The opinion
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 8, 2009
No. 07-30658 Charles R. Fulbruge III
Clerk
MARGARET M. SHIMON, ETC.; ET AL.,
Plaintiffs,
v.
SEWERAGE & WATER BOARD OF NEW ORLEANS,
Defendant–Third-Party Plaintiff–Appellant,
v.
FIDELITY AND GUARANTY INSURANCE COMPANY; BROWN,
CUNNINGHAM & GANNUCH INC.; CONTINENTAL CASUALTY
COMPANY; SCHRENK & PETERSON CONSULTING ENGINEERS INC.;
SECURITY INSURANCE COMPANY OF HARTFORD; JAMES
CONSTRUCTION GROUP LLC, formerly known as Angelo Iafrate
Construction LLC,
Third-Party Defendants–Appellees.
ANGELES P. BLALOCK; ET AL.,
Plaintiffs,
v.
SEWERAGE & WATER BOARD OF NEW ORLEANS,
Defendant–Third-Party Plaintiff–Appellant,
v.
No. 07-30658
JAMES CONSTRUCTION GROUP LLC, formerly known as Angelo
Iafrate Construction LLC; BROWN, CUNNINGHAM & GANNUCH INC.;
SCHRENK & PETERSON CONSULTING ENGINEERS INC.; FIDELITY
AND GUARANTY INSURANCE COMPANY; CONTINENTAL CASUALTY
COMPANY; SECURITY INSURANCE COMPANY OF HARTFORD,
Third-Party Defendants–Appellees.
RUTH A. SMITH, ETC.; ET AL.,
Plaintiffs
v.
SEWERAGE & WATER BOARD OF NEW ORLEANS,
Defendant–Third-Party Plaintiff–Appellant,
v.
JAMES CONSTRUCTION GROUP LLC, formerly known as Angelo Iafrate
Construction LLC; BROWN, CUNNINGHAM & GANNUCH INC.;
SCHRENK & PETERSON CONSULTING ENGINEERS, INC.; FIDELITY
AND GUARANTY INSURANCE COMPANY; CONTINENTAL CASUALTY
COMPANY; SECURITY INSURANCE COMPANY OF HARTFORD,
Defendants–Third-Party Defendants–Appellees.
MYRON W. SHEEN, DDS; ET AL.,
Plaintiffs,
v.
SEWERAGE & WATER BOARD OF NEW ORLEANS,
Defendant–Third-Party Plaintiff–Appellant,
v.
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No. 07-30658
JAMES CONSTRUCTION GROUP LLC; BROWN, CUNNINGHAM AND
GANNUCH INC.; SCHRENK & PETERSON CONSULTING ENGINEERS
INC; FIDELITY AND GUARANTY INSURANCE COMPANY;
CONTINENTAL CASUALTY COMPANY; SECURITY INSURANCE
COMPANY OF HARTFORD,
Third-Party Defendants–Appellees.
Appeal from the United States District Court
for the Eastern District of Louisiana
Before REAVLEY, BENAVIDES, and OWEN, Circuit Judges.
PRISCILLA R. OWEN, Circuit Judge:
The Sewerage & Water Board of New Orleans (SWB) appeals from the
dismissal of its third-party claims on the basis of res judicata. We affirm.
I
These cases arise from a flood-control construction project in New Orleans
called the “Southeastern Louisiana Urban Flood Control Project, Napoleon
Avenue Covered Canal” (SELA). Although the SELA project included
construction in several parishes, the portion of SELA at issue here involved the
installation of a box culvert beneath Napoleon and Claiborne Avenues in New
Orleans. Appellees are engineering and construction firms involved in the SELA
project and their insurers:
! Schrenck & Peterson Consulting Engineers, Inc. (S&P) was responsible for
engineering design and some day-to-day monitoring of construction
activities;
! Security Insurance Company of Hartford (Security) was S&P’s
professional liability insurer;
! James Construction Group (James) was the general contractor for this
portion of the SELA project;
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No. 07-30658
! BCG Engineering & Consulting, Inc. (BCG) provided program
management services, including construction monitoring (i.e. photography,
groundwater monitoring, and vibration monitoring), through
subcontractors that are not parties to this appeal;
! Continental Casualty Company (Continental) is BCG’s professional
liability insurer;
! Fidelity & Guaranty Insurance Company (F&G) is BCG’s general liability
insurer.
Various land owners affected by the SELA project sued SWB for property
damage under theories of inverse condemnation, negligence, absolute liability,
and strict liability. According to SWB, there were sixty-two separate suits
involving over 250 individual plaintiffs and one putative class action. Most or
all of these suits were originally filed in Louisiana state court and, according to
SWB, most or all of the suits named SWB as the sole defendant. In each case,
SWB filed third-party claims for indemnity and contribution against various
engineering and construction firms that performed the SELA work, including all
of the appellees in the instant appeal. Three of the suits received a preferential
trial date in state court under a Louisiana statute giving priority to plaintiffs
over age seventy (the Holzenthal litigation). The Louisiana Civil District Court
held a bench trial and granted judgment to the third-party defendants on the
indemnification and contribution claims and to the plaintiff-property owners on
their claims against SWB. The Louisiana Fourth Circuit Court of Appeal
affirmed the trial court 1 and the Louisiana Supreme Court denied petitions for
writs of certiorari.
Most or all of the remaining untried SELA suits were removed to federal
court by third-party defendants. The district court selected four of the removed
1
Holzenthal v. Sewerage & Water Bd., 06-0796, 06-0797, 06-0798 (La. App. 4 Cir.
1/10/07); 950 So. 2d 55.
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No. 07-30658
cases for “bellwether” trials: the claims of Shimon, et al.,2 Blalock, et al.,3 Smith,
et al.,4 and Sheen, et al.5 Some third-party defendants in those cases—the six
appellees in this case—moved for summary judgment on the third-party claims,
arguing that SWB’s claims for indemnification and contribution had already
been decided in the Holzenthal litigation. Applying the Louisiana res judicata
statute,6 the district court granted summary judgment to the third-party
defendants. The court denied SWB’s motions for reconsideration and motion for
certification for immediate appeal but did not immediately enter a final
dismissal of the third-party defendants. After approximately a year of discovery
and trial preparation, SWB moved the court to reconsider its dismissal. The
court denied SWB’s motion but certified its dismissal of the third-party
defendants as a final order under Federal Rule of Civil Procedure 54(b). The
court stayed all proceedings pending this appeal.
Subsequent to oral argument before this court, the Louisiana Fourth
Circuit Court of Appeal, in a related case, determined that the Holzenthal
litigation barred the claims against the Appellees.7 Specifically, the court of
appeal held:
Even a cursory reading of Holzenthal I reveals that the causes of
action were not limited to those specific plaintiffs, but to the project
as a whole.
2
USDC No. 05-1392.
3
USDC No. 05-3729.
4
USDC No. 05-5944.
5
USDC No. 05-6660.
6
L A . REV . STAT . § 13:4231.
7
Holzenthal v. Sewerage & Water Bd., 08-0493, 08-0494, 08-0495 (La. App. 4 Cir.
12/3/08); 999 So. 2d 1191, 1197.
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No. 07-30658
All of the present plaintiffs’ claims arose out of SELA, a
project that was going to cause unavoidable damage to the
properties in the vicinity. All of SWB’s claims against the
third-party defendants are for breach of contract, issues addressed
in Holzenthal I. Thus, we agree that res judicata applies and that
the trial court was correct in rendering its judgment.8
The Louisiana Supreme Court denied SWB’s application for a writ of
certiorari.9
II
The Supreme Court has held that “under the Full Faith and Credit Act a
federal court must give the same preclusive effect to a state-court judgment as
another court of that State would give.” 10 “It has long been established that
§ 1738 does not allow federal courts to employ their own rules of res judicata in
determining the effect of state judgments. Rather, it goes beyond the common
law and commands a federal court to accept the rules chosen by the State from
which the judgment is taken.”11 The Full Faith and Credit Act thus “[allows] the
States to determine, subject to the requirements of the statute and the Due
Process Clause, the preclusive effect of judgments in their own courts.”12
Because the Louisiana Fourth Circuit Court of Appeal has held that the
Holzenthal litigation bars SWB’s claims due to res judicata and the Louisiana
Supreme Court denied SWB’s application for a writ of certiorari, we are bound
by the Louisiana court of appeal decision and must affirm.
8
Id.
9
Holzenthal v. Sewerage & Water Bd., 09-0006 (La. 3/6/09); 2009 WL 679605.
10
Parsons Steel, Inc. v. First Ala. Bank, 474 U.S. 518, 523 (1986).
11
Id. (quoting Kremer v. Chem. Constr. Corp., 456 U.S. 461, 481-82 (1982)).
12
Id. (alteration in original) (quoting Marrese v. Am. Acad. of Orthopaedic Surgeons,
470 U.S. 373, 380 (1985)).
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No. 07-30658
* * *
AFFIRMED.
7