In Taranto v. Louisiana Citizens Prop. Ins. Corp.(pdf), the Louisiana Supreme Court ruled, in a 5-2 decision, that the filing of a proposed class action lawsuit against an insurance company extends the time to bring suit for all members of the proposed class under suit limitation provisions in homeowners’ policies.  (The time to sue was originally one year under most policies but had been extended, with respect to Katrina and Rita claims, by the Louisiana Legislature.) 

The central issue in the case was how you interpret the term “liberative prescription” in Article 596 of the Louisiana Code of Civil Procedure.  Under Article 596, “liberative prescription” is “suspended” when a proposed class action is filed.  “Prescription” is essentially the Louisiana term for what the rest of the country calls a statute of limitations.  When “prescription” is “suspended” it means that the time to sue stops running while the proposed class action is pending, but, when the time starts running again, you count the time that ran before the proposed class action was filed.  So if a proposed class action was filed two days before the deadline, when the suspension stops running (as I’ll discuss further below), individual members of the proposed class would have only two days to sue.  But if the proposed class action was filed about a year before the deadline (which some Katrina cases were), the homeowners would have another year or so to sue when the suspension stops.

The debate within the court centers on whether “liberative prescription” refers only to a statute or also refers to a contractual limitations period.  In my view, the plurality opinion of Justice Johnson and the concurring opinion of Justice Weimer (joined by Justice Clark) stretch a bit to find that a contractual provision is really equivalent to a statute.  Even though parties to an insurance contract were allowed under Louisiana law to select any time period from 1 year up to 10 years, the court says that is really no different from a statutory limitations period because the legislature has placed bounds on both ends.  But there are many different ways in which statutes and insurance department regulations place limitations on various different types of insurance contract provisions.  Would the court hold all of those provisions are in effect statutory and not really contractual?  I doubt it.  The dissent of Justice Victory seems to have the better of that argument.  The majority may have been concerned about whether a different result would place Louisiana out of the mainstream on class action tolling, see American Pipe & Constr. Co. v. Utah.  But there is little federal law on the issue in Taranto of whether class action tolling applies to contractual provisions as opposed to statutory ones.

Taranto leaves two questions without a clear answer:

  1. Article 596(3) requires that the suspension of the time to sue does not stop until notice is given to the proposed class members that a proposed class action has been dismissed or class treatment has been denied.  This is unique — federal law does not require this and I am not aware of any other state rule with a similar requirement.  Does the publication of a court decision constitute adequate notice, or is something more required?  If more is required, what is required — publication in a newspaper or on the web?  Personal mailings?  And does a court have to approve the notice?  And who pays for it? There does not appear to be a crystal clear answer to this in the code itself, or in Taranto or other case law.  There likely will be further litigation on this issue.  It seems quite unfair to require defendants who have successfully defeated an unsuccessful (or, in some cases, frivolous) proposed class action to pay for any type of costly notice.  And in some cases the proposed class is so badly defined that it will be difficult to identify to whom notice must be given.
  2. Does this notice requirement apply where the class action was dismissed in federal court, where the Federal Rules of Civil Procedure apply and do not require that notice be given of a dismissal of a proposed class action?

Stay tuned — the resolution of these issue will be critical in determining to what extent Taranto has opened the floodgates for more Katrina and Rita insurance lawsuits.

Tags: Katrina, Louisiana
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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and most of the class actions I’ve defended have been brought against insurance companies. I’ve also handled some involving products liability, managed care, health care, utilities, financial services, higher education and environmental issues.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at work, you might find me running lines or watching a musical with my teenage daughter who hopes to be a Broadway star (or taking her to voice or dance lessons) or reading a good book.

Read more about Wystan Ackerman
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