Louisiana Supreme Court issued a significant ruling in a class action case involving tax credits for solar panels

In a previous blog, we outlined developing law in the Louisiana appeals courts, and federal district courts in Louisiana on the issue of whether a claimant may maintain a separate cause of action against an employer for independent negligence when it is stipulated that the employee was in the course and scope of employment.¹ Most courts held a claimant could not maintain a separate action against the employer under these circumstances, reasoning that the employee’s fault would impute to the employer, and therefore, additional inquiry was not appropriate. However, the Louisiana Supreme Court recently addressed the issue and stated:

“(A) plaintiff may pursue both a negligence cause of action against an employee for which the employer is vicariously liable and a direct claim against the employer for its own negligence in hiring, supervision, training, and retention as well as a negligent entrustment claim, when the employer stipulates that the employee was in the course and scope of employment at the time of the injury.” (Emphasis added) See Martin v. Thomas et al., 21-1490 (La. 12/21/21), 328 So. 3d 1164.

This holding notably overturned the 1^st Circuit Court of Appeal ruling in Elee v. White, - - So.3d - - (La. App. 1 Cir 7/24/20), 2020 WL 4251974 and other Louisiana 5^th Circuit Court of Appeals decisions. The Supreme Court in Martin reasoned that “the initial assessment of fault required by the law is not bypassed due to the employer-employee relationship” and “shielding a potential tortfeasor from liability is not compatible with a comparative negligence regime.” The Court further stated that the possibility that both the employee and employer may be at fault is not “subsumed” by the employer’s admission on course and scope. In fact, if the fault of the employee is shown, then the issue of whether there is also fault on the part of the employer remains and must be decided by the evidence on a case-by-case basis.

The consequences of this decision remain to be seen, but it is expected that claimants may also pursue employers separately on theories such as negligent hiring, supervision, and entrustment. The scope of such discovery will remain within the sound discretion of the trial judge.

By: John P. Wolff, III and Richard W. Wolff

¹Louisiana Appeal Courts Prohibit Direct Negligence Claims Against Employer; US District Court Uses Rule to Limit Discovery - Keogh Cox

Keogh Cox attorneys Andrew Blanchfield, Chris Jones, and Chelsea Payne successfully defeated class certification in an action students brought to recover a partial refund of tuition and fees they claim they were owed after in-person classes were converted to remote learning because of the COVID-19 global pandemic. See Miazza v. Board of Supervisors of Louisiana State University and Agricultural and Mechanical College.

In 2021, plaintiffs Taylor Gunter and Michael Miazza filed a lawsuit seeking a partial refund of the tuition they paid to LSU for Spring 2020 classes. They alleged that they were entitled to a partial refund of tuition and certain fees because in-person classes were cancelled in the wake of the COVID-19 pandemic. In lieu of in-person classes, remote learning went into effect after spring break, from March 30, 2020 through the end of the spring semester.

In addition to their own claims for partial refunds, the plaintiffs tried to bring the case as a class action and moved to certify a class defined as: “All students who, as of March 13, 2020, were enrolled at Louisiana State University's main campus in Baton Rouge who paid Tuition and/or Fees for the Spring 2020 semester, or on whose behalf such payment was made.”

After the completion of discovery for class certification, and after the dismissal of Plaintiff Michael Miazza’s claim, Plaintiff Taylor Gunter filed a Motion for Class Certification. After hearing, the Trial Court certified the class as alleged, finding all the requirements for class certification set forth in La. C.C.P. art. 591 were satisfied. LSU appealed the decision to the First Circuit Court of Appeals.

The First Circuit reversed the Trial Court’s judgment and found the Plaintiff failed to satisfy all of the requirements for class certification. After conducting a rigorous analysis of the class certification requirements, the Court concluded that “a multitude of individualized inquiries and proof make up the liability and damages issues essential to the putative plaintiffs’ implied contract claims.” The Court identified some of these “individualized inquiries” as follows:

• which representations in each school’s or college’s catalogs, bulletins, and website materials did the putative plaintiff rely upon in developing his or her expectation and what particular facilities and on-campus opportunities did a putative plaintiff expect to utilize;

• whether the putative plaintiff has historically utilized on-campus facilities and opportunities; which facilities and/or on-campus opportunities, if any, were necessary for a particular school's or college's course completion;

• whether a putative plaintiff was satisfied with the online instruction, course credits received, and grading options provided; and

• whether a putative plaintiff actually suffered any financial loss, mindful of each student’s particular situation.

Ultimately, the Court concluded that the record lacked sufficient evidence to support findings of offers and acceptances, where were necessary (1) to establish meetings of the mind and (2) conclude each putative plaintiff and LSU consented to an implied contract. Any determination of liability for an implied contract also is dependent upon proof of facts individual to each putative class member. Therefore, the class would degenerate into a series of individual trials.

The First Circuit concluded that certification of the case as a class action was an abuse of discretion. It reversed the Trial Court’s judgment and decertified the matter. Plaintiff filed a Writ Application with the Louisiana Supreme Court. On January 14, 2025, the Louisiana Supreme Court denied Plaintiff’s Writ Application, finally resolving the class certification issue. As a result, Plaintiff cannot pursue class certification, but rather may only pursue her own individual claim.

References:

Miazza v. Board of Supervisors of Louisiana State University and Agricultural and Mechanical College, 2023-1194 (La. App. 1 Cir. 8/9/24), 394 So.3d 874, writ denied, 2025 WL 87255 (La. 1/14/25).

The Louisiana Supreme Court recently addressed the impact of contractual "errors" in Cynthia Fry Perionnet and Elizabeth Fry Franklin v. Matador Resources Company, 2012-2292, 2012-2377, -- So. 3d --.

The Perionnet case involved a dispute over the intent of a contract to extend a mineral lease. The property owners believed that the lease was extended as to only 168.95 acres of nonproducing land. The defendant/lessors argued that the contract contemplated that the lease would extend to the entire 1850.34 acres to include producing wells. Plaintiffs/property owners argued that their unilateral error regarding the terms of the contract was ground for rescission. The jury ruled in favor of the defendant/lessors. The Court of Appeal reversed. The Supreme Court granted writs.

The Perionnet Court began its opinion with an overview of basic tenets of contract law. The Louisiana Civil Code defines a contract as "an agreement by two or more parties whereby obligations are created, modified, or extinguished." La. C.C. art. 1906. Contracts are formed through offer and acceptance. La. C.C. art. 1927. Once formed, contracts have "the effect of law for the parties and may be dissolved only through the consent of the parties or on grounds provided by law." La. C.C. art. 1983. One such "ground" under Louisiana law is "error." La. C.C. art. 1948.

The Louisiana Civil Code recognizes two forms of error: mutual error (both parties are mistaken) or unilateral error (only one party is mistaken). However, for either error to cause the dissolution of a contract, the error (1) must effect the cause of the obligation and (2) the other party must have known that the matter impacted by the error was the reason for the contract. La. C.C. art. 1949. In a case of mutual error, the court can reform the contract. Either partial or full rescission is the only remedy available for unilateral error. La. CC. art. 1952.

A party challenging a contract for unilateral error must also prove that the error was excusable. "Louisiana jurisprudence is sprinkled with cases which deny relief to the parties who claim an agreement should be invalidated because of unilateral error which is caused, in large part, by the complaining party's inexcusable ignorance, neglect or want of care." Id. p. 25.

The Perionnet Court found that the plaintiffs' alleged mistake was inexcusable. The defendants demonstrated that: 1) plaintiffs could show no excuse for failing to read and understand the contract; 2) plaintiffs' agents who negotiated and reviewed the contract were self-proclaimed experts in oil and gas; and 3) the original lease was on the plaintiffs' agent's own forms. The Court found a "sea of flags" in the written agreement that should have notified the experienced plaintiffs that the agreement extended to the entire property. Therefore, the Court found that the mistake was easily detectable and could have been rectified by a minimal amount of care, i.e. "by simply reading the document and/or requesting simple changes to the written offer before acceptance." Id. at 30.

The Supreme Court's Perionnet decision serves as a healthy reminder of a basic concept - read your contracts. Although to err may be human, it can affect your bottom line.