Click here to download  a copy of the digest.  For a hard copy, please email client_services@keanmiller.com

* The digest is a compilation of certain class action decisions and it should not be construed as a complete reflection of the holdings of the cases.

The Louisiana First Circuit Court of Appeals has issued the first Appellate Court decision dealing with the Louisiana New Home Warranty Act and its application to Chinese Drywall claims in the case of Jennifer L. Caminita, wife of/and Frank L. Caminita v. Regina, wife of/and Barney Core, Smith and Core, Inc., et al., State of Louisiana Court of Appeals, First Circuit, 2010 CA 1961.

The First Circuit has ruled that the periods of limitation set forth in the New Home Warranty Act provide the exclusive periods by which claims can be brought against home builders for alleged defects related to the installation of Chinese Drywall in new homes. In the Caminita case the First Circuit specifically found that the one year preemptive period provided by La.R.S. 9:3144A(1) was applicable to claims related to Chinese Drywall incorporated into new homes. Based on this finding, the court dismissed the action against the home builder.

This ruling by the Louisiana First Circuit Court of Appeals is the first Louisiana case reported at the appellate level on this issue and is in line with decisions by district courts last year which were also reported on the Kean Miller blog.
 

On September 30, 2010, the Internal Revenue Service issued guidance providing relief to homeowners who have suffered property losses due to the effects of certain imported drywall installed in homes between 2001 and 2009.  In particular, the IRS issued Revenue Procedure 2010-36 which enables affected taxpayers to treat damages from corrosive drywall as a casualty loss and provides a ”safe harbor” formula for determining the amount of the loss.

Revenue Procedure 2010-36 provides the following relief:

• Individuals who pay to repair damage to their personal residences or household appliances resulting from corrosive drywall may treat the amount paid as a casualty loss in the year of payment.
• Taxpayers who have already filed their income tax return for the year of payment generally have three years to file an amended return and claim the deduction. The amount of a loss that may be claimed depends on whether the taxpayer has a pending claim for reimbursement (or intends to pursue reimbursement) of the loss through property insurance, litigation or otherwise.
• In cases where a taxpayer does not have a pending claim for reimbursement, the taxpayer may claim as a loss all unreimbursed amounts paid during the taxable year to repair damage to the taxpayer’s personal residence and household appliances resulting from corrosive drywall.
• If a taxpayer does have a pending claim (or intends to pursue reimbursement), a taxpayer may claim a loss for 75 percent of the unreimbursed amount paid during the taxable year to repair damage to the taxpayer’s personal residence and household appliances that resulted from corrosive drywall.

A taxpayer who has been fully reimbursed before filing a return for the year the loss was sustained may not claim a loss. A taxpayer who has a pending claim for reimbursement (or intends to pursue reimbursement) may have income or an additional deduction in subsequent taxable years depending on the actual amount of reimbursement received.

For purposes of this revenue procedure, the term “corrosive drywall” means drywall that is identified as problem drywall under the two step identification method published by the CPSC and the Department of Housing and Urban Development in their interim guidance dated January 28, 2010.

Further details and limitations can be found in Revenue Procedure 2010-36 on www.irs.gov. The Revenue Procedure can be found here.
 

Electronic Discovery, or “E-Discovery”, is not considered the “novel issue” it once was. However, E-Discovery still presents problems that litigants and courts struggle with. Below is a summary of recent Louisiana Federal Court opinions dealing with the issues surrounding E-Discovery.

In Frees, Inc. v. McMillian, 2007 WL 184889 (W.D. La. Jan. 22, 2007), the Western District of Louisiana granted the plaintiff’s motion to compel. In an unfair competition and trade secret theft action, the plaintiff claimed that the defendant, a former employee, had stolen various data files. Plaintiff had unsuccessfully requested production of defendant’s laptop and desktop. The Court granted the motion to compel the defendant to produce these two items because they were the most likely places that the data files would be located. The Court did institute protective measures so as to prevent the disclosure of any irrelevant or personal information.
 

In Green v. Fluor Corp., 2009 WL 1668376 (M.D. La. June 11, 2009), a case in the Middle District of Louisiana, the defendant sought access to the plaintiff’s phone and e-mail system to obtain the original version of a photograph the plaintiff had given to the defendant as part of discovery. The defendant claimed the produced photograph taken from a phone was of low quality and wanted access to the plaintiff’s phone and e-mail to obtain a clearer picture. The Court denied the motion because the defendant failed to ask for the particular form of the discovery in regards to the picture and therefore had to settle with what the plaintiff had produced.

In Marketfare Annunciation, LLC v. United Fire & Casualty Ins. Co., 2007 WL 3273440 (E.D. La. Nov. 5, 2007), the Eastern District of Louisiana dealt with a spoliation issue involving electronic evidence in a claim that arose due to Hurricane Katrina. The defendant failed to produce certain e-mails even after the plaintiff put the defendants on notice to preserve them. However, the plaintiff waited until the eve of the close of discovery to file sanctions and therefore the court denied the request.

In Thomas v. IEM, 2008 WL 695230 (M.D. La. Mar. 12, 2008), the Middle District of Louisiana dealt with a civil rights violation. The plaintiff served a Rule 45 subpoena on the defendant in order to obtain access to nine named individuals’ e-mail boxes. The Court held this was an attempt to circumvent discovery deadlines under Rules 26 and 34 and therefore did not grant the request.

In Canon USA, Inc. v. SAM, Inc., 2008 WL 2522087 (E.D. La. June 20, 2008), the Eastern District of Louisiana granted a motion to compel electronically stored data that the defendant had at his home in Florida. After Hurricane Katrina, defendant moved his computer to Florida but when discovery requests were made he did not search the computer to provide complete answers to interrogatories. The court held that this “lackadaisical” treatment of discovery was unacceptable and held that any undeleted information on the computer was discoverable. The Court ordered the defendant to obtain the services of a “forensic computer specialist” and fully respond to the discovery request.

In re Riverside Healthcare, Inc., 2008 WL 4183609 (M.D. La. Sept. 11, 2008), a case in the Middle District of Louisiana, a bankruptcy liquidating supervisor accused a creditor of destroying evidence and sought the adverse presumption that follows spoliation. The creditor had deleted e-mails that the liquidating supervisor considered necessary evidence. However, the court held that spoliation requires bad faith and here there was no bad faith due to the fact that the creditor destroyed e-mails automatically every sixty to ninety days.

In Johnson v. Big Lots Stores, Inc., 2008 WL 2191357 (E.D. La. May 7, 2008), the Eastern District of Louisiana ruled that a plaintiff could not take another deposition of the defendant’s representatives regarding how the defendants preserved and collected electronic data. The Court stated that since the plaintiffs failed to list “e-Discovery” as an issue at the original deposition and since they waited until two days before the close of discovery, the motion to compel the second deposition was denied. The Court also stated that “e-discovery” matters are no longer the novel issues that they once were with the advent of the Internet and wide expansion of computerized data collection and the plaintiffs had no legitimate excuse as to why they failed to make issue of “e-discovery” at the original deposition.

In Hoover v. Fla. Hydro, Inc., 2008 WL 4467661 (E.D. La. Oct. 1, 2008), the Eastern District of Louisiana allowed discovery of two non-parties’ computers. In this breach of contract claim, the defendant sought the electronic data from the plaintiff’s mother and a friend who helped him in his business. The Court held that this would not create an undue burden on the mother because the non-party was involved in the plaintiff’s business and would have relevant information stored on her computer. The subpoena was quashed as to the friend because he had adequately answered the discovery request.

In May v. Fedex Freight Southeast, Inc., et al., 2009 WL 1605211 (M.D. La. June 8, 2009), a Middle District of Louisiana case, the plaintiff brought suit for sexual harassment while she was employed by the defendant. Plaintiff sought “any and all e-mails referencing, as well as those sent to and from, plaintiff and [the accused sexual harasser].” The defendant claimed that this was not possible because the e-mail was inaccessibly archived and unsorted. The Court held that the plaintiff and defendant had to meet with the defendant’s IT department to discuss the “burden and expense of producing the e-mails requested by plaintiff.” If then there was still no agreement, the plaintiff was urged to reassert her motion to compel.
 

Judges in East Baton Rouge and St. Tammany Parish have issued two of the earliest rulings on the impact of the Louisiana New Home Warranty Act on claims by homeowners against contractors for damages related to Chinese Drywall. Both state district court judges have found that the Louisiana New Home Warranty Act is the exclusive remedy as between a builder and a homeowner for damages caused by Chinese Drywall. Both judges have also ruled that the Chinese Drywall incorporated into homes in Louisiana is not a structural component of the home and is thus subject to a one year warranty period.

In both of the district court cases, the courts dismissed the plaintiff’s case because the suits against the contractors were brought more than one year after the homes were occupied by the original owners.

The rulings by the district court judges should have no impact on homeowner claims against suppliers and manufacturers of Chinese Drywall as the Louisiana New Home Warranty Act only applies to the relationship and rights between a home builder and a home owner in Louisiana.
 

The United States Supreme Court recently resolved conflicts among the Circuit Courts about the citizenship of a corporation for determining diversity of citizenship jurisdiction (1). This will allow corporations to analyze with more predictable results whether to remove a case to federal court. In Hertz Corp. v. Friend, et al, No. 08-1107 (February 23, 2010) (a unanimous decision, which is unusual in and of itself), the Court decided that when determining a corporation’s citizenship for diversity of citizenship jurisdiction, the “principal place of business” of the corporation is “the place where the corporation’s high level officers direct, control, and coordinate the corporation’s activities”—something that courts have referred to as the “nerve center” of the corporation.

The District Court and Ninth Circuit determined diversity did not exist because they determined that although Hertz did business in 44 states its business activity was “significantly larger” and “substantially predominated” over activity in other states. Therefore, Hertz’s “principal place of business” and thus, its citizenship, was in California. The Supreme Court agreed to review the Ninth Circuit’s decision.

The Court’s decision focused on the meaning of “principal place of business” in Section 1332(c)(1). It started its analysis with a discussion of the history and rationale for diversity jurisdiction starting with the first diversity jurisdiction statue enacted in 1789 and ending with the current version of 28 U.S.C. §1332(c)(1) which was enacted in 1958. The court then reviewed the various tests used by federal appellate courts to determine the location of a corporation’s “principal place of business.” For example, the First Circuit used a “nerve center” test (the location from which the corporations activities are directed and controlled); the Second Circuit used a “business activities” test (where a corporation’s actual business activities are located); the Sixth and Tenth circuits used a “total activities” test (a combination of the “nerve center” and “business activities” tests); the Fifth and Eleventh circuits used a two-part test (are corporate activities “centralize or de-centralized” and then either a “place of operations” or a “nerve center” test.

The old “nerve center” test won out. The Court found that the best way to identify the principal place of business of a corporation as “the place where a corporation’s officers direct, control, and coordinate the corporation’s activities.” This conclusion was reached for three reasons: (1) the statutory language supported the approach of identifying a single state as the principal place of business; (2) it leads to “administrative simplicity” and predictability that will allow courts to focus on the underlying merits of a case rather than jousting over jurisdiction; and (3) the legislative history supported the conclusion.
 

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 (1) The diversity jurisdiction statute, 28 U.S.C. §1332(c)(1) says that “a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.”

Since that time, a number of lawsuits related to Chinese drywall have been filed in various State and Federal Courts. 

In an effort to organize the numerous lawsuits that have been filed in Federal Courts, the Judicial Panel on Multidistrict Litigation recently issued a Transfer Order that class action suits filed around the country against Chinese drywall manufacturers would be docketed in the Eastern District of Louisiana.

The United States Judicial Panel on Multidistrict Litigation is an entity of the United States Federal Court System.  It was created by Congress in 1968 under 28 U.S.C. §1407.  The Panel has the responsibility of determining whether civil actions pending in two or more federal judicial districts should be transferred to a single federal district court for pretrial proceedings.  When asked to consider a transfer, the Panel will:

1. determine whether civil actions pending in different Federal district courts involve one or more common questions of fact such that the actions should be transferred to one federal district for coordinated or consolidated pretrial proceedings; and

2. Select the judge or judges and court assigned to conduct such proceedings.

[United States Judicial Panel on Multidistrict Litigation]

The rationale behind combining the lawsuits in this way for pretrial proceedings is to avoid discovery duplication, to prevent inconsistent pretrial rulings; and to conserve the resources of the parties, their counsel, and the judiciary.  Generally, the court will set standing orders or pretrial orders informing the lawyers involved of the ground rules, deadlines and procedures the court expects the litigants to follow.  After discovery and completion of pretrial matters, the case will be remanded back to the transferor court for trial.

While the Transfer Order for the Chinese drywall cases listed only ten cases, it is likely that the many other cases filed will be considered tag – along cases.  A case may only be characterized as a "tag-along action" if it involves "common questions of fact with actions previously transferred" under 28 U.S.C. § 1407.  See, Rule 1.1 of the General Rules for Judicial Panel on Multidistrict Litigation for the definition.  Upon learning of the pendency of a potential “tag-along action,” as defined in Rule 1.1, an order may be entered by the Clerk of the Panel transferring that action on the basis of the prior hearings and for the previously expressed reasons of the Panel.  The Panel then issues a Conditional Transfer Order transferring to the court tag-along actions that the Panel determined has “questions of fact common to the actions previously transferred”.  The order does not become effective until it is filed with the transferee district court.  The transmittal of the order to the transferee district court shall be stayed fifteen days from the entry thereof and if any party files a notice of opposition with the clerk of the Panel with in this fifteen day period, a stay will be continued until further order of the Panel. [See Rule 7.4 of the General Rules for Judicial Panel on Multidistrict Litigation]
 

The Louisiana Legislature has adopted House Concurrent Resolution No. 185, authored by Representative Tim Burns.  The resolution urges and requests that the Department of Health and Hospitals and the Deptartment of Insurance, in consultation with the Louisiana State Licensing Board for Contractors, investigate the health risks associated with living in homes that contain drywall imported from China, study the potential homeowners insurance coverage issues, including triggers, endorsements, and exclusions to policies that are related to drywall imported from China, and determine whether such material should be identified as a substandard, unsafe building material.  The resolution goes on to request a report of the findings and recommendations of this study to the legislature prior to the convening of the 2010 regular session.

A copy of the enrolled version of the resolution can be seen here: Download file

On January 24, 2006, the U.S. Food and Drug Administration (FDA) issued a Final Rule entitled Requirements on Content and Format of Labeling for Human Prescription Drug and Biological Products, 71 Fed. Reg. 3922 (Jan. 24, 2006). In the now-famous preamble to that Final Rule, the FDA stated its view that “… under existing preemption principles, FDA approval of labeling under the act, whether it be in the old or new format, preempts conflicting or contrary State law.”   The preamble contains a detailed explanation of why the FDA believes that allowing certain state tort law claims for failure to warn would conflict with and stand as an obstacle to achievement of the full objectives and purposes of Federal labeling requirements for pharmaceutical and biologic products.   The FDA explains that it makes labeling decisions based on “a comprehensive scientific evaluation of the products’s risks and benefits under the conditions of the use prescribed, recommended, or suggested in the labeling.”   The FDA further explains:

* * *

State law actions also threaten FDA’s statutorily prescribed role as the expert Federal agency responsible for evaluating and regulating drugs. State actions are not characterized by centralized expert evaluation of drug regulatory issues. Instead, they encourage, and in fact require, lay judges and juries to second-guess the assessment of benefits versus risks of a specific drug to the general public – the central role of FDA – sometimes on behalf of a single individual or group of individuals. That individualized reevaluation of the benefits and risks of a product can result in relief – including the great of significant damage awards or penalties – that creates pressure on manufacturers to attempt to add warnings that FDA has neither approved nor found to be scientifically required. This could encourage manufacturers to propose “defensive labeling” to avoid State liability, which, if implemented, could result in scientifically unsubstantiated warnings and underutilization of beneficial treatments.  

Id., at 3935.   The FDA’s full analysis can be read in the following link, under section “D” entitled “Comments on Product Liability Implications of the Proposed Rule,” at p. 37).  

 http://www.fda.gov/OHRMS/DOCKETS/98fr/00n-1269-nfr0001-01.pdf 

          Since promulgating this Final Rule in January, 2006, there has been considerable debate in the courts as to the level of deference courts should give to FDA’s position regarding preemption.   This issue was recently the focus of pre-trial motions in two cases pending in the Vioxx multidistrict litigation pending in New Orleans, Louisiana, In Re: Vioxx Products Liability Litigation, MDL No. 1657, United States District Court, Eastern District of Louisiana.   In a July 3, 2007 ruling, the Court rejected Merck’s preemption defense and concluded that “the FDA’s current view on the question of immunity for prescription drug manufacturers is entirely unpersuasive and thus not entitled to deference.” A copy of the July 3, 2007 Order and Reasons is attached in the following link.   Order

In the Vioxx MDL, Merck filed motions for summary judgment in two of the pending cases on the grounds that the plaintiffs’failure to warn claims were impliedly preempted because the Vioxx labeling was approved by the FDA. The label expressly mentioned the results of a study that showed a statistically significant increase in serious cardiovascular thrombotic events and noted that such information “should be taken into consideration and caution should be exercised when Vioxx is used in patients with a medical history of ischemic heart disease.” In both of the cases, the plaintiff did not begin taking Vioxx until after Merck had revised, and the FDA had approved, the package insert warning of the risk of cardiovascular thrombotic events.   

In reaching its ruling, the Vioxx Court noted that several other courts have given deference to the FDA’s position and recognized implied preemption, but concluded that “the majority of courts continue to find that state-law claims against prescription drug manufacturers are not preempted, affording little or no deference to the FDA’s recent statements.”   See, Order and Reasons, at p. 16, for the Court’s listing of opinions for and against giving deference to the FDA’s position.   The Court discussed several reasons for refusing to give deference to the FDA, including: (1) the preemption statements in the preamble “were not promulgated pursuant to [FDA’s] rulemaking authority, nor do they seek to clarify any ambiguity in the FDA regulations …, [r]ather, the FDA added these views at the end of the rulemaking process in a preamble….” (2) prior to January 24, 2006, the FDA had recognized that state-law claims could coexist with federal regulation of prescription drugs; and (3) because there are no federal remedies for individuals harmed by prescription drugs, a finding of implied preemption “… would abolish state-law remedies and would, in effect, render legally impotent those who sustain injuries from defective prescription drugs.”  

Although not discussed as one of the formal bases for its ruling, the Court made a point to state its concern that “FDA must rely heavily, if not exclusively, on the data provided by the manufacturer, the very entity that seeks approval of the drug and its label.”  The Court noted that “while the scope of the FDA’s duty is vast, it is increasingly argued that the agency’s staffing, laboratory facilities, and research capacity is sorely lacking; calls for changes in the FDA’s structure and procedures have only increased in the wake of Merck’s voluntary withdrawal of Vioxx from the market.”   Order and Reasons,  pp. 10-11.   It is unclear to what extent these latter concerns factored in the Court’s preemption analysis, but it is significant that the Court chose to mention them in the ruling. 

The Vioxx Court’s ruling is the first in Louisiana addressing the effects of FDA’s 2006 preamble statements, and it certainly will add fuel to the debate over the deference that should be given FDA’s preemption statement. Several other courts have thoroughly considered the issue and have ruled that FDA’s statement is entitled to great deference.   See, e.g., Sykes v. Glaxo-SmithKline, 484 F.Supp.2d 289, 306-17 (E.D. Pa. 2007) and In re Bextra & Celebrex Mktg. Sales Practices & Prod. Liab. Litig., MDL 1699, 2006 WL 2374742, at *5-12 (N.D. Cal. Aug. 16, 2006).   Those courts note, among other things, that “… an agency’s view of the preemptive effect of its regulations may change over time as the agency gains more experience with the interrelationship between its regulations and state laws.” See In re Bextra, supra, at *8. They further recognize that the FDA is not constrained to express its preemption position in formal rule-making procedures, but rather may “communicate those intentions, for example, through statements in regulations, preambles, interpretive statements, and responses to comments.” Sykes, supra, 484 F.Supp.2d at 314, quoting Horn v. Thoratec Corporation, 376 F.3d 163, 170 n. 12 (3^rd Cir. 2004).  

Merck has requested the United States Fifth Circuit Court of Appeal to address the issue, but it remains to be seen whether the Fifth Circuit will intervene at this juncture. Until the issue is addressed more thoroughly at the appellate levels, it appears that the viability of the preemption defense will continue to be difficult to predict and likely will vary from jurisdiction to jurisdiction.          

"We are very excited to welcome these distinguished attorneys to our law firm. They are an outstanding resource for our clients. Our offices are located in Louisiana's major port cities --- New Orleans, Baton Rouge and Lake Charles -- and this esteemed group brings over 150 years of combined experience in maritime issues, admiralty law, marine insurance, oil & gas, drilling and exploration, pipelines, construction, and energy law to our clients." said Gary A. Bezet, managing partner of the 121-lawyer firm.

Michael A. McGlone, Charles R. Talley, Glenn P. Orgeron, Lisa A. Easterling, Bradley J. Schlotterer, and Lawrence J. Hand, Jr. join the firm as partners in the New Orleans office. The firm also welcomes Karen Waters Shipman, Stephen C. Hanemann, Jamie Domilise Henry, Kelly B. Green, and Michael J. O'Brien as associates. Heather Ashman Johnson joins the firm as of counsel. All were formerly with Lemle & Kelleher, LLP of New Orleans.

About the New Partners:

Michael A. "Mike" McGlone joins the firm as a partner in the New Orleans office. He is the senior-most Admiralty and Maritime lawyer in the firm. He has extensive experience in admiralty and maritime law, maritime litigation, marine insurance, personal injury defense, allisions, collisions, and appeals. Mr. McGlone, a native of New Orleans, received his J.D. from Loyola University Law School in 1975 where he was a member of the Loyola Law Review. He earned his B.A. in Business Administration, cum laude, from Loyola University in 1972. Upon graduation from law school, he served as a law clerk to the Hon. Herbert W. Christenberry of the United States District Court for the Eastern District of Louisiana.

Charles R. "Chuck" Talley joins the firm as a partner in the New Orleans office. He practices in the Admiralty and Maritime and Oil & Gas practice groups. He has particular experience in admiralty and maritime law, personal injury defense, property damage claims, appeals, Corbello litigation, and oil & gas law. Mr. Talley received his J.D. from Florida State University in 1981 where he was a member of the Florida State University Law Review and served as Articles and Notes Editor. He earned B.A., magna cum laude, from Vanderbilt University in 1978.

Glenn P. Orgeron joins the firm as a partner in the New Orleans office. A native of New Orleans, he practices in the Admiralty and Maritime and Construction practice groups. He has particular experience in construction law, consumer credit issues, and product liability litigation. Mr. Orgeron is a Lieutenant Colonel (Retired) in the United States Marine Corps. He has served in a variety of legal positions for the United States Marine Corps, including assignments as Deputy General Counsel, Assistant General Counsel, and General Counsel in wide range of jurisdictions including Hawaii, Japan, the Indian Ocean, Washington, D.C., California, and Panama. During his military career, Mr. Orgeron handled all aspects of felony criminal trials and administrative law litigation matters and advised the staffs of the Chief of Naval Operations, Joint Chiefs of Staff, and major operational commanders on worldwide international and operational law. Prior to his 20-year military career, he served as an electrical engineer with the NASA Manned Spacecraft Center in Houston on the Apollo XI Lunar mission and on the Apollo Lunar Rover development team. Mr. Orgeron received his J.D. from the Tulane University Law School in 1978 and his Master of Legal Letters in International Law from The George Washington University in 1983. He earned his Master of Science in Electrical Engineering from Louisiana State University in 1970 and his Masters of Science in Administration from The George Washington University in 1975. Mr. Orgeron earned his B.S. in Electrical Engineering from Tulane University in 1968.

Lisa A. Easterling joins the firm as a partner in the New Orleans office. She practices in Construction and Litigation groups. Ms. Easterling has extensive experience in complex commercial construction matters, construction defect cases, mold litigation, and Fair Credit Reporting Act litigation. Ms. Easterling received her J.D. from the University of Mississippi Law School in 1992 where she was a member of the Mississippi Law Review. After law school, she served as a judicial law clerk to the Hon. George Arceneaux, Jr. , the Hon. Henry A. Mentz, Jr. and the Hon. Veronica D. Wicker, all of the United States District Court for the Eastern District of Louisiana. She earned her B.S. in Journalism, with honors, from the University of Southern Mississippi in 1988.

Bradley J. Schlotterer, a native of New Orleans, joins the firm as a partner in the New Orleans office. He practices in the Admiralty and Maritime practice group. Following law school, Mr. Schlotterer served as a federal law clerk to the Hon. G. Thomas Porteous, Jr. at the United States District Court for the Eastern District of Louisiana. Mr. Schlotterer received his J.D. from the LSU Law Center in 1995. He earned his B.S. in Finance from Louisiana State University in 1991.

Lawrence J. Hand, Jr. joins the firm as a partner in the New Orleans office. He practices in the Energy, Pipeline and Toxic Tort practice groups. Mr. Hand has extensive experience in energy law, regulation and litigation, insurance coverage and litigation, toxic tort litigation, contract litigation, and complex commercial disputes. He has particular experience in complex legal representation of interstate and intrastate natural gas pipelines, natural gas gathering companies, crude pipelines, natural gas processors, power generators, marketers and distributors, oil and gas producers, chemical manufacturers, and aluminum manufacturers. Mr. Hand also represents life insurers, regional banks, malpractice insurers, and general liability insurers. Mr. Hand received his J.D., cum laude, from the Loyola University School of Law in 1995 where he was a member of the Loyola Law Review. He earned his B.A. in Secondary Speech and Communication Education from the University of New Orleans in 1991.

About the New Attorneys:

Karen W. Shipman joins the firm as an associate in the New Orleans office. She practices in the Admiralty and Maritime practice group. She has particular experience in admiralty issues involving a wide variety of admiralty and oil & gas issues, including Jones Act, personal injury, oil and gas exploration, well blowouts, cargo damage, vessel collisions, and barge damage. She also has experience in construction law, consumer credit reporting, and general personal injury litigation. Following law school, Ms. Shipman served as a contact attorney in New York City. Upon her return to New Orleans, she served as a judicial law clerk to the Hon. Fredericka H. Wicker of the Twenty-Fourth Judicial District Court for the Parish of Jefferson. Karen received her J.D., cum laude, from the Tulane University School of Law in 1998 with a Certificate of Specialization in Admiralty Law. She earned her B.A. in Anthropology and Human and Natural Ecology from Emory University in 1993.

Stephen C. Hanemann joins the New Orleans office as an associate attorney. He practices in the Admiralty and Maritime practice group. He has extensive experience in a wide variety of admiralty issues, including Jones Act, personal injury, oil and gas exploration, pipeline spills, drilling accidents, well blowouts, cargo damage, ship collisions, ship allisions, vessel groundings, lift boat and jack-up rig accidents, vessel liens, sunken barges, vessel mortgage filings, product liability, redhibition, commercial lease agreements, and other commercial litigation issues. Mr. Hanemann received his J.D. from the Loyola University School of Law in 2002. He earned his B.A. in French from the University of Texas at Austin in 1999.

Jamie Domilise Henry joins the New Orleans office as an associate attorney. She is a native of New Orleans and practices in the Admiralty and Maritime practice group. Ms. Henry received her J.D. and her Bachelor's Degree in Civil Law from the LSU Law Center in 2002. She earned her B.A. in Biology (1998) and English (1999) from the University of Mississippi.

Kelly B. Green joins the New Orleans office as an associate attorney. She practices in the Admiralty and Maritime practice group. Ms. Green received her J.D. from the Tulane University School of Law in 2003. She earned her B.A. in Political Science from Mary Baldwin College in 2000.

Michael J. O'Brien joins the New Orleans office as an associate attorney. A native of New Orleans, he practices in the Admiralty and Maritime practice group. He has extensive experience in a wide variety of admiralty issues, including Jones Act and personal injury defense, maritime litigation, oil and gas exploration, drilling accidents, well blowouts, cargo damage, ship collisions, ship allisions, vessel groundings, lift boat and jack-up rig accidents, vessel mortgage filings, product liability, redhibition, as well as premesis liability, construction defect litigation and appeals. Michael received his J.D. from Loyola University in 2001 where he received the Joseph Rault Award for excellence in Admiralty and Maritime Law. He earned his B.A. in Political Science from Iowa State University in 1998. He attended Iowa State on a NCAA football scholarship.

Heather Ashman Johnson joins the New Orleans office as of counsel. A native of New Orleans, Ms. Johnson practices in the Admiralty and Maritime practice group. She has served as Counsel for Brown & Root, Inc. in Houston, Texas and as a General Attorney with the Saudi Arabian Oil Company in Saudi Arabia. She has particular experience in complex commercial maritime issues including all aspects of international sales contract negotiations, chartering activities, downstream joint ventures, and in the negotiation of multi-million dollar cargo damage claims. Ms. Johnson received her J.D. from the University of Pennsylvania Law School in 1981 and a Master of Laws, with distinction, from the Tulane University School of Law in 1983. She earned her B.A. in Political Science, summa cum laude, from Newcomb College in New Orleans in 1977.

About the Admiralty and Maritime, Construction and Energy Law Groups:

Kean Miller represents a wide range of clients in admiralty and maritime issues in Louisiana. Our lawyers have extensive experience in the shipping, marine insurance, tugs and towage, drilling rigs, and oil & gas exploration. Our offices are located in major port cities throughout Louisiana, including New Orleans, Baton Rouge, and Lake Charles, Louisiana. Our Admiralty and Maritime team has significant experience in personal injury defense, property damage claims, appeals, and oil & gas law. We offer clients detailed admiralty experience with regard to activities in the "oil patch" involving the exploration, development, production and transportation of oil and gas. We represent numerous clients in "brownwater" and deepwater (or "bluewater") matters throughout the Gulf Coast region. Many members of the team are involved at a leadership level in the Maritime Law Association, the Greater New Orleans Barge Fleeting Association, the Marine Index Bureau, Mariners Club Port of New Orleans, and the maritime and admiralty sections of the Louisiana State Bar Association and the American Bar Association. We represent our clients before all state and federal courts, governmental regulatory and administrative bodies, and in complex litigation. We serve as counsel to local, national and international oil and gas producers, vessel owners and operators, shipyards, drilling contractors, service companies, brokers, barge lines, and underwriters.

Kean Miller represents many of Louisiana's most successful construction businesses and Fortune 500 companies in construction law matters. We handle legal issues in connection with contract interpretation, including drawings, specifications, change orders and back charges, lien rights and remedies, contract disputes and litigation. In addition, we have substantial experience in the Private Works Act, the Public Works Act and the Miller Act. Our lawyers assist industry clients with issues involving performance and payment, bid and retainage bond rights, liability and responsibility. On behalf of our clients, we have negotiated with owners, general contractors, subcontractors, architects, laborers, material men, bond companies, suppliers, architects, attorneys, bankruptcy trustees, bankers, and public officials.

We also represent clients in lawsuits, arbitration, mediation and alternative dispute resolution proceedings. Recently, we have represented clients in lawsuits involving insurers of engineers and building owners, and suits for and against sub-contractors and architects.

Kean Miller has represented the Louisiana energy industry since its earliest presence in the state. Many of the firm's national and international chemical and refining clients came to our predecessor firm in the 1920s for assistance in the acquisition of land for their first Louisiana sites. As these companies expanded in Louisiana, so did the variety and complexity of their legal needs. Today, these energy clients continue to rely on Kean Miller for their legal services based on our understanding of the complex needs of their industry, our knowledge of their business, and our Louisiana know-how.

Kean Miller has extensive experience in energy law, regulation and litigation. We have particular experience in complex legal representation of interstate and intrastate natural gas pipelines, natural gas gathering companies, crude pipelines, natural gas processors, power generators, marketers and distributors, oil and gas producers, chemical manufacturers, and aluminum manufacturers.

About Kean Miller:

With more than 120 lawyers, Kean Miller serves the legal needs of Louisiana businesses and Fortune 500 companies. The firm maintains two offices in Baton Rouge, and full service offices in New Orleans, Lake Charles and Plaquemine, Louisiana. Kean Miller is the largest law firm in the Greater Baton Rouge region. The firm serves clients in numerous industries including energy, petrochemical and chemical, technology and telecommunications, shipping and transportation, drilling and exploration, pipelines, media and advertising, financial services, insurance, gaming, government and education, health care, manufacturing, real estate, retail, construction and leasing. The firm combines the talent and expertise of its lawyers into multi-disciplinary client and industry teams. These teams are comprised of seasoned legal professionals from a variety of disciplines who are equipped to identify legal and business needs and to develop superior service strategies that provide unmatched support to the client.

For more information, contact Steve Boutwell at 225.389.3736, or steve.boutwell@keanmiller.com

The FDA explains that "the agency makes approval decisions based not on an abstract estimation of [the product's] safety and effectiveness, but rather on a comprehensive scientific evaluation of the product's risks and benefits under the conditions of the use prescribed, recommended, or suggested in the labeling." The FDA expresses concern that, in the past, there have "several instances in which product liability lawsuits have directly threatened the agency's ability to regulate manufacturer dissemination of risk information for prescription drugs in accordance with the act." It explains that state court rulings often misconstrue the agency's labeling requirements as a "minimum safety standard" rather than both a "floor and a ceiling." This inappropriate interpretation can have the dangerous effect of making companies engage in "defensive labeling" - that is, including speculative risks in their product inserts to avoid possible tort liability. As explained by the FDA in its comments, "exaggeration of risk could discourage appropriate use of a beneficial drug, [and] labeling that includes theoretical hazards not well-grounded in scientific evidence can cause meaningful risk information to 'lose its significance.'"

These comments are the most recent and forceful statement by the FDA of the preemptive effect of its labeling decisions. They will certainly provide a new impetus for asserting the federal preemption defense to many types of pharmaceutical product liability lawsuits.

For more information, contact Glenn M. Farnet.

In-house counsel who are employed in Louisiana but are not licensed to practice law here have until July 1, 2005 to file an application for limited licensure to practice under the Louisiana Supreme Court's new In-House Counsel Rule.

Licensure pursuant to the In-House Counsel Rule is discretionary and is not a matter of right. The license issued pursuant to this rule only authorizes the lawyer to practice exclusively for the employer filing the affidavit submitted with the application. The license is automatically terminated if the lawyer's employment with the employer filing the affidavit is terminated. If the lawyer's employment is terminated but the lawyer is immediately thereafter employed by another employer who files an affidavit, the limited license shall be reinstated. A limited license is valid for four years from the date of issuance. The limited license may be renewed for a successive four year period by filing a written application required by the Committee at least 90 days prior to the expiration of the current license. The application for renewal shall be accompanied by a non-refundable fee.

A lawyer admitted pursuant to the In-House Counsel Rule is required to pay the annual disciplinary assessment required of attorneys admitted to practice three years or more in Louisiana, and State Bar Association annual dues during the period of the limited license. The in-house counsel must also comply with the Louisiana Continuing Legal Education requirements.

If you have questions about the In-House Counsel Rule, please contact us, or the Louisiana Committee on Bar Admissions.

The plaintiff filed suit against Black & Decker under the Louisiana Products Liability Act, La. R.S. 9:2800.51, et seq. (the "LPLA"), and claimed that the nail gun was unreasonably dangerous in design. Black & Decker moved for summary judgment on numerous grounds, including: (1) plaintiff's use of the nail gun without wearing safety glasses provided with the product was not a "reasonably anticipated use" since the plaintiff was an experienced carpenter who testified he was aware of the risk of eye injury when using nail guns; (2) the proposed "alternative design" proferred by the plaintiffs was, in fact, provided with the product even though it was not pre-installed; and (3) the plaintiff could not come forward with competent evidence to satisfy the "risk/utility" standard of a defective design claim. The district court granted Black & Decker's summary judgment because he found that the plaintiff did not present sufficient evidence to support a jury finding that the likelihood the product's design would cause the plaintiff's injury and the gravity of that injury outweighed the adverse effect of such alternative design on the utility of the product. See, La. R.S. 9:2800.56(2). He found that the risk of injury with this particular product was lower than it was with other types of nail guns because it was designed to fire brad (or finishing) nails and, thus, had a much lower recoil force and was less likely to double fire. He also concluded that the risk of injury was further reduced because the product manual and labels warned about the dangers of double fire, warned about the risk of ricochet, and provided safety glasses with the product. Lastly, the district court noted that the plaintiff did not present adequate evidence to make a prima facie showing that the proposed alternative design would not unduly impact the utility of the nail gun.

On appeal, the Fifth Circuit essentially agreed with all of the district court's findings and conclusions and affirmed the dismissal of the case.

Mr. Jarman argued the case before the Fifth Circuit, and Mr. Farnet argued the case before the district court.