Louisiana Law Blog

by Todd A. Rossi

In Sher v. Lafayette Insurance Co. (La. 2008), an apartment unit was flooded when levees failed immediately following Hurricane Katrina. The insurer inspected the property to determine the amount of covered loss and concluded that most of the building’s damage was due to poor maintenance, disrepair, and flooding. Checks totaling slightly more than $2,700 were tendered but rejected. Although the term “flood” was not defined in the policy, the Louisiana Supreme Court rejected the argument that the definition depended on whether the event resulted from a natural disaster or a man-made one, instead focusing on the prevailing meaning of the word “flood,” i.e., the overflow of a body of water causing a large amount of water to cover an area that is usually dry. Accordingly, the court did not find the term ambiguous, and found that the levee breaches were covered by the flood exclusion. 

by Todd A. Rossi

In Landry v. Louisiana Citizens Property Insurance Co. (La. 2008), the Louisiana Supreme Court rejected a homeowner’s breach of contract claim against the insurer for failure to pay the face value of the policy after their house was totally destroyed by Hurricane Rita. The parties did not dispute that the insurance in question covered any loss caused by wind and rain, and that the policy specifically excluded damages caused by flood waters. Even so, the homeowner claimed that Louisiana’s statutory law (R.S. 22:695) obligated the insurer to pay the face value of the policy. The insurer responded, asserting several defenses, including damages caused by flood, high tides, and storm surge. The statute in question was the Louisiana Value Policy Law (R.S. 22:695), that sets forth the methodology to compute loss and that its provisions are not altered due to concurrently causing damages, even if one of such damages is not covered. 

by Valerie A. Judice

On June 10, 2008, Michael O. Leavitt, Secretary of the Department of Health and Human Services (DHHS) announced that Louisiana was one of twelve (12) communities chosen to participate in an Electronic Health Records Medicare Demonstration Project. The project will last five (5) years and will provide physicians with financial incentives to use certified electronic health records (EHRs). Incentive payments for the entire 5-year period may reach $58,000 per physician and $290,000 per practice.  

by Linda G. Rodrigue

In Advisory Opinion No. 08-05, issued February 15, 2008, the OIG concluded that an arrangement whereby a pharmaceutical company placed electronic kiosks in physician offices would not generate prohibited remuneration under the anti-kickback statute. Further, the OIG opined that the arrangement would not violate the federal prohibition against giving anything of value to a Medicare or Medicaid beneficiary that is likely to influence the beneficiary’s selection of a particular provider.

By Deborah Juneau

The Louisiana Supreme Court issued its new opinion after a rehearing in Borel v. Young, again affirming the Third Circuit’s ruling and dismissing the lawsuit against late-added physician defendants, but on different grounds. The supreme court’s decision on rehearing solved an apparent dilemma for the plaintiffs created by the original opinion: the plaintiffs were precluded from filing suit until after the medical review panel had rendered an opinion but, in any case, were required to file suit within three years of the alleged medical malpractice. Since the three year period could not be suspended during the pendency of the medical review panel, the plaintiffs faced the possibility that their claims would be barred by the three-year peremptive period before the panel convened to consider their claims.

by Bradley C. Myers

In a major victory for business interests involved in maritime operations and what many commentators say is a harbinger of things to come, the United States Supreme Court recently struck down the $2.5 billion punitive damage award against ExxonMobil in a case involving claims for individual economic damages filed by landowners, native Alaskans and commercial fisherman following the 1989 grounding of the Exxon Valdez. See Exxon Shipping Company, et al v. Grant Baker, et al, 554 U.S. ____(June 25, 2008).  The Court determined that the upper limit for punitive damages in maritime cases was a 1:1 ratio to compensatory damages and sent the case back to the appellate court to reduce the punitive damage award to $507.5 million which was the amount of compensatory damages (those agreed upon in settlement and those awarded following trial) that the trial court determined were relevant for purposes of determining punitive damages.

by Katherine K. Green and Richard D. McConnell

There are scores of oilfield contamination cases, coined “legacy lawsuits,” in which landowners claim that their property has been contaminated by historical oil and gas exploration and production operations. Legacy lawsuits are a means for plaintiffs to potentially obtain large jury verdicts to remediate property. Plaintiffs, however, are not required to use their monetary awards towards the remediation of their property. In 2006, the Louisiana Legislature, in response to windfall jury verdicts, lack of remediation obligations on landowner plaintiffs, and the adverse effect of those events on oil and gas operators in the State, enacted Louisiana Revised Statute 30:29 (“Act 312”). Act 312 reflects the Legislature’s concern that the State’s natural resources were not being protected under then-existing laws. 

The constitutionality of Act 312 was recently challenged in M.J. Farms, Ltd. v. Exxon Mobil Corporation, No. 07-CA-2371. In a unanimous opinion rendered by the Court, Act 312 was held to be not only constitutional but also applicable to legacy cases.  

by Clay J. Countryman

The Centers for Medicare and Medicaid Services (“CMS”) recently issued on June 8, 2008 an advisory opinion in which CMS addressed whether a proposed physician ownership in a diagnostic center complies with the rural provider exception to the Stark Law. CMS concluded that the facts of the proposed physician ownership in the diagnostic center would satisfy the rural provider exception, but CMS also cautioned that meeting the elements of the rural provider exception is an ongoing requirement and must be continuously satisfied during the period of a physician’s ownership interest.

by Linda G. Rodrigue

On April 16, 2008, the Louisiana Third Circuit Court of Appeal upheld a trial judge’s application of a 35% minority discount in determining the fair market value of the interest of a partner withdrawing from a limited liability partnership (LLP). It appears that the Supreme Court has been asked to consider this case, but has not yet made a determination of whether to do so. Accordingly, this decision may or may not be final, and although it did not involve a health care entity, it is instructive for health law purposes.

by Laura L. Hart

        On May 19, 2008, OSHA Directive Number 08-03 became effective. That directive provides the criteria by which OSHA will conduct the 2008 Site-Specific Targeting (“SST-08”) plan. OSHA’s SST program is the main programmed inspection plan for non-construction workplaces that have 40 or more employees.

       OSHA’s SST-08 plan has three listings of “establishments” that will be targeted. The focus of the agency’s unannounced comprehensive safety inspections under SST-08 are approximately 3,800 high-hazard workplaces contained on OSHA’s Primary List.  The workplaces on the Secondary List and Tertiary List will only be inspected pursuant to SST-08 if all of the workplaces on the Primary List are inspected.