# Ramsey v. Independent Specialty Insurance Company

> District Court, E.D. Louisiana · December 11, 2023

URL: https://www.frixlaw.com/law-library/cases/10190241

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** December 11, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

MONICA S. RAMSEY CIVIL ACTION
AND ROGER DALE RAMSEY

VERSUS NO. 23-632

INDEPENDENT SPECIALTY SECTION “B”(2)
INSURANCE COMPANY
AND SEDGWICK CLAIMS
MANAGEMENT SERVICES, INC.

ORDER & REASONS
Before the Court are plaintiffs Monica S. Ramsey and Roger Dale Ramsey’s motion for
certification of interlocutory appeal pursuant to 28 U.S.C. § 1292(b) (Rec. Doc. 22) and defendants
Independent Specialty Insurance Company and Sedgwick Claims Management Services, Inc.’s
opposition (Rec. Doc. 23). For the following reasons,
IT IS HEREBY ORDERED that plaintiffs’ motion for certification of interlocutory
appeal pursuant to 28 U.S.C. § 1292(b) is DENIED.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Detailed extensively in our previous orders, this insurance coverage dispute pits insured
plaintiffs Monica S. Ramsey and Roger Dale Ramsey (the “Ramseys”) against their insurer,
Independent Specialty Insurance Company (“ISIC”), and its third-party claims management
administrator, Sedgwick Claims Management Services, Inc. (“Sedgwick”). See Rec. Docs. 16; 19.
The Ramseys contend that, following Hurricane Ida’s landfall on August 29, 2021, ISIC and
Sedgwick (collectively “defendants”) “grossly underreported” plaintiffs’ property damage and
failed to make any claim payment for eight months. See Rec. Doc. 1 at 3–4. Accordingly, the
Ramseys sued defendants for “payment of all covered damage amounts under the terms of the
policy and statutory penalties, damages, and attorneys’ fees pursuant to La. Rev. Stat. 22:1973 and
La. Rev. Stat. 22:1892, et seq.” Rec. Doc. 1 at 8. Defendants responded with a motion to compel
arbitration and stay or, alternatively, dismiss the proceedings. See Rec. Doc. 9. In sum, defendants
argued that parties had agreed to arbitrate disputes and that, unlike in other insurance contracts,
such an agreement was not reverse-preempted by Louisiana statute when contained in a surplus

line policy. See id. at 5–7. In a carefully weighed decision, the Court agreed. See Rec. Doc. 16.
The Ramseys’ policy in effect at the time of Hurricane Ida was “a surplus lines coverage
under the Insurance Code of the State of Louisiana.” Rec. Doc. 9-2 at 12. Surplus line coverage is
not subject to approval by the Department of Insurance. See Rec. Doc. 16 at 13. As such, the policy
may not strip state courts of jurisdiction, but pursuant to Louisiana Revised Statutes § 22:868(D),
may contain “a forum or venue selection clause.” See id. at 9–10. The Court concluded that, based
on Louisiana and federal precedent, arbitration clauses are a subset of forum selection clauses and,
thus, not prohibited in surplus line insurance agreements. See id. at 13.
Although granting defendants’ motion to compel arbitration, the Court acknowledged the
absence of Louisiana State Supreme Court rulings on the topic: “The question of whether La. Rev.

Stat. § 22:868 applies to surplus line insurers has not been ruled on by the Louisiana Supreme
Court, therefore this Court ‘must make an Erie guess and determine as best it can what the
Louisiana Supreme Court would decide.’” Id. at 8 (quoting Howe ex rel. Howe v. Scottsdale Ins.
Co., 204 F.3d 624, 627 (5th Cir. 2000)). The Ramseys moved for reconsideration of the order,
which the Court denied with similar reasons. See Rec. Docs. 17; 19 at 3 (“The instant motion fails
to cite additional legal authority for requested relief. Instead, Plaintiffs predominantly restate
arguments made in opposition to Defendants’ motion to compel.”). The Ramseys now move for
certification of interlocutory appeal pursuant to 28 U.S.C. § 1292(b). Rec. Doc. 22.
II. LAW AND ANALYSIS
A. 28 U.S.C. § 1292(b) Standard
Interlocutory appeals pursuant to 28 U.S.C. § 1292(b) are appropriate only in exceptional
cases. Fairfield Royalty Co. v. Island Operating Co., Inc., 2011 WL 6140665, at *2 (E.D. La. Dec.
9, 2011) (citing United States v. Garner, 749 F.2d 281, 286 (5th Cir. 1985)). Thus, the court’s

exercise of discretion is not based simply on “the correctness of a judgment.” Clark-Dietz &
Assocs.-Engineers, Inc. v. Basic Const. Co., 702 F.2d 67, 68 (5th Cir. 1983); see also Swint v.
Chambers Cnty. Comm’n, 514 U.S. 35, 47 (1995) (citation omitted) (“Congress thus chose to
confer on district courts first line discretion to allow interlocutory appeals.”). Rather, certification
of an interlocutory appeal from an order is appropriate when the district court is “of the opinion
that such order involves a controlling question of law as to which there is substantial ground for
difference of opinion and that an immediate appeal from the order may materially advance the
ultimate termination of the litigation.” 28 U.S.C. § 1292(b); see also Nguyen v. Am. Com. Lines
L.L.C., 805 F.3d 134, 137–38 (5th Cir. 2015). “A district court cannot certify an order for
interlocutory appeal unless all three criteria are present.” David v. Signal Int’l, LLC, 37 F. Supp.

3d 836, 839 (E.D. La. 2014) (citing Aparicio v. Swan Lake, 643 F.2d 1109, 1110 n.2 (5th Cir.
1981)). Additionally, in deciding to certify an order for interlocutory appeal, the court should
articulate why the order satisfies each of these criteria. See Linton v. Shell Oil Co., 563 F.3d 556,
558 (5th Cir. 2009) (“Though it will often be evident why the question presented by the certified
order is ‘controlling,’ elaboration by the district judge will normally be helpful in understanding
why the judge believes that there is a ‘substantial ground for difference of opinion’ and that
‘immediate appeal from the order may materially advance the ultimate termination of the
litigation.’”).
B. Interlocutory Appeal
1. Controlling Question of Law
An interlocutory appeal presents a limited review of a non-final order. See Louisiana
Patients’ Comp. Fund Oversight Bd. v. St. Paul Fire & Marine Ins. Co., 411 F.3d 585, 588 (5th
Cir. 2005). One such limitation is its consideration of a pure legal question. See Malbrough v.

Crown Equip. Corp., 392 F.3d 135, 136 (5th Cir. 2004) (refusing to assess an asserted genuine
issue of material fact because such “is not a question of law within the meaning of § 1292(b)”);
Williams v. Taylor, No. 15-321, 2015 WL 4755162, at *2 (E.D. La. Aug. 11, 2015) (citation
omitted) (describing a controlling question of law as one the “court of appeals could decide quickly
and cleanly without having to study the record”). A controlling question of law, therefore, is a
matter of differing statutory interpretations that would impact the course of the litigation. See Ryan
v. Flowserve Corp., 444 F. Supp. 2d 718, 722–23 (N.D. Tex. 2006) (citing 16 Charles A. Wright,
Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3929 at 426 (2d ed.1996)
(“[A] controlling question of law—although not consistently defined—at the very least means a
question of law the resolution of which could materially advance the ultimate termination of the

litigation—thereby saving time and expense for the court and the litigants.”)).
Here, plaintiffs’ motion for certification of an interlocutory appeal presents a controlling
question of law. Louisiana Revised Statutes § 22:868(D) permits insurance coverage “that is not
subject to approval by the Department of Insurance” to contain “a forum or venue selection
clause.” La. Rev. Stat. § 22:868(D). In the light of state and federal precedent, the Court determined
that an arbitration clause is a subset of a forum selection clause, and thus, the arbitration clause in
this insurance-related proceeding was valid and enforceable. See Rec. Doc. 16 at 13. This legal
interpretation clearly impacts the litigation by compelling arbitration, whereas parties would
continue moving their case through federal pre-trial stages otherwise. The Ramseys seek review
of this controlling question of law.
2. Substantial Ground for Difference of Opinion
The threshold for establishing the second factor for certifying an order for interlocutory

appeal “is a high one.” S. U.S. Trade Ass’n v. Unidentified Parties, No. 10-1669, 2011 WL
2790182, at *2 (E.D. La. July 14, 2011) (citation omitted). Disagreement with a court’s order is
not enough to establish that there is substantial ground for a difference of opinion. U.S. ex rel.
Branch Consultants, L.L.C. v. Allstate Ins. Co., 668 F. Supp. 2d 780, 813–14 (E.D. La. 2009).
Instead, the second element is met where “there is a genuine doubt as to the correct legal standard
to be applied.” S. U.S. Trade Ass’n, 2011 WL 2790182, at *2 (citation omitted); see also In re
Babcock & Wilcox, No. 03-1065, 2004 WL 626288, at *2 (E.D. La. Mar. 29, 2004) (“Difference
of opinion refers to an unsettled state of law or judicial opinion, not mere discontent by the
appealing party.”). Doubt as to the correct legal standard is most often present with “a new legal
question,” but also where the litigation “is of special consequence,” as where the interpretation is

particularly injurious to a party or similarly positioned courts are also weighing the issue. Mohawk
Indus., Inc. v. Carpenter, 558 U.S. 100, 110–11 (2009). As such, a substantial ground for
difference of opinion is not merely that “settled law might be applied differently,” but that there
has been a substantial difference in application. S. U.S. Trade Ass’n, 2011 WL 2790182, at *3
(citation omitted).
Defendants argue that the law on the validity of arbitration clauses in surplus lines coverage
is settled. See Rec. Doc. 23 at 4 (“[T]he Louisiana Supreme Court has held that arbitration
provisions are a type of forum or venue selection clause.”). To support this contention, defendants
cite a series of similar cases from sections of the district court for the Eastern District of Louisiana
decided after the Court’s order compelling arbitration. See id. (first citing Bourgeois v. Indep.
Specialty Ins. Co., No. 22-1256, 2023 WL 6644171, *3 (E.D. La. Oct. 12, 2023) (Lemmon, J.);
then citing Queens Beauty Supply, LLC v. Indep. Specialty Ins. Co., No. 22-3444, 2023 WL
7154117, *3 (E.D. La. Oct. 31, 2023) (Guidry, J.); then citing Beachcomer Properties, LLC v.

Indep. Specialty Ins. Co., No. 23-1287, 2023 WL 7280516 (E.D. La. Nov. 3, 2023) (Ashe, J.)).
However, in Queens Beauty Supply, LLC, Judge Guidry acknowledged the less-than-
settled state of the law: “The Louisiana Supreme Court has not ruled specifically on whether La.
R.S. 22:868(A) prohibits arbitration clauses in surplus lines insurance policies, and there is a split
in how Federal district courts sitting in Louisiana have decided this issue.” Queens Beauty Supply,
LLC, 2023 WL 7154117, at *2; see also Beachcorner Properties, LLC, 2023 WL 7280516, at *5
(Ashe, J.) (“Federal district courts in Louisiana are split on this issue.”). The cited cases make the
same Erie guess as did the undersigned in this case.
Notably, opposite conclusions were made in other federal district court opinions. See
Fairway Vill. Condominiums v. Indep. Specialty Ins. Co., No. 22-2022, 2023 WL 2866944, at *5

(E.D. La. Apr. 10, 2023) (Brown, C.J.) (citation omitted) (“[T]he plain language of § 22:868(D) is
limited to forum and venue selection clauses, and to read arbitration clauses into the text of
Subsection D would be to confer a different meaning than intended by the legislators.”); Next Level
Hosp. LLC v. Indep. Specialty Ins. Co., No. 2:21-4240, 2023 WL 2771583, at *6 (W.D. La. Mar.
31, 2023) (“Based on the text of § 22:868, the Court cannot arrive at an interpretation that conflates
arbitration clauses with forum and venue clauses; the former is jurisdictional whereas the latter are
not.”); Mahant Hospitality LLC v. Indep. Specialty Ins. Co., No. 6:21-4322, 2023 WL 7476380, at
*4 (W.D. La. Oct. 11, 2023) (“The subject of Subsection D’s clause, ‘[t]he provisions of
Subsection A,’ includes (A)(2)’s anti-arbitration provision.”). In an earlier opinion in Mahant
Hospitality LLC, the Western District of Louisiana court noted it had considered rulings that found
arbitration clauses valid with surplus line insurers but concluded differently. Mahant Hosp. LLC
v. Indep. Specialty Ins. Co. Inc., No. 6:21-4322, 2023 WL 6120261, at *1 (W.D. La. Sept. 18,
2023) (submitting that it “respectfully disagrees with Judge Lemelle’s recent decision.”).

In sum, it is debatable whether the noted disagreements on correctness of the Erie guesses
satisfy the high hurdle to become a substantial ground on the correct legal standard to apply. See
e.g. S. U.S. Trade Ass’n, 2011 WL 2790182, at *2 (citation omitted). Therefore, we proceed to the
second element for an interlocutory appeal.
3. Materially Advancing the Ultimate Termination of the Litigation
While finding the first element has been established and even assuming arguendo
satisfaction with the second element, an exceptional interlocutory appeal must also materially
advance the ultimate termination of the litigation. The final element “does not require the appeal
to certainly advance the termination of the litigation. It only requires such appeal may advance the
ultimate termination of the litigation if permitted.” Napoleon v. Shows, Cali & Walsh, LLP, No.

20-1775, 2022 WL 721560, at *6 (E.D. La. Mar. 10, 2022) (quotation omitted). Material
advancement exists when the appeal “would eliminate the need for trial, simplify the issues for
trial, or reduce the burden of discovery.” David v. Signal Int’l, LLC, 37 F. Supp. 3d 836, 839 (E.D.
La. 2014). The Fifth Circuit has found avoidance of a final-judgment appeal sufficient for the third
§ 1292(b) element. See Cazorla v. Koch Foods of Miss., 838 F.3d 540, 548 (5th Cir. 2016). Courts
should keep paramount how certification would speed up the litigation. See id. (“[W]e may be able
to hasten the end of this already long-running litigation.”). As such, courts must realistically assess
both the possible quickening and lengthening impacts on the litigation through an interlocutory
appeal. See Clark-Dietz & Assocs.-Engineers, Inc., 702 F.2d at 68 (5th Cir. 1983) (“[W]hile an
immediate appeal may save the district court time because reversal might preclude a hearing on
damages and affirmance might induce settlement, an immediate appeal may delay judgment and
thus penalize the appellees.”).
The Ramseys provide little argumentation on how the certification of the appeal would

provide for the material advancement toward the ultimate termination of the litigation. They
simply note that “if the Order were to be reversed, the parties would be allowed to proceed in
litigation or even in the Streamlined Settlement Protocol, the Court’s fast track program for
resolving claims.” Rec. Doc. at 3–4. In contrast, defendants contend that the appeal would “prolong
the litigation of this dispute, and would likely take longer than the entire arbitration process itself.”
Rec. Doc. 23 at 6. To support this argument, defendants insist that an interlocutory appeal faces
an even higher hurdle because of the Court’s arbitration order. See id. Although an interlocutory
appeal of an order to compel arbitration could quicken litigation “by eliminating the time required
to obtain what may be an unenforceable arbitration award,” defendants argue that the intent behind
the Federal Arbitration Act was “to move the parties to an arbitrable dispute out of court and into

arbitration as quickly and easily as possible.” Id. (quoting Commonwealth Ins. Co. v. Underwriters,
Inc., 846 F.2d 196, 199 (3d Cir. 1988)).
Authority from the Third Circuit Court of Appeals is persuasive, though with slightly
distinguishable facts. In Commonwealth Insurance Company, the Third Circuit considered, inter
alia, a district court’s order staying litigation pending the resolution of arbitration between the
plaintiff and one defendant. See Commonwealth Ins. Co., 846 F.2d at 197. While quickly
concluding that, absent district court certification, it had no authority to weigh a § 1292(b) appeal,
the Third Circuit stressed the inaptness of interlocutory appeals for orders to compel arbitration:
“The statutory policy is that of rapid and unobstructed enforcement of arbitration agreements.
Routine interlocutory appellate consideration of stays pending arbitration would frustrate both that
policy and the long-standing federal policy against piecemeal review.” Id. at 199 (citation omitted).
The Ramseys have failed to show how the exceptional grant of an interlocutory appeal will
materially advance the ultimate termination of the litigation. Rather than simplifying issues and

procedure, an appeal would do just the opposite, and thereby, counteract the purpose of arbitration.
Further, an interlocutory appeal would not resolve parties’ contentions. The certification of this
exceptional appeal would not materially advance the ultimate termination of the litigation.
III. CONCLUSION
“Permitting piecemeal, prejudgment appeals . . . undermines efficient judicial
administration,” and therefore, is disfavored. Mohawk Indus., Inc., 558 U.S. at 106. As all §
1292(b) criteria are not present, certification of an interlocutory appeal is not proper.
Accordingly,
IT IS HEREBY ORDERED the motion for certification of interlocutory appeal pursuant
to 28 U.S.C. § 1292(b) is DENIED.

New Orleans, Louisiana, this 7th day of December, 2023

_______________________________________
SENIOR UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10190241. Public record. Not legal advice.