Opposition Brief — Xavier University of Louisiana v. Travelers Casualty Property Co. of America (No. 07-711)

2

fo . No. 07-711 DEC 2 t 2007

: OPEICE OF THE CLERK.

Su The

Supreme Court of the United States

®

IN RE KATRINA CANAL BREACHES LITIGATION

XAVIER UNIVERSITY OF LOUISIANA,

Petitioner,

V.

TRAVELERS PROPERTY CASUALTY

COMPANY OF AMERICA,

Respondent.

e

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

¢

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

.

CHARLES FRIED RALPH S. HUBBARD, III

Counsel of Record SIMEON B. REIMONENQ, JR.

1545 Massachusetts Ave. SETH A. SCHMKEECKLE

Cambridge, MA 02138 LUGENBUHL, WHEATON,

(617) 495-4636 PECK, RANKIN & HUBBARD

601 Poydras St., Ste. 2775

New Orleans, LA 70130

(504) 568-1990

STEPHEN E. GOLDMAN

WYSTAN M. ACKERMAN

JOHN M. TANSKI

ROBINSON & COLE LLP

280 Trumbull St.

Hartford, CT 06103

(860) 275-8200

Counsel for Respondent

COCKLE LAW BRIEF PRINTING CO (S00) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Did the Fifth Circuit abuse its discretion in

concluding that “the rules of contract interpretation

set forth in the Louisiana Civil Code provide us with

an adequate basis to decide this appeal,” and there-

fore denying Petitioner’s motion to certify a question

of insurance policy interpretation to the state su-

preme court?

ii

CORPORATE DISCLOSURE STATEMENT

Respondent Travelers Property Casualty Com-

pany of America is an indirect wholly-owned subsidi-

ary of The Travelers Companies, Inc.

ili

TABLE OF CONTENTS

Page

CPR IE ROI FUR oEe BOs vac oscesseskssciasasonsinaccavenna i

CORPORATE DISCLOSURE STATEMENT ........ ii

pF we oes el gy | -. Sn ne er iv

STATEMENT OF THE CASB............cccccccosssscoseness 1

SUMMARY OF ARGUMENT ...................cceccseeeees 7

REASONS FOR DENYING THE WRIT.............. 8

I. THE FIFTH CIRCUIT ACTED WELL

WITHIN ITS DISCRETION IN DENY-

ING PETITIONER’S MOTION TO CER-

TIFY QUESTIONS TO THE STATE

PU RUN EP EPMG E60 diss cds aseincsasstcenevacchects 8

Il. PETITIONER’S ATTEMPT TO MANU-

FACTURE A CIRCUIT SPLIT IS WITH-

PR NT ss occu sccintnives tea pea sigte trea 15

Ill. THE LOUISIANA COURT OF APPEAL

DECISION IN SHER IS NOT GROUNDS

FOR GRANTING CERTIORARI............... 20

ON Ripe PIN 4b ants ocahavek cy eens weak ceexeds cane cobs nero 25

lV

TABLE OF AUTHORITIES

Page

CASES

Am. Fid. Bank & Trust Co. v. Heimann, 683

Beate OE SAR IY oso inca cccenisnsna sear tacunecsdaiedinnes 17

Am. Int'l Specialty Lines Ins. Co. v. Canal

Indem. Co., 352 F.3d 254 (5th Cir. 2003)..................5

Arizonans for Official English v. Arizona, 520

Mee I ic ad cea cinaady Scuaauoxesiaobine 13, 14

Baker by Thomas v. Gen. Motors Corp., 522

Spee I CE ores a kegesiasddnomn cea beara nioamemmeies 23

Bi-Rite Enters. v. Bruce Miner Co., 757 F.2d

NE on os chsntsceyh ch cecnsauctsastgncacsoiadcrnciia ves 17

Butner v. United States, 440 U.S. 48 (1979).......0000... 11

Cantwell v. University of Mass., 551 F.2d 879

6 GS Re yxy Feeney ee eR ease ene Ranta 13

Chaney v. Travelers Ins. Co., 249 So. 2d 181

a ee ge ain et ee pee ae 21

Chevron USA, Inc. v. Vermilion Parish Sch.

Bd., 377 €.30 450 (6th Cit. BOO4) vc ccneccscecsseocccss 19, Zz

Citizens Comm. for Better Law Enforcement v.

Lafayette, 685 So. 2d 289 (La. Ct. App. 1996)........ 21

City of Burlington v. Indemnity Ins. Co. of N.

Ae BSe Bie OO Ce Ci BS) oovkvsccocscasscsccckadascccs: 17

City of Houston v. Hill, 482 U.S. 451 (1987) 10

DiBella v. Hopkins, 403 F.3d 102 (2d Cir. 2005) 16

Doe v. City of Chicago 360 F.3d 667 (7th Cir

2004 ) 12

TABLE OF AUTHORITIES —- Continued

Page

Elk Grove Unified Sch. Dist. v. Newdow, 542

aso 0s akc acte ce lc ocierg cane 11

Elkins v. Moreno, 435 U.S. 647 (1978)................. 13, 14

Fields v. Legacy Health Sys., 413 F.3d 943 (9th

I 22 t os as snsdcccgpdibecetsinarpecshadedaanaeae 16

Fiess v. State Farm Lloyds, 392 F.3d 802 (5th

as os cacndanintcessbcatenaadeanaansaumeueaieeeneeen 19

Jefferson v. Lead Indus. Ass’n, 106 F.3d 1245

ac concn 12

Jennings v. BIC Corp., 181 F.8d 1250 (11th Cir.

RR SR Ea ree Sse Oe a a eR 16

Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701

ERASER eS Po aioe ll

In re Katrina Canal Breaches Consol. Litig.,

466 F. Supp. 2d 729 (E.D. La. 2006)..............0.0... 3

In re Katrina Canal Breaches Litig., 495 F.3d

Be IN NI BINED oncnccicsc dv onssc ss dniniancndanctdasansaed passim

Lake Charles Diesel, Inc. v. GMC, 328 F.3d 192

i sank Uaewignuansacetem 19, 22

Lamar Homes, Inc. v. Mid-Continent Cas. Co..,

Oe Bee Bete (GEM Cir, BOO) qn. cicncccccscccccccccsscccsssceses 19

Lawrence v. Chater, 516 U.S. 163 (1996) ......0............24

Lehman Bros. v. Schein, 416 U.S. 386 (1974)........ 9 10

Local 514 Transport Workers Union of Am. v

Keating, 358 F.3d 743 (10th Cir. 2004 16

vi

TABLE OF AUTHORITIES - Continued

Page

McMillian v. Monroe County, 520 U.S. 781

a chiar daiduapanwenadeeeeate 1]

One Beacon Ins. Co. v. Don’s Building Supply,

Ene, 490 £.06 SOL (56H Cir, 2007) .......000.00.c000.0000000 19

Pembaur v. City of Cincinnati, 475 U.S. 469

Ne aa ny sade Lan wukhan vveeandnnjasins 11

Powell v. U.S. Fid. & Guar. Co., 88 F.3d 271

a iss han cou unaidaiiiniakswavesciannasae 17

Savoie v. Fireman’s Fund Ins. Co., 347 So. 2d

ac ehacdh ocrcdauisheubaubadadunseuansacwadns 5

Schmude v. Sheahan, 420 F.3d 645 (7th Cir.

ere eis caida dNdkiabedndavaneoces 16

Schroeder v. Bd. of Supervisors of La. State

RPOORE, Tk GOO, BO Ee CL. 1991)... cans cc ccecccccsccccoccncse 5

Shakopee Mdewakanton Sioux Cmty. v. City of

Prior Lake, 771 F.2d 1153 (8th Cir. 1987) .............. 17

Sher v. Lafayette Ins. Co., 2007 WL 4247708

(La. Ct. App. Nov. 19, 2007)...............c..sssec00 6, 20-24

State of Florida ex rel. Shevin v. Exxon Corp.,

So F.20 2o0 (Sth Cir. 1976) ........................-.... 15, 18

Thomas v. American Home Prods., Inc., 519

CNee ne eed daheéspesanaevecsss 1.24

Tidler v. Eli Lilly & Co., 851 F.2d 418 (D.C. Cir

ela Sind dude swusgdvewias 13, 16, 18

Town of Castle Rock v. Gonzales, 545 U.S. 748

(P2005) 13, 14

Vill

TABLE OF AUTHORITIES — Continued

Page

Transamerica Ins. Co. v. Duro Bag Mfg. Co., 50

ee eI AE, SPINE vississs eh pr nsnrscsovernnncrdetssece sane 17

Travelers Indem. Co. v. DiBartolo, 171 F.3d 168

a I la sa entsn dd sect ncccansesilad ncn aaieaiaeemanncceks 17

United States Fid. & Guar. Co. v. Park ’n Go of

Georgia, Inc., 66 F.3d 273 (11th Cir. 1995)............. 18

In re Whitaker Constr. Co., 439 F.3d 212 (5th

te S| ERRANDS a Meroe ee SAREE ee eh ee ND 5

Woodbridge Place Apartments v. Wash. Square

Capital, Inc., 965 F.2d 1429 (7th Cir. 1992)........... 17

York Ins. Co. v. Williams Seafood of Albany,

Ine., 223 F.3d 1253 (11th Cir. 2000) ..................:.... 18

STATUTES

a Te ON OO, I hae spat veavasacnes picadsvnndiudievadennciowiaces 4

Bi, Ke eG, FE ihe aicntctaxesanssrsnideccdeiosae 4

TREATISE

17A Charles A. Wright et al., FEDERAL PRACTICE

AND PROCEDURE § 4248 (1988)...........................12. 15

BRIEF FOR RESPONDENT IN OPPOSITION

Petitioner asks this Court to review the Fifth

Circuit’s decision not to certify a question of insur-

ance policy interpretation to a state supreme court.

There is no reason, let alone a compelling reason, to

grant certiorari. There is no circuit split. No federal

constitutional provision or federal statute is involved.

Petitioner invokes only this Court’s supervisory

power, asking the Court to review a highly discre-

tionary decision by a court of appeals. The Fifth

Circuit acted well within its considerable discretion

in determining that well-established principles of

contract interpretation in the Louisiana Civil Code

provided sufficient guidance for the Fifth Circuit to

decide a straightforward question of insurance policy

construction. Given that Petitioner chose to file this

suit in federal court under diversity jurisdiction, it

can hardly complain about the fact that a federal

court of appeals decided a state law issue rather than

certifying it. The petition for certiorari should there-

fore be denied.

STATEMENT OF THE CASE

Petitioner Xavier University of Louisiana is a

large university located in the City of New Orleans. It

purchased commercial property insurance coverage

from Respondent Travelers Property Casualty Com-

pany of America, which was in effect when Hurricane

Katrina struck on August 29, 2005. Petitioner’s

2

buildings sustained some damage resulting from

Hurricane Katrina’s winds. During the hurricane,

levees broke on several canals in New Orleans, re-

sulting in large-scale flooding. Some of Petitioner’s

buildings were damaged by the floodwaters.

The insurance policy issued by Respondent

covered loss caused by wind, but expressly excluded

loss caused by “flood.” Petitioner also purchased a

separate flood insurance policy through the National

Flood Insurance Program, but the limits were inade-

quate to cover the flood damage to Petitioner’s build-

ings. Seeking to recover for both wind and flood

damage, Petitioner filed this breach of contract suit

against Respondent in the U.S. District Court for the

Eastern District of Louisiana, which had jurisdiction

based on diversity of citizenship.

In the district court, Petitioner filed a mction for

partial summary judgment, seeking a ruling that the

insurance policy covered the damage to its buildings

caused by the massive inundation of New Orleans,

notwithstanding the “flood” exclusion. As Petitioner

put it, it was seeking coverage for “damages to Xa-

vier’s campus following Hurricane Katrina [that]

were caused by ground water which came from the

collapses of the 17th Street Canal and the London

Avenue canal levees... .” Petitioner argued that the

term “flood” should be interpreted as referring to a

“natural” event, and that the levee breaches were

caused by “non-natural” causes — human acts or

omissions in the design, construction or maintenance

of the levees

3

Petitioner’s motion for partial summary judg-

ment was heard together with dispositive motions in

other cases raising essentially the same issue.’ The

district court granted Petitioner’s motion for partial

summary judgment in part, holding that the term

“flood” was ambiguous and should be construed as

referring to “natural” events. In re Katrina Canal

Breaches Consol. Litig., 466 F. Supp. 2d 729, 766-67

(E.D. La. 2006), vacated and remanded, 495 F.3d 191

(5th Cir. 2007). The district court concluded, however,

that there were genuine issues of fact in dispute with

respect to the cause of the levee breaches. /d. at 767.

The district court sua sponte certified its order for

interlocutory appeal pursuant to 28 U.S.C. § 1292(b).

Id. at 780-81. Respondent filed a petition for permis-

sion to appeal in the Fifth Circuit, which granted

review.

While the case was pending in the Fifth Circuit,

Petitioner and other plaintiffs moved to certify the

question presented to the Louisiana Supreme Court.

These motions were carried with the case to be ruled

upon by the merits panel. When it issued its decision

on the merits, the Fifth Circuit denied the motions to

certify, concluding that “[blecause the rules of con-

tract interpretation set forth in the Louisiana Civil

Code provide us with an adequate basis to decide this

' There is another petition for certioran pending in this

Court in one of the cases that was heard together with the

instant case in both the district court and the court of appeals

See Chehardy v. Allstate Indem. Co., No. 07-713

4

appeal, we decline the certification requests.” In re

Katrina Canal Breaches Litig., 495 F.3d 191, 208 n.11

(5th Cir. 2007).

The Fifth Circuit concluded, unanimously, that

what occurred in New Orleans was clearly a “flood”:

[W]e conclude that the flood exclusions in the

plaintiffs’ policies are unambiguous in the

context of the facts of this case. In the midst

of a hurricane, three canals running through

the City of New Orleans overflowed their

normal boundaries. The flood-control meas-

ures, i.e., levees, that man had put in place

to prevent the canals’ floodwaters from

reaching the city failed. The result was an

enormous and devastating inundation of wa-

ter into the city, damaging the plaintiffs’

property. This event was a “flood” within that

term’s generally prevailing meaning as used

in common parlance, and our interpretation

of the exclusions ends there. The flood is un-

ambiguously excluded from coverage under

the plaintiffs’ all-risk policies, and the dis-

trict court’s conclusion to the contrary was

erroneous.

Id. at 196. In reaching this result, the Fifth Circuit

applied the principles of contract interpretation set

forth in the Louisiana Civil Code. The Code provides

that “[t]he words of a contract must be given their

generally prevailing meaning,” and that “[wlhen the

words of a contract are clear and explicit and lead to

no absurd consequences, no further interpretation

may be made in search of the parties’ intent.” La. Civ.

5

Code arts. 2046, 2047.’ The Fifth Circuit applied the

Code the same way the Louisiana Supreme Court

does. The state supreme court has held that the

“generally prevailing meaning” of a word is the

meaning used in “common parlance” by “a reasonable

person, a person in the street or an average citi-

zen....” Schroeder v. Bd. of Supervisors of La. State

Univ., 591 So. 2d 342, 346 (La. 1991). See also Savoie

v. Fireman’s Fund Ins. Co., 347 So. 2d 188, 191 (La.

1977). As the Fifth Circuit held, there is no doubt that

in common parlance what occurred in New Orleans

was a “flood.” Katrina Canal Breaches, 495 F.3d at

196.

Petitioner filed a petition for rehearing en banc,

arguing, inter alia, that the panel erred in declining

to certify the question presented to the state supreme

court. Petitioner asked the en banc court to certify the

question. Petitioner also moved to stay the mandate

on the grounds that, in Sher v. Lafayette Ins. Co., the

Louisiana Fourth Circuit Court of Appeal was sched-

uled to hear oral argument on the applicability of

a “flood” exclusion in a Hurricane Katrina case.

* Louisiana is a unique civil law jurisdiction in which “the

only authoritative ‘sources of law are legislation and custom,”

and “courts must look first and foremost to the state’s ‘primary

sources of law: the State’s Constitution, codes, and statutes.”

Am. Int'l Specialty Lines Ins. Co. v. Canal Indem. Co., 352 F.3d

254, 260 (5th Cir. 2003). See also In re Whitaker Constr. Co., 439

F.3d 212, 222 (5th Cir. 2006) (“In the civil law tradition, the Civil

Code is the ‘solemn expression of legislative will’ to which our

Erie obligation applies.”).

6

Petitioner asked that the mandate be stayed until

both the Louisiana Fourth Circuit and the Louisiana

Supreme Court had issued decisions in Sher. The

Fifth Circuit denied the petition for rehearing en

banc, denied the motion to stay the mandate, and

issued its mandate.

Following issuance of the mandate, discovery has

continued in the district court. Petitioner filed several

motions for partial summary judgment on other

issues that it claims are closely tied to the interpreta-

tion of the “flood” exclusion. While those motions

were pending, the Louisiana Fourth Circuit issued a

decision in Sher. As explained in further detail

herein, the Sher court did not issue a majority opin-

ion on the “flood” exclusion. It voted 2-2 on whether

the term “flood” was ambiguous, with one judge

ruling that the term “flood” was unambiguous, but

that the damage at issue was covered because it was

caused by wind, and one judge concurring in the

result without explaining her views. Sher v. Lafayette

Ins. Co., 2007 WL 4247708 (La. Ct. App. Nov. 19,

2007). After the Sher opinion came down, the district

court denied Petitioner’s motions for partial summary

judgment, without prejudice to the motions being re-

urged after the Louisiana Supreme Court denies

writs or issues a decision on the merits in Sher.

¢

7

SUMMARY OF ARGUMENT

The only issue decided by the Fifth Circuit was a

question of contract interpretation under Louisiana

law. Petitioner does not ask this Court to review the

issue decided by the Fifth Circuit because it knows

that this Court does not, except in extraordinary

circumstances, review decisions by the lower federal

courts on issues of state law. In an effort to manufac-

ture a “federal” issue, Petitioner argues that the Fifth

Circuit erred in failing to certify a question of state

law to the state supreme court. But that is a highly

discretionary decision, dependent on a careful analy-

sis of the state law issue on which certification is

being sought. Petitioner fails to show that the Fifth

Circuit committed any error, let alone such an egre-

gious abuse of discretion as to warrant the exercise of

this Court’s supervisory powers.

This Court gives the courts of appeals consider-

able deference in deciding questions of state law, and,

as part of that process, deciding whether to certify a

question to a state supreme court. In making that

decision, the Fifth Circuit and other courts of appeals

consider all relevant factors, most importantly

whether the applicable principles of state law are

sufficiently clear. Petitioner does not challenge the

criteria applied by the Fifth Circuit in exercising its

discretion. While Petitioner attempts to suggest that

there is a circuit split on the certification of questions

to state supreme courts, there clearly is none.

8

In order to decide whether the Fifth Circuit

abused its discretion, this Court would have to im-

merse itself in Louisiana contract law and its unique

civilian tradition. Such an inquiry would, however,

readily demonstrate that the Fifth Circuit acted well

within its discretion. The question of whether the

massive inundation of New Orleans at the time of

Hurricane Katrina was a “flood” was governed by

well-established, basic principles of contract law set

forth in the Louisiana Civil Code and Louisiana

Supreme Court decisions.

Petitioner also argues that the Fifth Circuit’s

decision conflicts with the decision by the Louisiana

intermediate appellate court in Sher. But there was

no majority opinion in Sher. The plurality opinion

contains little reasoning and ignores the Fifth Cir-

cuit’s decision. A non-precedential, evenly-divided and

sparsely reasoned opinion of one of Louisiana’s five

circuit courts of appeal is not grounds for this Court

to intervene.

REASONS FOR DENYING THE WRIT

I. THE FIFTH CIRCUIT ACTED WELL WITHIN

ITS DISCRETION IN DENYING PETI-

TIONER’S MOTION TO CERTIFY QUES-

TIONS TO THE STATE SUPREME COURT

Certification of a question to a state supreme

court is not governed by any federal statute or rule of

procedure. Instead, it is a procedure that is made

9

available to the federal courts by some state courts of

last resort, and is exercised by the federal courts in

their discretion. This Court has long recognized that

certification to a state supreme court is never “obliga-

tory,” and “in a given case rests in the sound discre-

tion of the federal court.” Lehman Bros. v. Schein, 416

U.S. 386, 390-91 (1974). When a federal court decides

to certify, the decision to answer a certified question,

or decline to do so, rests entirely in the discretion of

the state court. State statutes and rules of court vary

considerably with respect to whether certification is

permitted, the criteria for considering certification,

and which federal courts can certify a question. It is a

procedure that is highly discretionary in both the

federal and state courts.

A court of appeals’ decision on certification is

inherently intertwined with its evaluation of the

merits of the state law issue on which certification is

sought. “(T]he use of such a procedure is more a

question of the considerable discretion of the federal

court in going about the decisionmaking process than

it is a question of a choice trenching upon the funda-

mentals of [this Court’s] federal-state jurisprudence.”

Id. at 394 (Rehnquist, J., concurring). A decision on

certification necessarily depends, in part, on how

well-established the applicable principles of state law

are, and the extent to which state appellate courts (or

courts in other jurisdictions that may be looked to for

guidance) have disagreed on the question presented.

As then-Justice Rehnquist noted, “it would be un-

thinkabie to any of the Members of this Court to

10

prescribe the process by which a district court or a

court of appeals should go about researching a point

of state law which arises in a diversity case.” Id. “Ifa

district court or court of appeals believes that it can

resolve an issue of state law with available research

materials already at hand, and makes the effort to do

so, its determination should not be disturbed simply

because the certification procedure existed but was

not used.” Id.

As this Court has recognized, certification is not

a panacea, and in some instances is clearly improper.

“It would be manifestly inappropriate to certify a

question in a case where ... there is no uncertain

question of state law whose resolution might affect

the pending federal claim.” City of Houston v. Hill,

482 U.S. 451, 471 (1987). For example, “[a] federal

court may not properly ask a state court if it would

care in effect to rewrite a statute.” Jd. While this

Court has at times suggested that, on remand, it may

be appropriate for a court of appeals to certify a

question of state law, Petitioner fails to cite a single

case in which this Court has ever ordered a court of

appeals to use the certification procedure. It does not

appear that this Court has ever done so.

The discretion this Court has given the courts of

appeals on certification goes hand-in-hand with the

considerable deference this Court accords the courts

of appeals in deciding the merits of issues of state

law. This Court’s “custom on questions of state law

ordinarily is to defer to the interpretation of the

Court of Appeals for the Circuit in which the State is

ll

located.” Elk Grove Unified Sch. Dist. v. Newdow, 542

U.S. 1, 16 (2004). See also Pembaur v. City of Cincin-

nati, 475 U.S. 469, 485 n.13 (1986) (“We generally

accord great deference to the interpretation and

application of state law by the courts of appeals.”).

The main reason for this is that “federal judges who

deal regularly with questions of state law in their

respective districts and circuits are in a better posi-

tion than [the Supreme Court] to determine how local

courts would dispose of comparable issues.” Butner v.

United States, 440 U.S. 48, 58 (1979).* Judges on the

Fifth Circuit, for example, are well-versed in Louisi-

ana’s unique system of civil law. The members of the

Fifth Circuit panel in this case collectively had 46

years of experience on the federal appellate bench,

during which they have decided countless questions

of Louisiana law.

The Fifth Circuit acted well within its discretion

in concluding that “the rules of contract interpreta-

tion set forth in the Louisiana Civil Code provide us

with an adequate basis to decide this appeal... .”

Katrina Canal Breaches, 495 F.3d at 208 n.11.

The Fifth Circuit had no difficulty in applying the

* See also McMillian v. Monroe County, 520 U.S. 781, 786

(1997) (“Since the jurisdiction of the [Eleventh Circuit] Court of

Appeals includes Alabama, we defer considerably to that court’s

expertise in interpreting Alabama law.”); Jett v. Dallas Indep.

Sch. Dist., 491 U.S. 701, 738 (1989) (“We think the [Fifth

Circuit] Court of Appeals, whose expertise in interpreting Texas

law is greater than our own, is in a better position to determine

[the state law issues in the case}.”).

12

Louisiana principles of contract law to decide whether

the massive inundation of New Orleans was a “flood.”

Indeed, to the average citizen it seems preposterous

that lawyers are even arguing about whether the

inundation of New Orleans was a “flood.” Petitioner

fails to explain why the governing principles of con-

tract law were so uncertain that this Court should

exercise its supervisory power to grant certiorari, and

then immerse itself in Louisiana contract law to

determine whether the Fifth Circuit abused its dis-

cretion in denying certification. While the question

before the Fifth Circuit was important to policyhold-

ers and the insurance industry, there is no require-

ment that all important questions be certified even if

the applicable principles are clear.

Moreover, the Fifth Circuit was entitled to take

into account the fact that Petitioner chose to sue in

federal district court, knowing that a federal court

would decide the issues of state law presented by the

case. See Jefferson v. Lead Indus. Ass’n, 106 F.3d

1245, 1248 (5th Cir. 1997) (noting that courts are

“slow to honor a request for certification from a party

who chose to invoke federal jurisdiction”) (quoting

17A Charles A. Wright et al., FEDERAL PRACTICE &

PROCEDURE § 4248, at 176 (1988).*

* The courts of appeals frequently look with skepticism on a

motion to certify by the party that chose to litigate in a federal

forum. See, e.g., Doe v. City of Chicago, 360 F.3d 667, 672 (7th

Cir. 2004) (“{I]t’s not a proper alternative to proceeding in the

first instance in state court to sue in federal court but ask that

(Continued on following page)

13

Petitioner relies on three decisions by this Court

which are readily distinguishable. Elkins v. Moreno,

435 U.S. 647 (1978); Arizonans for Official English v.

Arizona, 520 U.S. 43 (1997); Town of Castle Rock v.

Gonzales, 545 U.S. 748 (2005). In all three cases,

there was a state law issue that, depending on how it

was decided, might make it unnecessary to decide a

question of federal constitutional law. In Elkins, this

Court certified a question to the Maryland Court of

Appeals based on the Court’s “longstanding policy

of avoiding unnecessary constitutional questions.”

Elkins, 435 U.S. at 661. Similarly, in Arizonans, the

Court noted in dicta (after concluding that the

plaintiffs had no standing) that the lower courts

could potentially have avoided deciding whether an

amendment to the Arizona Constitution was com-

patible with the U.S. Constitution if the Arizona

Supreme Court had been offered the opportunity to

construe the state constitutional provision. The

Court explained that “[wlarnings against premature

adjudication of constitutional questions bear height-

ened attention when a federal court is asked to

invalidate a State’s law, for the federal tribunal risks

the suit be stayed to permit certifying the interpretive issue to

the state court, thus asking that the suit be split between two

courts.”); Tidler v. Eli Lilly & Co., 851 F.2d 418, 426 (D.C. Cir.

1988) (noting that the position of plaintiffs who brought suit in

federal court “and when they saw the result, thought better of

the state after all ... could hardly have been made less compel-

ling”); Cantwell v. University of Mass., 551 F.2d 879, 880 (1st

Cir. 1977) (“[O]ne who chooses the federal courts in diversity

actions is in a peculiarly poor position to seek certification.”).

14

friction-generating error if it endeavors to construe a

novel state Act not yet reviewed by the State’s highest

court.” Arizonans, 520 U.S. at 79.

In Town of Castle Rock, this Court avoided a

federal constitutional question when it held that

Colorado law did not provide the plaintiff with a right

to police enforcement of a restraining order. The

Court concluded that certification of that question to

the state supreme court was unnecessary. Town of

Castle Rock, 545 U.S. at 758-66 & n.5. Petitioner

relies on the dissent, which concluded that the Court

should have deferred to the Tenth Circuit’s interpre-

tation of Colorado law or, “barring that,” should have

certified the question to the Colorado Supreme Court.

Id. at 778 n.6 (Stevens, J., dissenting) (“Both options

that I favor — deferring to the Circuit’s interpretation

or, barring that, certifying to the Colorado Supreme

Court — recognize the comparative expertise of

another tribunal on questions of state law.” (emphasis

added)).

The federalism concerns that were implicated in

Elkins, Arizonans, and Town of Castle Rock, where

federal courts were asked to strike down a state

statute or state constitutional provision on federal

constitutional grounds, are not present when federal

courts are interpreting state law in diversity cases.

The diversity jurisdiction dockets of the federal courts

of appeals would grind to a halt if they were required

to certify to a state supreme court questions as

straightforward as whether the massive inundation

of a major city was a “flood.” Litigants who, like

15

Petitioner, choose to sue in federal court assume the

risk that the result they obtain from the federal court

of appeals might not be the same result that other

litigants obtain in state court.

If. PETITIONER’S ATTEMPT TO MANUFAC.

TURE A CIRCUIT SPLIT IS WITHOUT

MERIT

Petitioner tries to create a circuit split by citing

instances in which courts of appeals have on occasion

certified questions of insurance policy interpretation

to state courts of last resort. But Petitioner has failed

to show that there is any disagreement among the

courts of appeals, let alone a well-developed dis-

agreement that would require intervention by this

Court.

In exercising its discretion on certification, the

Fifth Circuit takes into consideration all pertinent

factors. “The most important [factors] are the close-

ness of the question and the existence of sufficient

sources of state law ... to allow a.principled rather

than conjectural conclusion.” State of Florida ex rel.

Shevin v. Exxon Corp., 526 F.2d 266, 275 (5th Cir.

1976). The Fifth Circuit also considers, among other

factors, “the practical limitations of the certification

process; significant delay and possible inability to

frame the issue so as to produce a helpful response on

the part of the state court.” Jd. See also 17A Charles

A. Wright et al., FEDERAL PRACTICE AND PROCEDURE

§ 4248 (quoting Shevin’s description of the factors

16

that guide certification and noting that “the Fifth

Circuit ... has had by far the greatest experience

with certification”).

The courts of appeals are in agreement that the

decision on certification is a highly discretionary,

case-by-case determination, in which the court will

consider all pertinent factors. For example, the D.C.

Circuit has noted that “[t]he most important consid-

eration guiding the exercise of this discretion ... is

whether the reviewing court finds itself genuinely

uncertain about a question of state law that is vital to

a correct disposition of the case.” Tidler, 851 F.2d at

426. Similarly, the Second Circuit has stated that it

“will not certify questions of law where sufficient

precedents exist for us to make this determination’;

rather, “[clertification is to be used in those cases

‘where there is a split of authority on the issue, where

[a] statute’s plain language does not indicate the

answer, or when presented with a complex question of

[state] common law for which no |state] authority can

be found.’” DiBella v. Hopkins, 403 F.3d 102, 111 (2d

Cir. 2005) (citations omitted). The Seventh Circuit

considers “several factors ... the most important of

which is whether we feel genuinely uncertain about

an issue of state law.” Schmude v. Sheahan, 420 F.3d

645, 650-51 (7th Cir. 2005).

* Other circuits apply similar factors. See Fields v. Legacy

Health Sys., 413 F.3d 943, 958 (9th Cir. 2005); Local 514 Trans-

port Workers Union of Am. v. Keating, 358 F.3d 743, 758 (10th

Cir. 2004); Jennings v. BIC Corp., 181 F.3d 1250, 1254 n.2 (11th

(Continued on following page)

17

Like the Fifth Circuit, other courts of appeals

have concluded that where the governing principles of

state law are sufficiently clear, there is typically no

need for certification. See, e.g., Transamerica Ins. Co.

v. Duro Bag Mfg. Co., 50 F.3d 370, 372 (6th Cir. 1995)

(“Although Kentucky has not addressed the exact

question at issue, it does have well-established prin-

ciples to govern the interpretation of insurance con-

tracts. Accordingly ... we [] decline to certify it.”);

Woodbridge Place Apartments v. Wash. Square Capi-

tal, Inc., 965 F.2d 1429, 1434 (7th Cir. 1992) (refusing

to certify because “Indiana’s general principles of

contractual construction provide enough guidance”).

The cases cited in the Petition fail to demonstrate

any disagreement between the courts of appeals on

certification, let alone a well-developed one. In City of

Burlington v. Indemnity Ins. Co. of N. Am., 332 F.3d

38 (2d Cir. 2003), the Second Circuit certified ques-

tions of insurance policy interpretation to the Ver-

mont Supreme Court because it found that, in order

to decide those questions, it would have to make

“significant assumptions” about basic, fundamental

principles of Vermont insurance law. Jd. at 50. To use

the terminology of its sister circuits, the Second

Cir. 1999): Travelers Indem. Co. v. DiBartolo, 171 F.3d 168, 169

n.1 (3d Cir. 1999); Powell v. U.S. Fid. & Guar. Co., 88 F.3d 271,

273-74 (4th Cir. 1996); Shakopee Mdewakanton Sioux Cmty. v.

City of Prior Lake, 771 F.2d 1153, 1157 n.2 (8th Cir. 1987); Bi-

Rite Enters. v. Bruce Miner Co., 757 F.2d 440, 443 n.3 (1st Cir

1985); Am. Fid. Bank & Trust Co. v. Heimann, 683 F.2d 999,

1002 (6th Cir. 1982).

18

Circuit was unable to find “sufficient sources of state

law ... to allow a principled rather than conjectural

conclusion” and therefore found itself “genuinely

uncertain about a question of state law that is vital to

the correct disposition of the case.” Shevin, 526 F.2d

at 275; Tidler, 851 F.2d at 426. Here, in contrast, the

Fifth Circuit did not need to make any assumptions

about Louisiana law in applying the well-established

ptinciples of the state’s Civil Code.

Petitioner also cites two cases in which the

Eleventh Circuit certified questions of insurance

policy interpretation to the Georgia Supreme Court.

In York Ins. Co. v. Williams Seafood of Albany, Inc.,

223 F.3d 1253, 1256 (11th Cir. 2000), the court of

appeals found that two policy provisions were in

conflict, that there were several reasonable interpre-

tations, and that Georgia appellate caselaw provided

insufficient guidance. In United States Fid. & Guar.

Co. v. Park ’n Go of Georgia, Inc., 66 F.3d 273, 277-78

(lith Cir. 1995), the court of appeals concluded that

there were two seemingly inconsistent lines of Geor-

gia Supreme Court authority on the basic question of

when a court can look outside the four corners of a

contract to ascertain its meaning. Here, unlike in

Williams Seafood and Park ’n Go, the Fifth Circuit

concluded that the applicable rules of contract inter-

pretation in Louisiana were clear and _ well-

established. Katrina Canal Breaches, 495 F.3d at 208

n.11. Petitioner does not seriously contend that the

applicable principles of Louisiana law were unclear.

19

There is also no merit to Petitioner’s attempt to

create an “intra-circuit” split by suggesting that the

Fifth Circuit’s decisions on certification are inconsis-

tent.° In all three cases relied on by Petitioner, there

was disagreement between the intermediate appel-

late courts in Texas on the questions presented. One

Beacon Ins. Co. v. Don’s Building Supply, Inc., 496

F.3d 361, 364 (5th Cir. 2007); Lamar Homes, Inc. v.

Mid-Continent Cas. Co., 428 F.3d 193, 197-98 (5th

Cir. 2005); Fiess v. State Farm Lloyds, 392 F.3d 802,

809-10 (5th Cir. 2004). Moreover, Texas, unlike Lou-

isiana, is a common-law jurisdiction, which lacks the

type of definitive contractual interpretation statutes

that Louisiana has enacted in its Civil Code. In

Louisiana, legislation is the primary source of law

and judicial decisions are never binding until there is

a series of decisions that rise to the level of jurispru-

dence constante. See Chevron USA, Inc. v. Vermilion

Parish Sch. Bd., 377 F.3d 459, 462 (5th Cir. 2004)

(“[A]lthough we may be guided by decisions rendered

by the Louisiana appellate courts, we are not strictly

bound by them, particularly when the jurisprudence

has not developed to the status of jurisprudence

constante (a series of decisions in accord on a given

issue).”); Lake Charles Diesel, Inc. v. GMC, 328 F.3d

192, 197 (5th Cir. 2003) (noting that, in Louisiana,

“judicial decisions acquire the force of law only when

° If there were inconsistency in the Fifth Circuit’s decisions,

that might lead to en banc review, but would not warrant a

grant of certioran.

20

their numerosity and uniformity are sufficient to

achieve the status of jurisprudence constante’”).

The Fifth Circuit’s denial of the Petitioner’s

motion to certify was consistent with this Court’s

decisions and the standards for certification through-

out the courts of appeals. The Fifth Circuit’s decision

to decline certification was also a permissible exercise

of that court’s considerable discretion. There is thus

no reason, let alone a compelling one, to grant certio-

rari.

lil. THE LOUISIANA COURT OF APPEAL

DECISION IN SHER IS NOT GROUNDS

FOR GRANTING CERTIORARI

The Petition also contends that the Fifth Circuit’s

decision conflicts with Sher, a Hurricane Katrina case

in which the Louisiana Fourth Circuit affirmed a jury

verdict requiring an insurer to pay for damage to the

basement of the insured building, which the insurer

contended was caused by flood. The five-member

panel, however, could not reach a majority on the

rationale for this result. The vote on the “flood”

exclusion was 2-2 with one abstention. A two-judge

plurality concluded, without much explanation, that

the term “flood” was ambiguous. Sher, 2007 WL

4247708, at *4-5 (Love, J., joined by McKay, J.). One

judge concluded that “it is clear that the word ‘flood’

applied to any and all floods,” but then found, based

largely on “judicial notice,” that the damage to

the basement was caused by wind, not flood, and

21

therefore was covered by the policy. Jd. at *20-21

(Tobias, J., concurring in the result). One judge

dissented from the portion of the opinion requiring

the insurer to pay for the damage to the basement.

He concluded that “the term ‘flood,’ as well as the

entirety of the exclusion, is clear and unambiguous.”

Id. at *23 (Cannizzaro, J., concurring in part and

dissenting in part). The fifth member of the court,

Judge Murray, cryptically concurred only in the

result, declining to explain her reasons or join any of

her colleagues’ opinions. Jd. at *20 (“Murray, J.,

concurs in the result.”). Judge Murray offered no

indication of her view on the flood exclusion, leaving

the court evenly split on that issue. Consequently,

Sher only stands for a result — that the plaintiff, for

whatever reason, is entitled to insurance coverage for

water damage to his basement.

Because there was no majority opinion on the

water damage exclusion in Sher, the decision has

little precedential value. Citizens Comm. for Better

Law Enforcement v. Lafayette, 685 So. 2d 289, 293

(La. Ct. App. 1996) (explaining that a plurality

opinion “is of little value as precedent and should

properly be limited to the facts of that case only”);

see also Chaney v. Travelers Ins. Co., 249 So. 2d 181,

184 (La. 1971) (explaining that there was no major-

ity on a seven-member court where one justice

concurred in the result and three justices dissented).

This is especially true in Louisiana, where judicial

decisions are never binding until they rise to the level

22

of jurisprudence constante. See Chevron USA, 377

F.3d at 462; Lake Charles Diesel, 328 F.3d at 197.

Petitioner does not even argue that the Fifth

Circuit would reach a different result based on the

non-precedential decision in Sher. The _ plurality

opinion is unpersuasive, and fails to even acknowl-

edge the Fifth Circuit’s thorough opinion. The plural-

ity reasoned as follows:

A review of the Policy reveals that the par-

ties intended to cover and include all risks

that were not specifically excluded or lim-

ited. Lafayette failed to specifically exclude

all floods because of the ambiguity contained

within the water exclusion. While the Policy

states that it does not cover damage caused

by a “flood,” it also states that it does not

cover “waves, tides, tidal waves,” and the

“overflow of any body of water ... whether

driven by wind or not.” This exclusion in-

cludes “flood,” but then continues to list spe-

cific natural disasters that cause inundations

of water, commonly labeled as “floods.” For

example, a varying cause of a flood can be

man-made or natural, as documented in La.

R.S. 29:762, which states that a flood is a

natural disaster.

Sher, 2007 WL 4247708, at *4.

This reasoning was persuasively rejected by two

other judges on the Sher panel. As Judge Cannizzaro

explained, the words “surface water, waves,” etc. are

“not intended in any way to be a definition of the

23

word ‘flood,’” or otherwise restrict the meaning of

“flood.” Id. at *24 (Cannizzaro, J.). As Judge Tobias

explained, “[t]he greater includes the lesser” and “[i]n

context, it is clear that ‘flood’ includes flood from any

source whatsoever, including surface water, waves, et

cetera.” Id. at *20 (Tobias, J.). To the extent that the

plurality relied on the fact that the word “flood” was

included in a list of “natural disasters” in a Louisiana

homeland security statute, the plurality was grasping

at straws. See id. at *26 (Cannizzaro, J.) (noting that

the homeland security statute “provides no guidance

to the use of the word ‘flood’ relative to the case at

hand and, particularly, to the policy issued by the

defendant (i.e., contract between the parties).”).

Given the lack of persuasiveness of the plurality

opinion, Sher can hardly be expected to persuade the

Fifth Circuit that its lengthy and careful opinion was

an incorrect prediction of how the Louisiana Supreme

Court would rule. See Baker by Thomas v. Gen.

Motors Corp., 522 U.S. 222, 249 (1998).

Sher in no way warrants an order granting the

Petition, vacating the decision below, and remanding.

This procedure, known as GVR, is “potentially appro-

priate” when “intervening developments, or recent

developments that [this Court has] reason to believe

the court below did not fully consider, reveal a rea-

sonable probability that the decision below rests upon

a premise that the lower court would reject if given

the opportunity for further consideration, and where

it appears that such a redetermination may deter-

mine the ultimate outcome of the litigation. .

24

Lawrence v. Chater, 516 U.S. 163, 167 (1996) (per

curiam). While this Court has on occasion issued a —

GVR order where there is an intervening state su-

preme court decision that is squarely contrary to the

decision of a federal court of appeals, see, e.g., Thomas

v. American Home Prods., Inc., 519 U.S. 913 (1996), it

does not appear that this Court has ever issued a

GVR order based on an intervening decision by a

state intermediate appellate court, or based on the

possibility that a state supreme court might decide

the question. Even if an intermediate appellate

decision could be grounds for a GVR order; there is no

“reasonable probability” that the Fifth Circuit “would

reject” its own thorough decision based on a non-

precedential, 2-2 ruling by one of Louisiana’s five

circuit courts of appeal. This is particularly true here

where the Fifth Circuit denied Petitioner’s request to

stay the mandate pending decisions by the Louisiana

appellate courts in Sher.

25

CONCLUSION

The petition for a writ of certiorari should be

denied.

Dated: December 27, 2007 Respectfully submitted,

CHARLES FRIED RALPH S. HUBBARD, III

Counsel of Record SIMEON B. REIMONENQ, JR.

1545 Massachusetts Ave. SETH A. SCHMEECKLE

Cambridge, MA 02138 LUGENBUHL, WHEATON,

(617) 495-4636 PECK, RANKIN & HUBBARD

601 Poydras St., Ste. 2775

New Orleans, LA 70130

(504) 568-1990

STEPHEN E. GOLDMAN

WYSTAN M. ACKERMAN

JOHN M. TANSKI

ROBINSON & COLE LLP

280 Trumbull St.

Hartford, CT 06103

(860) 275-8200

Counsel for Respondent