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

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 According to the Court, the plaintiffs no longer maintained a “justiciable controversy” because Act 413 provided for the payment of the entirety of the previously denied tax credits.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

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).

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.