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Insight
The Rise of the Drones
Drones play an increasing role in modern life; all indications are that this role will increase, maybe to disturbing levels. The popularity and availability of drones have sky-rocketed in recent years. As with most new technologies, the development of the law to regulate this technology lags behind. To their credit, the DOT and FAA have been pro-active in developing regulations. This article will address some of these regulations and the expected development of future regulations.
Initially, the FAA prohibited the use of drones in the commercial industry. Gradually, the FAA granted exemptions to certain companies for the commercial use of drones. These exemptions permitted these companies to use drones for:
(i) the movie and video industry;
(ii) real estate photography;
(iii) agricultural monitoring;
(iv) aerial surveying;
(v) delivery of medical supplies in rural areas; and,
(vi) inspecting flare stacks
Applying for exemptions can be costly and the outcome is not guaranteed. However with growing commercial demand, the FAA has gradually loosened its restrictions and granted more exemptions.
The FAA and DOT finalized the first operational rules for routine commercial use of drones which took effect in August 2016. These regulations are available at: http://www.faa.gov/uas/media/Part_107_Summary.pdf. The issuance of these regulations is projected to generate $82 billion for the U.S. economy and create more than 100,000 jobs over the next ten years.
While these regulations are fairly comprehensive, they prohibit the use of drones beyond the line of sight of the operator over unprotected persons on the ground. Further, there are limitations on size and when drones can be flown. Based on these restrictions, plans to use drones for delivery services will likely have to wait. However, the FAA is permitting companies to apply for waivers, available if companies demonstrate that the proposed flight will be conducted safely. Even if a drone flight is permitted, air traffic control authorization is required if the flight is in controlled airspace. Requests for waivers and authorization must be applied for on the FAA’s online portal located at https://www.faa.gov/uas/.
The FAA is trying to balance the benefits of drone use with its mission to protect public safety. The FAA also provides all drone users with recommended privacy guidelines and is set to issue new guidance to local and state governments on drone privacy concerns.
The White House announced that the FAA is currently working on developing regulations to permit the safe and beneficial use of drones over crowds. As part of this development, the FAA launched an Unmanned Aircraft Safety Team and a Drone Advisory Committee.
We expect the FAA to allow a more expansive use of drones in the years to come. Like it or not, the drones are here and are not going away; they are rising.
Property
Insight
Homeowners Awarded Money Damages Against "Good Faith" Seller of In-Ground Swimming Pool
Anyone who has spent time in the humid South knows why swimming pools are popular. The Hoffmanns, Louisiana residents, tried to purchase an in-ground swimming pool to entertain their grandchildren but found the pool was far from the oasis they imagined. Recently, in Hoffmann v. B & G, Inc., 2016-1001 (La. App. 1 Cir. 2/21/17), 215 So.3d 273, the First Circuit upheld an award in their favor which returned the price of the pool and additional costs related to its installation even though the seller was unaware of the problems with the pool at the time of sale.
The Hoffmanns asserted what is known in Louisiana law as a "redhibition" claim. Redhibition allows purchasers to void a sale if the thing bought has a “vice or defect” that makes it either:
(1) useless, or
(2) so inconvenient that the buyers would not have bought the thing had they known of the problem.
When the Hoffmanns purchased the pool, the seller arranged to have it installed, which was included in the price. The Hoffmanns used the pool for two summers. However, when they uncovered the pool for its third summer of use, they discovered that the pool liner had detached. The Hoffmanns later learned that the manufacturer no longer recommended their specific pool to be installed completely in-ground.
With redhibition, “good faith" sellers (sellers who did not know of the defect) must be given the chance to repair or replace the defective thing. Instead of repairing the pool, the seller of the Hoffmanns’ pool arranged for a new pool to be installed by a third party. Unfortunately, this second "replacement" pool also failed, this time because of an installation issue. After the second pool failed, the Hoffmanns filed suit.
The pool company argued that the Hoffmanns could not support a redhibition claim because the second pool they provided did not have a defect, but instead failed because of faulty installation. It claimed that it discharged its redhibition duties with respect to the first pool when it replaced the pool. The court disagreed and found that the "object" of the sale was a functioning in-ground swimming pool and that, after all of the efforts to repair and/or replace the original pool, the Hoffmanns still did not have a “defect-free useable in-ground swimming pool.”
The Hoffmanns won, making their summer a little more bearable.
Louisiana
Insight
When a Settlement Is Not a Settlement
Louisiana law favors the settlement of disputes. With a settlement, both sides agree to avoid costly litigation and obtain a certain, negotiated result. While neither side is completely happy with the result in a typical settlement, the case is at least closed and the financial and emotional drain of litigation is ended. But the recent decision in The Marietta Trust and The Warren Trust v. J.R. Logging, Inc., Fair Hills Farm, LLC, Jerry Avants, Jr., Thomas Keaty, Jr. and XYZ Insurance Company, 2016 CA 1136 (La. App. 1 Cir. 5/11/17) shows what can happen when one of the parties change their mind. This case is important because it calls into question whether an exchange of emails is sufficient to reach a final settlement.
The Marietta Trust case involved a dispute regarding the wrongful cutting of timber and the parties seemingly came to a resolution. Via email, the case was negotiated and the terms were agreed upon. Formal settlement documents were drawn up and money was exchanged. However, when the time came to execute the final documents, one set of defendants refused to sign the paperwork. This refusal to sign came after the attorney for these defendants directly stated in an email that his "clients have agreed to the settlement." Id. at *4. In response to the refusal to sign, the other parties filed a Joint Motion to Enforce Settlement Agreement which was denied by the Trial Court.
Settlement agreements are governed by the Louisiana Civil Code art. 3071 which provides that litigation can be resolved via settlement or compromise. A settlement agreement can take two forms: 1) recitation in open court; or 2) a writing. “The purpose of the writing requirement is to serve as proof of the agreement and the acquiescence therein.” Marietta Trust, 2016 CA 11336, Id. at *3. The writing must be signed by the parties or their agents. “Until the parties sign a written document or documents evincing their consent to the terms of the proposed agreement, a party is free to change his or her mind.” Id. at *3. Prior courts have found that emails meet the "writing" requirements. See, Geer v. BP America Production Co., 2014-450 (La. App. 3 Cir. 11/5/14), 150 So. 3d 621; Dozier v. Rhodus, 2008-1813 (La. App. 1 Cir. 5/5/09), 17 So. 3d 402.
The appellate court in Marietta Trust refused to enforce the "settlement." The court found that the exchange of emails was insufficient to meet the "writing" requirement of Civil Code article 3071 because neither the emails nor any other evidence showed that the attorney possessed "the express consent necessary to accept the terms of the settlement." Id. at *3.
When is a settlement not a settlement? Maybe when it came to you through your inbox. So, if an email from the attorney is not sufficient to perfect a settlement, what can we do? The answer offered by the 1st Circuit is to either: 1. Recite in open court; or 2. Obtain a writing that includes the client’s express consent given to the attorney to settle the case (presumably for the amount in the writing).
Resolution
Litigation
Insight
Who Gives a Fuss about an Oxford Comma?
Who Gives a Fuss about an Oxford Comma?
Some judges do. And a missing comma might cost $10 million.
By: C. Reynolds LeBlanc
Let’s take a trip back to middle school for a quick grammar review. Before I was a lawyer, I taught English. Diligently, I taught my students the importance of proper comma usage but never imagined that the fate of a multi-million dollar lawsuit would rest on how this simple mark on the page can change the meaning of a sentence.
As I taught my students, the Oxford comma comes into play when you have a series of words, phrases, or clauses. Take a look at the previous sentence. I used an Oxford comma. It is the one between “phrases” and “or.” People who like the Oxford comma say that it makes it easier for the reader to understand what the author is trying to say.
Not everyone thinks the comma is necessary. Every now and then, a student, whose curiosity would override their fear of appearing “too interested” in grammar, would ask, “Why do you even need a comma if you can tell what the author is trying to say without it?” It is a good question, and grammar nerds have been arguing about its answer for more than a century.
But the Oxford comma can make a dramatic difference. Consider these two sentences:
Darren is excited about his vacation with his wife, his best friend, and his cousin.
vs.
Darren is excited about his vacation with his wife, his best friend and his cousin.
Here, the Oxford comma makes all the difference. It distinguishes between (1) a nice vacation Darren will have with three other people and (2) an awkward situation where Darren should be advised that he is living a weird, taboo lifestyle and that his marriage to his best friend and cousin is absolutely null under La. C.C. art. 94. While we can safely assume that Darren was excited about a group trip, this example makes the point.
In O'Connor v. Oakhurst Dairy, 851 F. 3d 69 (1 Cir. 3/13/17), a federal court refused to make a similar assumption, and it might cost more than $10 million, all because a statute did not use an Oxford comma. In O'Connor, dairy truck drivers filed a lawsuit to recover overtime pay. In Maine, overtime pay law does not apply to “canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of” food.
The defendant (the Oakhurst dairy) argued that the case should be dismissed because the drivers were involved in the “distribution of” food and were not entitled to overtime pay. The district court agreed and dismissed the case.
On appeal, the drivers countered that because there was no Oxford comma after “shipment,” the statute only applied to the act of “packing” food (for shipment or distribution), which they did not do. An Oxford comma would have made the dairy’s argument correct and the case would have been dismissed. However, no comma was used and the federal court of appeals found that the statute was ambiguous. The case was sent back to district court, where the dairy may now get squeezed for someone else's $10 million comma omission.
Maybe the Maine legislators should have paid a little more attention in class.
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Insight
"IME" Killer Bill Put Down
The Louisiana plaintiffs’ bar recently sought to tilt the scales of justice through Senate Bill 185, a bill seeking to complicate a defendant’s efforts to obtain an Independent Medical Examination ("IME"). An IME is an examination of the plaintiff by a physician or medical examiner hired by the defense. IMEs are important in the defense of a case and often act as a catalyst for settlement or to reduce the value of a claim.Bill 185 was introduced by Senator Jay Luneau (D) and passed with a unanimous 35 – 0 vote in the Senate. The bill proposed amendments to Louisiana Code of Civil Procedure Article 1464 to impose the following conditions upon IMEs:
- All parties would be barred from referring to an IME as “independent” in the presence of a jury.
- A plaintiff could not be ordered to submit to multiple examinations by multiple physicians within the same field of specialty, regardless of the number of defendants.
- The party to be examined would have the right to have a person of his or her choosing present during the exam, including the plaintiff’s attorney.
- The party to be examined would have the right not only to have the entire examination videotaped, but the ability to force the party requesting the examination to pay for all associated costs.
Were these conditions enforced, many physicians might have chosen not to provide IMEs at all when the process would involve: a potentially adversarial plaintiff’s attorney; a patient room packed with video equipment; and, the spectacle of it all captured on tape. Further, the bill would have stifled the ability to defend injury claims.We may never know what effect these changes might have brought. On May 16, 2017, the House Civil Law and Procedure Committee, involuntarily deferred on a 4-4 vote. This action effectively killed the bill and saved the IME as currently understood. By: John Grinton, a Keogh Cox associate whose practice areas include commercial and construction litigation. When he is not practicing law, John spends most of his time with his wife, Kellye, and their two dogs.
Evidence
Louisiana
State Courts
Insight
Louisiana Courts Continue Re-Establishment of the Open and Obvious Defense
Under traditional Louisiana law, if somebody tripped and fell, the property owner would not be liable for an injury (1) if the person reasonably should have seen the thing that caused them to fall or (2) if it was as obvious to the person as it was to the property owner. Stated another way, if the alleged condition was “open” and “obvious,” then that condition could not be “unreasonably dangerous,” and the property owner would not be liable. This thinking formed the basis of the “open and obvious defense” in Louisiana law.
A few years ago, the Louisiana Supreme Court issued a ruling in Broussard v. State, 2012-1238 (La. 2013), 113 So.3d 175 that raised doubts about the usefulness of the open and obvious defense. However, recent decisions by the Louisiana Supreme Court and various courts of appeal have clarified that the open and obvious defense is not dead.
A recent example of this trend is seen in Morel v. Cheema Properties, LLC, 16-666 (La. App. 5 Cir. 4/12/17), — So.3d —. This case involved a trip-and-fall accident at a gas station. On her way inside to pay for her gas, an elderly plaintiff saw two hoses next to a curb where she stepped up to enter the store. When she exited the store, she saw that the two hoses had separated and now blocked her path. She fell and was injured when she tried to navigate through these hoses. The property owner asserted the open and obvious defense and plaintiff’s suit was dismissed.
The court found that the plaintiff “was aware of the open and obvious risk” and that she fell while attempting to step over the hoses. The court observed that the plaintiff could have avoided the risk by asking for assistance or for the hoses to be moved. To the court, it was significant “that the plaintiff saw the hoses and was aware that the hoses could cause her to fall.” Therefore, because the alleged condition was open and obvious, it did not present an unreasonable risk.
This recent Fifth Circuit decision is consistent with recent trends in Louisiana law and shows that the open and obvious defense remains alive and well.
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Insight
Too Much Money and No One to Give it to- The Cy Pres Doctrine
What happens when someone leaves money in a will to a charity that has closed its doors by the time the will is probated? In this strange circumstance, a court may apply the “cy pres doctrine” to answer this question. Cy pres is a French term which loosely translates to mean “as near as possible.” In modern litigation, cy pres is not only used to distribute charitable donations, but also to distribute millions of dollars left over in class action settlements.
In the example above, a court may use cy pres to transfer the donated money to a charity similar to the one that had shut down. In class actions, there are often funds left over when not enough people register to receive money under a settlement. In this situation, the court will use cy pres to decide where this money goes; but that decision is a tricky one. Courts will sometimes direct these funds to a governmental entity loosely related to what the lawsuit was about. Other times these funds will go to a charity. Whatever the choice, there are usually complaints.
In one case, a nationwide class of AOL customers agreed to a settlement in a class action filed in California. Even though class members lived all over the country, the cy pres funds went to a legal aid office in Los Angeles, where the judge’s husband served as a director. This raised some eyebrows.
In another case, Kellogg’s settled a class action filed because its advertisements claimed that frosted mini-wheats improved kids’ brain power, which -sadly- turned out not to be true. Those cy pres funds initially went to a charity designed to feed the poor. However, the court later ruled that the funds should have gone to a group that protected the public from false advertising.
As more and more cases like these garnered attention, rules were passed as to how to distribute these funds. Generally, these rules require some connection between the issues in the lawsuit and the mission of the group that gets the funds. While the United States Supreme Court has yet to address these issues, Chief Justice Roberts recently indicated that the Court may be ready to put its stamp on cy pres.
We may be “as near as possible” to some clarity in the murky law of cy pres.
Class Actions
Litigation
Resource
FRAUD / WORKERS’ COMPENSATION: Johnson v. A.W. Chesterton
In Johnson v. A.W. Chesterton, 16-807 (La. App. 3d Cir. 2/1/17), the Louisiana Third Circuit was faced with the issue of whether a workers’ compensation claimant committed fraud under La. R.S. 23:1208 when he sold a horse but failed to report the earnings. No fraud was identified because horses were a hobby for claimant and the sale of the horse was the sale of a personal asset immaterial to the workers’ compensation claim.
The workers' compensation judge found that the defendants failed to prove requirements of La. R.S. 23:1208, that claimant willfully made a misrepresentation for the purpose of obtaining workers’ compensation benefits. The trial court ordered the employer/carrier to reinstate weekly benefits at the full rate, and awarded Johnson $8,000 in penalties and $10,000 in attorney’s fees.
On appeal, the Third Circuit affirmed the ruling and awarded the claimant an additional $2,500 in attorney’s fees “for work performed on appeal.” The appellate court noted that Johnson “had owned horses as a hobby since he was 5 years old;” was 76 years old at the time of the trial; and, “had owned as many as 42 horses in the past but had decreased that number to 7 after the accident.” Further, claimant testified that the horse he sold for only $3,500 “was purchased for $20,000 nineteen years prior.”
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News
Dancing for Big Buddy
Chris Jones has practiced, taken off his court-ready tie, and is poised to take the stage this Saturday for his dancing debut in support of a good cause, the Big Buddy Program.
Modeled after the hit ABC television show, Dancing for Big Buddy is a charity event featuring community leaders and prominent citizens as they perform a choreographed ballroom dance. At the event, Chris, along with 15 other local community leaders, will put their dancing skills to the test as they perform at LSU’s Pete Maravich Assembly Center.
Collin LeBlanc, Chris’ partner at Keogh Cox, served on the Big Buddy board for many years. About Chris’ efforts, he said “I’m proud of him. I’ve spoken at the event. I’ve helped host the event, but it takes a different kind of courage to get in front of a thousand-plus people --with the cameras rolling-- and dance.”
All of the proceeds from the event will support the Big Buddy Program’s mission to provide positive role models and quality learning experiences for the under-served children and youth of Baton Rouge.
To learn more about the Big Buddy Program and the important work they do, visit their website at www.bigbuddyprogram.org
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Resource
IMMUNITY / NEGLIGENCE
Foster v Kinchen, Wells & Farm Bureau Insurance Company, 2016-0544 (La. App. 1 Cir. 3/29/17), - So.3d -, presents the narrow legal issue of whether a drunk bicyclist’s suit is barred by LSA-R.S. 9:2798.4 which provides immunity for damages suffered by persons operating a “motor vehicle, aircraft, watercraft or vessel” while under the influence of alcohol. According to the First Circuit in Foster, the immunity statute does not apply and the intoxicated cyclist can speed forward with his suit.
In Foster, the plaintiff / bicyclist filed suit after he was hit by a pickup truck. Post-accident blood work revealed that the plaintiff had a blood alcohol content of .084%. Defendants filed a motion for summary judgment contending that plaintiff was precluded from recovery as a result of the immunity provided by LSA-R.S. 9:2798.4. This motion was granted. Plaintiff appealed arguing that the statute was inapplicable because a bicycle is not a “motor vehicle” as referenced in the statute.
Defendants cited to statutory authority which provides that “every person riding a bicycle shall be granted all of the rights and shall be subject to all of the duties applicable to the driver of a vehicle” and argued that “there should be no difference between bicycles and motor vehicles under the law.” Defendants further pointed to the Title 32 definition of “vehicle” which includes bicycles and even “ridden animals” as “vehicles.”
The Foster court rejected the defense arguments and ruled for plaintiff as a matter of statutory construction. Because a motorized bicycle is excluded from the definition of "motor vehicle,” a fortiori, a non-motorized bicycle is also excluded.
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Insight
Do You Have the “Right to Remain Silent” in Business Dealings?
As a general rule in Louisiana, a party involved in business dealings may keep silent, but exceptions exist. Sure, where information is volunteered that may influence the other party’s conduct, that information must be truthful, but is there a duty to disclose information harmful to your position? According to one recent decision, the answer may be “yes.”
In Parkcrest Builders, LLC v. Housing Authority of New Orleans, 2017 WL 193500 (E.D. La. 2017), the court highlighted a wrinkle in the general rule of silence. According to the Parkcrest court, a party to a proposed transaction may have a duty to disclose any information that an ethical person would disclose. This duty complicates matters for a party wishing to disclose as little as possible in order to protect its interests in an arms-length negotiation. It also raises a question: can a party be sued in fraud if they don’t divulge enough information to satisfy the other party?
“Fraud” is defined as a misrepresentation or suppression of a material fact, made with the intent to obtain an unjust advantage or to cause a loss or inconvenience to the other party. La. Civil Code article 1953. In order to prove fraud by silence, there must exist a duty to disclose.
Parkcrest involved a public project to construct new affordable housing units where the owner terminated its contract with the contractor and sued the contractor’s bond company. In the suit against the bond company, the owner alleged fraud and claimed that the bond company improperly concealed (1) its intent to rehire the defaulted contractor to complete the project, and (2) the nature of the bond company’s agreement with the contractor. According to Parkcrest, these allegations, if proven, were sufficient to prove fraud by silence.
Given that the law allows recovery of economic losses arising from a party’s reasonable reliance upon information provided by another, businesses need to be careful in what they say, and even in what they don’t say.
Contractors
Corporate Law
Fraud
Resource
DRAM SHOP / NEGLIGENCE
In Reed v. Cowboy's W. Store & Trailer Sales, Inc., 2016-462 (La. App. 3 Cir. 3/1/17), — So.3d —, the Third Circuit affirmed summary judgment and found that a night club was not be liable to the plaintiff after one of its patrons left the premises and rear-ended the plaintiff’s tractor. At issue in the case was whether the bar’s duty extended beyond a duty not to sell alcohol to an underage patron.
In Reed, the plaintiff alleged that the underage bar-patron was intoxicated after she left the bar and that her impairment contributed to the accident. The plaintiff argued that the bar breached its duty to prohibit underage consumption of alcohol on its premises and was therefore liable in the accident.
The Third Circuit disagreed. According to the Reed court, the only duty the bar possessed was a duty to refrain from selling alcohol to those below the legal age. It declined to impose a heightened duty to patrol the premises continuously to ensure that underage patrons did not consume alcohol unlawfully or secure alcohol from someone of legal drinking age. Because no evidence showed that the patron bought alcohol at the bar, the court was left with only speculation as to how she acquired the alcohol.
In dicta, the court commented that plaintiff also failed to establish that the patron was, in fact, intoxicated or that her intoxication caused the accident. The bar offered expert testimony that the patron was neither intoxicated nor impaired at the time of the accident based upon an examination of her body weight, the amount of alcohol she consumed, and the time that elapsed before the accident transpired. In response, the plaintiff offered testimony from three lay witnesses who essentially testified that the patron “could have been intoxicated.” This testimony was insufficient to dispute the expert’s conclusion.
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