STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
10-1405
PATRICK E. PHILLIPS, JR., ET AL.
VERSUS
G & H SEED CO., ET AL.
********** APPEAL FROM THE TWENTY-SEVENTH JUDICIAL DISTRICT COURT PARISH OF ST. LANDRY, DOCKET NO. 00-C-2220-D HONORABLE DONALD W. HEBERT, DISTRICT JUDGE **********
SYLVIA R. COOKS JUDGE
**********
Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and John D. Saunders, Judges.
REVERSED AND REMANDED.
THIBODEAUX, Chief Judge, concurs and assigns additional reasons.
Elwood C. Stevens, Jr. Domengeaux Wright Roy & Edwards, LLC 556 Jefferson Street, Suite 500 P.O. Box 3668 Lafayette, LA 70502-3668 (337) 233-3033 COUNSEL FOR PLAINTIFFS/APPELLANTS: Patrick E. Phillips, et al.
Jerald Edward Knoll, Sr. The Knoll Law Firm, LLC P.O. Box 426 Marksville, LA 71351-0426 (318) 253-6200 COUNSEL FOR PLAINTIFFS/APPELLANTS: Patrick E. Phillips, et al. Andre’ F. Toce The Toce Firm, A.P.L.C. 969 Coolidge Blvd. Lafayette, LA 70503 (337) 233-6818 COUNSEL FOR PLAINTIFFS/APPELLANTS: Patrick E. Phillips, et al.
Gary A. Bezet Robert E. Dille Carol L. Galloway Allison N. Benoit Kean, Miller, Hawthorne, D’Armond, McCowan & Jarman, L.L.P. II City Plaza 400 Convention Street, Suite 700 P.O. Box 3513 Baton Rouge, LA 70821 (225) 387-0999 COUNSEL FOR DEFENDANTS/APPELLEES: Bayer CropScience LP, Michael Redlich, G&H Seed Company, Inc., Crowley Grain Drier, Inc., Nolan J. Guillot, Inc., and Mamou Rice Drier and Warehouse, Inc.
Terrence D. McCay Kean, Miller, Hawthorne, D’Armond, McCowan & Jarman, L.L.P. One Lakeshore Drive, Suite 1150 Lake Charles, LA 70629 (337) 430-0350 COUNSEL FOR DEFENDANTS/APPELLEES: Bayer CropScience LP, Michael Redlich, G&H Seed Company, Inc., Crowley Grain Drier, Inc., Nolan J. Guillot, Inc., and Mamou Rice Drier and Warehouse, Inc.
Raymond P. Ward Adams and Reese, L.L.P. 701 Poydras Street, Suite 4500 New Orleans, LA 70139 (504) 581-3234 COUNSEL FOR DEFENDANTS/APPELLEES: Bayer CropScience LP and Michael Redlich
Michael T. Pulaski McCranie, Sistrunk, Anzelmo, Hardy, Maxwell & McDaniel, PC 195 Greenbriar Blvd., Suite 200 Covington, LA 70433 (337) 831-0946 COUNSEL FOR DEFENDANTS/APPELLEES: Allianz Global Risks and US Insurance Company COOKS, Judge.
Plaintiffs, who consist of several dozen buyers and/or processors of crawfish,
appeal the trial court’s granting of the defendants’ motions for summary judgment,
which dismissed the remaining claims of the buyer/processor plaintiffs. For the
following reasons, we reverse the summary judgment grants, and remand the matter
back to the trial court for trial on the merits.
FACTS AND PROCEDURAL HISTORY
This protracted and contentious litigation had its genesis in the late 1990’s,
when Bayer CropScience LP and its employee, Michael G. Redlich, marketed the
insecticide ICON in Louisiana. Certain companies purchased ICON, applied it to rice
seed, and sold the ICON-coated rice seed to rice farmers in Louisiana. Many of these
rice farmers also raised crawfish in their rice ponds.
Essentially, Plaintiffs allege the ICON coated rice seed was introduced into the
rice fields/crawfish ponds of South Louisiana in 1999. The active ingredient in ICON
was fipronil, which is a chemical used to control arthropods and is used in a variety
of compounds to control insects such as termites, fleas, mole crickets and the rice
water weevil. According to the plaintiffs, the introduction of ICON killed and/or
sterilized the crawfish, both wild and pond-raised. According to the plaintiffs, as a
result of the contamination, Louisiana’s annual farm-raised crawfish crop dropped
from over 60 million pounds to approximately 10 million pounds.
Defendants argued the use of ICON is compatible with crawfish farming,
provided the farmer allows for a suitable waiting period between planting the ICON-
treated rice seed and introducing crawfish to the rice field. Defendants also argued the
record breaking drought in Louisiana during the time in question was the reason for
the decline in crawfish production.
-1- In 1999, a class action lawsuit was filed on behalf of all crawfish farmers in
Louisiana, Craig West, et al. v. G & H Seed Co., et al., No. 99-C-4984-A in the
Twenty-Seventh Judicial District Court, Parish of St. Landry. That lawsuit was
eventually settled.
Thereafter a class action suit was initiated on behalf of Patrick Phillips and
Atchafalaya Processors, Inc, individually and on behalf of all others similarly situated.
This class action suit was brought by crawfish buyers, processors and resellers.
Named as Defendants were Bayer CropScience LP and Michael Redlich. Also named
as Defendants were the companies who purchased the ICON, applied it to the rice
seed, and sold it to the farmers: G&H Seed Co., Inc., Crowley Grain Drier, Inc., Delhi
Seed Co., Inc., Terral Seed Co., Inc., Mamou Rice Drier & Warehouse, Inc.
Plaintiffs eventually abandoned their efforts to certify either a plaintiff or
defendant class. Thereafter, through a series of supplemental and amending petitions,
the matter proceeded as a cumulation of individual actions comprising the claims of
approximately 72 individual crawfish buyers, resellers, and processors.
Bayer filed an exception of no cause of action, contending in order to maintain
a delictual action against a manufacturer for property damage caused by a defective
product, the claimants must have some proprietary interest in the damaged property.
Bayer argued that since none of the plaintiffs in this litigation are crawfish farmers,
and none of them had any ownership in the damaged crop, they could not demonstrate
the required proprietary interest. Plaintiffs argued there were existing joint ventures
between the crawfish farmers and buyers/processors during the time the crawfish crop
was damaged. The trial court overruled the exception, rejecting the per se
exclusionary/proprietary interest rule of Robins Dry Dock & Repair Co. v. Flint, 275
U.S. 303, 48 S.Ct. 134 (1927), in favor of the policy driven duty/risk analysis
-2- espoused in PPG Industries, Inc. v. Bean Dredging, 447 So.2d 1058 (La.1984). The
trial court found in applying a duty-risk analysis, the law extended a remedy to the
buyer/processor plaintiffs. Bayer applied for writs to this Court. Writs were denied.
Because of the enormity of trying all 72 actions at once, the trial court
determined it would be best to try the actions of four plaintiffs, three to be chosen by
the plaintiffs and one chosen by the defense. This number was eventually reduced to
three plaintiffs: Patrick Phillips (d/b/a Phillips Seafood), James Bernard (d/b/a J.
Bernard Seafood Processors, Inc.), and Lisa Guidry (d/b/a Guidry’s Crawfish).
After a full trial on the merits, Plaintiffs filed a Motion for Directed Verdict on
whether the Defendants’ duty extended to these buyer/processor plaintiffs. Finding
there was an “ease of association from farmer to wholesaler” such that farmers and
processors are “inextricably interwoven and symbiotic in their relationships,” the trial
court granted the Motion for Directed Verdict. The jury then returned a verdict in
favor of each of the three plaintiffs, assigning 94% fault or causation to Bayer, 1% to
Bayer salesman Michael Redlich, and 4% to the drought that occurred in South
Louisiana. It awarded $900,000 to plaintiff Phillips, $750,000 in damages to plaintiff
Bernard, and $100,000 to plaintiff Guidry.
Defendants timely filed a Motion for Judgment Notwithstanding the Verdict,
New Trial, and Remittitur. The motions were denied and Defendants filed an appeal
with this Court.
A five judge panel of this Court reversed the trial court’s directed verdict on
scope of duty and set aside the jury’s verdict. Phillips v. G & H Seed Co., 08-934
(La.App. 3 Cir. 4/8/09), 10 So.3d 339 (hereafter referred to as Phillips I). The
majority reasoned that since “the plaintiffs in this case failed to prove a proprietary
interest in the crawfish crop destroyed by the use of ICON. . . . the plaintiff’s cause
-3- must fail.” Id. at 344. The majority did not undertake a duty-risk analysis or apply the
PPG factors as done by the trial court. Instead it applied the per se
exclusionary/proprietary interest rule of Robins Dry Dock. Plaintiffs also note the
majority did not explain what would be “sufficient” to establish a proprietary interest
under Louisiana law.
Judge Saunders dissented from the majority opinion, finding it contradicted the
Louisiana Supreme Court’s finding in 9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228,
234 (La. 1989), that “the PPG case abrogat[ed] the rule that flatly prohibited recovery
for intangible economic loss produced by negligent conduct.” Judge Saunders found
“the only conclusion a reasonable juror could reach was that Bayer had reckless
disregard for the potential ramifications to this state’s crawfish industry, as a whole,
when crawfish farmers used ICON.” Phillips I, 10 So.3d at 345. This callousness,
Judge Saunders concluded, was sufficient to support the trial court’s directed verdict
on scope of duty. Further, Judge Saunders noted that even if one interprets PPG as
the majority does, it was factually distinguishable from the present case. In PPG, the
plaintiff had an alternative source to get the natural gas it needed, whereas the
buyers/processors here had no other source for the crawfish they contracted to receive
from the crawfish farmers. This interwoven, symbiotic relationship between crawfish
farmers and crawfish buyers/processors was different than that present in PPG.
Plaintiffs’ Application for Rehearing to this Court was denied. Similarly, the
application for a Writ of Review to the Louisiana Supreme Court was denied. Phillips
v. G & H Seed Co., 09-1504 (La. 10/30/09), 21 So.3d 284. Following these denials,
Defendants filed Motions for Summary Judgment against all the remaining
buyer/processor plaintiffs based on the proprietary interest requirement espoused by
this Court’s opinion in Phillips I.
-4- At the hearing on the summary judgment motions, Plaintiffs argued the duty-
risk analysis set forth in the PPG case was controlling in this case. Plaintiffs also
contended even if the trial court was compelled to enforce a proprietary interest
requirement pursuant to this Court’s decision in Phillips I, that term had never been
defined by our Supreme Court to require ownership to assert a claim for economic
damages. Plaintiffs complained they were at a loss to understand exactly what
material fact(s) were necessary to establish a level or degree of interest sufficient to
allow them to prevail. Nonetheless, in an attempt to meet this burden of proof,
Plaintiffs submitted numerous sworn affidavits attesting to the nature and extent of the
buyers/processors involvement in the Louisiana crawfish industry.
In oral reasons for judgment, the trial court voiced its disagreement with the
opinion in Phillips I. However, believing it was constrained by that ruling, the trial
court granted the motions for summary judgment and dismissed the remaining claims
of the buyer/processor plaintiffs.1
1 There was also a corollary federal action in the United States District Court, Western District of Louisiana, Wiltz, et al. v. Bayer CropScience, et al., Docket No. 08-2024, which arises from the exact same set of facts as the present case and concerns the same question regarding the scope of the defendants’ duty. The Wiltz case previously came to this Court as an appeal from the denial of a Motion to Intervene in Phillips. The Wiltz intervention in Phillips was ultimately denied by this Court. See Phillips v. G & H Seed Co., 09-1102 (La.App. 3 Cir. 3/10/10), 32 So.3d 1134, writ denied, 10-822 (La. 6/18/10), 38 So.3d 325. The matter was then removed by the defendants to federal court. The defendants then filed a motion for summary judgment on the alleged lack of a proprietary interest in the plaintiffs. Much as the trial court did in the present case, the federal district court judge granted the motion for summary judgment even though he did not believe a bright line litmus test on proprietary interest was the correct law in Louisiana. The district judge explained in detail why he felt compelled to grant the summary judgment:
MR. STEVENS (counsel for Plaintiffs): I would like this Court to rule that the motions for summary judgment by the defendants based strictly on the proprietary interest rule is denied because proprietary interest is not the law of the Louisiana Supreme Court. In a products liability case, which must apply a duty/risk analysis under controlling jurisprudence, it is particularly foreseeable that these folks would be injured, therefore, they are within the scope of the duty of this defendant not to negligently kill the crawfish crop that these folks spent 30 years helping to develop. ...
THE COURT: Then let me state this for the record. I agree with that statement. However, if I do that, I’m going to get reversed by the Fifth Circuit. I agree with it. I agree with everything you had to say. I would also recommend to the Fifth Circuit, when you take your appeal, that
-5- Plaintiffs have appealed the trial court’s granting of the summary judgment, and
assert the following assignments of error:
1. It was error to ignore the mandates of PPG and its progeny and not employ a duty-risk/ease of association analysis which considers the scope of Defendants’ duties in the context of moral, social and economic issues involved and a view toward the ideal of justice.
2. It was error to require Plaintiffs to prove a “proprietary interest” in the damages crawfish crops as a prerequisite to recovery in this tort suit asserting claims under the Louisiana Products Liability Act for breach of express warranty, failure to warn and false representations.
3. If a proprietary interest is required (which is disputed), then the trial court erred in applying Phillips I so as to require actual “ownership” in order to establish such an interest contrary to Supreme Court jurisprudence which clearly envisions an interest “derived from the owner” (less than ownership but more than a mere guest or member of the general public).
4. The trial court erred in granting summary judgments even against those buyers/processors who presented issues of fact as to an actual “ownership” interest in crawfish ponds from which they would have supplied crawfish top their respective businesses, “but for” Defendants’ negligent acts and egregious conduct.
you ask them to certify this to the Supreme Court and they can get a final ruling on this issue. I agree with everything you have to say. I agree with all of it. I agree with Judge Hebert.
MR. STEVENS: The question is as a matter of law what is the law of the Louisiana Supreme Court? Is it duty/risk analysis or is it proprietary interest? And –
THE COURT: I think if I rule your way, I’m going to get reversed. I’m inviting you to take it to the Fifth Circuit. My opinion is that you’re absolutely correct. I do think they have a proprietary interest.
MR. STEVENS: Well, then –
THE COURT: Listen to me, Mr. Stevens.
MR. STEVENS: I’m sorry.
THE COURT: You know, I’m going to rule against you. What I’m trying to do is give you some information so that when you take it up, you can say, you know. Judge Haik did this because he got slapped on the wrist by the Court pertaining to Taira Lynn. And I think he was wrong in doing that because that was a maritime case and this belongs to Louisiana – this is a Louisiana driven cause of action, not a maritime driven cause of action. Therefore, I think Judge Haik is wrong. Okay? So do that, Mr. Stevens. Do that
-6- 5. The trial court erred in granting summary judgments even against those buyers/processors who demonstrated long standing, symbiotic relationships with the farmers/fishermen and reasonable, recurring and investment-based expectations of an economic interest in the annual crawfish crops which, as a matter of law, made their damages particularly foreseeable and established material issues as to the existence of a sufficient interest to be worthy of legal protection.
6. The trial court committed manifest error by concluding that even the claims of “hybrids” should be summarily dismissed because many of them had “settled” their claims in a companion Class Action settlement in 2004 between these Defendants and the farmer/fishermen group of claimants, even though the final judgment in that matter expressly reserved the right of all settling farmers/fishermen “to pursue their respective claims as buyers and/or processors of crawfish.”
Defendants contend that this Court’s previous decision in Phillips I has already
decided the legal issues raised in this appeal, and thus, the “Law of the Case” doctrine
applies.
ANALYSIS
A. Law of the Case Doctrine.
We will first address Defendants argument that this Court’s decision in Phillips
I is law of the case, and should not be revisited. For the following reasons, we do not
find the law of the case doctrine applicable here.
Generally, the law of the case doctrine applies to prior rulings of the appellate
court and an appeals court will not reconsider its own ruling in the same case. Gentry
v. Biddle, 05-61 (La.App. 3 Cir. 11/2/05), 916 So.2d 347. However, the application
of this doctrine is discretionary and an appellate court may reconsider an issue if the
prior decision was “palpably erroneous or its application would result in manifest
injustice.” Id. at 352 (quoting Griggs v. Riverland Med. Ctr., 98-256, p. 6 (La.App.
3 Cir. 10/14/98), 722 So.2d 15, 19, writ denied, 99-385 (La.5/28/99), 735 So.2d 622.
We note that earlier in the procedural history of this case, Defendants filed an
exception of no cause of action asserting, for Plaintiffs to maintain a delictual action,
they must first demonstrate some proprietary interest in the damaged property. The
-7- trial court overruled the exception, rejecting the per se exclusionary/proprietary
interest rule of Robins Dry Dock in favor of the policy driven duty/risk analysis set
forth by the Louisiana Supreme Court in PPG Industries. A three member panel of
this Court unanimously denied writs, finding no error in the trial court’s decision.
However, on appeal a five-judge panel (with one dissenting judge) reached an
opposite conclusion, finding “the plaintiff's case [sic] must fail” because they “failed
to prove a proprietary interest in the crawfish crop.” Phillips I, 10 So.3d at 344.
Finding this Court’s previous rulings on this issue are equivocal, we choose not to
apply the law of the case doctrine.
B. Proprietary Interest.
We initially make the following observations at the outset of our discussion on
proprietary interest: (1) the trial court unquestionably based its ruling granting the
summary judgments solely on this Court’s prior decision in Phillips I, 10 So.3d 339;
(2) although the opinion in Phillips I, discussed PPG and the duty-risk method, it did
not engage in any such duty-risk analysis; instead it resurrected the bright-line litmus
test that required a proprietary interest in the damaged property that was abrogated in
PPG.
The issue in this case boils down to whether Louisiana will apply a bright-line
litmus test mandating proprietary interest in damaged property as a prerequisite to
recovery, or do Louisiana courts apply a multi-factor, policy-driven, duty-risk analysis
when determining the scope and extent of a defendant’s duties under the Louisiana
Products Liability Act for particularly foreseeable economic damages. Finding our
previous opinion in Phillips I failed to consider the instruction of the Louisiana
Supreme Court’s opinion in PPG, which directed that a duty-risk analysis should be
-8- performed to determine the scope and extent of a particular defendant’s duties,2 we
decline to follow it, and instead adhere to the dictates of our state’s highest judicial
court. We find the course of action taken in Phillips I, can, in certain instances,
deprive an innocent person of any remedy for damage suffered in direct contrast to our
fundamental civil law principal that obliges a person to fully repair damage caused by
his fault. La.Civ.Code art. 2315.
Our review of the jurisprudence of this State indicates that the per se
exclusionary/proprietary interest rule illustrated in Robins Dry Dock, is not the law of
this state. Rather, a duty-risk analysis was adopted by the Louisiana Supreme Court
in PPG.
In PPG, the defendant’s dredging operations damaged a gas pipeline owned by
Texaco. Texaco had a contract to supply gas to PPG. As a result of the damage to the
pipeline, PPG was forced to obtain gas from other sources. PPG sued Bean Dredging,
seeking recovery of the additional costs expended to obtain gas. Although the
supreme court ultimately held PPG’s damages did not fall within the scope of the duty
not to damage a pipeline owned by Texaco, it did so after undertaking a duty-risk
analysis to determine whether that particular risk fell within the scope of the duty. The
court stated:
Policy considerations determine the reach of the rule, and there must be an ease of association between the rule of conduct, the risk of injury, and the loss sought to be recovered. Hill v. Lundin & Assoc., Inc., 260 La. 542, 256 So.2d 620 (1972). A judge, when determining whether the interest of the party seeking recovery of damages is one that falls within the intended protection of the rule of law whose violation gave rise to the damages, should consider the particular case in the terms of the moral,
2 We are cognizant that the Supreme Court denied writs in Phillips I. However, even though writs were denied, there was, of course, no discussion by the Supreme Court explaining the reasons for the writ denial. In contrast, we have the Supreme Court opinion in PPG Industries, which as Justice Dennis later noted in 9 to 5 Fashions, 538 So.2d at 234, “abrogat[ed] the rule that flatly prohibited recovery for intangible economic loss produced by negligent conduct.” We choose this day to follow the express dictates of PPG Industries rather than the implied message of a writ denial in Phillips.
-9- social and economic values involved, as well as with a view toward the ideal of justice. See Entrevia v. Hood, 427 So.2d 1146 (La.1983).
PPG Indus., Inc., 447 So.2d at 1061.
The court in PPG did caution that a party who negligently causes injury to
property will not always be held legally responsible to all persons for all damages
flowing in a “but for” sequence, because the list of possible victims might be
“expanded indefinitely.” Thus, the court must “necessarily make a policy decision on
the limitation of recovery of damages.” Id. at 1061-62.
In his dissent in PPG, Justice Calogero “applaud[ed] the majority’s applying a
duty risk analysis in the consideration of tort recovery . . . and [in] abandoning the per
se exclusion of such damages which our courts have heretofore adopted on the heels
of Robins and Forcum-James [Co. v. Duke Transportation Co., 231 La. 953, 93 So.2d
228 (1957)].3
The cases since have consistently followed the duty-risk analysis set forth in
PPG. In Cleco Corp. v. Johnson, 01-175 (La. 9/18/01), 795 So.2d 302, a negligent
truck operator backed into a utility pole causing a power surge that ultimately caused
damages to the property of Cleco’s customers. Cleco then paid for the customers’
damages and filed suit to recover those payments. The supreme court examined
whether the law afforded Cleco’s customers a cause of action. The supreme court
utilized the case by case, duty-risk analysis set forth in PPG, and found that the law
extended a remedy to both Cleco and its customers. In her concurring opinion, Justice
Kimball specifically noted “[t]he majority today has chosen to handle these claims on
a case by case basis using the duty-risk analysis, which in my view is the preferable
approach.” Id. at 307. Even the dissent in Cleco did not question the majority’s
3 Justice Calogero dissented, not because of the implementation of a duty-risk analysis, but rather because he disagreed with the majority’s determination that PPG’s economic loss, from added fuel cost, was not a risk encompassed within the duty not to negligently injure Texaco’s pipelines.
-10- decision to utilize a duty-risk analysis as set forth in PPG, but rather believed the duty
allegedly violated in that case did not encompass the particular risk of injury sustained
by Cleco and/or its customers.
The court in Cleco, cited with approval this Court’s decision in Istre v. Fidelity
Fire & Casualty Ins. Co., 628 So.2d 1229 (La.App. 3 Cir.1993), writ denied, 634
So.2d 852 (La.1994). In Istre, a backhoe operator working for a construction company
came into contact with electrical lines causing a power outage that knocked out
electrical power to a traffic signal four miles away. Approximately one hour later, the
plaintiff was involved in an accident due to the traffic light outage. The plaintiff
subsequently filed suit against several parties, including the construction company.
After utilizing a duty-risk analysis, this Court found the construction company liable,
stating:
The construction company’s main argument is that its duty to avoid knocking out electrical power does not extend to the risk that one hour later, a driver at an intersection four miles away, will fail to see that traffic lights are not working and that other drivers were treating the intersection as a four-way stop, out of turn, and hurt another driver who was entering the intersection in obedience to a four-way stop rotation. To this it pleads that the company could not have known that engaging this one power line would create a general outage affecting signal lights four miles away.
We reject this argument. This backhoe operator knew the risk of his backhoe knocking out power. His construction company knew or should have known the risks to people and property caused by power outages, and the predictability of widespread effects and delays in restoring power. The increased risk of an accident caused by this defendant’s conduct was still present when the accident occurred. This accident to this plaintiff was reasonably foreseeable. This defendant is liable to the plaintiffs for the breach of its duty.
Id. at 1232.
As noted by Judge Saunders in his dissent in Phillips I, the supreme court in 9
to 5 Fashions, Inc. v. Spurney, 538 So.2d 228, 234 (La. 1989), specifically found that
“the PPG case abrogat[ed] the rule that flatly prohibited recovery for intangible
-11- economic loss produced by negligent conduct.”
In Roberts v. Benoit, 605 So.2d 1032 (La.1991), the supreme court reiterated
that the extent of protection owed a particular plaintiff is determined on a case-by-case
basis to avoid making a defendant an insurer of all persons against all harms. The
Roberts court found that “[r]egardless if stated in terms of proximate cause, legal
cause, or duty, the scope of the duty inquiry is ultimately a question of policy as to
whether the particular risk falls within the scope of the duty.” Id. at 1044.
We also note the comments of several commentators, that have expressed both
the conclusion that PPG’s utilization of a case by case duty-risk analysis is the law in
Louisiana, and that it is the preferable approach. Justice Dennis, in his opinion in
Pitre v. Opelousas General Hospital, et al., 530 So.2d 1151, 1155-56, citing Prosser
and Keeton, stated:
The duty risk approach is most helpful, however, in cases where the only issue is in reality whether the defendant stands in any relationship to the plaintiff as to create any legally recognized obligation of conduct for the plaintiff’s benefit.
Plaintiffs also call this Court’s attention to the following language from a
leading treatise on tort law in this state.:
Neither a blanket denial nor an unlimited approval of recovery is appropriate. One of the fears is that allowing recovery may subject defendants to liability for an indeterminate amount of damages to a potentially indeterminate class of claimants. Another is that in some cases, allowing recovery will result in double compensation because the plaintiff has already protected himself from the risk of the economic harm through contract, such as insurance, indemnity or the increased price for his goods. Also, in some cases, the economic harm the plaintiff suffers is an ordinary risk of the enterprise in which he is participating. However, where none of these factors is justified, recovery should be permitted. Thus a case-by-case analysis appears superior to the Robins “no duty” rule.
Frank L. Maraist & Thomas C. Galligan, Louisiana Tort Law, § 5.09 (1996).
Our review of the jurisprudence establishes that the Louisiana Supreme Court
-12- in PPG, and the cases that followed, abandoned the per se no duty rule espoused in
Robins Dry Dock and Forcum-James in favor of a duty-risk analysis. Rather than
“taking a mechanical approach to the unreasoned conclusion that the petition for
economic loss caused by negligent interference with contractual relations fails to state
a cause of action,” the supreme court concluded a more nuanced, case specific, duty-
risk analysis was preferable. PPG, 447 at 1061. PPG clearly shows the supreme
court did not intend to close the door to recovery for all claims of economic harm
arising out of damage to what is technically a third person’s property, i.e., “proprietary
interest.” It made such recovery available in certain circumstances for limited groups
of people with a special interest in or relationship with the damaged property, whose
damages were a particularly foreseeable result of the tortious conduct of the defendant.
Although the opinion in Phillips I discussed PPG and its utilization of a duty-risk
method of analysis, the court failed to perform any such duty-risk analysis, and instead
concluded the “plaintiffs’ cause must fail” because they failed to prove a proprietary
interest in the damaged property. Phillips I, 10 So.3d at 344. This was contrary to the
law.
CONCLUSION
For the foregoing reasons, we reverse the trial court’s grant of the summary
judgments because a per se proprietary interest rule is not the law of Louisiana in a
products liability case. Our Louisiana Supreme Court in PPG Indus. Inc., 447 So.2d
1058, mandates a case specific duty-risk analysis be undertaken to determine the scope
and extent of the defendants duties in this case. As the trial court based its granting of
the summary judgments solely on this Court’s opinion in Phillips 1, we now reverse
and remand this case back to the trial court for further proceedings consistent with this
opinion. As this case is before us on grants of summary judgment, it is not appropriate
-13- for this Court to determine or even speculate on the result of the required duty-risk
analysis. Our determination on this issue renders Plaintiffs’ other assignments of error
moot. All costs of this appeal are assessed to Defendant-Appellees.
-14- STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
THIBODEAUX, Chief Judge, concurring for additional reasons.
I fully agree with the majority opinion. I add this brief comment to
provide an additional reason for reversal. While I do not agree that the proprietary
interest rule is the law in Louisiana, the plaintiffs did not attempt to prove proprietary
interest in Phillips I. This case is properly remanded to allow them to prove that
standard, if they choose to do so, as an additional supplement to a duty-risk analysis.