Justia Louisiana Supreme Court Opinion Summaries

Articles Posted in Business Law
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Baker Sales, Inc. (“BSI”) obtained two loans from Newtek Small Business Finance, Inc. (“Newtek”) which were secured by mortgages on BSI’s commercial property. Robert and Elsa Baker (collectively “the Bakers”) executed agreements unconditionally guaranteeing payment of all amounts owed on the loans. These agreements were secured by conventional mortgages on the Bakers’ home. BSI filed for bankruptcy approximately two years later. Newtek filed a proof of claim in the bankruptcy proceeding for the total amount of the outstanding balance of the loans. The bankruptcy court granted Newtek’s motion to lift the automatic bankruptcy stay. Newtek then filed a petition for executory process in state court against BSI and the Bakers requesting seizure and sale of BSI’s commercial property without the benefit of appraisal. Newtek purchased the seized property at a sheriff’s sale; the bankruptcy case was subsequently closed. Newtek filed the suit at issue here, seeking to foreclose on the Bakers’ home. The trial court issued a judgment preliminarily enjoining the sale of the Bakers’ home and converted the proceeding from executory to ordinary. The Bakers filed a petition seeking a declaration under the Louisiana Deficiency Judgment Act (“LDJA”) that as the underlying debt was extinguished, Newtek could no longer pursue them as sureties. The Louisiana Supreme Court granted certiorari review to determine whether a creditor’s recovery in a deficiency judgment action was barred against a surety when a creditor forecloses on property through a judicial sale without appraisal. Harmonizing the LDJA with the law of suretyship, the Supreme Court agreed with the court of appeal that such recovery was barred. View "Newtek Small Business Finance, LLC v. Baker" on Justia Law

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Plaintiff sought insurance coverage under an all-risks commercial insurance policy for business income losses during the COVID-19 pandemic. Finding no “direct physical loss of or damage to property” caused by COVID-19, the Louisiana Supreme Court reversed the appeal court and reinstated the trial court judgment denying coverage. View "Cajun County, LLC et al. v. Certain Underwriter at Llloyd's, London, et al." on Justia Law

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In July 2019, Plaintiffs Suzanne Farrell and her husband, Joseph Farrell, were traveling to Galveston, Texas, when they stopped to refuel at a Circle K Store in Pineville, Louisiana. While Mr. Farrell pumped gas, Mrs. Farrell decided to take their dog for a walk. She ultimately chose a grassy area located at the edge of the Circle K parking lot. In order to reach this area of grass, Mrs. Farrell had to traverse a pool of water. The water extended approximately the length of a tractor-trailer and was draining to the low spot of the parking lot. Mrs. Farrell walked to the narrowest part of the water—approximately one foot across— and attempted to step over the water. She was unsuccessful, and she fell and sustained personal injury. Mr. and Mrs. Farrell subsequently filed this personal injury lawsuit against Circle K and the City of Pineville. Defendants jointly moved for summary judgment, arguing that they were not liable on the ground that the alleged hazardous condition was open and obvious. Plaintiffs opposed the motion, arguing that the hazard was not the pool of water, but the slippery substance hidden in the water, and that made the hazard not open and obvious. The trial court denied Defendants’ motion for summary judgment, finding “that there exist issues of material fact regarding whether a reasonable person should have seen the mold/mildew/algae/slime present in the water puddle at issue.” The Louisiana Supreme Court disagreed with the district court's decision, reversed and rendered judgment in favor of defendants. View "Farrell v. Circle K Stores, Inc. et al." on Justia Law

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The district court awarded damages to plaintiff Lashondra Jones who was allegedly injured when she stepped on a wooden pallet with an attached pallet guard, holding a bulk watermelon bin, to reach a watermelon in the bottom of the bin, and the pallet guard collapsed. Defendant Market Basket Stores, Inc. appealed, and the appellate court reversed the award, finding manifest error in the factual findings of the district court requiring de novo review and concluding that the watermelon display did not present an unreasonable risk of harm to plaintiff. After review, the Louisiana Supreme Court concluded there was no manifest error in the district court’s finding of negligence on the part of the defendant; therefore, the appellate court erred in its ruling. View "Jones v. Market Basket Stores, Inc." on Justia Law

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Lake Charles Rubber and Gasket Co., L.L.C. ("Lake") and its sole owner, Vesta Balay Johnston (collectively, Plaintiffs), and Gulf Coast Rubber and Gasket, L.L.C. ("Gulf') and Bryan Vincent (collectively, Defendants), both appealed certain court of appeal rulings. Defendants asserted the court of appeal failed to correctly apply the manifest error standard of review in reversing the district court's findings that certain Lake information in Gulf's possession did not constitute "trade secrets" or that their misappropriation was not otherwise a violation of the Louisiana Unfair Trade Secrets Act ("LUTSA"). They further argued the court of appeal erred in increasing the damages award from $700,000 to $19,574,884, i.e., a multiple of nearly 28, where ample evidence in the record supported the district court's judgment as to damages. Plaintiffs argued the court of appeal erred on rehearing by eliminating the treble damages applied to its award for unjust enrichment and dismissing Johnston's claim for diminution in value of her ownership interest in Lake. The Louisiana Supreme Court reversed the court of appeal in part as to its finding that Lake's parts numbering system and descriptions constituted a trade secret under LUTSA. Furthermore, the Court reversed the court of appeal as to the increase in the amount of lost profit damages. The case was remanded to the district court for a recalculation of lost profit damages giving consideration to the violations of LUTSA related to Gulf's misappropriation of Lake's customer lists and inventory usage history with respect to the Sasol customer contract. The Court affirmed in all other respects and remanded for further proceedings. View "Johnson, et al. v. Vincent, et al." on Justia Law

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The Louisiana Supreme Court granted certiorari to consider whether waste tire processors were prohibited from charging waste tire generators a transportation fee above the fees statutorily provided by Louisiana’s waste tire laws. Finding there were no provisions prohibiting such a transportation fee, the Court concluded that Defendants, waste tire processors, were not prohibited from charging Plaintiffs, waste tire generators, a fee for the transportation of waste tires from the waste tire generators’ location to the processing facilities. Therefore, the lower courts’ judgments were reversed. View "Winmill Tire, LLC et al. v. Colt, Inc., et al." on Justia Law

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Luv N’ Care, Ltd. (“LNC”), a Louisiana corporation, filed suit against Jackel International Limited (a corporation established under the laws of England and Wales, having its principal place of business in England) and others, relating to a distribution agreement for child and baby care items. Jackel would be the exclusive distributor of certain LNC products. LNC contended Jackel agreed bot to copy any of LNC's products, their design, prototypes, packaging, methods, or any other proprietary information without LNC's written permission. However, LNC alleged that, on or about October 2009, it learned that Jackel had been selling child and baby products not covered under the terms of the distribution agreement with LNC, but which closely resembled LNC products. Furthermore, in April of 2010, LNC learned that Jackel began to commercialize additional child and baby products, which allegedly incorporated LNC’s products, design, and/or packaging in violation of the contract between the parties. This case presented an issue of first impression for the Louisiana Supreme Court regarding whether La. R.S. 13:4611(1)(g) authorized an award of attorney fees to a party in a contempt proceeding, who had been found not guilty of contempt of court, or whether an award of attorney fees was only authorized in favor of a party who successfully prosecuted a contempt action. The district court awarded, and the appellate court affirmed, attorney fees to Jackel, who was found not to be in contempt, as the “prevailing party.” Having determined that La. R.S. 13:4611(1)(g) only authorized courts to award attorney fees to a party who successfully prosecuted a rule for contempt of court, the Supreme Court concluded the district court erred in awarding attorney fees in favor of Jackel, and reversed the appellate and district courts holding otherwise. Insofar as the judgment awarded attorney fees, that portion was vacated. View "Luv N' Care, Ltd. v. Jackel International Limited" on Justia Law

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The Louisiana Supreme Court granted certiorari to determine whether the lower courts correctly ruled an online marketplace was obligated as a "dealer" under La. R.S. 47:301(4)(l) and/or by contract to collect sales tax on the property sold by third party retailers through the marketplace’s website. Wal-Mart.com USA, LLC (“Wal-Mart.com”) operated an online marketplace at which website visitors could buy products from Wal-Mart.com or third party retailers. From 2009 through 2015, Wal-Mart.com reported its online sales in Jefferson Parish, Louisiana of its products and remitted the required sales tax to the Louisiana Department of Revenue and ex-officio tax collector, then Sheriff Newell Normand (Tax Collector). The reported sales amount did not include proceeds from online sales made by third party retailers through Wal-Mart.com’s marketplace. Following an attempted audit for this period, Tax Collector filed a “Rule for Taxes” alleging Wal-Mart.com “engaged in the business of selling, and sold tangible personal property at retail as a dealer in the Parish of Jefferson,” but had “failed to collect, and remit . . . local sales taxes from its customers for transactions subject to Jefferson Parish sales taxation.” In addition, Tax Collector alleged that an audit of Wal-Mart.com’s sales transactions was attempted, but Wal-Mart.com “refused to provide [Tax Collector] with complete information and records” of Jefferson Parish sales transactions, particularly, those conducted on behalf of third party retailers. In connection with online marketplace sales by third party retailers, Tax Collector sought an estimated $1,896,882.15 in unpaid sales tax, interest, penalties, audit fees, and attorney fees. The Supreme Court determined an online marketplace was not a “dealer” under La. R.S. 47:301(4)(l) for sales made by third party retailers through its website and because the online marketplace did not contractually assume the statutory obligation of the actual dealers (the third party retailers), the judgment of the trial court and the decision of the court of appeal were reversed and vacated. View "Normand v. Wal-Mart.com USA, LLC" on Justia Law

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The Louisiana Supreme Court accepted a certified question of Louisiana law presented by the U.S. District Court of Appeals for the Fifth Circuit. This case involves a dispute between two creditors, each of which attached the same pig iron owned by the common debtor, America Metals Trading L.L.P. (“AMT”). Daewoo International Corp. (“Daewoo”), a South Korean trading company, entered into a series of contracts with AMT in May 2012 for the purchase of pig iron, to be delivered in New Orleans. The sale contracts contained arbitration clauses. Although Daewoo made payments under the contracts, AMT never shipped the pig iron. Daewoo sued AMT in the United States District Court for the Eastern District of Louisiana seeking an order compelling AMT to arbitrate the dispute pursuant to the terms of the contract and also seeking a writ of attachment of AMT’s pig iron on board the M/V Clipper Kasashio under the Louisiana non-resident attachment statute, Louisiana Code of Civil Procedure article 3542. The writ was granted and served by the U.S. Marshals Service on December 22, 2012. Noting that La. C.C.P. art. 3542, Louisiana’s non-resident attachment statute, allows a party to obtain a writ of attachment in "any action for a money judgment, whether against a resident or a nonresident, regardless of the nature, character, or origin of the claim, whether it is for a certain or uncertain amount, and whether it is liquidated or unliquidated," the federal court stated the issue as "whether Daewoo’s suit to compel arbitration and obtain provisional relief is an 'action for a money judgment' to which Louisiana’s non-resident attachment statute applies." The Louisiana Supreme Court responded: "Louisiana Code of Civil Procedure article 3542 allows for attachment in aid of arbitration if the origin of the underlying arbitration claim is one pursuing money damages and the arbitral party has satisfied the statutory requirements necessary to obtain a writ of attachment." View "Stemcor USA Inc. v. CIA Siderurgica Do Para Cosipar" on Justia Law

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In this case, the issue presented for the Louisiana Supreme Court’s review centered on whether a City of New Orleans ordinance levying a gallonage tax based on volume upon dealers who handle high alcoholic content beverages was a valid exercise of its authority to levy and collect occupational license taxes within the meaning of La. Const. Art. VI, sec. 28. The trial court declared the ordinance unconstitutional. The Supreme Court found the portion of the ordinance at issue was not an unconstitutional exercise of the City’s taxing authority. Thus, the Court reversed the trial court’s grant of summary judgment in favor of the plaintiffs, and remanded to the trial court for further proceedings. View "Beer Industry League of Louisiana v. City of New Orleans" on Justia Law