An Exercise in Inaction

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 According to the Court, the plaintiffs no longer maintained a “justiciable controversy” because Act 413 provided for the payment of the entirety of the previously denied tax credits.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.

Witness For The Prosecution was a 1957 film about the testimony of a German-born wife whose husband was on trial for murdering a rich woman. Based upon an Agatha Christie novel, the film gave a quote which has been parroted by attorneys ever since.

Sir Wilfrid: And when you said that he had accidentally cut his wrist, again, you lied?　

Helm: Yes!

Sir Wilfrid: And now today you've told us a new story entirely! The question is, Frau Helm, were you lying then, [or] are you lying now?　

Whether in court, deposition or on the big screen, the impeachment of witness creates drama-the kind of drama opposing attorneys try to avoid.

In O'Dwyer v. Our Lady of the Lake, -- So. 3d ---, 2013 WL 2131763 (La. 5/17/13), the Louisiana Supreme Court was asked to decide whether audio recordings of a defense witness must be disclosed before the deposition of the witness. The O'Dwyer plaintiff was a nursing student who alleged that she had been targeted for termination from the nursing program through "harassment, bullying, stalking, and intimidation."

O'Dwyer's attorney sought to depose the nursing program director. The defendant sought production of audiotaped conversations between the program director and another student before the deposition was allowed, and successfully obtained a written order that the audiotapes be produced. The First Circuit denied the plaintiffs' writ, but writs were granted by the Louisiana Supreme Court.

The O'Dwyer Court looked to prior jurisprudence. In Wolford v. JoEllen Smith Psychiatric Hospital, 96-2460 (La. 5/20/97), 693 So. 2d 1164), the Supreme Court held that a defendant was not required to produce surveillance of the plaintiff until after the plaintiff's deposition. The Court highlighted the "important function in the search for truth" served by surveillance. After all, the value of the surveillance could be minimized were a plaintiff able to view the evidence and tailor his or her testimony to match. Therefore, the evidence was viewed as potential impeachment evidence and could be withheld prior to deposition.

In Bell v. Treasure Chest Casino, L.L.C., 06-1538 (La. 2/22/07), 950 So. 2d 654, the Court refused to extend Wolford to the production of video which captured the accident itself. Video of the accident upon which the plaintiff sued was direct evidence and not primarily impeachment evidence. Therefore, it had to be produced prior to the plaintiff's deposition.

In O'Dwyer, the Court concluded that the audiotapes were made for impeachment and therefore need not be produced until after the nursing director's deposition. Justice Weimer, in dissent, challenged the characterization of the audiotapes as exclusively impeachment evidence. He cited to the language of the writ application which described the tapes as "unique evidence that may be used for direct or impeachment evidence at trial."

O'Dwyer indicates that a court may look to the primary function of the evidence in deciding its discoverability. The fact that the audiotapes may serve as direct evidence did not require their production when their primary function was impeachment.

Almost no litigation grabs attention and headlines more than a high-profile class action. The Louisiana Supreme Court's recent class action ruling was no exception in a case involving salacious conduct and a violation of privacy.

The plaintiff in Jane Doe v. Southern Gyms, LLC, 2012-1566 (La. 3/19/13) was an unnamed victim of a "peeping tom." She contended that an employee of a popular gym placed a pen camera in the women's bathroom where he would tape unsuspecting women in various states of undress. The pen camera could hold only 1-2 hours of film. The perpetrator testified that, after viewing, he would immediately delete the footage. The images of only four women were seen on the footage when it was discovered. After the employee was arrested, one of the victims filed the class action lawsuit. At issue before the Louisiana Supreme Court was whether the class action was properly certified by the Trial Court.

Class action is a nontraditional litigation procedure that was introduced into Louisiana civil procedure in 1961. Louisiana class action procedure is modeled after the original federal rule and has been extensively revised since its inception. Louisiana Code of Civil Procedure Article 591 provides the elements that must be met before a class action can be certified. Failure to meet one of the threshold requirements of Article 591 precludes class action treatment. Once of these threshold requirements is numerosity, i.e. a class of potential plaintiffs "so numerous that joinder of all members is impractical." La. C.C.P. art. 591(a)(1). The requirement of numerosity was at issue in Jane Doe.

In its analysis, the Supreme Court stressed that courts must perform a rigorous analysis to determine whether the proposed class action meets the requirements of Article 591. Simply pleading a class action is insufficient. Instead, the plaintiff "must be prepared to prove in fact" that the Article 591 requirements are met. Id. at p. 9. To establish the "numerosity" requirement, the class representative cannot simply allege that several persons were affected by the defendant's bad acts. She must be able to offer some proof of a definable group of aggrieved persons so numerous that joinder is impractical.

In Jane Doe, the Supreme Court held that the plaintiff did not satisfy numerosity. The employee's testimony revealed that he may have recorded approximately 20 women. However, because the footage was deleted, most of the potential class members could not show that their privacy had been violated. Only nine women had positive knowledge that they were on video. According to the Jane Doe Court, nine class members did not meet the numerosity requirement and the class was decertified. While the Court did not reveal a "magic number" to meet numerosity, we now know it may be higher than nine.

There is an old adage that "bad facts make bad law." In Jane Doe, the Louisiana Supreme Court did not let the egregious nature of the conduct impact its view that the requirements of Article 591 must be met in every circumstance.