon the policy obligations they contractually assume. That is what Great Lakes did in the insurance policy at issue here.” Despite the tragic facts presented in the case, in so holding, it appears the court agreed with Aristotle’s belief that the Law is Reason Free from Passion.