Foreclosure proceedings in Louisiana can be challenging for lenders and servicers not familiar with the Bayou State’s particular procedures. This blog post provides a brief introduction to Louisiana’s foreclosure process focused on mortgaged commercial or industrial property.

First and foremost, Louisiana is a judicial-foreclosure state. The foreclosing creditor must request and obtain a court order authorizing the seizure and sale of the mortgaged property before the foreclosure sale can happen. If the mortgage allows for foreclosure by executory process, the order authorizing a foreclosure sale on that mortgage may be issued within days of a foreclosure petition being filed. A later blog post will discuss the differences between “executory process” and “ordinary process” foreclosures in Louisiana. Louisiana does not allow a foreclosure sale to occur without some judicial process.

Second, in addition to a judge, Louisiana foreclosure procedure also involves participation from local law enforcement. The Sheriff for the parish (read “county”) where the immovable property and improvements are located must constructively seize the property and post public notices about the seizure and the scheduled sale date. (In Louisiana, the proper legal name for real estate that can be encumbered by a mortgage is “immovable property.” Tangible things that can generally be encumbered by a security agreement and a UCC-1 are called “movable property.”)

The Sheriff and the foreclosing creditor’s attorney will both work to ensure that the required notices are posted, advertised in the newspaper, and sent to all Mennonite notice parties before the foreclosure sale occurs. Having the Sheriff involved also helps to keep the peace during the entire process. In exchange for this work, the Sheriff is entitled to a commission equal to three (3%) percent of the price that the property brings at the foreclosure auction, called a “Sheriff’s sale” here. The foreclosing creditor can credit bid its debt at the Sheriff’s sale, but it must pay the Sheriff’s commission and all costs of the sale in cash before the Sheriff will convey title to the property.

For servicers contemplating foreclosure on commercial or industrial property worth millions of dollars, the prospect of a three (3%) commission, paid in cash, can be problematic. Sometimes lenders and servicers can reduce their out-of-pocket expense on an already-non-performing loan by filing the foreclosure lawsuit in federal court instead of state court. The U.S. Marshal’s Office, not the local Sheriff, will oversee the foreclosure process arising from a foreclosure a lawsuit filed in federal court. The U.S. Marshal’s commission is calculated at one and one-half (1.5%) percent of the sale price (after the first $1,000 of sale proceeds), and is capped by federal regulation at $50,000. See 28 CFR § 0.114(h). There are pros and cons to filing a foreclosure lawsuit in federal court instead of in state court. A later blog post will discuss the procedures for foreclosures in federal court in Louisiana.

An attorney experienced with Louisiana’s foreclosure laws and procedures will be able to help a servicer determine if a federal court foreclosure is possible, and if federal court may be a better path than state court in light of the particular property, borrower, and loan documents involved, among other considerations. Kean Miller works with lender, servicers, and law firms from across the country on workouts, foreclosures, dation en paiement (read “deed in lieu”), note sales, and commercial bankruptcy cases.

Earlier this month, the U.S. Supreme Court granted cert in the case of Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC. The question before the Court is whether, under federal admiralty law, a choice-of-law clause in a marine insurance policy can be rendered unenforceable if enforcement is contrary to a strong public policy of the state whose law is displaced.

The Supreme Court’s resolution of this rather hair-splitting dispute is likely to have significant implications for the marine insurance industry in particular, and could even extend to non-maritime insurers as well. The Court is poised either to expose a chink in the armor of choice-of-law clauses and their presumed enforceability under maritime law, or to shore up the defense that such clauses afford to insurers. And depending on how broad the Court’s ruling is, litigants in non-maritime contexts are sure to take their cue accordingly.

The Great Lakes case arose in 2019, when a yacht owned by Raiders Retreat Realty Co., LLC ran aground near Fort Lauderdale, Florida, sustaining at least $300,000 in damage. Raiders had insured the yacht with hull coverage through a policy from marine insurer Great Lakes Insurance SE. Raiders submitted a claim to Great Lakes, which rejected it. The insurer claimed that the yacht’s fire-extinguishing equipment was not timely recertified or inspected and that Raiders had misrepresented the state of this equipment in the past, thereby voiding the policy.

Great Lakes then filed suit in the U.S. District Court for the Eastern District of Pennsylvania to determine whether the policy was in fact void. Raiders denied any misrepresentation and brought five counterclaims, including breach of fiduciary duty, bad faith, and a violation of Pennsylvania’s Unfair Trade Practices Law.

Great Lakes moved for judgment on the pleadings on these three counterclaims on the grounds that each arose under Pennsylvania law and therefore contravened the insurance policy’s choice-of-law provision. That clause stated:

It is hereby agreed that any dispute arising hereunder shall be adjudicated according to well established, entrenched principles and precedents of substantive United States Federal Admiralty law and practice but where no such well established, entrenched precedent exists, this insuring agreement is subject to the substantive laws of the State of New York.

Raiders argued that the choice-of-law clause was unenforceable because applying New York law would frustrate Pennsylvania’s strong public policy of punishing insurers that deny coverage in bad faith.

The district court disagreed, holding that “the public policy of a state where a case was filed cannot override the presumptive validity, under federal maritime choice-of-law principles, of a provision in a marine insurance contract.” The key to this result was the court’s interpretation of the Supreme Court’s decision in The Bremen v. Zapata Off-Shore Co. as relevant to choice-of-forum clauses, not choice-of-law clauses.

In The Bremen, the Supreme Court noted that “[a] contractual choice-of-forum clause should be held unenforceable if enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial decision.” Distinguishing The Bremen, the district court determined that in the context of choice-of-law provisions, presumptive enforceability was the rule. Therefore, New York law should apply as the parties contracted, the court held, rendering Raiders’ Pennsylvania-based counterclaims inappropriate.

Raiders appealed the dismissal of its three counterclaims, and the Third Circuit reversed the lower court’s ruling. The appellate court reasoned that the district court had construed The Bremen too narrowly, as only applying to forum clauses. Importantly, the court noted that other circuits, including the Fifth Circuit, have extended The Bremen to choice-of-law contexts.

The Third Circuit did not do away with the principle of the presumptive enforceability of choice-of-law provisions, but it determined that one exception to that rule is where a strong public policy of the forum state would be thwarted by enforcing the choice-of-law clause.

The Supreme Court’s agreement to hear Great Lakes signals one of two things: either the Court is ready to put the presumption back in presumptive enforceability, or instead place its seal of approval on a fairly significant exception to the enforcement of choice-of-law clauses in marine insurance policies.

Stay tuned for more coverage as this case further unfolds before the Supreme Court.

With the Corporate Transparency Act (CTA) set to take effect on January 1, 2024, an estimated 32 million entities will soon be required to report personal information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. While the law is aimed at curbing money laundering, terrorist financing, and other financial crimes, its broad regulations will have a sweeping impact on many companies doing business in the U.S.

Companies subject to the CTA will need to file with FinCEN a Beneficial Ownership Information Report containing the full legal name, date of birth, current residential or business street address, and an image of an acceptable identification document for each beneficial owner. More information about the CTA’s reporting requirements can be found here.

Here are some steps that companies can take to prepare for the implementation of the new regulations:

1. Review Your Corporate Structure

Review your corporate structure and identify who the beneficial owners of your company are. Generally, a beneficial owner is anyone who owns 25% or more of a company’s equity or voting rights or has substantial control over the company.

For corporations, beneficial owners can include shareholders, directors, and officers. For LLCs, beneficial owners can include members and managers.

2. Create a Beneficial Ownership Register

Once you have identified the beneficial owners, create a beneficial ownership register. The register should include the name, address, date of birth, and copy of a government-issued photo ID (such as a passport or driver’s license) of each beneficial owner.

It’s important to keep the register up to date and accurate, as inaccurate or incomplete information could result in fines or other penalties.

3. Develop a Compliance Program

Companies should consider developing a compliance program to ensure they are in compliance with the CTA. The program should include policies and procedures for identifying and verifying beneficial owners, maintaining the beneficial ownership register, reporting beneficial ownership information to FinCEN, and safeguarding the beneficial owners’ personal information collected by the company.

4. Ask for Help if Necessary

Companies may need to work with law firms to help them comply with the CTA. An attorney can help identify beneficial owners, create and maintain the beneficial ownership register, and report beneficial ownership information to FinCEN.

5. Stay Up to Date on Changes

U.S. companies should stay up to date on any changes to the CTA or FinCEN regulations. The CTA is a new law, and it’s possible that there could be changes or clarifications to the law in the future.

In conclusion, the Corporate Transparency Act represents a significant change in U.S. corporate law, and companies should soon start preparing for its implementation. By following these steps, companies can ensure they are prepared to comply with the CTA when it becomes effective in 2024.

The Louisiana Supreme Court answered the question of when general damages are recoverable for mental anguish by tort plaintiffs who suffer no physical injury in Spencer v. Valero Refining Meraux, LLC. In this action which involved the claims of four plaintiffs, an accident, fire, and explosion occurred at the Valero refinery in Meraux, Louisiana at 12:45 a.m.[1] Nearly 32 hours later, at 10:00 a.m. on April 11, 2020, the fire was extinguished. Although no significant levels of chemicals were detected as a result of the explosion, multiple residents who lived in the vicinity of the refinery filed suit for negligent infliction of emotional distress.[2]

In their complaints, each plaintiff alleged hearing loud sounds at the time of the explosion and feeling nervous or anxious after the explosion. The plaintiffs also alleged disturbances to their sleep, but each were able to return to normal sleep schedules and resume their daily activities in the days and weeks after the explosion.[3] The court noted that none of the plaintiffs received medical treatment or experienced any physical symptoms, and the damages sought by the plaintiffs were only for general fear and anxiety resulting from the explosion.

In determining whether Valero was liable for negligent infliction of emotional distress, the court considered the jurisprudence relied on by the parties. In Moresi v. Department of Wildlife and Fisheries, the Louisiana Supreme Court considered whether a trial court properly awarded plaintiffs damages for negligent infliction of emotional distress.[4] The plaintiffs had not alleged that they suffered any bodily harm or property damage as a result of the Louisiana Department of Wildlife and Fisheries agents’ negligence. Instead, the plaintiffs alleged that the agents’ ordinary negligence caused them mental disturbance.

The Louisiana Supreme Court noted in Moresi that generally, if a defendant’s conduct is merely negligent and causes only mental disturbances, in the absence of accompanying physical consequences or injuries, the defendant is not liable for such emotional disturbance. Louisiana courts have deviated from the general rule; however, as the court in Moresi noted, where there have been deviations, the cases all fell into categories where there was an “especial likelihood of genuine and serious mental distress, arising from special circumstances. . . .”[5] In Moresi, the court found that the plaintiffs’ mental disturbances were not severe, or “related to personal injury or property damage, and the plaintiffs were not in great fear of their personal safety.” Therefore, the case did not fall into a category that had an especial likelihood of genuine and serious mental distress, and it lacked any elements that would guarantee the genuineness of the injury claimed.[6]

In Spencer, after examining the relevant jurisprudence, the Louisiana Supreme Court noted that for negligent infliction of emotional distress, a plaintiff is required to prove “the especial likelihood of genuine and serious mental distress, arising from the special circumstances, which serves as a guarantee that the claim is not spurious.”[7] This rule must be stringently applied in cases that are inherently speculative in nature, and the defendant’s actions must constitute negligence. Additionally, the plaintiff’s mental disturbance must be “serious.”

The court noted that in analyzing whether a plaintiff’s mental disturbance is serious, evidence of generalized fear or mere inconvenience is insufficient.[8] A plaintiff is not required to present evidence of medical treatment or history, but he or she bears the burden of presenting sufficient evidence on the nature and extent of the mental anguish suffered. Further, emotional distress does not need to be reasonably foreseeable or severe and debilitating, and whether mental distress is serious is a matter of proof. 

These guidelines, the court went on, must be applied with necessary policy considerations, including deterring future harm, economic considerations, and opening the floodgates to unnecessary litigation.[9]  The court considered that the purpose of tort law is “to protect some persons under some risks.”  In applying the policy considerations and guidelines to the facts of this case, the court found that Valero owed a duty to protect those in the surrounding community and that the plaintiffs fell within the class of plaintiffs to whom the duty is owed. The court also found that Valero breached the duty owed, and that breach was the cause-in-fact of the plaintiffs’ generalized fear and anxiety. However, under the stringent application of the rule from Moresi, the plaintiffs failed to prove the “especial likelihood of genuine and serious mental distress, arising from the special circumstances, which serves as a guarantee that the claim is not spurious.” Further, no plaintiff put forth sufficient evidence that their mental disturbances were “serious.” Therefore, the plaintiffs did not prove the element of damages within the parameters of claims for negligent infliction of emotional distress absent physical damage or injury, and there was no factual basis for an award for such claim.

The Louisiana Supreme Court added that recovery for negligent infliction of emotional distress in the absence of physical damage or injury is not precluded. However, because of the nature of such claims, courts must be mindful of the policy goal of preventing spurious claims, and not every harm yields accompanying liability and damages. Here, none of the plaintiffs established that the mental disturbances they suffered were “serious.”

As Justice Crain noted his concurrence, however, one problem with the majority’s decision is that “serious” was not defined; rather, it was left to be defined “in an ad hoc manner.”[10] Crain signaled that he would move in the direction of code-based analysis rather than fact-specific inquiry the court adopted.[11] He then suggested that the “zone of danger test” was applicable in this case, and Valero did not breach its duty to the plaintiffs because there were no chemicals released into the area of their homes. Also in concurrence, Justice Weimer noted that in limiting recovery, he would not impose guidelines which are applied with policy considerations that are not tethered to legislation.[12] Instead, he suggested that the Louisiana Civil Code provides a more appropriate analysis under article 2315.6 which reflects the legislative will of limiting claims for negligent infliction of emotional distress without physical damage or injury. 

The majority opinion in Spencer, written by Justice Genovese, rejected a “direct duty” owed by defendants to plaintiffs as a condition for recovery of negligent infliction of emotional distress in the absence of physical injury or damage. Instead, the court applied guidelines from relevant jurisprudence and policy considerations to come to its conclusion, and it emphasized that these cases are fact intensive. In doing so, the court rejected a code-based analysis and established a fact-specific standard for sufficient proof of damages.

[1] Spencer v. Valero Refining Meraux, L.L.C., 2023 WL 533268, at *1 (La. 2023).

[2] Id. at *2.

[3] Id. at *3–4.

[4] 567 So. 2d 1801 (La. 1990).

[5] Moresi, 567 So. 2d at 1096 (In determining whether the sufficiency of the plaintiff’s claim, the court noted the general rule that the absence of accompanying physical injury, illness, or other physical consequences, a defendant is not liable for such emotional disturbance. However, Louisiana has deviated from the general rule. The court noted circumstances where Louisiana courts have allowed recovery for negligent infliction of emotional distress in the absence of physical injury, including: negligent transmission of a message, especially one announcing death, mishandling of corpses, failure to install, maintain or repair consumer products, failure to develop film, and negligent damage to one’s property while the plaintiffs were present and saw their property damaged).

[6] Id.

[7] Id. at *8.; see also Moresi, 567 So. 2d at 1096.

[8] Spencer, 2023 WL 533268, at *8.

[9] Id. at *9.

[10] Id. at *16 (Crain, J., concurring).

[11] Id. at *14 (Crain, J., concurring).

[12] Id. at *12 (Weimer, C.J., concurring).

On February 2, 2023, the New Orleans City Council adopted an ordinance modeled after that of the City of Baltimore, Maryland, wherein properties found to be “chronic public nuisances” may be prohibited from holding occupational licenses for a period of up to two years. The ordinance does not apply to residential properties. The so called “padlock” ordinance defines a “chronic nuisance property” as follows:

“Chronic nuisance property” means any property or group of adjoining properties under common ownership that, on three or more separate occasions within a one-year period, were used:

The Superintendent of the New Orleans Police Department (“NOPD”) will determine whether a property constitutes a chronic nuisance and will notify the “person in charge” of the property accordingly.  The person in charge will be given an opportunity to work with NOPD on strategies to abate the nuisance activities.  If the person fails to respond to the notice, the matter will be referred to the City Attorney for prosecution.  If a court determines that the property is a chronic nuisance property, the court may order the property closed and secured against all unauthorized access, use, and occupancy for a period of up to two years, in addition to civil penalties. 

The Superintendent will report to the City Council twice per year with information regarding all properties found to be chronic nuisances, the reasons for the conclusion, the dates of NOPD service calls and reference numbers, the notice sent to the person in charge, any agreed abatement plan, a status update, penalties assessed, and the demographic information of the person in charge. 

Any judgment finding a property to be a chronic nuisance may be filed in the public records and will run as a covenant with the land.  Such judgments will be effective against third parties.  For good cause shown, if the City believes that the nuisance is not likely to continue, the chronic nuisance judgment may be released.  No particulars were adopted as to the release process.

UPDATEOn February 15, 2023, the Louisiana Department of Revenue issued Revenue Information Bulletin (“RIB”) No. 23-010 stating that qualifying businesses can submit an application under the Fresh Start Proper Worker Classification Initiative by sending an email to FreshStart.LDR@LA.GOV. RIB No. 23-010 also states that in order to qualify, the employer must have consistently treated the entire class or classes of workers (i.e., providing the same or similar services) as non-employees for the last three years. For instance, if income taxes were withheld or unemployment contributions were made for a worker, that worker was not treated as a non-employee. The Louisiana Department of Revenue will review applications and notify applicants in writing of their eligibility. An applicant who receives notice of the acceptance of their application must treat the class or classes of workers covered by the application as employees beginning on the reclassified date stated in the closing agreement. This blog post was originally published in January 2023 and has been updated to reflect these developments.

The Louisiana Department of Revenue (“LDR”) recently promulgated rules to implement the Fresh Start Proper Worker Classification Initiative, and also published guidance to explain when and how businesses should file non-employee information returns (Forms 1099-NEC) directly with the LDR. These developments are potentially interrelated and may facilitate the LDR’s efforts to monitor the classification and taxation of workers as employees or independent contractors.

Fresh Start Proper Worker Classification Initiative

In 2021, Louisiana introduced its Fresh Start Proper Worker Classification Initiative and Voluntary Disclosure Program that included tax amnesties for businesses looking to voluntarily properly classify workers previously classified as non-employees (i.e., independent contractors), as employees.[1] That law was due to take effect from January 1, 2022, but was suspended because certain provisions were not in conformity with federal law.[2]

The law was reintroduced in 2022 after modifications that brought it into conformity with federal law.[3] The Voluntary Disclosure Program provides for a waiver of interest for eligible employers who opt to make a disclosure and pay unemployment taxes and penalties[4] for workers who should have been classified as employees but were not over an agreed look-back period.[5] The Louisiana Workforce Commission is authorized to promulgate rules and regulations for the implementation of the Voluntary Disclosure Program.[6]

The Fresh Start Proper Worker Classification Initiative on the other hand allows an eligible taxpayer to voluntarily reclassify a worker as an employee for future tax periods without being liable for any withholding tax or related interest and penalties on past amounts paid to such workers.[7] The LDR is authorized to promulgate rules and regulations for the implementation of the Fresh Start Proper Worker Classification Initiative.[8]

The LDR has now adopted rules to implement the Fresh Start Proper Worker Classification Initiative. The rules provide that applications are to be submitted electronically between January 1, 2023 and December 31, 2023 and must be accompanied by documentation that includes details regarding the workers for whom reclassification is sought and copies of related IRS Forms 1099-NEC and 1099-MISC for the past three years. If the LDR determines that the taxpayer is ineligible for the Program, written notice will be sent within thirty (30) days of the determination. The acceptance of an application constitutes a joint closing agreement with the LDR which is deemed to include conditions requiring the taxpayer to timely report and remit withholding taxes and unemployment insurance contributions for the reclassified employees. The closing agreement can be voided by the LDR if the taxpayer fails to comply with the prescribed conditions.[9]

State Filing of Forms 1099-NEC

The LDR recently issued Revenue Information Bulletin 23-006 dated January 12, 2023 requiring businesses to directly file with the LDR any Forms 1099-NEC for services provided in Louisiana or for services performed by an individual residing in Louisiana at the time the services were performed, but only under certain circumstances. This requirement applies from the 2022 tax year onwards. The deadline for the direct filing with the LDR is February 28 of each year.

When do Businesses Need to File Forms 1099-NEC with LDR

The direct filing requirement is triggered only if a business has not timely filed Forms 1099-NEC with the Internal Revenue Service (“IRS”) electronically. It does not apply where the business has either (i) timely filed Forms 1099-NEC with the IRS through their FIRE system after opting into the Combined Federal/State Filing Program (CF/SF) and identifying the data by the Louisiana state code of 22, or (ii) timely filed Forms 1099-NEC through commercial third-party software and authorized the IRS to share the information with LDR.

The requirement will apply where only a paper filing of Forms 1099-NEC has been made with the IRS, whether or not an electronic filing is mandated.

How do Businesses File their Forms 1099-NEC with LDR  

If the state filing requirement is triggered, businesses filing fifty (50) or more Forms 1099-NEC with LDR must do so electronically using LDR’s LaWage application.[10] For paper filings, businesses may use Form R-91001, Annual Summary and Transmittal of Form 1099-NEC.

Businesses with an LDR account number must use that number when filing, otherwise the Federal Employer Identification Number (“FEIN”) must be included. Sole proprietors who are not required to obtain a FEIN and have not been issued an LDR account number may use their Social Security Number.


The direct filing requirement was initially introduced in 2021, in the same legislative session as the worker classification amendment, and was to similarly apply from January 1, 2022.[11] However, due to the state of emergency on account of Hurricane Ida recovery efforts and COVID-19, the requirement was administratively waived for the 2021 tax year by Revenue Information Bulletin No. 22-006 dated January 20, 2022.

At the time that it was enacted, the requirement was introduced in tandem with other amendments[12] that suggest that its intent was to make available information from Louisiana-related Forms 1099-NEC to the Department of Children and Family Services in relation to the family and child support program.

Because Forms 1099-NEC are filed for independent contractors but not for employees, it is possible that the direct filing requirement may also have relevance for the LDR to monitor worker classification going forward.

For additional information, please contact: Jaye Calhoun at (504) 293-5936 or Willie Kolarik at (225) 382-3441.

[1] Act No. 297 of the 2021 Regular Session.

[2] Revenue Information Bulletin No. 21-031 dated December 1, 2021 and Emergency Rule dated September 9, 2021 issued by the Louisiana Workforce Commission.

[3] Act No. 406 of the 2022 Regular Session and La. Admin. Code 61:III.2301 effective January 20, 2023.

[4] Under La. R.S. 47:1775(F), State Unemployment Tax Act (SUTA) dumping penalties and fraud penalties will not be waived under federal law under any circumstances.

[5] La. R.S. 23:1771, 1773 and 1775. The look-back period must include the three-year experience rating period.

[6] La. R.S. 23:1773(B).

[7] La. R.S. 47:1576.3. In addition, La. R.S. 47:1576.4 provides for a safe harbor under which putative employers meeting all the prescribed requirements will not owe withholding tax, interest or penalties otherwise due for their workers.

[8] La. R.S. 47:1576.3(H).

[9] La. Admin. Code 61:III.2301.

[10] La. Admin. Code 61:I.1515.

[11] Act No. 285 of the 2021 Regular Session, which introduced La. R.S. 47:114.1.

[12] La. R.S. 46:236.14(D)(2) and La. R.S. 47:1508(B)(23).

On February 15, 2023, the Louisiana 4th Circuit Court of Appeal affirmed the trial court’s award of $2.75M each to the two surviving children of a deceased mesothelioma plaintiff and also affirmed the trial court’s award of judicial interest relating back to the date the original petition was filed.

In December 2021, after a multi-day trial in Civil District Court in Orleans Parish before Judge Rachael Johnson, the jury awarded sisters Jill and Shelley Stauder each $2.75M in wrongful death damages for the death of their father, David Stauder, Jr. (“Mr. Stauder”).[1] This amount is nearly six times higher than the prior approximate $500,000 average wrongful death awards. The jury found that Mr. Stauder was exposed to asbestos while working as a pipefitter for several employers at various industrial sites between the 1960s and the 1980s, which caused him to develop, and later die from, mesothelioma. At the time of trial, premises owner Union Carbide Corporation (“UCC”) was the only remaining defendant. The jury found seven defendants liable, including UCC, and assigned UCC 20% fault on the wrongful death claim. Further, the trial court awarded plaintiffs judicial interest against UCC from the date the original petition was filed in March 2016 even though UCC was not added to the lawsuit until the 6th amended petition filed in July 2018. UCC appealed.

UCC argued on appeal that the jury erred in awarding the Stauders each $2.75M in wrongful death damages, far exceeding any jurisprudential award to adult children in the 4th Circuit, because only generalized testimony was offered in support of the Stauders’ claim. UCC asserted that such testimony is insufficient to support the jury’s large award. At trial, Jill Stauder testified via video regarding her relationship with her father, while Mr. Stauder’s girlfriend testified as to Shelley Stauder’s relationship with her father due to Shelley being unavailable to appear at trial because of a mental disability.

The Appellate Court found that although generalized testimony was offered about the mutual love the Stauders and their father shared, specific testimony was also offered regarding the unique relationship each daughter had with their father and the impact of his death on each. Accordingly, the Court found that the jury’s reliance on this testimony was not an abuse of its vast discretion and affirmed the $2.75M award to each daughter. The Court distinguished the Stauder testimony from the testimony, or lack thereof, in the Lege[2] case relied on by UCC. In Lege, although the decedent’s four children were present at trial, only two testified and the testimony provided was general in nature.

Regarding judicial interest, UCC maintained that it should only be ordered to pay judicial interest from the date UCC was added to the lawsuit (July 2018), and not the date the original petition was filed two years earlier (March 2016). UCC argued that because the Stauders’ claim against UCC does not arise out of a “single tortious occurrence” with the original defendants named in the original petition, UCC should not have to pay judicial interest dating back to the filing of the original petition. The Court found that UCC failed to provide any supporting jurisprudence for its interpretation of “single tortious occurrence.” Further, the Court found that the Louisiana Supreme Court had previously held that prejudgment interest relates back to the date the plaintiff filed suit against the first solidary defendant. Accordingly, the Court affirmed the trial court’s award of judicial interest from the date the original petition was filed.

[1] The jury additionally awarded $4.85M in survival damages, with UCC’s share being $693K. This award was not appealed.

[2] Lege v. Union Carbide Corporation, 20-252 (La.App. 4 Cir. 04/01/2021), 2021 WL 1227137, as clarified on reh’g, 20-252 (La.App. 4 Cir. 05/12/2021), 2021 WL 1917784.

Judge Donald Johnson, of the Louisiana 19th Judicial District Court (“JDC”), granted an appeal of a final order of the Louisiana Pilotage Fee Commission (“PFC”) in Docket No. P20-001, that approved numerous rate increases for the Crescent River Port Pilots’ Association (“CRPPA”). The appeal was jointly filed by the Louisiana Chemical Association (“LCA”) and Louisiana Mid-Continent Oil & Gas Association (“LMOGA”) – – two Louisiana Industry trade associations who participated as Intervenors in the PFC docket to oppose the pilot rate increases that would ultimately be paid by Industry for shipping on the lower Mississippi River. As background, the PFC is authorized by Louisiana statute to regulate the rates charged by the pilot associations for pilotage services in their respective service areas in which they have the exclusive right to operate.

The PFC order granted CRPPA an increase in of $112,000 in target compensation per pilot per year, an additional 15 pilots for inclusion in rates, annual Cost of Living Adjustments and other relief. LCA and LMOGA appealed the PFC’s order to the 19th JDC, arguing that the PFC order violated the PFC’s statutory authority, is not supported by evidence and is arbitrary and capricious and should be reversed.

After briefing and oral argument, the 19th JDC reversed the PFC on all errors of law and evidence argued by LCA-LMGOA. The 19th JDC held:

The PFC authorization of tariff increases to reflect the 24% ($112,000) increase in target compensation, the implementation of a COLA, the fixing of target compensation based on a workload limited to “for 16,151 turns,” and the increase of 15 pilots, violates the PFC statutory authority pursuant to La. R.S. 34:1122, is not supported by the evidentiary record, and is arbitrary, capricious and contrary to law, and is reversed.

Louisiana Chemical Association and Louisiana Mid-Continent Oil and Gas Association v. Louisiana Pilotage Fee Commission, Case No. C-715244, Louisiana 19th Judicial District Court, Judgement at 2 (December 9, 2022).

The PFC and CRPPA have appealed the decision of the 19th JDC to the Louisiana First Circuit Court of Appeals.

On January 12, 2023, the Louisiana Board of Tax Appeals (the “Board”) granted a motion for partial summary judgment in Apple, Inc. v. Samuel, Dkt. No. L01283 (January 12, 2023) and held that the Internet Tax Freedom Act (the “ITFA”) prohibited Orleans Parish from imposing sales tax on subscription fees paid for the use of personal storage on Apple’s iCloud. In so holding, the Board also noted that personal electronic storage services are not specifically enumerated as taxable services in La. R.S. 47:301(14) and thus would not be considered taxable services for Louisiana sales and use tax purposes.

Scope of “Internet Access” under the ITFA

The ITFA imposes a moratorium on states (and their political subdivisions) levying taxes on “Internet Access” or imposing discriminatory taxes or multiple taxes on electronic commerce.[1] In 2007, the definition of “Internet Access” was expanded to include several items including “personal electronic storage capacity” when “provided independently or not packaged with Internet access.”

Apple’s iCloud storage offering allows a user to upload personal digital content (including data, photos, music, videos etc.) to remote servers, and retrieve that data, via an internet connection, by using any of their Apple devices or other devices connected to the internet. iCloud comes preloaded on Apple devices with no charge for its use. However, a user seeking to store more than 5 gigabytes of data must pay a monthly subscription fee, with storage plans ranging from $0.99 to $9.99 a month. A user does not receive any additional software upon subscribing to one of these plans, only increased storage on iCloud.

The Orleans Parish Tax Collector (the “Collector”) conducted an audit of Apple and issued a notice of assessment that sought to impose sales tax on the subscription fees Apple received for iCloud storage subscriptions. Apple appealed the assessment to the Board.

In its Motion for Partial Summary Judgment (“MSJ”),[2] Apple asserted that the subscription fees paid for additional iCloud storage qualified as “Internet Access” under ITFA, and that Orleans Parish, as a subdivision of the state of Louisiana, was preempted from imposing a sales tax on those fees under the Supremacy Clause[3] of the United States Constitution. The Collector notified the Board that it would not oppose, nor consent to, Apple’s motion, and did not appear at the hearing.

The Board analyzed the definition of “Internet Access” using dictionary definitions and concluded that the iCloud offering fit within the ordinary meaning of the statutory language under ITFA and that Apple’s prayer for partial summary judgment was therefore supported by the “uncontested facts and the plain language of the statute.”[4]

Taxability under the Louisiana statute

In its holding, the Board also noted an additional ground for granting Apple’s motion, specifically, that iCloud storage is a service that is not among the enumerated taxable services under Louisiana law[5]. As a result, iCloud storage should be treated as a non-taxable service. The Collector also did not oppose the affidavit characterizing iCloud storage as a service.


Similar proceedings related to the taxation of digital products and services are ongoing in other states. For example, Apple has also asserted that the ITFA operates to prohibit Texas from subjecting its iCloud Storage and iTunes Match services to Texas sales tax as taxable as data processing services.[6] While the Collector did not oppose Apple’s motion in Louisiana, the Texas Comptroller of Public Accounts ( the “Comptroller”) is arguing that the Texas sales tax does not violate the ITFA because the Texas tax did not single out transactions using the internet that would be barred by the ITFA, but instead singled out transactions using a computer. In the alternative, the Comptroller has asserted that the ITFA is itself unconstitutional under the anti-commandeering doctrine that does not permit Congress to issue orders directly to the states.[7]

In Comcast[8], the ITFA was also one of the grounds on which Maryland’s digital services tax (“DST”) on advertising was held by a district court to be unconstitutional. Specifically, in Comcast the court in that case held that the DST violated ITFA because traditional advertising was not equivalently taxed by the state. The Maryland Supreme Court has since granted direct appeal of the trial court’s ruling but denied the state’s motion to stay enforcement pending the appeal.[9]

What makes the Louisiana case unique is that ITFA arguments usually require a demonstration that the state is discriminating between activities carried out through the internet and those that are carried out offline, as in the Texas and Maryland proceedings above. However, in this case the Board highlights certain activities that qualify as “Internet Access” that states cannot tax at all, whether discriminatorily or otherwise.

The additional ground noted by the Board in this case also affirms that services are not generally taxable unless specifically covered under the Louisiana sales tax statute. At present, the statute only taxes eight categories of service.[10] The state and its political subdivisions are prohibited from subjecting any service that is not enumerated in the statute to state or local sales or use tax.

At present it is not clear whether Orleans Parish intends to appeal the Board’s decision. However, any business that provides personal data storage services or other services listed in the ITFA should review its Louisiana state or local sales and use taxes and consider whether it is properly classifying its digital services as taxable or non-taxable. Similarly, any customer that has paid a significant amount of Louisiana state or local sales or use taxes on non-taxable digital services should also consider whether it is appropriate to file a refund claim.

For additional information, please contact: Jaye Calhoun at (504) 293-5936 or Willie Kolarik at (225) 382-3441.

[1] ITFA Sec. 1101(a)(1) & (2) and 1105(5)(A) & (E).

[2] The MSJ was limited to local sales tax on the subscription fees for iCloud storage, while the remainder of Apple’s petition (Docket No. L01283) included subscription fees paid for Apple Music.

[3] Article VI, Paragraph 2 of the Constitution of the United States.

[4] The Board also referenced J2 Cloud Servs., Inc. (f/k/a J2 Glob., Inc. & J2 Glob. Commc’ns, Inc.) v. Comm’r of Revenue, Docket No. C325426, 2019 WL 1102964, at7 (Mass. App. Tax. Bd. Feb. 27, 2019), in which the Massachusetts Appellate Tax Board rejected an ITFA challenge because any storage services in that case were not provided for independently but were packaged along with an eFax service.

[5] La. R.S. 47:301(14).

[6] Tex. Tax Code Sec. 151.0035.

[7] Apple Inc. v. Glenn Hegar, Comptroller of Public Accounts et al., Case No. D-1-GN-20-004108, District Court of Travis County, Texas, 345th Judicial District.

[8] Comcast v. Comptroller, Case No. C-02-cv-21-000509 (Cir. Ct. for Anne Arundel County, Oct. 20, 2023).

[9] Comcast v. Comptroller, Case No. SCM-REG-0032-2022 (S. Ct. of Md., Jan. 20, 2023).

[10] La. R.S. 47:301(14).

In response to a court ruling finding that New Orleans’ requirement that the holder of a residential short-term rental (“RSTR”) license hold a homestead exemption violated the Constitution’s Commerce Clause, the New Orleans City Planning Commission is making recommendations for changes to the RSTR regulations.  In particular, on January 27, 2023, the City Planning Commission adopted recommendations that there be only one RSTR license issued per person, that only one RSTR could be licensed per block face (with a possible process for an exemption to be determined), that the maximum number of guests in an RSTR be reduced from ten to six, and that the maximum number of bedrooms in an RSTR be reduced from five to three.  The issue will be considered by the New Orleans City Council before the court-imposed March 31, 2023, deadline.

In response to publicity that the 53 affordable housing units planned for the old Brown’s Dairy plant (1300 Baronne Street) were instead allegedly sold to a commercial short-term rental operator, the New Orleans City Council adopted a resolution on February 2, 2023, that created an Interim Zoning District (“IZD”) entitled “Preserving Residential Character Interim Zoning District”, which would cover areas of Central City, the Lower Garden District, and the Irish Channel.  The IZD would temporarily prohibit the issuance of new commercial STR licenses in lots zoned HU-MU (Neighborhood Mixed-Use District), MU-1 (Medium Intensity Mixed-Use District), and MU-2 (High Intensity Mixed District) pending a public hearing before the City Planning Commission to amend the current short term rental regulations.  Existing licenses may be renewed and an appeal of the IZD is permitted for new license applicants.  By law, an IZD is a temporary measure to be effective for a maximum of one year, with subsequent extensions possible.

The City Council also created a city-wide IZD known as the “Bed and Breakfast Interim Zoning District”, which causes all bed and breakfast uses, whether principal or accessory, to be conditional uses in zoning districts where such uses are currently permitted.  This legislation was passed to anticipate any persons now prohibited from applying for a short-term rental license from seeking to circumvent regulations by applying for a bed and breakfast license.