St. Charles Surgical Hospital, L.L.C. v. Louisiana Health Service & Indemnity D/B/A Blue Cross Blue Shield of Louisiana, Blue Cross & Blue Shield of Louisiana, Inc. and Hmo Louisiana, Inc.

ST. CHARLES SURGICAL * NO. 2025-CA-0290
HOSPITAL, L.L.C., ET AL
*
VERSUS COURT OF APPEAL
*
LOUISIANA HEALTH FOURTH CIRCUIT
SERVICE & INDEMNITY *
D/B/A BLUE CROSS BLUE STATE OF LOUISIANA
SHIELD OF LOUISIANA, *******
BLUE CROSS & BLUE SHIELD
OF LOUISIANA, INC. AND
HMO LOUISIANA, INC.

APPEAL FROM
CIVIL DISTRICT COURT, ORLEANS PARISH
NO. 2017-01095, DIVISION “C”
Honorable Sidney H. Cates, Judge
******
Judge Rosemary Ledet
******
(Court composed of Judge Rosemary Ledet, Judge Nakisha Ervin-Knott, and Judge
Monique G. Morial)

James M. Williams
David R. Sherman
Walter R. Woodruff, Jr.
Daniel H. Edwards
Daniel E. Buras, Jr.
Inemesit U. O'Boyle
Matthew A. Sherman
Patrick R. Follette
CHEHARDY SHERMAN WILLIAMS RECILE & HAYES
One Galleria Blvd., Suite 1100
Metairie, LA 70001

H. Minor Pipes, III
Catherine F. Giarrusso
Katherine Seegers Roth
PIPES MILES BECKMAN, LLC
1100 Poydras Street, Suite 1800
New Orleans, LA 70163
New Orleans, LA 70163

COUNSEL FOR PLAINTIFFS/APPELLEES

Kim M. Boyle
Allen Miller
Rebecca Sha
Clerc Cooper
PHELPS DUNBAR LLP
365 Canal Street, Suite 2000
New Orleans, LA 70130

Richard Allen Sherburne, Jr.
Douglas M. Chapoton
ATTORNEY AT LAW
P. O. Box 98029
5525 Rietz Avenue
Baton Rouge, LA 70898-9029

Shelton Dennis Blunt
A. Paul LeBlanc, Jr.
Michael B. Victorian
PHELPS DUNBAR LLP
400 Convention Street, Suite 1100
Baton Rouge, LA 70802

Martin A. Stern
Leigh Ann Schell
Alexandra R. Lamb
ADAMS AND REESE LLP
701 Poydras Street, Suite 4500
New Orleans, LA 70193

Thomas More Flanagan
Anders F. Holmgren
Camille E. Gauthier
FLANAGAN PARTNERS, LLP
201 St. Charles Avenue
Suite 3300
New Orleans, LA 70170

Richard C. Stanley
Kathryn W. Munson
Brandon A. Naquin
STANLEY REUTER ALFORD OWEN MUNSON & PAUL, LLC
909 Poydras Street, Suite 2500
New Orleans, LA 70112

COUNSEL FOR DEFENDANTS/APPELLANTS

REVERSED; REMANDED FOR NEW TRIAL
January 23, 2026

RML

NEK This is a fraud and an abuse of rights case stemming from a dispute over
MGM
commercial medical insurance reimbursement claims. This dispute involves

approximately 7,800 claims that an out-of-network provider submitted to a health

insurer for reimbursement.1 Plaintiffs are the Center for Restorative Breast

Surgery, LLC (“Center”) and St. Charles Surgical Hospital, LLC (“Hospital”)

(collectively “Provider”). Defendants are Louisiana Health Service and Indemnity

1 The difference between an “in-network” versus an “out-of-network” healthcare provider has

been explained as follows:

When a healthcare provider has contracted with an insurer to set the prices the
insurer and its members will pay, that provider is considered in-network. Insurers
generally promise that they will pay the full cost for care from in-network
providers, less cost-sharing amounts like copays, deductibles, and the like, which
the member pays. An insurer can reliably make such promises because these fixed-
price agreements limit the insurer's risk. Out-of-network providers, in contrast,
have no agreement with the insurer setting prices in this manner. For care from out-
of-network providers, an insurer’s contract with its members will set out a formula
for determining what it commits to pay. If the out-of-network provider charges
more than that amount, the provider can—at least in some instances—“balance bill”
the patient for the difference.

AMISUB (SFH), Inc. v. Cigna Health & Life Ins. Co., 142 F.4th 403, 405 (6th Cir. 2025).
Another relevant consideration here is the federal and parallel Louisiana statutes mandating
healthcare providers cover certain post-mastectomy breast-reconstruction medical services. See
29 U.S.C.A. § 1185b (Women’s Health and Cancer Rights Act of 1998); and La. R.S. 22:1077.
1

Company, d/b/a Blue Cross Blue Shield of Louisiana (“LHS”) and HMO

Louisiana, Inc. (“HMO La.”) 2 (collectively “La Blue”).

Provider did not sign a contract to participate in the Blue Cross Blue Shield

provider network, meaning it is an out-of-network provider with La Blue and other

Blue Cross Blue Shield affiliated entities (“Home Plans”). Provider contends that it

was not paid to its satisfaction for authorized medical services that it provided to

La Blue and Home Plans insureds. Provider further contends that La Blue engaged

in a continuous, systematic, sophisticated, and intentional scheme to defraud it.

Following a three-week jury trial, a judgment was rendered in favor of

Provider and against La Blue for $421,488,633. La Blue appeals. Based on our

finding that the jury instructions on fraud were legally erroneous, we reverse and

remand for a new trial.

FACTUAL AND PROCEDURAL BACKGROUND

The dispute between the parties has been the subject of protracted litigation,

straddling Louisiana state and federal courts. To provide a backdrop for analyzing

the myriad of issues presented here, we set forth the following time line.

In 2003, Drs. Scott Sullivan and Frank DellaCroce—two prominent plastic

surgeons—founded the Center; the Center is a physician group that specializes in

providing post-mastectomy breast-reconstruction medical services to women

2 LHS is a health insurer licensed by the Louisiana Department of Insurance, which administers

health insurance benefits for Louisiana residents. LHS also is a registered not-for-profit mutual
insurance company with a license to use the Blue Cross and Blue Shield trademarks in
Louisiana. HMO La. is a wholly owned subsidiary of LHS; it sells insurance and administers
reimbursement claims for Louisiana residents and businesses. In addition to LHS and HMO La.,
Provider named a third entity as a defendant—Blue Cross & Blue Shield of Louisiana, Inc. But,
no such entity exists. It is undisputed there are only two defendants—LHS and HMO La.

2

diagnosed with breast cancer. According to Dr. Sullivan’s trial testimony, the

Center was a participating provider with La Blue and Home Plans for a short time

after it started business. The Center unilaterally decided to go out-of-network for

business reasons, including dissatisfaction with in-network payment rates.

In 2009, Drs. Sullivan and DellaCroce founded the Hospital; the Hospital is

a thirty-nine bed, short-term acute hospital out of which the Center’s physicians

operate. The Center and the Hospital are both New Orleans-based businesses,

located on St. Charles Avenue. Drs. Sullivan and DellaCroce also formed a

separate billing company—Sigma Delta Billing, LLC—to handle administrative

matters, such as insurance claim processing, for the Center and the Hospital (again

collectively “Provider”).

All of Provider’s claims at issue here stem from the same basic underlying

facts—its routine providing services as an out-of-network provider to patients

insured by La Blue and Home Plans. Before providing its medical services to each

La Blue or Home Plans insured, Provider secured medical authorization. The

method by which Provider secured authorization differed depending on whether

the patient was an in-state patient—a La Blue insured—or an out-of-state patient3

—a Home Plans insured.4 For La Blue insureds, the authorization was obtained

through La Blue. La Blue provided authorizations by telephone before 2007; after

3 As pointed out during oral argument before this Court, Home Plans insureds also include some

patients who live in Louisiana; this can occur if the patient’s employer is an out-of-state
company.
4 As discussed elsewhere in this opinion, this sorting of insureds into two groups based on their

insurer—La Blue versus Home Plans—is relevant in multiple respects in this case.

3

2007, it provided authorizations by using La Blue’s web portal—the iLinkBlue

portal.5 For Home Plans insureds, the authorization was obtained by

communicating directly with the patient’s out-of-state plan—the “Member” Plan.

For Home Plans insureds, La Blue functions as a “Host” plan. Generally, the Host

plan’s role vis-à-vis the Member plan comes into play in the post-treatment,

reimbursement phase.

La Blue and Home Plans are separate and independent entities. But, they are

all members of the Blue Cross Blue Shield Association—a group of thirty-three

independent Blue Cross Blue Shield affiliated entities that operate in various

regions of this country. La Blue is the entity that operates in the Louisiana region.

One year after the Hospital opened, in 2010, Provider filed suit in Orleans

Parish Civil District Court (“CDC”) against not only La Blue, but also multiple

Home Plans (the “2010 Suit”). In the 2010 Suit, Provider asserted claims not only

on its own behalf, but also as assignee of individual patients. The gist of Provider’s

claims was that it provided out-of-network services after receiving medical

authorization from the respective La Blue and Home Plans and that it was not paid

appropriately for its services.

The 2010 Suit was removed to federal court in 2011; it was fully litigated.

Provider’s attempt to have portions of the 2010 Suit remanded to state court

failed.6 The last iteration of Provider’s complaint in the 2010 Suit was the Fifth

5 The Center first obtained access to iLinkBlue in 2007, which was before the Hospital was

formed.
6 See Ctr. for Restorative Breast Surgery, L.L.C. v. Blue Cross Blue Shield of Louisiana, No. CV

11-806, 2015 WL 13534222, at *2 (E.D. La. Nov. 9, 2015).

4

Amended Complaint, filed in January 2015. In that Complaint, Provider asserted

the following eight counts:

• Count I: Failure to determine benefits in accordance with the terms of
Employee Retirement Income Security Act of 1974 (“ERISA”) plans;

• Count II: Failure to supply requested information ERISA requires to be
produced;

• Count III: Failure to provide full and fair review under ERISA;

• Count IV: Breach of fiduciary duties of loyalty, disclosure, and
prudence under ERISA;

• Count V: Detrimental reliance/breach of oral contract(s) under
Louisiana law;

• Count VI: Breach of contract(s) under Louisiana law;

• Count VII: Negligent Misrepresentation(s) under Louisiana law; and

• Count VIII: Fraud under Louisiana law.7

In June 2015, the federal district court dismissed most of Provider’s ERISA

claims—Counts II, III, and IV—with prejudice. The federal district court also

dismissed Count VIII—the fraud claim—after Provider moved for dismissal of that

claim with prejudice.

In 2016, the federal district court dismissed, on summary judgment,

Provider’s breach of contract claim—Count VI—and detrimental reliance claim—

Count V.8 Also in 2016, the federal district court conducted a jury trial on

7 In the Fourth Amended Petition, Provider asserted an unjust enrichment claim. The federal

district court dismissed the unjust enrichment claim, citing the principle that under Louisiana law
when another remedy is available, an unjust enrichment claim must be dismissed. See Ctr. for
Reconstructive Breast Surgery, LLC v. Blue Cross Blue Shield of Louisiana, No. CV 11-806,
2014 WL 4930443, at *9 (E.D. La. Sept. 30, 2014).
8 See Ctr. for Restorative Breast Surgery, L.L.C, v. Blue Cross Blue Shield of La., No. CV 11-

806, 2016 WL 9439243, at *10 (E.D. La. Sept. 19, 2016).

5

Provider’s negligent misrepresentation claim—Count VII—as it related to seven

bellwether patients. “The jury returned a verdict in favor of the Defendants, finding

there was no ‘causal connection between the misrepresentation or omission made

by the Defendant and the decision to treat [the bellwether] patient[s].’” Ctr. for

Restorative Breast Surgery, L.L.C. v. Blue Cross Blue Shield of Louisiana, No. CV

11-806, 2017 WL 3308919, at *1 (E.D. La. Mar. 31, 2017) (unpub.). Thereafter,

the federal district court granted summary judgment, dismissing the remaining

negligent misrepresentation claims.

The following year, in 2017, the federal district court entered a final

judgment dismissing Provider’s 2010 Suit.9 Although Provider filed an appeal, it

dismissed its appeal in August 2017.

In February 2017, before the 2010 Suit was dismissed, Provider filed this

suit in CDC against only La Blue (the “2017 Suit”). In the 2017 Suit, Provider

asserted four state law claims: (i) breach of contract; (ii) detrimental reliance;

(iii) negligent misrepresentation; and (iv) fraud. The 2017 Suit was based on

claims that were submitted after January 2015.

Answering the 2017 Suit, La Blue alleged Provider was asserting the same

claims it previously asserted, and the federal district court decided, in the 2010

Suit. In response, Provider filed a First Amended Petition to clarify that the claims

it was asserting in this suit were separate and distinct claims from the claims it

asserted and litigated in the 2010 Suit in federal court. The 2010 Suit was cabined

9 See Ctr. for Restorative Breast Surgery, 2017 WL 3308919, at *10.

6

to claims that were submitted between May 2007 and December 2014. As noted

elsewhere in this opinion, Provider’s final complaint in the 2010 Suit was its Fifth

Amended Complaint, which it filed in January 2015.

In April 2017, La Blue filed a petition in federal district court pursuant to the

All Writs and Anti-Injunction Acts seeking to enjoin—as previously litigated and

decided—Provider’s claims asserted in the 2017 Suit. Agreeing in part with La

Blue, the federal district court, the following month, in May 2017, enjoined

Provider from pursuing claims for breach of contract, detrimental reliance, and

negligent misrepresentation. The federal district court did not enjoin Provider from

pursuing a fraud claim because Provider had dismissed its fraud claim in the 2010

Suit.10

10 In its ruling, the federal district court enjoined Provider from making the following claims:

1. Any claim for breach of oral contract the value of which exceeds $500 in which
they allege an oral contract existed by virtue of telecommunication and/or accessing
the iLinkBlue web portal;

2. Any claim under the theory of detrimental reliance for which: (1) there was no
attempt to verify the patient’s eligibility and benefits through a verification
telephone call or iLinkBlue; (2) there was an attempt to verify the patient’s
eligibility and benefits through iLinkBlue, but the verification page did not provide
the amount the insurer will pay for a specific procedure; or (3) there was an attempt
to verify the patient’s eligibility and benefits through a verification telephone call,
but a disclaimer stating there was “no guarantee of payment” was played at the
beginning of the call, and the [Center and the Hospital] did not request further
assurance or clarification about the amount of the allowable charge; and

3. Any claim under the theory of negligent misrepresentation for which: (1) there
was no attempt to verify the patient’s eligibility and benefits through a verification
telephone call or iLinkBlue; (2) there was an attempt to verify the patient’s
eligibility and benefits through iLinkBlue but the coverage summaries did not state
the allowable amount or any other procedure-specific information; or (3) there was
an attempt to verify the patient’s eligibility and benefits through a verification
telephone call, but the [Center and the Hospital] did not ask Blue Cross Louisiana
for the allowable amount.

St. Charles Surgical Hosp., LLC. v. Louisiana Health Serv. & Indem. Co., No. CV 19-13497,
2020 WL 634918, at *2 (E.D. La. Feb. 11, 2020), vacated and remanded sub nom. St. Charles
Surgical Hosp., L.L.C. v. Louisiana Health Serv. & Indem. Co., 990 F.3d 447 (5th Cir. 2021).

7

Following the federal district court’s ruling, in June 2017, Provider filed a

Second Amended Petition in the 2017 Suit pending in CDC. In its Second

Amended Petition, Provider dismissed the breach of contract, detrimental reliance,

and negligent misrepresentation claims; maintained the fraud claim; and added (for

the first time) an abuse of rights claim.

In response to the Second Amended Petition, La Blue filed peremptory

exceptions of res judicata and no cause of action. La Blue argued that the federal

district court’s rulings in the 2010 Suit barred Provider’s fraud and abuse of rights

claims. La Blue further argued that Provider’s claims were barred for two reasons:

• Claim preclusion, because the claims arise from the same transaction
and occurrences as the claims in the 2010 Suit; and

• Issue preclusion, based on the findings in the 2010 Suit of no
misrepresentation, no duty to disclose, no reasonable reliance (all
essential elements of fraud); and no contractual relationship (an
essential element of abuse of rights).

La Blue also argued that Provider failed to state a cause of action for abuse of

rights.

Provider countered that the 2010 Suit was cabined to pre-January 2015

claims and that the federal district court refused to allow it to plead any post-

January 2015 claims in that suit.

In December 2017, the trial court denied La Blue’s res judicata and no cause

of action exceptions. From this ruling, La Blue filed a writ application. Granting

the writ, this Court found that the trial court erred in denying the res judicata

exception (the “Writ Opinion”). In the Writ Opinion, this Court first observed that

Louisiana courts apply federal res judicata law when, as here, addressing the

8

preclusive effect of a judgment rendered by a federal court. Citing federal

jurisprudence, this Court observed that “[t]he rule of res judicata encompasses two

separate but linked preclusive doctrines: (1) true res judicata or claim preclusion

and (2) collateral estoppel or issue preclusion.” St. Charles Surgical Hosp., LLC v.

Louisiana Health Serv. & Indem. Co., 18-0052, p. 3 (La. App. 4 Cir. 3/21/18), 317

So.3d 854, 856-57 (internal citations and quotations omitted), writs denied, 18-

1136 (La. 10/15/18), 253 So.3d 1302; 18-1118 (La. 10/15/18), 253 So.3d 1308.

Finding res judicata applied, this Court observed that “the only difference

between the two (2) lawsuits is the claims asserted in the federal suit are alleged to

have occurred from 2009 to April 2011, and the claims asserted in the present suit

are alleged to have occurred after April 2011. However, the claims that are alleged

to have occurred after April 2011 could have and should have been asserted in the

federal proceeding[.]” Id., 18-0052, p. 5, 317 So.3d at 858. Hence, “[Provider’s]

claims for fraud and abuse of process are barred by the doctrine of res judicata

because the claims arose from the same set of facts and circumstances as the

claims litigated and disposed of in the federal proceeding.” Id., 18-0052, p. 4, 317

So.3d at 857. This Court also found no error in the trial court’s denial of the

exception of no cause of action as to the abuse of rights claim. Id., 18-0052, p. 7,

317 So.3d at 859.

From the Writ Opinion, Provider filed a rehearing application. Granting

Provider’s rehearing application, this Court, in June 2018, amended and clarified

9

the Writ Opinion. Id. (the “Rehearing Decision”). In its Rehearing Decision, this

Court observed:

This Court maintains that the trial court erred in denying [La
Blue’s] peremptory exceptions of res judicata and no cause of action
(“the exceptions”) only as it concerns those claims arising from facts
and circumstances that were the subject of the federal court proceeding,
specially claims prior to January 2015. Therefore, this Court modifies
its writ disposition, so as to reverse the trial court’s judgment and grant
the exceptions for those claims arising prior to January 2015, and affirm
the trial court’s judgment denying the exceptions with respect to those
claims arising after January 2015.

Id.

Before this Court’s Rehearing Decision was rendered, in December 2017, La

Blue sent a letter to all non-participating providers—including Provider—

informing them of the manner in which it would calculate their reimbursement (the

“December 2017 Letter”).11 The December 2017 Letter stated as follows:

Blue Cross and Blue Shield of Louisiana and HMO Louisiana, Inc.
[collectively La Blue] are notifying you that the method of calculating
a [La Blue] member’s non-participating provider reimbursement under
our member benefit contracts is changing for claims for services
rendered on or after January 1, 2018. Specifically, the language of our
member benefit contracts, as approved by the Louisiana Department of
Insurance, is as follows:

For Non-Participating Providers—The Allowable Charge will be the
lowest of:

1. An amount We establish based on Our choice of Medicare’s
published fee schedule, what Medicare pays, or what
Medicare allows for the service;

2. An amount We establish; or

3. The provider’s billed charge.

11 Two identical letters were sent to Provider, both in the month of December 2017—one dated

December 4, 2017; the other, December 21, 2017. For ease of discussion, we refer to the two
letters singularly as the “December 2017 Letter.”

10

Thereafter, on November 7, 2019, Provider, with leave of court, filed the

Third Amended Petition—the last iteration of its petition in the 2017 Suit. Beyond

re-alleging its fraud and abuse of rights claims, Provider pled that it waived

recovery for any fraud or abuse of rights claim that it may have in connection with

federally-insured patients. Indeed, Provider included an entire section in its Third

Amended Petition—labelled “The Claims of [Provider] are Exclusively State Law

Claims”—devoted to disclaiming reliance on any federal law in this case. In this

section of its petition, Provider averred as follows:

79. This case arises and is brought exclusively under the laws of
Louisiana, not the laws of the United States. Nothing pleaded herein
alleges any relief governed by or available pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C.
§ 1001 et seq., or the Federal Employees Health Benefits Act
(“FEHBA”), 5 U.S.C. § 8901 et seq., or federal common law, or any
claims involving a federal officer. To the extent that any such claims
may be even implied, [Provider] expressly reject[s] such implications
and expressly state[s] that [it] do[es] not and will not seek damages
for any such claims and expressly waive[s] same.

80. [Provider’s] claims do not relate to employee welfare benefit plans
subject to federal law pursuant to either ERISA, 29 U.S.C. § 1132(a),
or FEHBA, 5U.S.C. §8901 et seq., and [Provider] expressly waive[s]
same. Further, [Provider] do[es] not challenge the benefit that may be
owed to the patients. Finally, [Provider] specifically do[es] not seek
any coverage determination or finding as to what benefits may be
owed/not owed under any insurance policy to or on behalf of [its]
patients. [Provider] specifically refuse[s] to plead and expressly
waive[s] any rights [it] may have against [La Blue] under any and all
federal laws, either independently or on behalf of [its] patients.

81. [Provider] do[es] not seek to recover for alleged underpayments
of health benefits owed to [its] patients or for [its] patients and
expressly waive[s] same. [Provider] do[es] not seek to enforce rights
or recover benefits under the terms of any insurance policy.

82. [Provider] do[es] not seek to recover benefits under ERISA for
[its] patients and expressly and hereby waive[s] same.

…

11

86. [Provider] [is] not, do[es] not, and will not make a claim against
[La Blue] either expressly or impliedly under ERISA. [Provider] [is]
not and will not make a claim against [La Blue] either expressly or
impliedly based upon assignments regarding claims [La Blue’s]
customers may have against [La Blue] and hereby expressly waive[s]
same.

On the same day as the Third Amended Petition was filed (November 7,

2019), La Blue removed the case to federal court. According to La Blue, it filed the

removal petition because, contrary to Provider’s disclaimer in its petition, Provider,

in discovery, in October 2019, produced a spreadsheet of patient transactions

alleged to be at issue that involved FEHBA or ERISA plans. Given the inclusion of

patient transactions that La Blue administers under color of federal officer pursuant

to FEHBA, La Blue removed the case based on the federal officer removal statute,

28 U.S.C. § 1442(a)(1); and based on the inclusion of patient transactions that

involve La Blue plans governed by ERISA, La Blue removed the case based on

federal question jurisdiction, 28 U.S.C. § 1331. Summarizing, La Blue argued in

its removal petition that federal subject matter jurisdiction exists for two reasons:

(i) Provider’s claims are preempted by ERISA and FEHBA; and (ii) removal is

proper under the federal officer removal statute.

One month later, in December 2019, Provider filed a motion to remand to

state court. Provider argued that the federal court lacked subject matter jurisdiction

over this matter because its claims were not preempted; the federal officer removal

statute was not applicable; and La Blue’s removal was not timely. Provider

contended that its discovery responses were inadvertent, citing the express waiver

in its Third Amended Petition of all federal claims and any damages in connection

with FEHBA-governed health insurance plans.

12

In February 2020, the federal district court judge—Susie Morgan (“Judge

Morgan”)—granted Provider’s motion to remand to state court. Providing

extensive reasons (the “First Remand Ruling”), Judge Morgan observed that there

was no complete ERISA preemption:12

Having considered all the relevant factors in the ERISA
preemption inquiry, the Court finds “coverage and benefit
determinations are not implicated [by the [T]hird [A]mended
[P]etition’s added allegations concerning “medical necessity” and
“authorizations”].” Further, the [T]hird [A]mended [P]etition’s added
allegations concerning “ERISA-related procedural requirements” do
not implicate the right to payment under the terms of a benefit plan. As
a result, [Provider’s] allegations do not cause [Provider’s] claim to fall
within the scope of ERISA § 502(a)(1)(B), and [Provider] lack[s]
standing to bring [its] claims under ERISA. [Provider’s] claims
implicate legal duties independent of ERISA. Similarly, [Provider’s]
claims do not address an area of exclusive federal concern, nor do they
directly affect the relationship among traditional ERISA entities. Blue
Cross Louisiana Defendants have failed to carry their burden of
establishing [Provider’s] claims are preempted under ERISA.

St. Charles Surgical Hosp., 2020 WL 634918, at *14. Judge Morgan additionally

held that La Blue was not entitled to removal under the federal officer removal

statute.13

12 This section of the First Remand Ruling was titled: “[t]he Court concludes there is not

complete preemption under ERISA.” The distinction between complete and conflict preemption
is discussed elsewhere in this opinion.
13 Judge Morgan denied Provider’s request for attorney’s fees pursuant to 28 U.S.C. § 1447(c),

observing:

This issue is a close one. On one hand, [Provider] went out of [its] way to make
clear in the third amended petition that [it is] not seeking benefits on behalf of
[its] patients and expressly waive [its] right to bring derivative actions under
ERISA or FEHBA. In addition, for the reasons discussed above, [La Blue has]
failed to provide on point case law supporting the removability of this case. On
the other hand, however, “the Court also recognizes that the boundaries of
ERISA [and FEHBA] preemption are murky and involve shifting factual
circumstances in the caselaw.”

St. Charles Surgical Hosp., 2020 WL 634918, at *17.

13

La Blue appealed Judge Morgan’s ruling to the federal Fifth Circuit. But, its

appeal was limited, by statute, to only the FEHBA claims;14 its appeal could not,

and did not, include the ERISA claims. Stated otherwise, only the determination of

lack of jurisdiction under §1442(a)(1)—under the federal officer removal statute—

was appealable; Judge Morgan’s other finding rejecting La Blue’s removal on

federal question jurisdiction, 28 U.S.C. § 1331, was not appealable.

On appeal, the federal Fifth Circuit vacated Judge Morgan’s First Remand

Ruling and remanded with the following instructions: (i) reexamine whether

removal pursuant to federal officer removal statute is warranted under the recently

clarified jurisprudential test; (ii) determine whether the express waiver pled by

Provider of FEHBA-governed claims is enforceable; and (iii) determine whether

Provider’s waivers defeat federal officer jurisdiction. St. Charles Surgical Hosp.,

990 F.3d at 451.

On the day prior to the remand hearing before Judge Morgan (July 5, 2021),

Provider filed a stipulation by its then attorney, James Garner (“Mr. Garner”), who

attested:

1. In the matter titled St. Charles Surgical Hospital, L.L.C. and
Center for Restorative Breast Surgery, L.L.C. v. Louisiana Health
Service & Indemnity Company d/b/a Blue Cross/Blue Shield of
Louisiana, Blue Cross & Blue Shield of Louisiana, Inc. and HMO
Louisiana, Inc., 17-1095, Div. “C,” Civil District Court for the Parish
of Orleans, State of Louisiana and removed to this Court in St. Charles
Surgical Hospital, LLC, et al. v. Louisiana Health Service & Indemnity
Company, et al.. No. 19-13497, United States District Court for the

14 “Although an order remanding a case to state court is not generally reviewable, ‘an order

remanding a case to the [s]tate court from which it was removed pursuant to section 1442 . . . of
this title shall be reviewable by appeal or otherwise.’” Latiolais v. Huntington Ingalls, Inc., 951
F.3d 286, 290 (5th Cir. 2020) (en banc) (quoting 28 U.S.C. § 1447(d)).

14

Eastern District of Louisiana, [Provider] ha[s] never intended to and
will not place at issue any patient transactions involving any FEHBA-
governed plans or [La Blue’s] liability in connection with those
transactions;

2. [Provider] will not introduce testimony or other evidence
related to [La Blue’s] handling or administration of any FEHBA-
governed plans to demonstrate [La Blue’s] fraudulent scheme with
respect to non-FEHBA governed plans;

3. [Provider is] judicially estopped from placing any FEHBA-
governed patient transactions in evidence as part of their showing of the
fraudulent [La Blue] scheme;

4. [Provider] will not rely on patient transactions involving
FEHBA-governed plans as part of [its] case in chief; and

5. [Provider] further reiterate[s] and confirm[s] [its] prior
renunciation and disclaimer of any recovery, damages, benefits, or
payments arising from any FEHBA-governed plan.

Provider’s stipulation also contained a footnote stating:

In opposing remand, [La Blue] ha[s] not made any arguments,
regarding any plan governed or available pursuant to the Employee
Retirement Income Security Act of 1974 (‘ERISA’). In an abundance
of caution, [Provider’s] stipulations herein apply to ERISA-governed
claims and/or plans as well as FEHBA-governed plans.

Shortly after the remand hearing before Judge Morgan (on July 16, 2021),

Provider submitted a second stipulation signed by its then managing members—

Drs. Sullivan and DellaCroce—who attested:

1. [Provider] ha[s] never intended to and will not place at issue any
patient transactions involving any FEHBA-governed or ERlSA-
governed plans or [La Blue’s] liability in connection with those
transactions;

2. [Provider] will not introduce testimony or other evidence related
to [La Blue’s] handling or administration of any FEHBA-governed or
ERISA-governed plans in the above-referenced case.

3. [Provider] will not intentionally request or produce discovery
concerning patient transactions involving FEHBA-governed or ERISA-
governed plans through written discovery and/or depositions and/or
subpoenas. Any production of FEHBA-governed or ERlSA-governed
plans through discovery will be deemed inadvertent and should be
ignored.

15

4. [Provider is] judicially estopped from placing any FEHBA-
governed or ERISA-governed patient transactions in evidence either in
[its] case-in-chief or rebuttal to support [its] claims that [La Blue]
committed fraud and/or abuse of rights;

5. [Provider] further reiterate[s] and confirm[s] [its] prior
renunciation and disclaimer of any recovery, damages, benefits, or
payments arising from any FEHBA-governed or ERISA-governed
plan.

Thereafter, Judge Morgan issued a second remand ruling, again remanding

the 2017 Suit to state court; she observed:

The Court finds [Provider’s] [T]hird [A]mended [P]etition does not
include any federally-governed claims and, alternatively, that
[Provider’s] waivers of such claims are valid and enforceable.
Furthermore, the Court finds [Provider’s] production of documentation
related to federally-insured transactions in the state court proceeding
was inadvertent. Because no federal officer jurisdiction is implicated,
the Court need not address whether [Provider’s] claims are removable
because [La Blue] “acted under” the Office of Personnel Management
(“OPM”) or whether the alleged conduct underlying [Provider’s] fraud
and abuse-of-rights claims was connected or associated with (or related
to) any federal directive from OPM.

St. Charles Surgical Hosp., LLC v. Louisiana Health Serv. & Indem. Co., No. CV

19-13497, 2021 WL 3077043, at *4 (E.D. La. July 21, 2021) (unpub.).

Back in state court (CDC), La Blue filed a partial summary judgment

motion, seeking to dismiss Provider’s claims for fraud or abuse of rights related to

patient transactions involving FEHBA and ERISA-governed plans. In support,

La Blue cited the language in the Stipulations. In response, Provider filed a

“Motion to Withdraw and/or Revoke Portions of Plaintiffs’ July 5, 2021 and

July 16, 2021 Stipulations.”15 In the Motion to Revoke, Provider sought to remove

any language regarding ERISA-governed plans from the Stipulations. Although

Provider disagreed with La Blue’s contention that the subject language in the

15 In this opinion, these two stipulations are referred to as the “Stipulations”; Provider’s motion

to revoke the ERISA portions of the Stipulations is referred to as the “Motion to Revoke.”

16

Stipulations could result in a dismissal of any claim dealing with the treatment of

an ERISA-governed patient, it filed the Motion to Revoke out of an abundance of

caution.

Over La Blue’s strong opposition, the trial court, in July 2022, rendered one

judgment granting Provider’s Motion to Revoke and denying La Blue’s partial

summary judgment motion.16 This Court and the Louisiana Supreme Court both

denied La Blue’s writ applications seeking review of the trial court’s rulings on the

Motion to Revoke and the partial summary judgment motion. St. Charles Surgical

Hosp., LLC v. Louisiana Health Serv. & Indem., 22-0588 (La. App. 4 Cir 9/23/22)

(unpub.), writ denied, 22-01590 (La. 12/20/22), 352 So.3d 82.

Thereafter, La Blue filed a summary judgment motion seeking dismissal of

Provider’s fraud and abuse of rights claims, which the trial court denied. This

Court and the Louisiana Supreme Court both denied La Blue’s writ applications

seeking review of that ruling. St. Charles Surgical Hosp., LLC v. Louisiana Health

Serv. & Indem. Co., 24-0506 (La. App. 4 Cir. 8/15/24) (unpub.), writ denied, 24-

01061 (La. 8/28/24), 391 So.3d 679.

On the eve of trial, La Blue filed an exception of no cause of action based on

ERISA preemption. Denying the exception, the trial court cited Judge Morgan’s

ruling on this “exact issue of ERISA preemption” and observed that “since then,

nothing’s changed. [Provider has] specifically refused to plead and expressly

disclaimed and waived any rights against [La Blue] under any and all federal law.”

In September 2024, this matter was tried over a three-week period before a

jury. On the morning of the first day of trial, Provider stipulated that given the

16 For ease of discussion, the trial court’s reasons for judgment in connection with this ruling are

outlined elsewhere in this opinion.

17

December 2017 Letter, it was dismissing claims regarding La Blue insureds treated

from January 1, 2018, to April 30, 2023. But, Provider reserved its right to

damages for La Blue insureds treated from January 1, 2015, to December 31, 2017.

Provider also reserved its right to damages for Home Plans insureds treated from

January 1, 2015, to April 30, 2023.17

Based on the stipulation, Provider filed a motion in limine to exclude from

evidence the December 2017 Letter. Although the trial court granted the motion in

limine, this Court granted La Blue’s expedited writ application and reversed the

trial court’s ruling. St. Charles Surgical Hosp., LLC v. Louisiana Health Serv. &

Indem. Co., 24-0557 (La. App. 4 Cir. 9/5/24) (unpub.), writ denied, 24-01101 (La.

9/6/24), 392 So.3d 327. This Court found that the December 2017 Letter was

relevant to La Blue’s defense of Provider’s fraud claim and that the trial court,

thus, abused its discretion in granting the motion in limine to exclude it. Id.18 The

Louisiana Supreme Court denied La Blue’s writ application seeking review of that

ruling.

At trial, the parties presented the testimony of multiple witnesses, including

experts. The trial court denied La Blue’s motion for directed verdict. At the end of

the trial, the jury returned a verdict in favor of Provider and against La Blue for

$421,488,633, plus judicial interest from the date of judicial demand. The trial

17 As discussed elsewhere in this opinion, the insureds in this case must be divided into two

groups—La Blue insureds and Home Plans insureds. The record reflects that most of the claims
at issue in this case are based on Provider’s treatment of Home Plans insureds.
18 During trial, two other evidentiary issues were the subject of expedited writ applications to this

Court, which were both denied. Given our disposition of this case on the legal issue of the jury
instructions on fraud, we find it unnecessary to reach the arguments raised regarding the other
evidentiary rulings.

18

court denied La Blue’s post-trial motions for judgment notwithstanding the verdict

and new trial. This appeal followed.

DISCUSSION

Although La Blue assigns a half dozen trial court errors,19 we group the

issues presented on appeal into three categories: (i) preclusion issues;

19 La Blue’s assigned errors are as follows:

A. The district court erred in overruling La. Blue’s exception of res judicata and,
by failing to apply the doctrine of issue preclusion, erroneously allowed [Provider]
to re[-]litigate essential elements of claims that [it] previously lost in federal court.

B. The district court erred for multiple, independent reasons in entering judgment
against La. Blue for fraud. In doing so, the district court improperly excluded
evidence (e.g., benefit plans, financial records, and [Provider’s] own use of La.
Blue for [its] employees). The district court erroneously instructed the jury on the
elements of fraud. [Provider] failed to prove any misrepresentation or actionable
omission by La. Blue, any justifiable reliance by [Provider], or any legal duty to
volunteer facts. And the district court erred in denying summary judgment and
directed verdict to La. Blue on [Provider’s] fraud claims because of these highly
prejudicial failures of proof.

C. The district court erred in entering judgment against La. Blue for abuse of rights
because [Provider] failed to show an enforceable contract right that La. Blue abused
and because La. Blue acted in accordance with legitimate interests in its dealings
with members. For these same reasons, the district court erred in denying La. Blue’s
motions for summary judgment and directed verdict on those claims.

D. The district court erred in denying La. Blue a directed verdict and then holding
La. Blue liable on [Provider’s] claims for billed charges for patients with out-of-
state plans. La. Blue had no role in preauthorization for such patients and owed
nothing for those services. Likewise, the district court erred in holding La. Blue
liable for abuse of rights in its capacity as an agent—not a principal—for out-of-
state plans.

E. The district court erred in overruling La. Blue’s exception, denying its summary
judgment motion, and entering judgment on claims that were subject to complete
and conflict preemption under ERISA. The district court erred in allowing
[Provider] to disavow binding stipulations and pursue ERISA-related claims [it]
previously repudiated to avoid a federal forum.

F. The district court erred in denying La. Blue’s motion for directed verdict on
damages and then awarding over $421 million in alleged damages despite the
absence of supporting evidence, where testimony from [Provider’s] damages expert
was unreliable and unsupported by record evidence, and [Provider] failed to prove
causation of special damages. The district court erred in allowing [Provider] to
introduce damages evidence (claims data on a jump drive) after resting, even more
so where much of the data on the jump drive did not relate to the claims at issue.
The court also erred in excluding evidence of a sale of business interests by
[Provider’s] owners that was relevant to witness bias and showed La. Blue owed
nothing. The district court further erred in awarding interest on the total damages

19

(ii) evidentiary and jury instructions issues; and (iii) substantive proof and damages

issues. We resolve this appeal on the first two.

Preclusion Issues

The preclusion issues raised on appeal are two-fold: res judicata and ERISA

preemption.

Res Judicata

La Blue contends that the trial court erred by failing to apply the res judicata

doctrine of issue preclusion and thereby erroneously allowed Provider to re-litigate

essential elements of claims that it previously lost in the 2010 Suit in federal court.

La Blue cites the federal district court’s grant of summary judgment on Provider’s

negligent misrepresentation and detrimental reliance claims. Again (as it did in its

res judicata exception), La Blue contends that the federal district court found there

was no misrepresentation, no reliance, and no duty to disclose—all necessary

elements of a fraud claim. Likewise, La Blue contends that the federal district court

found there was no contract between Provider and La Blue—a necessary element

for an abuse of rights claim.

La Blue acknowledges this Court’s Rehearing Decision dismissed many of

Provider’s claims as barred by the res judicata doctrine of claim preclusion.

La Blue, however, contends that this Court, in its Rehearing Decision, failed to

apply issue preclusion, which is broader than claim preclusion.20 According to La

award from the date of the original petition—years before most of the alleged
wrongs.
20 See Amrollah v. Napolitano, 710 F.3d 568, 571 (5th Cir. 2013) (internal quotation and citation

omitted) (observing that “[i]ssue preclusion, also known as collateral estoppel, applies when
“(1) the identical issue was previously adjudicated; (2) the issue was actually litigated; and (3)
the previous determination was necessary to the decision”).

20

Blue, there were different claims asserted before and after 2015—the date of

Provider’s last iteration of its complaint in the 2010 Suit—but not different issues.

This Court, by limiting the dismissal of claims on res judicata by date, La Blue

contends, implicitly confirmed that it was applying claim, not issue, preclusion.

Regardless, La Blue contends that the law of the case doctrine does not preclude

this Court from revisiting the res judicata issue anew on appeal.

Countering, Provider contends that this Court’s Rehearing Decision covered

both types of res judicata—issue and claim preclusion. Provider points out that this

Court, in the Writ Opinion, discussed issue preclusion, noting that res judicata

encompassed “two separate but linked preclusive doctrines”—claim and issue

preclusion. St. Charles Surgical Hosp., 18-0052, p. 3, 317 So.3d at 857. In its

Rehearing Decision, Provider contends that this Court held that res judicata—

including both claim and issue preclusion—only barred its pre-2015 claims.

Provider submits that this Court’s Rehearing Decision is law of the case.

The question whether to apply the law of the case doctrine is a legal one. See

Pegues v. Morehouse Par. Sch. Bd., 706 F.2d 735, 738 (5th Cir. 1983) (observing

that “the preclusive effect of the law of the case and res judicata doctrines presents

a pure legal question . . .”). Law of the case serves several important policies,

including: (a) avoiding indefinite re-litigation of the same issue; (b) consistency of

results in the same litigation; and (c) efficiency and fairness to both parties in

affording a single opportunity for the argument and decision of an issue. Holmes v.

City of New Orleans, 24-0269, pp. 3-4 (La. App. 4 Cir. 9/26/24), 399 So.3d 827,

830 (internal citation omitted).

As a commentator has noted, the following principles govern the

applicability of the law of the case doctrine:

21

The [law of the case] doctrine . . . applies to the appellate court’s revisit,
on a subsequent appeal, of an issue that the court decided in an earlier
appeal or after a grant of supervisory writs. However, the doctrine is
discretionary and will not be applied where “manifest injustice” would
result. The law of the case doctrine should not bar reconsideration
where in the interim the law has changed, and the change is retroactive.
(internal footnotes omitted).

1A Frank L. Maraist, LA. CIV. L. TREATISE: CIV. PROC.—SPECIAL PROCEED. § 4.7

(December 2025 Update).

This Court recently applied the law of the case doctrine to preclude re-

litigation of issues that it previously decided in a rehearing decision. Bol v. Breda,

LLC, 24-0715, p. 12 (La. App. 4 Cir. 5/16/25), 414 So.3d 1086, 1095. We

observed that “[t]he parties in this appeal are arguing the same legal issues applied

to the same factual background as in the Rehearing Decision” and that this

presented a “quintessential factual and procedural scenario for applying the law of

the case doctrine.” Id. (internal quotations and citation omitted). Such is the case

here.

The trial court denied La Blue’s res judicata exception in full. In the Writ

Opinion, this Court granted La Blue’s writ, sustained its res judicata exception in

full, and dismissed all of Provider’s claims. But, this Court in its Rehearing

Decision limited its ruling to pre-January 2015 claims—claims not before the

federal court in the 2010 Suit. In response to this Court’s Rehearing Decision, La

Blue applied to the Louisiana Supreme Court for supervisory writs. The Supreme

Court denied the writ application. Given these circumstances, this Court’s

Rehearing Decision is law of the case absent the applicability of an exception to

the doctrine.

The multiple exceptions to law of the case doctrine that the jurisprudence

has recognized are as follows:

22

• The doctrine has not been applied “in cases of palpable former error or
so mechanically as to accomplish manifest injustice.” Petition of
Sewerage & Water Bd. of New Orleans, 278 So.2d 81, 83 (La. 1973).
But, the palpable-error exception is inapposite when “there is merely
doubt as to the correctness of the former ruling.” Id.;

• The doctrine has not been applied “to supplant the Code of Civil
Procedure provision which clearly permits a reconsideration of the
overruling of peremptory exceptions,” Bank One, Nat. Ass’n, [v.
Velten,] 04-2001, pp. 6-7, 917 So.2d [454,] 459 (internal citations and
quotations omitted);

• The doctrine has not been applied “when the underlying, operative facts
upon which the court’s prior decision was based have changed.”
Holmes [24-0269, p. 4, 399 So.3d at 830]; and

• The doctrine has not been applied “against those who were not parties
to the litigation at the time the prior decision was rendered.” Marsh
Eng’g Inc. v. Parker, 04-0509, p. 8 (La. App. 3 Cir. 9/29/04), 883 So.2d
1119, 1124 (citation omitted).

Dunn v. Reg’l Transit Auth., 24-0513, p. 10 n.6 (La. App. 4 Cir. 3/11/25), 414

So.3d 754, 760, writ denied, 25-00444 (La. 6/17/25), 411 So.3d 632. None of the

exceptions apply here. Thus, we find Provider’s argument that the law of the case

doctrine applies persuasive and decline to revisit the res judicata issue.

ERISA preemption

The ERISA preemption issue La Blue raises on appeal has two parts—

revoking the Stipulations; and complete and conflict preemption.

Revoking the Stipulations

La Blue contends that the trial court erred in allowing Provider to revoke the

ERISA portion of the Stipulations, quoted elsewhere in this opinion. Resolution of

this issue turns on the context in which it arose. For this reason, we find it

instructive to quote portions of the trial court’s reasons for judgment on this issue,

which provide that context.

23

At the outset, the trial court observed that “[m]ost of the damages incurred

by [Provider] are related to [its] treatment of individuals with ERISA-governed

plans, but [Provider] ha[s] always maintained that its claims are exclusively state

law claims.” The trial court next observed that when La Blue removed the case to

federal court, the federal district court judge initially granted Provider’s motion to

remand—the First Remand Ruling. Although La Blue appealed that decision, the

only issue presented in La Blue’s appeal related to FEHBA—not ERISA.

Explaining the context in which the Stipulations were made, the trial court

observed:

As a result [of the limited scope of La Blue’s appeal], [Provider]
voluntarily filed a stipulation in an effort to maintain that [Provider]
w[as] waiving FEHBA claims. [Provider] filed a second stipulation to
further dispel any ambiguities regarding FEHBA claims. However, the
[S]tipulations included statements and references to ERISA, even
though ERISA was not a part of the appeal.

Continuing, the trial court observed that when the case returned to state

court, La Blue filed a partial summary judgment motion seeking dismissal of

Provider’s claims involving both FEHBA and ERISA governed plans. In support

of its motion, La Blue relied upon language in the Stipulations. In response,

Provider filed the Motion to Revoke. In the Motion to Revoke, Provider sought to

withdraw any language in the Stipulations regarding ERISA “to clarify any

unintended consequences.”

Summarizing the parties competing contentions (the same contentions they

repeat in this appeal), the trial court observed:

[Provider] allege[s] that any reference in the [S]tipulation[s] dismissing
[its] claims related to ERISA-governed plan[s] was an obvious error of
fact, and that [La Blue’s] interpretation of the [S]tipulations would
essentially force [Provider] to dismiss all of [its] damages in this case
since almost all surgeries involved a patient with an ERISA-governed
plan. [La Blue] argue[s] that [Provider’s] attempt to now assert an

24

“error of fact” and injustice because the [S]tipulations no longer suit
their litigation strategy. [La Blue] further assert[s] that [Provider’s]
current position is inconsistent with what [it] presented before the
federal court, and contend that [Provider] did not make any “error of
fact” at all; [Provider] simply miscalculated the ultimate impact of [its]
voluntary stipulations.

Finally, the trial court concluded:

Louisiana courts will permit a judicial confession (such as a stipulation)
to be revoked, but only when the confession was made based on an error
of fact and when there has been no reliance on the confession. Dolsen
v. City of New Orleans, 559 So.2d 50, 51 (La. A[pp.] 4[th] Cir. []1990).
Further, [s]ummary judgment is rarely appropriate for disposition of a
case requiring judicial determination of subjective facts such as intent,
motive, malice, good faith[,] or knowledge. Wise v. O’Neil, [20-3 (La.
App. 3 Cir. 6/17/20),] 299 So.[3]d 185, 191[].

Accordingly, the Court finds that [Provider’s] contention that [it] had
no intention to voluntarily dismiss the majority of [its] damages as [La
Blue] suggest[s] precludes the instant Motion for Summary Judgment.
The affidavit of Attorney James Garner who drafted the [S]tipulations,
further suggest that the unintended consequences of the [S]tipulations
were not contemplated by [Provider]. Additionally, both sides set forth
different interpretations of the same stipulations which makes it not ripe
for summary judgment. Dismissing all of [Provider’s] claims related to
patient transactions involving ERISA-governed plans would cripple
[Provider’s] case, and severely limit[] the reasons for filing the lawsuit
in the first place.

On appeal, La Blue challenges three of the trial court’s rulings: (i) denial of

La Blue’s partial summary judgment motion; (ii) grant of Provider’s Motion to

Revoke; and (iii) refusal to find judicial estoppel applies. The trial court’s denial of

La Blue’s partial summary judgment motion is reviewed under a de novo

standard.21 Whereas, an abuse of discretion standard applies to both the trial court’s

grant of Provider’s Motion to Revoke22 and refusal to apply judicial estoppel.23

21 See Farrell v. Circle K Stores, Inc., 22-00849, p. 2 (La. 3/17/23), 359 So.3d 467, 471.

22 See Coastal States Mktg., Inc. v. Hunt, 694 F.2d 1358, 1368-69 (5th Cir. 1983) (applying an

abuse of discretion standard to rulings on revocation of a stipulation).
23 See New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (observing that judicial estoppel is an

equitable doctrine that is invoked at a court’s discretion).

25

The trial court’s summary judgment ruling is supported by the record. In

opposing the motion, Provider submitted multiple affidavits—two from its

attorneys (one from Mr. Garner, who drafted the Stipulations; another from David

Sherman, who has represented Provider in this matter since 2017, when the

original petition was filed); and two from its managing partners (Drs. Sullivan and

DellaCroce). All four affidavits included the following attestation:

• Should any interpretation lead to the conclusion that the Stipulations
dismiss, forego, and/or waive damages to [Provider] for [its] treatment
of patients with an ERISA-governed insurance policy, the language in
the Stipulations concerning ERISA does not reflect the intent and
purpose of the stipulation and constitutes error.

In his affidavit, Mr. Garner additionally attested as follows:

• The Stipulations were filed solely in a good faith effort to re-urge the
waivers continuously asserted by [Provider] since the filing of the
original Petition for damages in February of 2017[; and]

• The Stipulations were never intended to dismiss, forego, and/or waive
the damages suffered by [Provider] for [its] treatment of patients with
an ERISA-governed insurance policy available under Louisiana law.

La Blue, as the trial court observed, presented a different interpretation of

the Stipulations. Citing the conflicting interpretation of the parties’ intent regarding

the Stipulations, the trial court denied the summary judgment motion. Based on our

de novo review of the record, we cannot conclude the trial court erred. The record

reflects a dispute between the parties regarding the intent behind the Stipulations.

As to the Motion to Revoke, the trial court stated the governing principle

that a stipulation can be revoked when made based on an error of fact provided

there has been no reliance on the stipulation. See Dolsen, 559 So.2d at 51.24

24 Because Provider made the Stipulations in federal court, federal law applies. Nonetheless,

federal law is the same as Louisiana law on the issue of the binding effect of a stipulation. See
Dolsen, 559 So.2d at 51 (citing Lockette v.Greyhound Lines, Inc., 817 F.2d 1182, 1187 (5th Cir.

26

La Blue contends that Provider did not stipulate to a fact; rather, Provider

disclaimed certain claims altogether. La Blue stresses that the trial court, rather

than point to any error of fact, observed that Provider “had no intention to

voluntarily dismiss the majority of [its] damages” and did not contemplate “the

unintended consequences of the [S]tipulations.” The trial court’s reasoning, La

Blue contends, establishes that Provider did not establish an “error of fact,” but

rather, at best, an “error of judgment.” Regardless, even if the Stipulations

involved an error of fact, La Blue contends that granting the Motion to Revoke was

still improper because La Blue relied on the Stipulations to its detriment. Absent

the Stipulations, La Blue contends it would have maintained its right to litigate this

case in federal court.

Provider counters that La Blue’s argument that it relied on the Stipulations

to its detriment is belied by the record. Provider emphasizes that when the

Stipulations were made, the federal district court (Judge Morgan) had already

rendered the First Remand Ruling, which contained an exhaustive analysis finding

that Provider’s state law claims were not preempted by ERISA. According to

Provider, even after the Stipulations were made, La Blue continued to contest

Provider’s motion to remand. Judge Morgan’s second remand order was based on a

rejection of La Blue’s other grounds for seeking to stay in federal court. Thus,

contrary to La Blue’s suggestion, Provider contends that the Stipulations regarding

the ERISA-based plans did not result in the remand to state court.

The jurisprudence has observed that “[t]he trial court has not only the right

but the duty to relieve a party from a pretrial stipulation where necessary to avoid

1987)); see also La. C.C. art. 1853 (providing that “[a] judicial confession . . . may be revoked
only on the ground of error of fact”).

27

manifest injustice . . . or where there is substantial evidence contrary to the

stipulation.” Rathborne Land Co. v. Ascent Energy, Inc., 610 F.3d 249, 262-63

(5th Cir. 2010) (internal quotations and citations omitted).25 Such is the case here.

The substantial evidence to the contrary is the context in which the Stipulations

were made. As the trial court observed and Provider points out, the ERISA-

governed plans were not at issue before the federal district court when Provider

made the Stipulations. La Blue’s argument of reliance to its detriment on the

Stipulations is belied by the record. Moreover, the severe consequences that

La Blue’s construction of the Stipulations would produce—dismissal of over 90%

of Provider’s damage claims—supports a finding of manifest injustice.

Accordingly, whether the trial court granted the Motion to Revoke based on an

error of fact or a finding of manifest injustice, its ruling was not an abuse of

discretion.

La Blue additionally contends that federal judicial estoppel and due

process—the guarantee of “fundamental fairness” in judicial proceedings—

prohibit Provider from revoking the Stipulations. According to La Blue, once

Provider successfully convinced the federal district court to remand the 2017 Suit

based on the Stipulations, federal judicial estoppel prohibited Provider from

disavowing the Stipulations in state court.

Provider counters by citing the trio of factors courts consider in determining

whether to apply judicial estoppel, which are as follows:

• The party against whom judicial estoppel is sought has asserted a legal
position which is plainly inconsistent with a prior position;

25 See also Brinson v. Tomlinson, 264 F.2d 30, 34 (5th Cir. 1959) (citations omitted) (observing

that “[j]ustice sometimes requires that stipulations made under misapprehension or without full
knowledge of all the facts, or as the result of mistake, be set aside”).

28

• A court accepted the prior position; and

• The party did not act inadvertently.

Reed v. City of Arlington, 650 F.3d 571, 574 (5th Cir. 2011) (reformatted).

Provider contends that even assuming the first factor is present, the second two

factors are not. According to Provider, the federal district court did not rely on the

Stipulations; and Provider acted inadvertently. Provider, thus, contends that the

trial court did not abuse its discretion in refusing to apply judicial estoppel. We

agree.

Judicial estoppel is “an equitable doctrine designed to protect the integrity of

the judicial process by prohibiting parties from deliberately changing positions

according to the exigencies of the moment.” Miller v. Conagra, Inc., 08-0021, p. 9

(La. 9/8/08), 991 So.2d 445, 452 (citing New Hampshire v. Maine, 532 U.S. 742,

749-50 (2001)).26 The “circumstances under which judicial estoppel may

appropriately be invoked are probably not reducible to any general formulation of

principle” and “[a]dditional considerations may inform the doctrine’s application

in specific factual contexts.” Id. (quoting New Hampshire, 532 U.S. at 750-51)

(internal quotations omitted).

We find the context in which the Stipulations were made establishes the

trial court did not abuse its discretion in refusing to apply judicial estoppel here.

When Provider made the Stipulations, the only issue before the federal district

court related to FEHBA. As discussed elsewhere in this opinion, the federal district

court, before the Stipulations were made, already had rendered a ruling—the First

26 Because Provider filed the Stipulations in federal court, federal judicial estoppel principles

apply. Nonetheless, federal law is the same as Louisiana law on this issue. See Lippitt v.
Raymond James Fin. Servs., Inc., 340 F.3d 1033, 1046 (9th Cir. 2004); Webb v. Webb, 18-0320,
p. 17 (La. 12/5/18), 263 So.3d 321, 332.

29

Remand Ruling—containing an exhaustive analysis relating to ERISA preemption.

The First Remand Ruling found that Provider’s state law claims were not

preempted by ERISA. Thus, ERISA was not before the federal district court when

the Stipulations were made.

For all the reasons noted above, we likewise find La Blue’s contention that

the trial court’s ruling on the Motion to Revoke violated constitutional due process

unpersuasive. Provider has been pursuing the same claims involving ERISA-

governed patient transactions since it filed this suit in 2017. The trial court’s ruling

on the Motion to Revoke simply allowed Provider to continue pursuing those same

claims. In sum, we find La Blue’s arguments regarding revoking the Stipulations

unpersuasive.

Complete and conflict preemption

La Blue next contends that even if Provider could permissibly revoke the

Stipulations, complete and conflict ERISA preemption apply and preclude

Provider’s claims. To place this argument in context requires an understanding of

the difference between complete and conflict ERISA preemption. Explaining the

difference, the federal Fifth Circuit has observed:

ERISA may occupy a particular field, which results in complete
preemption under 29 U.S.C. § 1132(a). See Metropolitan Life Ins. Co.
v. Taylor, 481 U.S. 58, 66, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987).
“Section 502 [1132(a)], by providing a civil enforcement cause of
action, completely preempts any state cause of action seeking the same
relief, regardless of how artfully pleaded as a state action.” Giles v.
NYLCare Health Plans, Inc., 172 F.3d 332, 337 (5th Cir. 1999).
Complete preemption permits removal to federal court because the
cause of action arises under federal law. See id. . . .

In contrast, ERISA preempts a state law action under 29 U.S.C.
§ 1144(a) when it conflicts with the state law. Bullock v. Equitable Life
Assur. Soc. of U.S., 259 F.3d 395, 399 (5th Cir. 2001). Conflict
preemption does not allow removal to federal court but is an affirmative

30

defense against claims that are not completely preempted under
Section 1132(a). Giles, 172 F.3d at 337.

Ellis v. Liberty Life Assur. Co. of Bos., 394 F.3d 262, 275 n.34 (5th Cir. 2004).

Complete preemption

Judge Morgan in the First Remand Ruling exhaustively addressed the issue

of whether complete preemption applies here. An entire section of the First

Remand Ruling is entitled “[t]he Court concludes there is not complete preemption

under ERISA”; this section is quoted elsewhere in this opinion.

On appeal, La Blue contends that the First Remand Ruling is not controlling

for two reasons: (i) it was vacated by the federal appellate court on La Blue’s

appeal; and (ii) it was an incorrect ruling. According to La Blue, a determination of

the medical necessity of a particular procedure is not the equivalent of a

representation that benefits will be paid to cover the cost of that procedure. Rather,

a medical-necessity determination, La Blue contends, is but the first step in the

process to determine the coverage of a procedure under a patient’s insurance plan.

La Blue’s obligation to pay for any services covered by the relevant ERISA-

governed plans arises only from those benefit plans. The state-claim label Provider

gives its claim is not controlling for purposes of complete preemption. La Blue,

thus, contends that complete preemption applies here.

Provider counters that Judge Morgan’s First Remand Ruling remains valid,

that her ruling is correct, and that we should follow it. Citing the trial court’s

observation in denying La Blue’s exception of no cause of action on the ERISA

preemption issue, Provider points out that nothing has changed since Judge

Morgan’s First Remand Ruling. We find Provider’s argument persuasive and

decline La Blue’s invitation to revisit the complete preemption issue—a removal

31

issue. But, Judge Morgan only addressed complete preemption; hence, La Blue’s

conflict preemption argument remains.

Conflict preemption

La Blue argues that Provider’s litigation claims—fraud and abuse of

rights—are barred by ERISA conflict preemption, which (as relevant here)

preempts any state law that “may now or hereafter relate to” any ERISA plan.27 A

state law “relates to” an ERISA plan “if it has a connection with or reference to

such a plan.”28 That standard preempts any state-law claim that implicates: [i] a

“central matter of plan administration”;29 [ii] “interferes with nationally uniform

plan administration”;30 or [iii] “produce[s] such acute, albeit indirect, economic

effects, by intent or otherwise, as to force an ERISA plan to adopt a certain scheme

of substantive coverage or effectively restrict its choice of insurers.”31 Any one of

these three grounds is sufficient for conflict preemption. According to La Blue,

Provider’s litigation claims do all three.

First, La Blue contends that Provider’s litigation claims implicate central

matters of benefit plan administration, both by effectively seeking to alter the

benefit levels the relevant benefit plans provide—by forcing the benefit plans to

cover out-of-network providers’ full billed charges—and by dramatically altering

27 29 U.S.C. §1144(a) (providing that “the provisions of this subchapter and subchapter III shall

supersede any and all State laws insofar as they may now or hereafter relate to any employee
benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of
this title.”
28 Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97 (1983).

29 Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 148 (2001).

30 Id.

31 N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 668

(1995) (“Travelers”).

32

the legal consequences of pre-treatment authorizations. See Bristol SL Holdings,

Inc. v. Cigna Health and Life Ins. Co., 103 F.4th 597, 605 (9th Cir. 2024)

(observing that “[s]ubjecting plan administrators to the prospect of binding

contracts through pre-treatment calls would … risk stripping [administrators] of

their ability to enforce plan terms that cannot be applied prior to treatment” and

that this is precisely “the kind of intrusion on plan administration that ERISA’s

preemption provision seeks to prevent”).32

Second, La Blue contends that Provider’s litigation claims would destroy

nationally uniform plan administration. If out-of-network providers could use state

law to bind insurers to pay the billed charges for any preauthorized treatment,

regardless of the actual terms of the governing benefit plan, “benefits would be

governed not by ERISA and the plan terms, but by innumerable phone calls and

their variable treatment under state law.” Bristol, 103 F.4th at 605. La Blue

contends that ERISA preemption precludes state law from requiring that kind of

patchwork approach to benefit plan administration.

Third and finally, La Blue contends that even if (contrary to fact) Provider’s

claims did nothing but increase costs, the “acute . . . economic effects” of the

dramatic cost increases that Provider’s theory would require (by guaranteeing all

out-of-network providers their full billed charges) would still trigger ERISA

conflict preemption by forcing ERISA plans “to adopt a certain scheme of

substantive coverage.” Travelers, 514 U.S. at 668.

32 See also Park Ave. Podiatric Care, P.L.L.C. v. Cigna Health & Life Ins. Co., 2024 WL

2813721, at *2 (2d Cir. June 3, 2024) (summary order) (observing that “because any legal duty
Cigna has to reimburse PAPC arises from its obligations under the patient’s ERISA plan, and not
from some separate agreement or promise, PAPC’s claims are expressly preempted by ERISA
§514(a)”).

33

Conversely, Provider contends that La Blue cannot establish that its

litigation claims are impermissibly connected to ERISA plans. In support, Provider

cites Rutledge v. Pharm. Care Mgmt. Ass’n, 592 U.S. 80, 87 (2020), which held

that a state law that “merely affects costs,” is permitted. Id.33 Provider points out

that following Rutledge, courts have held that state-law claims—like Provider’s

litigation claims—affect costs, at most, and thus are not impermissibly connected

to ERISA plans. See Emergency Physician Servs. of N.Y. v. Unitedhealth Grp.,

Inc., 749 F. Supp.3d 456, 470 (S.D.N.Y. 2024) (observing that “[i]f successful, the

[providers’] unjust enrichment claim would ‘merely increase costs’”). Provider

contends that here, as in the line of cases following Rutledge, its litigation claims

merely increase ERISA plan costs without requiring payment of specific benefits.

Because “cost uniformity was almost certainly not an object of pre-emption,” this

cost increase does not establish an impermissible connection to ERISA. Rutledge,

592 U.S. at 88 (quoting Travelers, 514 U.S. at 662)).34 Provider, thus, contends

that the trial court did not err in finding conflict preemption does not preclude its

litigation claims.

There is support in the jurisprudence for both sides’ positions. La Blue’s

position finds support in the Bristol line of cases. See Healthcare Ally Mgmt. of

33 In Rutledge, the Supreme Court held ERISA did not preempt an Arkansas law requiring

pharmacy benefits managers to reimburse pharmacies for prescription drugs at a particular rate,
finding the law “merely a form of cost regulation.” Id., 592 U.S. at 88.
34 Provider also contends that La Blue cannot show that its litigation claims “refer to” ERISA

plans. “[S]tate laws that treat ERISA and non-ERISA plans evenhandedly do not ‘refer to’
ERISA plans for preemption purposes.” Emergency Physician Servs. of N.Y., 749 F. Supp.3d at
468. Provider contends that Louisiana’s doctrines of fraud and abuse of rights apply
evenhandedly to Provider’s litigation claims for treatment of patients having both ERISA and
non-ERISA plans, and thus this requirement is not met. Id. at 470 (out-of-network emergency
providers’ state-law unjust enrichment claim that insurer failed to pay the reasonable value of
services rendered did not “refer to” ERISA plans because it “applie[d] evenhandedly to both
ERISA and non-ERISA plans”).

34

Cal., LLC v. United Healthcare Servs., Inc., 2024 WL 3915364, at *1 (C.D. Cal.

July 15, 2014) (observing that Bristol “clarifies” that ERISA preempts state law

misrepresentation and promissory estoppel claims based on allegations that the

“provider was not paid the reimbursement rates promised by Defendant on the

[verification] call”), aff’d, No. 24-5178, 2025 WL 3485391 (9th Cir. Dec. 4, 2025).

Likewise, the following observation by a commentator supports La Blue’s

position:

Out-of-network providers continue to argue that the
preauthorization process creates a separate contract/obligation on the
part of the plan to pay them. . . . Two Appellate Courts[—Bristol and ;
Park Ave. Podiatric Care, P.L.L.C. v. Cigna Health & Life Ins. Co.,
No. 23-1134-CV, 2024 WL 2813721, at *2 (2d Cir. June 3, 2024)35—]
reached the same result. Both cases involved out-of-network providers
that sued alleging that the preauthorization obligated the plans to pay
the amount billed by the providers. The bases of their lawsuits were an
estoppel theory and breach of contract. However, both claims were
dismissed on the grounds that ERISA preempted those claims. To allow
those types of claims would eliminate ERISA’s preemption rules.

Paul J. Routh, WELFARE BENEFITS GUIDE § 3:76, n.6, Pre-admission certification

(Nov. 2025 Update).

On the other hand, Provider’s position is supported by a recent Nevada

Supreme Court case: UnitedHealthCare Ins. Co. v. Fremont Emergency Servs.

(Mandavia), Ltd, 570 P.3d 107 (2025), cert. denied sub nom. Unitedhealthcare Co.

v. Fremont Emergency, No. 25-452, 2025 WL 3620468 (U.S. Dec. 15, 2025). In

UnitedHealthCare, an out-of-network provider—TeamHealth—asserted an unjust

enrichment claim against an insurer—United. TeamHealth’s unjust enrichment

claim arose out of its allegedly being underpaid for providing emergency medical

35 See Park Ave. Podiatric Care, 2024 WL 2813721, at *2 (observing that “any legal duty Cigna

has to reimburse PAPC arises from its obligations under the patient’s ERISA plan, and not from
some separate agreement or promise, PAPC's claims are expressly preempted by ERISA
§ 514(a)”).

35

services to United’s insureds. The Nevada Supreme Court held that TeamHealth’s

unjust enrichment claim was not conflict preempted because this was a suit

involving the rate of reimbursement for emergency services;36 the Court further

observed:

[T]his case involves the costs of services. United never disputed its duty
to provide some reimbursement to emergency medicine providers.
Likewise, United identifies no wholesale change to the administration
of its nationwide policies because of TeamHealth’s lawsuit.

We are also not convinced the recent cases highlighted by United
dictate a different conclusion. See Bristol SL Holdings, Inc. v. Cigna
Health & Life Ins., 103 F.4th 597, 604 (9th Cir. 2024); Park Ave.
Podiatric Care, PLLC v. Cigna. Health & Life Ins., No. 23-1134-cv
(L), 23-1135-cv (Con), 2024 WL 2813721 (2d Cir. June 3, 2024). Both
Bristol and Park Avenue concern the obligation to out-of-network
providers following preauthorization for nonemergency services.

Unlike in Bristol and Park Avenue where the payment disputes arose
from nonemergency care, here, EMTALA required TeamHealth to
provide medical services regardless of insurance status. Additionally,
this case does not present any argument of a preauthorization promise
to pay under an insurance contract. The sole issue in this case is the rate
of reimbursement for emergency services. As a result, this case does
not present an issue of conflict preemption because “cost uniformity
was almost certainly not an object of pre-emption.” Travelers, 514 U.S.
at 662, 115 S.Ct. 1671. TeamHealth’s claims are not conflict preempted
under traditional preemption analysis.

Id., 570 P.3d at 118. The holding in UnitedHealthCare supports Provider’s

position that conflict preemption does not preclude its litigation claims.

Given the conflicting case law on the conflict preemption issue, we decline

to find Provider’s claims precluded by ERISA conflict preemption. Accordingly,

we find no error in the trial court’s finding that neither complete nor conflict

ERISA preemption apply to preclude Provider’s litigation claims.

36 The Nevada Supreme Court also found complete preemption inapplicable given the case was a

suit involving the amount of payment.

36

Evidentiary and Jury Instructions Issues

The gist of the second group of issues La Blue raises on appeal is that a de

novo review of the jury’s fraud finding is necessary for two reasons: (i) the trial

court improperly excluded evidence; and (ii) the trial court failed to include an

essential element of fraud—justifiable reliance—in its jury instructions.37 Stated

otherwise, La Blue contends that because of the erroneous evidentiary rulings

coupled with the erroneous jury instructions on fraud, the de novo, as opposed to

the manifest error, standard of review applies. Provider counters that there are no

evidentiary errors, that the trial court’s jury instructions were correct, and that a

manifest error standard applies here.

An appellate court reviews a trial court’s factual findings under the manifest

error standard. See Jones v. Cap. Enters., Inc., 11-0956, p. 10 (La. App. 4 Cir.

5/9/12), 89 So.3d 474, 483 (citations omitted). But, the manifest error standard

assumes that the jury, as the fact finder, applied the correct law. Rathey v. Priority

EMS, Inc., 04-0199, p. 27 (La. App. 4 Cir. 1/12/05), 894 So.2d 438, 458-59. If the

jury applied the incorrect law because of erroneous jury instructions or

interrogatories, the appellate court “must determine if the error could have affected

the jury’s decision. If so, the manifest error standard does not apply; rather, the de

novo standard” does. Id., 04-0199, pp. 27-28, 894 So.2d at 459; see also Guidry v.

Bank of LaPlace, 94-1758, p. 9 (La. App. 4 Cir. 9/15/95), 661 So.2d 1052, 1058.

Such is the case here.

37 La Blue’s argument that the trial court erroneously instructed the jury on the fraud claim has a

second part. It argues that the trial court also failed to instruct that, in cases alleging fraud by
silence, the plaintiff must establish a duty to speak. Given our finding that the first part of
La Blue’s argument has merit, we pretermit addressing this second part of its argument.

37

The jurisprudence, however, has recognized that in certain circumstances a

remand for a new trial, rather than a de novo review, is the more appropriate course

of action. See Wegener v. Lafayette Ins. Co., 10-0810, 10-0811, pp. 19-20 (La.

3/15/11), 60 So.3d 1220, 1233-34 (recognizing that a “de novo review is not the

best course of action in every case” and citing Ragas v. Argonaut Southwest Ins.

Co., 388 So.2d 707, 708 (La. 1980)). Given the unique circumstance presented

here, we conclude, for the reasons discussed elsewhere in this opinion, that the

interest of justice dictates we remand for a new trial. See La. C.C.P. art. 2164.38

Jury instructions and interrogatories

Jury instructions are governed by La. C.C.P. art. 1792, which provides that

the trial court “shall instruct the jurors on the law applicable to the cause submitted

to them.” La. C.C.P. art. 1792(B). “In making charges to a jury, a trial judge is not

required to give the precise instructions submitted by either party, but must give

instructions which properly reflect the applicable law in light of the facts of the

particular case.” Lavigne v. Allied Shipyard, Inc., 18-0066, 18-0077 (La. App. 4

Cir. 1/15/20), 289 So.3d 1088, 1103 (internal citations and quotations omitted).

Summarizing the principles that govern appellate review of jury instructions

for error, a commentator has observed:

• Generally, an appellate court must use great restraint before overturning
a jury verdict based on erroneous jury instructions[;]

• A trial court’s judgment in formulating jury instructions will not be
reversed provided the charge correctly states the substance of the law[;]

38 La. C.C.P. art. 2164 provides as follows:

The appellate court shall render any judgment which is just, legal, and
proper upon the record on appeal. The court may award damages, including
attorney fees, for frivolous appeal or application for writs, and may tax the costs of
the lower or appellate court, or any part thereof, against any party to the suit, as in
its judgment may be considered equitable.

38

• If a trial court omits an applicable, essential legal principle, its
instruction does not adequately set forth the issues to be decided by the
jury and may constitute reversible error[;]

• When deciding whether an error in an instruction constitutes reversible
error, an appellate court must determine if there was a likelihood that
the instruction probably contributed to the jury verdict[; and]

• Specifically, the reviewing court must assess the alleged impropriety in
light of the entire jury charge to determine if they adequately provided
the correct principles of law as applied to the issues framed in the
pleadings and evidence and whether they adequately guided the jury to
the extent that it was prevented from dispensing justice.

Roger A. Stetter, LA. PRAC. CIV. APP. § 10:107, Standards of review for jury

trials—Jury instructions and interrogatories (Aug. 2025 Update) (internal citations

omitted and reformatted). The Louisiana Supreme Court has observed that “the

determinative question is whether the jury instructions misled the jury to the extent

that it was prevented from dispensing justice.” Adams v. Rhodia, Inc., 07-2110,

p. 7 (La. 5/21/08), 983 So.2d 798, 804 (citing Nicholas v. Allstate Ins. Co., 99-

2522, p. 8 (La. 8/31/00), 765 So.2d 1017, 1023).

Akin to jury instructions, jury interrogatories (jury verdict forms) may not be

set aside unless they are so inadequate that the jury is precluded from reaching a

verdict based on the correct law and facts. Georgia-Pac., LLC v. Dresser-Rand

Co., 15-2002, p. 7 (La. App. 1 Cir. 10/31/16), 207 So.3d 1131, 1137. “Jury forms

or interrogatories that are misleading or confusing may be reversible error.” Id.

(internal citation omitted). “Jury interrogatories must fairly and reasonably point

out the issues to guide the jury in reaching an appropriate verdict.” Id. “If the

verdict form does not adequately set forth the issues to be decided by the jury (i.e.,

omits an applicable essential legal principle or is misleading and confusing), such

39

interrogatories may constitute reversible error.” Id., 15-2002, p. 7, 207 So.3d at

1137-38.

Procedurally, “[a] party may not assign as error the giving or the failure to

give an instruction unless he objects thereto either before the jury retires to

consider its verdict or immediately after the jury retires, stating specifically the

matter to which he objects and the grounds of his objection.” La. C.C.P.

art. 1793(C); see also Yokum v. Funky 544 Rhythm & Blues Cafe, 16-1142, p. 5

(La. App. 4 Cir. 5/23/18), 248 So.3d 723, 731. “‘A party’s failure to timely object,

for the record, with specificity, constitutes a waiver of the objection.’” Lavigne,

18-0066, 18-0077, pp. 18-19, 289 So.3d at 1103 (quoting Berrera v. Hyundai

Motor Am. Corp., 620 So.2d 890, 893 (La. App. 4th Cir. 1993)). The same rule

applies to jury interrogatories (verdict forms). See Deykin v. Ochsner Clinic

Found., 16-488, p. 6, (La. App. 5 Cir. 4/26/17), 219 So.2d 1234, 1239. Here, the

record reflects that La Blue made a timely objection to the trial court’s proposed

jury instructions and interrogatories (verdict form) regarding the essential elements

of fraud.

During the last week of the three-week trial, the trial court held a charge

conference, which was not transcribed. Two days later (the day before closing

arguments), La Blue filed written objections to the trial court’s proposed jury

instructions and interrogatories (verdict form). In its written objections, La Blue

represented that it was “formally memorializing [its] objections as orally raised

during the Parties’ September 17, 2024 Charge Conference.” La Blue explained

that the trial court provided the parties with its proposed jury instructions on the

day before the charge conference. The trial court’s proposed instructions included

40

the following three paragraphs addressing Provider’s fraud claim—Paragraphs 24-

26:

24. Fraud is a “misrepresentation or a suppression of the truth made
with the intention either to obtain an unjust advantage for one party or
to cause a loss or inconvenience to the other.” Fraud may also result
from silence or inaction.

25. Fraud need only be proven by a preponderance of the evidence
and may be established by circumstantial evidence.

26. There are two elements necessary to prove legal fraud: an intent
to defraud and resulting damages.

In its written objections, La Blue argued that the trial court’s proposed

instructions and associated verdict form39 failed to sufficiently instruct the jury on

the essential elements of fraud and lacked necessary explanations of the meaning

of those instructions. La Blue submitted the following proposed jury instructions

and interrogatories (verdict form) on the fraud claim—Paragraphs 24-30:

24. Fraud is “a misrepresentation or a suppression of the truth made
with the intention either to obtain an unjust advantage for one party or
to cause a loss or inconvenience to the other.” [La. C.C. art. 1953.] To
succeed on a claim for fraud, [Provider] bear[s] the burden of proving,
by a preponderance of the evidence, all of the following [three]
elements:

(1) A misrepresentation of a material fact;
(2) Made with the intent to deceive; and
(3) Causing a justifiable reliance with resulting injury. [See
Becnel v. Grodner, 07-1041, p. 3 (La. App. 4 Cir. 4/2/08),
982 So.2d 891, 894].

25. With respect to the first element of [Provider’s] claim for fraud,
a fact is “material” only if a reasonable person would think the fact was
important to making a decision in the transaction in question. When the
party against whom the fraud was directed could have learned the truth
without difficulty, inconvenience, or special skill, a finding of fraud
does not take away consent. [See La. C.C. art. 1954].

39 La Blue’s written objections did not include the trial court’s proposed interrogatories (verdict

form) on fraud. As discussed elsewhere in this opinion, the trial court ultimately only submitted
to the jury a single interrogatory on the fraud claim, which read: “Do you find that [Provider]
proved, by a preponderance of the evidence, that [La Blue] committed fraud?”

41

26. With respect to the second element, [Provider] must prove that
[La Blue] had a specific intent to deceive [Provider]. A person intends
something when he subjectively wants it to happen, or when he must
have realized to a virtual certainty that it would happen. If you find that
[La Blue] made a mistake or was merely negligent, that is insufficient
to prove the claim of fraud. Stated differently, if you find [La Blue]
made any misrepresentations of material fact, you must focus on
whether this misrepresentation made by [La Blue] w[as] deliberate and
knowing and whether [La Blue] concealed evidence of the
misrepresentation from [Provider].

27. With respect to the third element, [Provider] must show that [it]
w[as] damaged by relying on incorrect information allegedly supplied
by [La Blue]. [It] must also show that [its] reliance on that information
was justifiable. In order for [Provider’s] reliance to be justified you
must find that it was reasonable. Whether [Provider’s] reliance is
reasonable is determined by examining all of the factual circumstances,
including the commercial sophistication of [Provider], the nature of the
statements [Provider] relied upon, and whether [Provider] could have
ascertained the truth without difficulty, inconvenience, or special skill
based on [its] commercial sophistication.

28. For [Provider] to show that [it] w[as] damaged by [La Blue’s]
alleged intent to deceive by providing incorrect information, [Provider]
must show that [it] changed [its] position because of the incorrect
information, or that [it] would have acted differently had it been
supplied the correct information by [La Blue]. Moreover, for fraud or
deceit to have caused [Provider’s] damage, [it] must show that had [it]
known the truth, [it] would not have acted as [it] did. [Provider] cannot
rely solely on an argument that [La Blue] had a moral duty to do or to
not do something.

29. [Provider] may not recover any damages you find are not
attributable to [LHS or HMO La. (collectively La Blue)] the only two
named Defendants in this case. Stated differently, you may not award
[Provider] any damages you find attributable to any entity or individual
other than [La Blue], including any other Blue Cross Blue Shield
Association members [(Home Plans)], who have not been sued in this
lawsuit.

30. If you believe that [Provider] ha[s] failed to establish any one of
these elements is more likely true than not true, then [Provider] [is] not
entitled to recover, and you should return a verdict for [La Blue].

JURY VERDICT FORM

FRAUD CLAIM

42

Interrogatory No. 1:

Ha[s] [Provider] proven by a preponderance of the evidence that [La
Blue] made a misrepresentation or omission of material fact to
[Provider]?

Answer No. 1:

Please indicate your answer to this interrogatory by
checking either “Yes” or “No” below:

“Yes” __________ or “No” __________

If you answered “no” to this question, you may not award
any damages for [Provider’s] Fraud Claim and should
proceed to Interrogatory No. 5 ([Provider’s] Abuse of
Right[s] Claim); if you answered “yes” to this question,
please proceed to Interrogatory No. 2.

Interrogatory No. 2:

Ha[s] [Provider] proven by a preponderance of the evidence that
[La Blue] made this misrepresentation or omission of material fact with
the intent to deceive [Provider]?

Answer No. 2:
Please indicate your answer to this interrogatory by
checking either “Yes” or “No” below:

“Yes” __________ or “No” __________

If you answered “no” to this question, you may not award
any damages for [Provider’s] Fraud Claim and should
proceed to Interrogatory No. 5 ([Provider’s] Abuse of
Right[s] Claim); if you answered “yes” to this question,
please proceed to Interrogatory No. 3.

Interrogatory No. 3:

Ha[s] [Provider] proven by a preponderance of the evidence that
[Provider’s] reliance on [La Blue’s] misrepresentation or omission of
material fact was reasonable?

Answer No. 3:

Please indicate your answer to this interrogatory by
checking either “Yes” or “No” below:

“Yes” __________ or “No” __________

43

If you answered “no” to this question, you may not award
any damages for [Provider’s] Fraud Claim and should
proceed to Interrogatory No. 5; if you answered “yes” to
this question, please proceed to Interrogatory No. 4.

Interrogatory No. 4:

Ha[s] [Provider] proven by a preponderance of the evidence that
[Provider] would have acted differently if [La Blue] had not made this
misrepresentation or omission of material fact?

Answer No. 4:

Please indicate your answer to this interrogatory by
checking either “Yes” or “No” below:

“Yes” __________ or “No” __________

If you answered “no” to this question, you may not award
any damages for [Provider’s] Fraud Claim; if you
answered “yes” to this question, you must award damages
for [Provider’s] Fraud Claim in Interrogatory No. 10(a).
Regardless of how you answered this question, please
proceed to Interrogatory No. 5 [Provider’s Abuse of
Rights Claim].

Rejecting La Blue’s proposed instructions and interrogatories (verdict form)

on the fraud claim, the trial court instructed the jury using its proposed

instructions—Paragraphs 24-26, quoted elsewhere in this opinion and repeated

below:

Fraud is a “misrepresentation or a suppression of the truth made
with the intention either to obtain an unjust advantage for one party or
to cause a loss or inconvenience to the other.” Fraud may also result
from silence or inaction.

Fraud need only be proven by a preponderance of the evidence
and may be established by circumstantial evidence.

There are two elements necessary to prove legal fraud: an intent
to defraud and resulting damages.

And, the trial court’s verdict form submitted to the jury included only the

following single interrogatory on the fraud claim:

44

Do you find that [Provider] proved, by a preponderance of the evidence,
that [La Blue] committed fraud?

“Yes” __________ or “No” __________

The jury answered yes.

Parties’ positions on jury instructions issue

La Blue contends that the trial court’s jury instructions misstated the law.

The trial court’s instructions stated that a fraud claim requires a plaintiff to prove

only two essential elements—(i) an intent to defraud; and (ii) resulting damages.

According to La Blue, the correct statement of the law is that a fraud claim

requires a plaintiff to prove three essential elements—(i) a misrepresentation of

material fact; (ii) the misrepresentation was made with the intent to deceive; and

(iii) the misrepresentation caused justifiable reliance with resultant injury. See

Becnel v. Grodner, 07-1041, p. 3 (La. App. 4 Cir. 4/2/08), 982 So.2d 891, 894.

La Blue submits that the trial court’s omission, over La Blue’s strong objection, of

the third element—justifiable reliance—is reversible error. La Blue further

contends that it was prejudiced by this error and that this error interdicted the fact-

finding process. According to La Blue, a properly instructed jury would have

found no justifiable reliance and, thus, no fraud.

Conversely, Provider contends that the trial court’s jury instruction tracks

the language of La. C.C. art. 195340—the code article that defines fraud—and

mirrors the Louisiana Supreme Court’s holding that “[t]here are two elements

necessary to prove legal fraud: an intent to defraud and a resulting damage.”

Lomont v. Bennett, 14-2483, p. 12 (La. 6/30/15), 172 So.3d 620, 629. Provider

40 La. C.C. art. 1953 provides that “[f]raud is a misrepresentation or a suppression of the truth

made with the intention either to obtain an unjust advantage for one party or to cause a loss or
inconvenience to the other. Fraud may result from silence or inaction.”

45

further contends that the jurisprudence has upheld jury instructions on La. C.C.

art. 1953 (fraud) that lacked justifiable reliance as an element. See Adams v. Canal

Indem. Co., 99-1190, p. 5 (La. App. 3 Cir. 5/10/00), 760 So.2d 1197, 1200-01.41

Resolution of the jury instructions issue turns on whether Louisiana law

requires a plaintiff prove justifiable reliance to establish a delictual fraud claim.

See Duvio v. Specialty Pools Co., 15-0423, p. 21 (La. App. 4 Cir. 6/16/16), 216

So.3d 999, 1014 (quoting Adams v. Rhodia, Inc., 07-2110, p. 6 (La. 5/21/08), 983

So.2d 798, 804) (observing that “[a] [jury] charge is appropriate if it ‘correctly

states the substance of the law’”).

Justifiable reliance is an element of a tort claim for fraud in Louisiana

The parties couch the jury instructions issue as turning on the number of

elements a delictual fraud claim under Louisiana law requires—two, as Provider

contends and the trial court instructed the jury; and three, as La Blue contends. But,

it is not the number of elements or how those elements are formulated that matters;

rather, it is the substance of what a plaintiff must prove to establish a fraud claim

that matters. As a commentator has observed:

Intentional misrepresentation is often called fraud or fraudulent
misrepresentation. Scienter or knowing fraud means the same. Courts
list anywhere from four to nine elements of the common law claim for
such misrepresentations. However the elements are formulated, courts
agree in substance that the plaintiff must prove the following elements:

(1) an intentional misrepresentation

(2) of fact

41 In Adams, the jury was instructed as follows:

Fraud is a misrepresentation or suppression of the truth made with the intention
either to obtain an unjust advantage for one party or to cause a loss or inconvenience
to the other. Fraud may also result from silence or inaction. . . . Additionally, the
law authorizes proof of fraud by circumstantial evidence, including highly
suspicious facts and circumstances.

99-1190, p. 5, 760 So.2d at 1200-01.

46

(3) that proximately causes harm and

(4) is material,

(5) intended to induce and

(5) does induce reliance by the plaintiff,

(6) which is reasonable or “justifiable.”

Dan B. Dobbs, Paul T. Hayden and Ellen M. Bublick, THE LAW OF TORTS § 664,

Fraudulent (intentional) misrepresentation: elements and burdens (2d ed. April

2025 Update) (internal footnotes omitted).42 Simply stated, the jurisprudence

reflects that, regardless of how the elements are numbered or formulated, a

delictual claim for fraud under Louisiana law requires a plaintiff prove justifiable

reliance.

Other litigants—like Provider—have argued that Louisiana law does not

require a showing of justifiable reliance when alleging a claim for delictual fraud.

Rejecting that argument, the federal district court in Thomas v. Chambers, No. CV

18-4373, 2019 WL 485781, at *3 (E.D. La. Feb. 7, 2019), observed:

Defendants correctly point out that Louisiana courts have been
inconsistent with explicitly naming justifiable reliance as an element of

42 Another commentator likewise has observed the vast differences, even within single

jurisdictions, over the number of elements a fraud claim is stated to require—ranging from less
than three, to as many as eleven; the commentator explains this observation as follows:

A vast group of modern cases, both from the standpoint of total number and from
the variety of commercial fact situations covered, runs through the various
American reports as to the essential and requisite elements to state a claim or cause
of action for fraud (and deceit). There is a certain sameness as to these essential
elements in total, but the cases vary widely in the number of elements and as to
their detail. In addition, in this connection, it should be noted and kept in mind that,
occasionally, even within a particular jurisdiction, the number and detail of these
elements may vary. In some states, 11 elements are held to be requisite; in others,
10 (approximately), nine, eight, seven, six (approximately), five (approximately),
four (approximately), and three—or less.

10 Charles F. Krause, et al., AMERICAN LAW OF TORTS § 32:19, Generally (Feb. 2025 Update).
The commentator groups Louisiana in the “three—or less” category, citing Lomont, 14-2483,
p. 12, 172 So.3d at 629.

47

this claim. Compare Williamson v. Haynes Best Western of Alexandria,
688 So.2d 1201, 1239 (La. App. 4[th] Cir. 1997) (“Two elements are
necessary to prove fraud: an intent to defraud and actual or potential
loss or damages.”), with Becnel, 982 So.2d at 894 (“To recover under
a cause of action in delictual fraud, a plaintiff must prove three
elements: (1) a misrepresentation of material fact, (2) made with the
intent to deceive, (3) causing justifiable reliance with resultant
injury.”). Federal courts applying Louisiana law, by contrast, routinely
include justifiable reliance as a distinct element of the claim. See, e.g.,
Kadlec [v. Med. Ctr. v. Lakeview Anesthesia Assocs.], 527 F.3d [412,]
418 [(5th Cir. 2008)]; Abbott v. Equity Grp., Inc., 2 F.3d 613, 624 (5th
Cir. 1993); Abell v. Potomac Ins. Co., 858 F.2d 1104, 1131 n.33 (5th
Cir. 1988).

But defendants wrongly conclude from these slight discrepancies
that they are not required to assert that they at one point believed
plaintiffs’ alleged misrepresentations, and acted to their detriment
because of that belief. The court in Sun Drilling Products Corporation
v. Rayborn, [00-1884, pp. 15-16 (La. App. 4 Cir. 10/3/01)], 798 So.2d
1141, 1152-53 [], explained:

Two elements are necessary to prove fraud: (1) an intent
to defraud and (2) actual or potential loss or damage.
Federal courts applying Louisiana law indicate that
reliance is an element of a claim for fraud. Moreover, for
fraud or deceit to have caused plaintiff’s damage, he must
at least be able to say that had he known the truth, he would
not have acted as he did to his detriment. Whether this
element is labeled reliance, inducement, or causation, it is
an element of a plaintiff’s case for fraud.

Id. [00-1884, pp. 15-16, 798 So.2d] at 1152-53 (internal citations
omitted). As this quotation makes clear, it is immaterial whether
Louisiana courts always explicitly list justifiable reliance as an element.
They nonetheless recognize that a party asserting fraud is required to
allege that it was unaware that the opposing party’s representation was
false, and that the misrepresentation caused it to act differently than it
would have had it known the truth.

Id.43

43 See also Hunters Run Gun Club, LLC v. Baker, No. CV 17-176-SDD-EWD, 2019 WL

3400696, at *6 (M.D. La. July 26, 2019); Stoke v. City of New Orleans, 25-0258, p. 9 (La. App. 4
Cir. 12/17/25), ___So.3d ___, ____, 2025 WL 3653403, *17 (quoting Thomas, supra, and
observing that “‘a party asserting fraud is required to allege that it was unaware that the opposing
party’s representation was false, and that the misrepresentation caused it to act differently than it
would have had it known the truth.’”).

48

Echoing the federal district court, commentators have observed that, under

Louisiana law, a delictual tort claim of fraud—sometime labelled deceit—requires

proof of three essential elements—“[i] The defendant must have made a false

statement of fact with the intent to gain an unfair advantage or to cause a loss or

inconvenience to another; [ii] The misrepresented fact must be material; and

[iii] There must be reasonable reliance and damages.” Frank L. Maraist & Thomas

C. Galligan, Jr., LOUISIANA TORT LAW §2-6(j), Fraud. (2d ed. 2018).44 In

support of the third element of justifiable reliance, the commentators cite La. C.C.

art. 1954, which provides:

Fraud does not vitiate consent when the party against whom the fraud
was directed could have ascertained the truth without difficulty,
inconvenience, or special skill.

This exception does not apply when a relation of confidence has
reasonably induced a party to rely on the other’s assertions or
representations.

The preceding Civil Code article, La. C.C. art. 1953,45 defines fraud as “a

misrepresentation or a suppression of the truth made with the intention either to

obtain an unjust advantage for one party or to cause a loss or inconvenience to the

other. Fraud may result from silence or inaction.” Provider’s contention that the

trial court’s jury instructions were sufficient because its instructions tracked the

language of La. C.C. art. 1953 is unpersuasive. This Court, in Sun Drilling Prods.

Corp. v. Rayborn, 00-1884 (La. App. 4 Cir. 10/3/01), 798 So.2d 1141, implicitly

44 As former Justice (then federal appellate judge) Dennis summarized, “[t]he elements of a

Louisiana delictual fraud or intentional misrepresentation cause of action are: (a) a
misrepresentation of a material fact, (b) made with the intent to deceive, and (c) causing
justifiable reliance with resultant injury.” Guidry v. U.S. Tobacco Co., 188 F.3d 619, 627 (5th
Cir. 1999).
45 The definition of fraud, La. C.C. art. 1953, is located in “Title IV. Conventional Obligations or

Contracts,” “Chapter 4. Vices of Consent.”

49

rejected that argument and expressly held that “for fraud or deceit to have caused

[a complainant’s] damage, he must at least be able to say that had he known the

truth, he would not have acted as he did to his detriment.” Id., 00-1884, p. 16, 798

So.2d at 1153. This Court further observed that “[w]hether this element is labeled

reliance, inducement, or causation, it is an element of a plaintiff's case for fraud.”

Id. Translated, this Court held, as the federal district court in Thomas observed,

that justifiable reliance is a distinct element that must be proven to establish a

delictual tort claim in Louisiana.

Alternatively, Provider contends that La Blue’s argument regarding the

detrimental reliance requirement is mooted by the trial court’s inclusion in the jury

instructions of the requirement of “resulting damage”—causation. According to

Provider, this Court, in Powell v. State Bd. of Certified Pub. Acct’s of La., 21-0385,

p. 13 (La. App. 4 Cir. 12/22/21), 366 So.3d 396, 404, observed that causation

incorporates reliance. Provider, thus, contends that when the trial court instructed

the jury on “resulting damage,” it necessarily instructed the jury on reliance. We

disagree.

This Court in Powell quoted the same language in Sun Drilling that the

federal district court in Thomas quoted. Repeating, the quoted language ends with

the conclusion that “[w]hether this element is labeled reliance, inducement, or

causation, it is an element of a plaintiff's case for fraud.” Sun Drilling, 00-1884,

p. 16, 798 So.2d at 1153. This Court in Powell, thus, reiterated its holding in Sun

Drilling that justifiable reliance is required regardless the label given that

requirement.

Moreover, the justifiable reliance element is a distinct one from the

“resulting damages” requirement that the trial court included in its instructions. As

50

a commentator observes, “[i]t is not enough that the defendant make a material,

factual misrepresentation that causes injury to the plaintiff. The injury must come

about by virtue of the plaintiff justifiably relying on the apparent truth of the

misrepresentation.” John C. P. Goldberg, et. al., The Place of Reliance in Fraud,

48 Ariz. L. Rev. 1001, 1004 (2006).46 Here, the trial court’s jury instructions

omitted any reference to the distinct requirement of justifiable reliance—an

essential element of a delictual fraud claim.

Recapping, justifiable reliance is an essential element of a tort claim for

fraud in Louisiana. It was legal error for the trial court to omit this essential

element from its jury instructions on fraud. See Nicholas, 99-2522, p. 9, 765 So.2d

at 1024 (observing that jury’s verdict finding intentional infliction of emotional

distress was interdicted when jury instructions failed to include “any reference to

the requirement that the defendants’ conduct be extreme and outrageous and that

plaintiff’s emotional distress be severe”). The Louisiana Supreme Court has

observed that “[i]f the trial court omits an applicable, essential legal principle, its

instruction does not adequately set forth the issues to be decided by the jury and

may constitute reversible error.” Adams, 07-2110, p. 6, 983 So.2d at 804. Such is

the case here.

The trial court’s error in failing to instruct the jury on the justifiable reliance

element was exacerbated by its submission to the jury of an inadequate verdict

form—a single interrogatory asking the jury if there was fraud. A similar scenario

46 See also Prentice v. R.J. Reynolds Tobacco Co., 338 So.3d 831, 838 (Fla. 2022) (observing

that “[i]n the common law of fraud, reliance is what establishes the necessary connection
between a fraudulent representation and the plaintiff’s injury. Put differently, regardless of the
form of the defendant’s fraudulent conduct, reliance is an indispensable aspect of proving
causation in a fraud claim”).

51

was presented in Georgia-Pac., LLC v. Dresser-Rand Co., 15-2002, p. 12 (La.

App. 1 Cir. 10/31/16), 207 So.3d 1131, 1140. There, the appellate court observed:

[T]he trial court’s error in failing to instruct the jury on the applicable
law was further compounded by the inadequacy of the jury’s verdict
form. The verdict form simply asked the jury whether either party
“owe[d]” the other party and if so, how much, and did not ask the jury
to make any specific underlying factual findings to support such a
determination, such as a finding of breach and causation of damages.
Thus, the verdict form did not point out any of the issues to guide the
jury in reaching an appropriate verdict.

The appellate court, thus, concluded that “no weight should be afforded to the

jury’s verdict.” Id. The same result is dictated by the record here.

Given our finding of prejudicial error, we must determine whether the

appropriate course of action is a de novo review of the record or a remand for a

new trial. As noted earlier, and explained below, we find it appropriate to remand

for a new trial.

Remand for a new trial

The general rule is that when, as here, a legal error has interdicted the fact-

finding process of the jury, “if the record is otherwise complete, the appellate court

should make its own independent de novo review of the record.” Wegener, 10-

0810, 10-0811, p. 19, 60 So.3d at 1233. But, the Supreme Court recognized an

exception to this general rule in Ragas, 388 So.2d at 708. Explaining the exception,

the Supreme Court observed:

This is not to say, and Gonzales [v. Xerox Corp., 254 La. 182,
320 So.2d 163 (1975)] should not be read to require, that the appellate
court must find its own facts in every such case. There are cases where
the weight of the evidence is so nearly equal that a first-hand view of
witnesses is essential to a fair resolution of the issues. The appellate
court must itself decide whether the record is such that the court can
fairly find a preponderance of the evidence from the cold record. Where
a view of the witnesses is essential to a fair resolution of conflicting
evidence, the case should be remanded for a new trial.

52

Ragas, 388 So.2d at 708.

In Wegener, the Supreme Court cited La. C.C.P. art. 2164 as authorizing an

appellate court to invoke the Ragas exception and to remand a case to the trial

court for proper consideration when the interest of justice so requires. Id., 10-0810,

10-0811, p. 20, 60 So.3d at 1233-34. There, the Supreme Court held that a remand

for a new trial, rather than a de novo review, was appropriate due to prejudicial

jury instructions regarding whether the plaintiffs—the Wegeners—were entitled to

damages and penalties under La. R.S. 22:1220. Id., 10-0810, 10-0811, p. 20, 60

So.3d at 1234.

In finding a remand for a new trial appropriate, the Supreme Court observed

that “[w]hether a particular case should be remanded is a matter which is vested

largely within the court’s discretion and depends upon the circumstances of the

case.” Wegener, 10-0810, 10-0811, at p. 20, 60 So.3d at 1234 (citing Alex v. Rayne

Concrete Serv., 05-1457 (La. 1/26/07), 951 So.2d 138, 155). Applying that

standard, the Supreme Court concluded:

[U]nder the specific facts and circumstances of this case, and the
particular legal errors involved, a remand of the case for a new trial is
dictated. The issues affected by the legal errors are damages and
penalties under La. R.S. 22:1220, primary components of the
Wegeners’ case. Whether the Wegeners suffered mental distress as a
result of Lafayette’s adjustment of their insurance claim, and whether
the Wegeners are entitled to penalties due to Lafayette’s breach of its
duties under this statute are both issues which are affected greatly by
the credibility of the plaintiffs and the claims personnel from Lafayette.
We find these issues necessarily require the fact finder to examine first-
hand the witnesses’ demeanor and testimony. We cannot, by
examination of the cold record alone, properly determine the issues
involved.

Wegener, 10-0810, 10-0811, p. 20, 60 So.3d at 1234. Citing the Ragas exception,

the Supreme Court concluded that the interest of justice was best served by

remanding the case for a new trial.

53

Applying the above principles here, we find it appropriate to remand for a

new trial, rather than conduct a de novo review, given the unique circumstances of

this case. This case involves a fraud claim, which by its nature requires the fact

finder examine first-hand the witnesses’ demeanor and testimony. Neither the trial

court nor the jury determined the fact-driven, essential element of justifiable

reliance, which is pivotal to this case. Moreover, the nature and magnitude of the

underlying dispute at issue here make deciding the issues presented on a cold

record impossible. For all these reasons, we conclude that this case falls into the

category of cases in which the interest of justice requires a retrial. Wegener, 10-

0810, 10-0811, at 20, 60 So.3d at 1234; see also Georgia-Pac., 15-2002, pp. 12-

13, 207 So.3d at 1140 (observing that “[d]ue to the substantial conflict in testimony

concerning the pertinent issue in this case, a preponderance of the evidence cannot

be determined fairly from the cold record” and that “the interests of justice would

best be served by a new trial where credibility determinations and resolutions of

the conflicting testimony can be made by the finder of fact”).47

47 The following is a collection of cases in which appellate courts have invoked the Ragas

exception and remanded for a new trial:

• Abney v. Smith, 09-0794, p. 12 (La. App. 1 Cir. 2/8/10), 35 So.3d 279, 287 (reasoning
that “[b]ecause a preponderance of the evidence cannot be determined fairly from the
cold record due to the substantial conflict in testimony on the condition of the single stop
sign situated in the right-of-way that buttressed the gas station, remand is proper in this
case”);

• Palumbo v. Shapiro, 11-0769, p. 12 (La. App. 4 Cir. 12/14/11), 81 So.3d 923, 930
(reasoning that “we cannot conduct a de novo review, but must instead remand the matter
for a new trial because a view of the witnesses is essential to a fair resolution of the
conflicting evidence. Specifically, the remaining defendants, especially Mr. Pigg and Mr.
Bartels, hold to the position that they cannot be liable for malpractice because they never
entered into an attorney-client relationship with Palumbo”);

• Delo Reyes v. Liberty Mut. Fire Ins. Co., 08-0769, pp. 4-5 (La. App. 4 Cir. 2/18/09), 9
So.3d 890, 893 (reasoning that “[t]he plaintiffs complain of debilitating injuries, similar
to injuries sustained in a previous automobile accident, while the defendants are
contesting the issue of negligence as well as causation” and finding that “the allegations
and defenses in the case sub judice are of a nature that necessitates the witnesses’

54

Because of our holding that the trial court committed reversible error in its

jury instructions on fraud, we pretermit La Blue’s other challenges to the fraud

liability basis of the verdict and judgment. Moreover, the jury interrogatories were

not framed to allow the jury to allocate its damage award between the fraud and

abuse of rights claims; rather, the jury was asked to give one lump sum award. As

a result, our finding of legal error on the fraud claim requires that we reverse the

entirety of the jury’s award.48

DECREE

For the foregoing reasons, the judgment of the trial court is reversed; and

this matter is remanded to the trial court for a new trial.

REVERSED; REMANDED FOR NEW TRIAL

credibility be taken into account to such a degree that rendering a just verdict on a cold
record would not be possible”);

• Hoffman v. Paracelsus Elmwood Med. Ctr., Inc., 03-0659, p. 17 (La. App. 4 Cir. 9/1/04),
881 So.2d 796, 807 (reasoning that “the weight of the evidence is so nearly equal that a
firsthand view of the witnesses is essential to a fair resolution of the issues”); and

• Diez v. Schwegmann Giant Supermarkets, Inc., 94–1089, pp. 9-10 (La. App. 1 Cir.
6/23/95), 657 So.2d 1066, 1071-72) (reasoning that a remand was appropriate in slip-and-
fall case in which credibility of the witnesses was pivotal given the testimony of the
defendant’s employees and others involved in assisting after the plaintiff’s fall occurred
was the only available proof and that the court would not “attempt to make credibility
determinations on the cold record and thus deprive plaintiffs of their right to present their
case before a trier of fact”).
48 We pretermit all of La Blue’s other assignments of errors that were not addressed in this

opinion, including its evidentiary errors and the third group of issues its raises—its substantive
proof and damages issues.

55