Dempster v. Lamorak Insurance Company

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

CALLEN DEMPSTER, et al. CIVIL ACTION

VERSUS CASE NO. 20-95

LAMORAK INSURANCE CO., et al. SECTION: “G”(1)

ORDER AND REASONS

Before the Court is Defendant General Electric Company’s (“General Electric”) “Motion

for Reconsideration.”1 In this litigation, Plaintiffs Louise Ella Simon Dempster, Tanna Faye

Dempster, Steven Louis Dempster, Janet Dempster Martinez, Marla Dempster Loupe, Callen

Dempster, Jr., Annette Dempster Glad, and Barnett Dempster’s (collectively, “Plaintiffs”) allege

that Decedent Callen L. Dempster (“Mr. Dempster”) was exposed to asbestos and asbestos-

containing products that were designed, manufactured, sold, and/or supplied by a number of

Defendant companies while Mr. Dempster was employed by Defendant Huntington Ingalls

Incorporated (f/k/a Northrop Grumman Shipbuilding, Inc., f/k/a Northrop Grumman Ship

Systems, Inc., f/k/a Avondale Industries, Inc., and f/k/a Avondale Shipyards, Inc.) (“Avondale”).2

In the instant motion, General Electric argues that the Court should reconsider an order by the state

trial court overruling General Electric’s exception of res judicata and dismiss Plaintiffs’ survival

claim and Louise Ella Simon Dempster’s (“Mrs. Dempster”) wrongful death claim pending against

1 Rec. Doc. 28.

2 See Rec. Doc. 1-2; Rec. Doc. 1-8. In particular, Plaintiffs bring claims against Lamorak Insurance Company,

Huntington Ingalls Inc., Albert Bossier, Jr., J. Melton Garrett, Eagle, Inc., Bayer Cropscience, Inc., Foster-Wheeler

LLC, General Electric Co., Hopeman Brothers, Inc., McCarty Corporation, Taylor-Seidenbach, Inc., CBS

Corporation, Uniroyal, Inc., International Paper Company, Houston General Insurance Company, Berkshire Hathaway

Specialty Insurance Company, Northwest Insurance Company, United Stated Fidelity and Guaranty Company, Fist

State Insurance Company, The American Insurance Company, Louisiana Insurance Guaranty Association, and the

Traveler’s Indemnity Company. Rec Doc. 1-8 at 2–3.

1

General Electric on res judicata grounds.3 Having considered the motion, the memoranda in

support and in opposition, the record, and the applicable law, the Court grants the motion in part

and denies the motion in part.

I. Background

A. Factual Background

In this litigation, Plaintiffs allege that Mr. Dempster was employed by Avondale from 1962

to 1994.4 During that time, Plaintiffs aver that Mr. Dempster was exposed to asbestos and asbestos-

containing products in various locations and work sites, resulting in Mr. Dempster breathing in

asbestos fibers and later developing asbestos-related cancer.5 Plaintiffs assert strict liability and

negligence claims against various Defendants.6

In 1991, Mr. and Mrs. Dempster, along with several thousand other plaintiffs, sued multiple

defendants for asbestos-related injuries in In re Asbestos, Plaintiffs v. Borden, Inc., et al., Case No.

91-18397, in the Civil District Court for the Parish of Orleans.7 The record shows that, during the

Borden litigation, Mr. and Mrs. Dempster were represented by the Wilson Law Firm. That

litigation resulted in a settlement between Mr. and Mrs. Dempster and General Electric; the parties

agreed to settle all claims and executed a “Release of General Electric Company” (the “Dempster

Release”).8 When Mr. and Mrs. Dempster executed the Dempster Release, Mr. Dempster had been

diagnosed with asbestosis but had not yet been diagnosed with lung cancer.

3 Rec. Doc. 28-1.

4 Rec. Doc. 1-2 at 5.

5 Id.

6 Id. at 7–8.

7 Rec. Doc. 28-16.

8 Id.

2

B. Procedural Background

Mr. Dempster filed a “Petition for Damages” in the Civil District Court for the Parish of

Orleans, State of Louisiana, on March 14, 2018.9 Defendants Huntington Ingalls Incorporated,

Albert Bossier, Jr., J. Melton Garret, and Lamorak Insurance Company (the “Avondale Interests”)

removed the case to the United States District Court for the Eastern District of Louisiana for the

first time on June 21, 2018.10 In the first notice of removal, Avondale Interests alleged that removal

was proper because this is an action “for or relating to conduct under color of federal office

commenced in a state court against persons acting under one or more federal officers within the

meaning of 28 U.S.C. § 1442(a)(1).”11

On January 7, 2019, this Court remanded the case to the Civil District Court for the Parish

of Orleans.12 The Court found that Defendants presented no evidence that Mr. Dempster came into

contact with asbestos aboard a government vessel, and thus, no federal interest was implicated.13

Alternatively, even accepting Defendants’ argument that Mr. Dempster came into contact with

asbestos aboard a government vessel as true, the Court did not find that the necessary causal nexus

existed between Federal Government action and Mr. Dempster’s claims.14 This determination was

based on the fact that Mr. Dempster brought negligence claims, rather than strict liability claims,

against Avondale Interests.15 Defendants did not appeal the January 7, 2019 Order.

9 Rec. Doc. 1-2 at 2–3.

10 Case No. 18-6158, Rec. Doc. 1 at 2.

11 Id.

12 Case No. 18-6158, Rec. Doc. 89.

13 Id. at 31.

14 Id.

15 Id. at 36–37. The January 7, 2019 Order predated the Fifth Circuit’s en banc decision in Latiolais v.

Huntington Ingalls, Inc., overruling prior precedent and holding that Avondale was entitled to remove a negligence

3

Mr. Dempster passed away on November 24, 2018, and a First Supplemental and

Amending Petition for Damages was filed in state court substituting Mr. Dempster’s heirs as

Plaintiffs on January 17, 2019.16 The amended petition does not purport to assert any strict liability

claims against Avondale.17 Trial was scheduled to begin before the state trial court on January 13,

2020. 18

On January 9, 2020, Avondale removed the case to the United States District Court for the

Eastern District of Louisiana for a second time.19 In the second notice of removal, Avondale once

again alleges that removal is proper because this is an action “for or relating to conduct under color

of federal office commenced in a state court against persons acting under one or more federal

officers within the meaning of 28 U.S.C. § 1442(a)(1).”20 In the second notice of removal,

Avondale contends that the jury interrogatories, jury charges, and Pre-Trial Order recently filed

by Plaintiffs in state court directly contradict Mr. Dempster’s prior representation in federal court

that he was not asserting strict liability claims against Avondale.21 On January 10, 2020, Plaintiffs

filed an “Emergency Motion to Remand”22 and an “Ex Parte Motion for Expedited Hearing and

for Emergency Ruling.”23

case filed by a former Navy machinist because of his exposure to asbestos while the Navy’s ship was being repaired

at the Avondale shipyard under a federal contract. 951 F.3d 286, 289 (5th Cir. 2020).

16 Rec. Doc. 1-8.

17 Id.

18 Rec. Doc. 1-12.

19 Rec. Doc. 1.

20 Id. at 2.

21 Id. at 4–5.

22 Rec. Doc. 4.

23 Rec. Doc. 5.

4

On January 28, 2020, the Court denied the motion to remand, finding that this case was

properly removed to this Court under the federal officer removal statute.24 Specifically, the Court

found that the notice of removal was timely filed and Plaintiffs’ pretrial filings constitute a proper

basis for the second removal.25 Additionally, the Court found that Avondale met the three-part test

for federal officer removal.26 Namely, (1) Avondale is a person within the meaning of the statute,

(2) Avondale acted pursuant to a federal officer’s directions and a causal nexus exists between its

actions under color of federal office and plaintiffs’ claims, and (3) Avondale has a colorable federal

defense to Plaintiffs’ claims under the government contractor immunity defense.27

On February 18, 2020, General Electric filed the instant “Motion for Reconsideration.”28

On March 3, 2020, Plaintiffs filed an opposition to the instant motion.29 General Electric, with

leave of Court, filed a reply brief in further support of the motion on March 10, 2020.30 At the

request of the parties, the Court heard oral argument on this motion on March 11, 2020.31

24 Rec. Doc. 17.

25 Id. at 20–22.

26 Id. at 23–36.

27 Id. The January 28, 2020 Order also predated the Fifth Circuit’s en banc decision in Latiolais. In Latiolais,

the Fifth Circuit held that “to remove under section 1442(a), a defendant must show (1) it has asserted a colorable

federal defense, (2) it is a “person” within the meaning of the statute, (3) that has acted pursuant to a federal officer’s

directions, and (4) the charged conduct is connected or associated with an act pursuant to a federal officer’s directions.”

951 F.3d at 296. The Fifth Circuit overruled prior caselaw applying the “causal nexus” requirement to Section 1442(a)

as amended in 2011. Id.

28 Rec. Doc. 28.

29 Rec. Doc. 89.

30 Rec. Doc. 118.

31 Rec. Doc. 120.

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II. Parties= Arguments

A. General Electric’s Argument in Support of the Motion

In the instant motion, General Electric argues that the Court should reconsider an order by

the state trial court overruling General Electric’s exception of res judicata and dismiss Plaintiffs’

survival claim and Mrs. Dempster’s wrongful death claim pending against General Electric on res

judicata grounds.32 General Electric acknowledges that the state district court denied General

Electric’s original motion on October 10, 2019, finding that the claims were not barred by res

judicata because the prior release agreement Mr. and Mrs. Dempster signed did not include the

words “lung cancer.”33 However, General Electric contends that on January 29, 2020, the

Louisiana Supreme Court issued its opinion in Gistarve Joseph, Sr., et al v. Huntington Ingalls

Incorporated in which the court rejected the rationale that a release must expressly refer to the

specific disease at issue in order to be effective.34 Accordingly, in light of this new authority from

the Louisiana Supreme Court, General Electric argues that this Court should reconsider the state

district court’s order overruling General Electric’s exception of res judicata.35

General Electric contends that by the unambiguous terms of the agreement, Mr. Dempster

and Mrs. Dempster settled all current and future claims against General Electric.36 General Electric

argues that the state district court erroneously denied General Electric’s exception based upon the

state district court’s mistaken belief that the release needed to include an express reference to “lung

32 Rec. Doc. 28-2.

33 Id. at 1.

34 Id. at 2.

35 Id. at 2.

36 Id. at 7.

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cancer” in order to be effective.37 However, General Electric contends that in Joseph, the Louisiana

Supreme Court expressly rejected the argument that a release must identify with particularity the

future disease or injury being released to be effective.38 Regarding the legal standard applicable to

a motion for reconsideration, General Electric argues that Joseph is an intervening change in the

controlling law with respect to the interpretation of releases like the release at issue.39

General Electric contends that the doctrine of res judicata applies to a transaction or

settlement of a disputed or compromised matter.40 Thus, General Electric argues that settlement

agreements are empowered with the same preclusive effect as final judgments with respect to

litigation involving the same parties and the same issues the parties intended to settle.41 Here,

General Electric contends that the release is in writing, between Mr. and Mrs. Dempster and

General Electric, involves the same claims at issue, and was for the purposes of preventing or

ending a lawsuit and compromising all future claims.42 Therefore, General Electric argues that by

the unambiguous terms of the agreement, Mr. Dempster and Mrs. Dempster agreed to settle all

future claims against General Electric, including claims arising out of Mr. Dempster’s alleged

exposure to asbestos or any future malignancies Mr. Dempster might develop as a result of alleged

asbestos exposure.43 Additionally, General Electric contends that the release clearly releases any

37 Id. at 8.

38 Id. at 9.

39 Id. at 10.

40 Id. at 12.

41 Id. at 12.

42 Id. at 13.

43 Id. at 7.

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“wrongful death” claim that might inure to Mrs. Dempster as a result of Mr. Dempster’s death.44

For these reasons, General Electric asserts that its exception of res judicata should granted.45

B. Plaintiffs’ Argument in Opposition to the Motion

In the opposition memorandum, Plaintiffs argue that Joseph does not support General

Electric’s argument.46 Plaintiffs argue that in Joseph, the Louisiana Supreme Court did not indicate

that it was overruling the Fourth Circuit’s decision in Becnel, wherein the Fourth Circuit

considered this identical General Electric release, denied General Electric’s writ application, and

upheld the trial court’s overruling of General Electric’s exception of res judicata.47 Plaintiffs

contend that for res judicata to apply, the intent of the parties to the compromise must be clear,

unambiguous and unequivocal.48 Plaintiffs argue that the Louisiana Supreme Court previously

held that “if the release instrument leaves any doubt as to whether a particular future action is

covered by the compromise, it should be construed not to cover such future action.”49

Plaintiffs contend that here, the intent of the parties as to the release is unclear.50 Plaintiffs

argue that Mr. Dempster only received payment for an asbestosis claim, and that he never received

compensation for lung cancer.51 Therefore, Plaintiffs contend that the circumstances and events

surrounding the General Electric release leaves significant doubt as to whether the parties intended

44 Id.

45 Id. at 16.

46 Rec. Doc. 89 at 1.

47 Id. at 2.

48 Id. at 3.

49 Id. at 4 (citing Brown v. Drillers, 630 So. 2d 741, 753 (La. 1994)).

50 Id. at 6.

51 Id. at 9.

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to release future asbestos-related malignancy claims.52 Plaintiffs argue that because both the

general language of the release and the surrounding circumstances all indicate that neither General

Electric nor the Dempsters intended to release any future claims for lung cancer, the motions

should be denied.53

Plaintiffs contend that while General Electric’s motion does not appear to seek preclusion

of the wrongful death claims of Mr. Dempster’s children, out of an abundance of caution, Plaintiffs

state the such claims would not be precluded.54 Additionally, Plaintiffs argue that the purported

release is unenforceable as contra bona mores because Mr. Dempster was never advised of the

workings of the master settlement.55 Plaintiffs argue that there is no evidence that General Electric

signed the purported release agreement nor that the signature on the purported release is even the

signature of Mr. Dempster.56 Furthermore, Plaintiffs contend that there was no intent between Mr.

Dempster and General Electric to settle any lung cancer claims.57 Lastly, Plaintiffs argue that the

agreement lacks consideration.58 Accordingly, Plaintiffs assert that General Electric’s exception

of res judicata fails, and this Court should not reconsider the state court’s order overruling the

exception.59

52 Id. at 10.

53 Id.

54 Id. at 11.

55 Id. at 13.

56 Id. at 15.

57 Id. at 17.

58 Id. at 23.

59 Id. at 24–25.

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C. General Electric’s Argument in Further Support of the Motion

In reply, General Electric first argues that Plaintiffs’ reliance on Louisiana Civil Code

article 2004 is misplaced because the release at issue is not against public policy.60 Responding to

Plaintiffs’ argument that a valid compromise does not exist because General Electric did not sign

the release, General Electric contends that the Louisiana Supreme Court previously held that where

two instruments read together outline the obligations each party has to one another and evidence

each party’s acquiescence in the agreement, and valid compromise exists.61 General Electric

contends that Plaintiff’s reliance on In Re: Ungar and In Re: Hoffman is misplaced, because those

cases concern the ethical rules for attorneys, not the validity of releases.62

General Electric argues that the language of the release, namely that Mr. and Mrs.

Dempster were “completely giving up, relinquishing, and discharging any and all rights, past,

present, and future that they possess against General Electric …, including the right to sue for

future injuries, including, but not limited to, malignancies and death” is clear and unambiguous.63

General Electric contends that Plaintiffs’ argument to admit parole evidence to vary the clear

wording of the release is without merit and would be inconsistent with Louisiana law.64

Furthermore, General Electric argues that Plaintiffs’ reliance on other cases decided before the

Louisiana Supreme Court’s decision in Joseph, is without merit because Joseph changed the

60 Rec. Doc. 118 at 1–2.

61 Id. at 3 (citing Felder v. Georgia Pacific Corp., et al., 405 So. 2d 521, 524 (La. 1981)).

62 Id. at 4 (citing In Re: Ungar, 2009-0573 (La. 10/30/09), 25 So. 3d 101, and In Re: Hoffman, 2003-B-

2499 (La. 9/9/04). 883 So. 2d 425).

63 Id. at 5 (citing Rec. Doc. 28-6).

64 Id. at 5–6 (citing Hymel v. Eagle, Inc., 7 So.3d at 1257–58).

10

landscape with respect to the interpretation of releases.65

Responding to Plaintiffs’ argument that Mr. Dempster did not settle his lung cancer claim

in this case since he was not paid the scheduled amount for lung cancer, General Electric argues

that Mr. Dempster did not have lung cancer at the time the release was signed.66 Furthermore,

General Electric contends that Plaintiffs are not entitled to a “comeback right” nor are Plaintiffs

entitled to bring another lawsuit against General Electric.67 General Electric argues that the amount

of the settlement plays no role in the court’s analysis.68 General Electric argues that the release at

issue is not against public policy.69 General Electric contends that Plaintiffs’ claim that a valid

compromise does not exist because General Electric did not sign the release is without merit.70

Accordingly, General Electric asserts that the Court should grant its “Motion to Reconsider and

reverse the ruling of the state district court overruling the peremptory exception of res judicata

filed by General Electric.”71

III. Legal Standard

A. Legal Standard for Reconsideration

Although the Fifth Circuit has noted that the Federal Rules “do not recognize a ‘motion for

reconsideration’ in haec verba,”72 it has consistently recognized that such a motion may challenge

65 Id. at 7.

66 Id. at 8.

67 Id.

68 Id. at 9.

69 Id. at 1–2.

70 Id. at 3.

71 Id. at 10.

72 Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990).

11

a judgment or order under Federal Rules of Civil Procedure 54(b), 59(e), or 60(b).73 Federal Rule

of Civil Procedure 59(e) also allows courts to alter or amend judgments after entry. The Court has

“considerable discretion” in deciding whether to grant a motion for reconsideration, but must

“strike the proper balance between two competing imperatives: (1) finality and (2) the need to

render just decisions on the basis of all the facts.”74 This Court’s discretion is further bounded by

the Fifth Circuit’s instruction that reconsideration is “an extraordinary remedy that should be used

sparingly,”75 with relief being warranted only when the basis for relief is “clearly establish[ed].”76

Courts in the Eastern District of Louisiana have generally considered four factors in deciding

motions for reconsideration under the Rule 59(e) standard:

(1) the motion is necessary to correct a manifest error of law or fact upon which

the judgment is based;

(2) the movant presents newly discovered or previously unavailable evidence;

(3) the motion is necessary in order to prevent manifest injustice; or

(4) the motion is justified by an intervening change in controlling law.77

A motion for reconsideration, “‘[is] not the proper vehicle for rehashing evidence, legal

theories, or arguments . . . .’”78 Instead, such motions “serve the narrow purpose of allowing a party

to correct manifest errors of law or fact or to present newly discovered evidence.”79 “It is well

73 Id. (Rules 59 and 60); Castrillo v. Am. Home Mortg. Servicing, Inc., No. 09-4369, 2010 WL 1424398, at

*3–4 (E.D. La. Apr. 5, 2010) (Rule 54).

74 Edward H. Bohlin Co., Inc. v. Banning Co., Inc., 6 F.3d 350, 355 (5th Cir. 1993).

75 Templet v. Hydrochem, Inc., 367 F.3d 473, 479 (5th Cir. 2004).

76 Schiller v. Physicians Res. Grp, Inc., 342 F.3d 563, 567 (5th Cir. 2003); Castrillo v. Am. Home Mortgage

Servicing, Inc., No. 09-4369 R, 2010 WL 1424398, at *3 (E.D. La. Apr. 5, 2010) (Vance, J.).

77 See, e.g., Castrillo, 2010 WL 1424398, at *4 (citations omitted).

78 Id. (quoting Templet v. HydroChem Inc., 367 F.3d 473, 478-79 (5th Cir. 2004)).

79 See Waltman v. Int’l Paper Co., 875 F.2d 468, 473 (5th Cir. 1989) (citation and internal quotation marks

12

settled that motions for reconsideration should not be used . . . to re-urge matters that have already

been advanced by a party.”80 When there exists no independent reason for reconsideration other

than mere disagreement with a prior order, reconsideration is a waste of judicial time and resources

and should not be granted.81

IV. Analysis

A. Whether General Electric is Entitled to Reconsideration

General Electric requests reconsideration of the state district court judgment overruling

General Electric’s exception of res judicata.82 The state district court judge stated on the record

that he denied General Electric’s exception of res judicata because the Dempster Release did not

explicitly mention “lung cancer.”83 Both the Louisiana Fourth Circuit Court of Appeal and the

Louisiana Supreme Court denied General Electric’s related writ applications.84 However, two

Louisiana Supreme Court justices indicated that they would grant the writ application, and Justice

Crichton issued a concurring opinion to the Louisiana Supreme Court’s decision.85 Justice

Crichton stated that he concurred in the decision to deny the writ application due to the impending

omitted).

80 Helena Labs. Corp. v. Alpha Sci. Corp., 483 F. Supp. 2d 538, 539 (E.D. Tex. 2007) (citing Browning v.

Navarro, 894 F.2d 99, 100 (5th Cir. 1990)).

81 Livingston Downs Racing Ass’n v. Jefferson Downs Corp., 259 F. Supp. 2d 471, 481 (M.D. La. 2002). See

also Mata v. Schoch, 337 B.R. 138, 145 (S.D. Tex. 2005) (refusing reconsideration where no new evidence was

presented); FDIC v. Cage, 810 F. Supp. 745, 747 (S.D. Miss. 1993) (refusing reconsideration where the motion merely

disagreed with the court and did not demonstrate clear error of law or manifest injustice).

82 Rec. Doc. 28-11.

83 Rec. Doc. 28-3 (“I’m going to overrule the exception of res judicata. The GE release doesn’t mention

‘lung cancer.’ That’s what concerns me. So I know y’all have some other things y’all are going to do, however I

rule. But that’s today’s ruling.”).

84 Rec. Docs. 89-1, 89-2.

85 Rec. Doc. 89-2.

13

trial date.86 Justice Crichton also stated in his concurrence that “the lower courts may find guidance

in this Court’s pending decision in Gistarve Joseph, Sr. v. Huntington Ingalls Incorporated, et al.,

writ granted, 18-2061 (La. 10/15/2019), 280 So.3d 596.”87 General Electric argues that the

Louisiana Supreme Court’s decision in Joseph is an intervening change in the law regarding the

interpretation of releases, namely, whether releases must explicitly mention a term in order to be

effective for res judicata.88

The Court must first determine the proper procedure to follow in resolving a motion for

reconsideration of a state court’s order denying an exception of res judicata before the case was

removed to federal court. Namely, the Court must determine what degree of deference is owed to

an interlocutory state court order once a case has been removed to federal court. After removal of

an action to federal district court, “[a]ll injunctions, orders, and other proceedings had in such

action prior to its removal shall remain in full force and effect until dissolved or modified by the

[federal] district court.”89

The Fifth Circuit addressed this issue in Nissho–Iwai American Corp. v. Kline.90 There, a

Texas state court granted a plaintiff’s motion to strike a defendant’s defenses and counterclaims

before the case was removed to federal court.91 In addressing the issue of deference, the Fifth

Circuit concluded that where “the state court’s ruling is purely interlocutory, it remains subject to

86 Id.

87 Id.

88 Rec. Doc. 28-2 at 10.

89 28 U.S.C. § 1450.

90 845 F.2d 1300 (5th Cir. 1988).

91 Id.

14

reconsideration just as it had been prior to removal.”92 The Fifth Circuit reasoned that “judicial

economy is served by eliminating the need for duplicative proceedings in federal court.”93

However, the Fifth Circuit held that federal procedure rather than state procedure governs the

manner in which the state court decision is to be enforced.94 “In sum, whenever a case is removed,

interlocutory state court orders are transformed by operation of 28 U.S.C. § 1450 into orders of

the federal district court to which the action is removed. The district court is thereupon free to treat

the order as it would any such interlocutory order it might itself have entered.”95

The Fifth Circuit addressed this issue again in Resolution Trust Corp. v. Northpark Joint

Venture.96 There, the Fifth Circuit held that a “prior state court order in essence is federalized when

the action is removed to federal court, although the order ‘remains subject to reconsideration just

as it had been prior to removal.’”97 In other words, the Federal Rules of Civil Procedure govern the

enforcement of a prior state court ruling in a case removed to federal court.98 For example, in

Northpark, where the prior state court order was decided on summary judgment, the Fifth Circuit

instructed that the federal court must ensure that the order is consistent with the requirements of

Federal Rule of Civil Procedure 56.99 “The standard of review is the same as if the federal court

92 Id. at 1303 (citing General Investment Co. v. Lake Shore & Michigan Southern Ry., 260 U.S. 261, 267,

(1922)).

93 Id.

94 Id.

95 Id. at 1304.

96 958 F.2d 1313 (5th Cir. 1992).

97 Id. at 1316 (quoting Nissho–Iwai American Corp., 845 F.2d at 1303).

98 Id.

99 Id. (“If the federal court declines to reconsider the state court summary judgment, then the federal court

certifies that the order is indeed consistent with Rule 56(c).”).

15

itself had entered the order. . .”100

The Fifth Circuit’s opinions in Nissho–Iwai American Corp. and Resolution Trust Corp.

show that (1) when a case is removed from state court, all orders of the state court remain in full

force and effect and (2) once removed, federal procedure governs the manner of enforcement of

the state court order.101 When this case was removed to federal court, the state court had overruled

General Electric’s exception of res judicata.102 The Fifth Circuit instructs federal district courts to

treat interlocutory state court orders as orders of the federal district court to which the action is

removed. The district court may treat the state court order as it would any interlocutory order it

might itself have entered.

General Electric argues that “[t]he Louisiana Supreme Court’s decision in Gistarve Joseph

clearly is an intervening change in the controlling law with respect to the interpretation of releases

like the Dempster Release.”103 General Electric argues that its “Motion is necessary to correct a

manifest error of law since on its face, the opinion in Gistarve Joseph expressly rejects the sole

reason given by the [state district court] in denying General Electric’s Exception of Res Judicata.

General Electric’s Motion is necessary to prevent a manifest injustice. If General Electric’s

Exception of Res Judicata is not granted, it will be forced to defend at trial claims that it previously

settled.”104 Lastly, General Electric argues that “Gistarve Joseph completely changed the

landscape with respect to the interpretation of releases such as the Dempster Release.”105

100 Id.

101 Nissho–Iwai American Corp., 845 F.2d at 1303; Resolution Trust Corp., 958 F.2d at 1316.

102 Rec. Doc. 28-11.

103 Rec. Doc. 28-2 at 10.

104 Id. at 12.

105 Rec. Doc. 118 at 7.

16

While the state district court judgment’s overruling General Electric’s exception of res

judicata was issued before the Louisiana Supreme Court’s decision in Joseph, General Electric’s

argument that Joseph “completely changed the landscape with respect to the interpretation of

releases” is unavailing.106 General Electric argues that Joseph is an intervening change in the

controlling law because, for the first time, “the Louisiana Supreme Court expressly rejected the

argument that a Release must identify with particularity the future disease or injury being released

to be effective.”107 However, the Louisiana Supreme Court had previously stated in Brown v.

Drillers that its holding “permits defendants to conclusively compromise potential wrongful death

claims, provided the intent to do so is unequivocally reflected, while not necessarily by express

mention of such claims, in the language employed in the release instrument.”108 In fact, the

Louisiana Supreme Court expressly acknowledged that its decision in Joseph was in fidelity to its

prior decision in Brown.109 As such, Joseph did not dramatically alter the legal landscape, but

rather, clarified the state of the law as it pertains to the preclusive effect of releases which do not

expressly identify a particular injury.110

Still, the Court appreciates that the sole reason the state district court provided for denying

General Electric’s exception of res judicata is because the Dempster Release did not explicitly

mention “lung cancer.”111 The Court cannot be certain that this is the sole reason the state district

106 Id.

107 Rec. Doc. 28-2 at 9.

108 Brown, 630 So. 2d at 757.

109 Joseph v. Huntington Ingalls Incorporated, 2018-2061 La. 1/29/20, 2020 WL 499939, at *7 (La. 2020)

(“Indeed, the very decision on which plaintiffs' rely, Brown, itself acknowledges there is no necessity for direct

reference to a particular injury, as long as the intent of the parties is clear.”).

110 Id. (“In effect, plaintiffs argue that for a release to ‘unequivocally reflect’ an intent to resolve a claim for

future disease or injury, it must expressly identify that disease or injury. Such is not the law.”).

111 Rec. Doc. 28-3 (“I’m going to overrule the exception of res judicata. The GE release doesn’t mention

17

court actually denied General Electric’s exception of res judicata, rather than simply the sole

reason provided on the record by the court. If it were the sole reason the state district court denied

General Electric’s exception of res judicata, the holding appears to be inconsistent with Louisiana

law. Furthermore, Joseph, while not changing the law, did clarify the law on the preclusive effect

of future releases. Accordingly, the Court finds reconsideration appropriate and will therefore

reconsider the state district court’s judgment.

However, this motion presents a unique procedural issue. General Electric requests that

this Court grant its exception of res judicata.112 Under Louisiana law, “[a]n exception is a means

of defense . . . used by the defendant, whether in the principal or an incidental action, to retard,

dismiss, or defeat the demand brought against him.”113 Under Louisiana Code of Civil Procedure

article 927, a peremptory exception of res judicata is recognized as a means of dismissing a matter

in Louisiana state courts. However, a peremptory exception is not a procedural device recognized

by the Federal Rules of Civil Procedure.114 To the extent General Electric seeks reconsideration

on the merits of the state court’s ruling, it must file a motion that is recognized by the Federal

Rules of Civil Procedure.115 Because the deadline to file non-evidentiary motions has passed, the

Court will grant General Electric leave to refile its motion.

‘lung cancer.’ That’s what concerns me. So I know y’all have some other things y’all are going to do, however I

rule. But that’s today’s ruling.”).

112 Rec. Doc. 28-1 at 16.

113 La. Code. Civ. P. art. 921.

114 See Fed. R. Civ. P. 8(c)(1). Federal Rule of Civil Procedure 8 classifies res judicata as an affirmative

defense.

115 See Louisiana v. Guidry, 489 F.3d 692, 698 (5th Cir. 2007) (federal district court could consider a “motion

for summary judgment, even though that motion encompassed many of the arguments rejected by the state trial court

in its judgment overruling [the defendant’s] peremptory exceptions.”).

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V. Conclusion

For the reasons discussed above, the Court finds that reconsideration of the state district

court’s judgment is appropriate. However, the Court cannot consider an exception of res judicata

because such a procedure is not authorized by the Federal Rules of Civil Procedure. Accordingly,

the Court will allow General Electric to file its motion authorized by the Federal Rules of Civil

Procedure.

Accordingly,

IT IS HEREBY ORDERED that for Defendant General Electric Company’s “Motion for

Reconsideration”'!° is GRANTED IN PART and DENIED IN PART.

IT IS FURTHER ORDERED that the motion is GRANTED to the extent that General

Electric seeks reconsideration of the state district court’s judgment. General Electric is granted

leave to file its motion authorized by the Federal Rules of Civil Procedure within fourteen days of

this Order. The motion is DENIED in all other respects.

NEW ORLEANS, LOUISIANA, this 6th day of May, 2020.

DM \arretto )lunitte □□□

NANNETTE JOLAVETTE BROWN

CHIEF JUDGE

UNITED STATES DISTRICT COURT

116 Rec. Doc. 28.

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