Patrick E. Phillips v. G & H Seed Company, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

10-1405

PATRICK E. PHILLIPS, JR., ET AL.

VERSUS

G & H SEED CO., ET AL.

**********
ON REMAND FROM THE LOUISIANA SUPREME COURT
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, DOCKET NO. 00-C-2220-D
HONORABLE DONALD W. HEBERT, DISTRICT JUDGE
**********

SYLVIA R. COOKS
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, John
D. Saunders, Oswald A. Decuir, Jimmie C. Peters, Marc T. Amy, Elizabeth A.
Pickett, Billy H. Ezell, J. David Painter, Shannon J. Gremillion and Phyllis M.
Keaty, Judges.

REVERSED AND REMANDED.
THIBODEAUX, Chief Judge, concurs and assigns additional reasons.

PAINTER, J., concurs and assigns written reasons.

DECUIR, J., dissents and assigns written reasons.

PICKETT, J., dissents and assigns written reasons.

EZELL, J., dissents for the reasons assigned by Decuir, J. and Pickett, J.

GREMILLION, J., dissents for the reasons assigned by Decuir, J. and Pickett, J.

GENOVESE, J., recused.

Elwood C. Stevens, Jr.
Domengeaux Wright Roy & Edwards, LLC
556 Jefferson Street, Suite 500
P.O. Box 3668
Lafayette, LA 70502-3668
(337) 233-3033
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Patrick E. Phillips, et al.

Jerald Edward Knoll, Sr.
The Knoll Law Firm, LLC
P.O. Box 426
Marksville, LA 71351-0426
(318) 253-6200
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Patrick E. Phillips, et al.

Andre’ F. Toce
The Toce Firm, A.P.L.C.
969 Coolidge Blvd.
Lafayette, LA 70503
(337) 233-6818
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Patrick E. Phillips, et al.

Gary A. Bezet
Robert E. Dille
Carol L. Galloway
Allison N. Benoit
Kean, Miller, Hawthorne, D’Armond, McCowan & Jarman, L.L.P.
II City Plaza
400 Convention Street, Suite 700
P.O. Box 3513
Baton Rouge, LA 70821
(225) 387-0999
COUNSEL FOR DEFENDANTS/APPELLEES:
Bayer CropScience LP, Michael Redlich, G&H Seed Company, Inc.,
Crowley Grain Drier, Inc., Nolan J. Guillot, Inc., and Mamou Rice Drier
and Warehouse, Inc.

Terrence D. McCay
Kean, Miller, Hawthorne, D’Armond, McCowan & Jarman, L.L.P.
One Lakeshore Drive, Suite 1150
Lake Charles, LA 70629
(337) 430-0350
COUNSEL FOR DEFENDANTS/APPELLEES:
Bayer CropScience LP, Michael Redlich, G&H Seed Company, Inc.,
Crowley Grain Drier, Inc., Nolan J. Guillot, Inc., and Mamou Rice Drier
and Warehouse, Inc.

Raymond P. Ward
Adams and Reese, L.L.P.
701 Poydras Street, Suite 4500
New Orleans, LA 70139
(504) 581-3234
COUNSEL FOR DEFENDANTS/APPELLEES:
Bayer CropScience LP and Michael Redlich

Michael T. Pulaski
McCranie, Sistrunk, Anzelmo, Hardy, Maxwell & McDaniel, PC
195 Greenbriar Blvd., Suite 200
Covington, LA 70433
(337) 831-0946
COUNSEL FOR DEFENDANTS/APPELLEES:
Allianz Global Risks and US Insurance Company

COOKS, Judge.

ON REMAND

Plaintiffs, who consist of several dozen buyers and/or processors of

crawfish, appeal the trial court’s granting of the defendants’ motions for summary

judgment, which dismissed the remaining claims of the buyer/processor plaintiffs.

In Phillips v. G & H Seed Co., 10-1405 (La.App. 3 Cir. 5/11/11), 66 So.3d 507

(hereafter referred to as Phillips II ), a panel of this Court reversed the summary

judgment grants, and remanded the matter back to the trial court for trial on the

merits. The panel in Phillips II reversed on the grounds that the trial court based

its granting of the summary judgments solely on this Court’s prior opinion in

Phillips v. G & H Seed Co., 08-934 (La.App. 3 Cir. 4/8/09), 10 So.3d 339, writ

denied, 09-1504 (La.10/30/09), 21 So.3d 284 (hereafter referred to as Phillips I).

In Phillips I, a panel of this Court held the plaintiffs in that case (who were three

specifically selected buyers and/or processors of crawfish) “failed to prove a

proprietary interest in the crawfish crop destroyed by the use of ICON.... [and as

such] the plaintiffs’ cause must fail.” Phillips I, 10 So.3d at 344. In Phillips II, we

held “a per se proprietary interest rule is not the law of Louisiana in a products

liability case” and the jurisprudence of this state has consistently mandated “a case

specific duty-risk analysis be undertaken to determine the scope and extent of the

defendants duties in this case.” Phillips II, 66 So.2d at 516. Defendants, Bayer

CropScience LP, its employee/salesman, Michael Redlich, and several companies

who purchased the allegedly defective insecticide from Bayer CropScience, LP,

applied for writs to the Louisiana Supreme Court. After considering the writ

application, the supreme court “remanded to the Third Circuit Court of Appeal for

en banc opinion after briefing and argument.” Phillips v. G & H Seed Co., 11-

1861 (La. 11/18/11), 10 So.3d 339

After en banc consideration, a majority of the judges vote to adopt Phillips

II as the controlling opinion from this Court, which we reissue this date:

Plaintiffs, who consist of several dozen buyers and/or processors of

crawfish, appeal the trial court's granting of the defendants' motions for summary

judgment, which dismissed the remaining claims of the buyer/processor plaintiffs.

For the following reasons, we reverse the summary judgment grants, and remand

the matter back to the trial court for trial on the merits.

FACTS AND PROCEDURAL HISTORY

This protracted and contentious litigation had its genesis in the late 1990’s,

when Bayer CropScience LP and its employee, Michael G. Redlich, marketed the

insecticide ICON in Louisiana. Certain companies purchased ICON, applied it to

rice seed, and sold the ICON-coated rice seed to rice farmers in Louisiana. Many

of these rice farmers also raised crawfish in their rice ponds.

Essentially, Plaintiffs allege the ICON coated rice seed was introduced into

the rice fields/crawfish ponds of South Louisiana in 1999. The active ingredient in

ICON was fipronil, which is a chemical used to control arthropods and is used in a

variety of compounds to control insects such as termites, fleas, mole crickets and

the rice water weevil. According to the plaintiffs, the introduction of ICON killed

and/or sterilized the crawfish, both wild and pond-raised. According to the

plaintiffs, as a result of the contamination, Louisiana's annual farm-raised crawfish

crop dropped from over 60 million pounds to approximately 10 million pounds.

Defendants argued the use of ICON is compatible with crawfish farming,

provided the farmer allows for a suitable waiting period between planting the

ICON-treated rice seed and introducing crawfish to the rice field. Defendants also

argued the record breaking drought in Louisiana during the time in question was

the reason for the decline in crawfish production.

2

In 1999, a class action lawsuit was filed on behalf of all crawfish farmers in

Louisiana, Craig West, et al. v. G & H Seed Co., et al., No. 99-C-4984-A in the

Twenty-Seventh Judicial District Court, Parish of St. Landry. That lawsuit was

eventually settled.

Thereafter a class action suit was initiated on behalf of Patrick Phillips and

Atchafalaya Processors, Inc, individually and on behalf of all others similarly

situated. This class action suit was brought by crawfish buyers, processors and

resellers. Named as Defendants were Bayer CropScience LP and Michael Redlich.

Also named as Defendants were the companies who purchased the ICON, applied

it to the rice seed, and sold it to the farmers: G & H Seed Co., Inc., Crowley Grain

Drier, Inc., Delhi Seed Co., Inc., Terral Seed Co., Inc., Mamou Rice Drier &

Warehouse, Inc.

Plaintiffs eventually abandoned their efforts to certify either a plaintiff or

defendant class. Thereafter, through a series of supplemental and amending

petitions, the matter proceeded as a cumulation of individual actions comprising

the claims of approximately 72 individual crawfish buyers, resellers, and

processors.

Bayer filed an exception of no cause of action, contending in order to

maintain a delictual action against a manufacturer for property damage caused by a

defective product, the claimants must have some proprietary interest in the

damaged property. Bayer argued that since none of the plaintiffs in this litigation

are crawfish farmers, and none of them had any ownership in the damaged crop,

they could not demonstrate the required proprietary interest. Plaintiffs argued

there were existing joint ventures between the crawfish farmers and

buyers/processors during the time the crawfish crop was damaged. The trial court

overruled the exception, rejecting the per se exclusionary/proprietary interest rule

of Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed.

3

290 (1927), in favor of the policy driven duty/risk analysis espoused in PPG

Industries, Inc. v. Bean Dredging, 447 So.2d 1058 (La.1984). The trial court

found in applying a duty-risk analysis, the law extended a remedy to the

buyer/processor plaintiffs. Bayer applied for writs to this Court. Writs were

denied.

Because of the enormity of trying all 72 actions at once, the trial court

determined it would be best to try the actions of four plaintiffs, three to be chosen

by the plaintiffs and one chosen by the defense. This number was eventually

reduced to three plaintiffs: Patrick Phillips (d/b/a Phillips Seafood), James Bernard

(d/b/a J. Bernard Seafood Processors, Inc.), and Lisa Guidry (d/b/a Guidry's

Crawfish).

After a full trial on the merits, Plaintiffs filed a Motion for Directed Verdict

on whether the Defendants’ duty extended to these buyer/processor plaintiffs.

Finding there was an “ease of association from farmer to wholesaler” such that

farmers and processors are “inextricably interwoven and symbiotic in their

relationships,” the trial court granted the Motion for Directed Verdict. The jury

then returned a verdict in favor of each of the three plaintiffs, assigning 94% fault

or causation to Bayer, 1% to Bayer salesman Michael Redlich, and 4% to the

drought that occurred in South Louisiana. It awarded $900,000 to plaintiff

Phillips, $750,000 in damages to plaintiff Bernard, and $100,000 to plaintiff

Guidry.

Defendants timely filed a Motion for Judgment Notwithstanding the Verdict,

New Trial, and Remittitur. The motions were denied and Defendants filed an

appeal with this Court.

A five judge panel of this Court reversed the trial court’s directed verdict on

scope of duty and set aside the jury’s verdict. Phillips v. G & H Seed Co., 08-934

(La.App. 3 Cir. 4/8/09), 10 So.3d 339 (hereafter referred to as Phillips I ). The

4

majority reasoned that since “the plaintiffs in this case failed to prove a proprietary

interest in the crawfish crop destroyed by the use of ICON.... the plaintiff’s cause

must fail.” Id. at 344. The majority did not undertake a duty-risk analysis or apply

the PPG factors as done by the trial court. Instead it applied the per se

exclusionary/proprietary interest rule of Robins Dry Dock. Plaintiffs also note the

majority did not explain what would be “sufficient” to establish a proprietary

interest under Louisiana law.

Judge Saunders dissented from the majority opinion, finding it contradicted

the Louisiana Supreme Court’s finding in 9 to 5 Fashions, Inc. v. Spurney, 538

So.2d 228, 234 (La.1989), that “the PPG case abrogat[ed] the rule that flatly

prohibited recovery for intangible economic loss produced by negligent conduct.”

Judge Saunders found “the only conclusion a reasonable juror could reach was that

Bayer had reckless disregard for the potential ramifications to this state’s crawfish

industry, as a whole, when crawfish farmers used ICON.” Phillips I, 10 So.3d at

345. This callousness, Judge Saunders concluded, was sufficient to support the

trial court’s directed verdict on scope of duty. Further, Judge Saunders noted that

even if one interprets PPG as the majority does, it was factually distinguishable

from the present case. In PPG, the plaintiff had an alternative source to get the

natural gas it needed, whereas the buyers/processors here had no other source for

the crawfish they contracted to receive from the crawfish farmers. This

interwoven, symbiotic relationship between crawfish farmers and crawfish

buyers/processors was different than that present in PPG.

Plaintiffs’ Application for Rehearing to this Court was denied. Similarly,

the application for a Writ of Review to the Louisiana Supreme Court was denied.

Phillips v. G & H Seed Co., 09-1504 (La.10/30/09), 21 So.3d 284. Following these

denials, Defendants filed Motions for Summary Judgment against all the remaining

5

buyer/processor plaintiffs based on the proprietary interest requirement espoused

by this Court’s opinion in Phillips I.

At the hearing on the summary judgment motions, Plaintiffs argued the

duty-risk analysis set forth in the PPG case was controlling in this case. Plaintiffs

also contended even if the trial court was compelled to enforce a proprietary

interest requirement pursuant to this Court’s decision in Phillips I, that term had

never been defined by our Supreme Court to require ownership to assert a claim

for economic damages. Plaintiffs complained they were at a loss to understand

exactly what material fact(s) were necessary to establish a level or degree of

interest sufficient to allow them to prevail. Nonetheless, in an attempt to meet this

burden of proof, Plaintiffs submitted numerous sworn affidavits attesting to the

nature and extent of the buyers/processors involvement in the Louisiana crawfish

industry.

In oral reasons for judgment, the trial court voiced its disagreement with the

opinion in Phillips I. However, believing it was constrained by that ruling, the trial

court granted the motions for summary judgment and dismissed the remaining

claims of the buyer/processor plaintiffs. 1

1
There was also a corollary federal action in the United States District Court, Western

District of Louisiana, Wiltz, et al. v. Bayer CropScience, et al., Docket No. 08-2024, which arises

from the exact same set of facts as the present case and concerns the same question regarding the

scope of the defendants’ duty. The Wiltz case previously came to this Court as an appeal from

the denial of a Motion to Intervene in Phillips. The Wiltz intervention in Phillips was ultimately

denied by this Court. See Phillips v. G & H Seed Co., 09-1102 (La.App. 3 Cir. 3/10/10), 32

So.3d 1134, writ denied, 10-822 (La. 6/18/10), 38 So.3d 325. The matter was then removed by

the defendants to federal court. The defendants then filed a motion for summary judgment on

the alleged lack of a proprietary interest in the plaintiffs. Much as the trial court did in the

present case, the federal district court judge granted the motion for summary judgment even

though he did not believe a bright line litmus test on proprietary interest was the correct law in

6

Plaintiffs have appealed the trial court’s granting of the summary judgment,

and assert the following assignments of error:

1. It was error to ignore the mandates of PPG and its progeny
and not employ a duty-risk/ease of association analysis which
considers the scope of Defendants’ duties in the context of moral,
social and economic issues involved and a view toward the ideal of
justice.

Louisiana. The district judge explained in detail why he felt compelled to grant the summary

judgment:

MR. STEVENS (counsel for Plaintiffs): I would like this Court to rule that
the motions for summary judgment by the defendants based strictly on the
proprietary interest rule is denied because proprietary interest is not the law of the
Louisiana Supreme Court. In a products liability case, which must apply a
duty/risk analysis under controlling jurisprudence, it is particularly foreseeable
that these folks would be injured, therefore, they are within the scope of the duty
of this defendant not to negligently kill the crawfish crop that these folks spent 30
years helping to develop....

THE COURT: Then let me state this for the record. I agree with that
statement. However, if I do that, I'm going to get reversed by the Fifth Circuit. I
agree with it. I agree with everything you had to say.

I would also recommend to the Fifth Circuit, when you take your appeal,
that you ask them to certify this to the Supreme Court and they can get a final
ruling on this issue.

I agree with everything you have to say. I agree with all of it. I agree with
Judge Hebert.

MR. STEVENS: The question is as a matter of law what is the law of the
Louisiana Supreme Court? Is it duty/risk analysis or is it proprietary interest?
And--

THE COURT: I think if I rule your way, I'm going to get reversed. I'm
inviting you to take it to the Fifth Circuit. My opinion is that you’re absolutely
correct. I do think they have a proprietary interest.

MR. STEVENS: Well, then--

THE COURT: Listen to me, Mr. Stevens.

MR. STEVENS: I'm sorry.

THE COURT: You know, I'm going to rule against you. What I'm trying
to do is give you some information so that when you take it up, you can say, you
know. Judge Haik did this because he got slapped on the wrist by the Court
pertaining to Taira Lynn. And I think he was wrong in doing that because that
was a maritime case and this belongs to Louisiana--this is a Louisiana driven
cause of action, not a maritime driven cause of action. Therefore, I think Judge
Haik is wrong. Okay?

So do that, Mr. Stevens. Do that

7

2. It was error to require Plaintiffs to prove a “proprietary
interest” in the damages crawfish crops as a prerequisite to recovery
in this tort suit asserting claims under the Louisiana Products Liability
Act for breach of express warranty, failure to warn and false
representations.

3. If a proprietary interest is required (which is disputed), then
the trial court erred in applying Phillips I so as to require actual
“ownership” in order to establish such an interest contrary to Supreme
Court jurisprudence which clearly envisions an interest “derived from
the owner” (less than ownership but more than a mere guest or
member of the general public).

4. The trial court erred in granting summary judgments even
against those buyers/processors who presented issues of fact as to an
actual “ownership” interest in crawfish ponds from which they would
have supplied crawfish top their respective businesses, “but for”
Defendants’ negligent acts and egregious conduct.

5. The trial court erred in granting summary judgments even
against those buyers/processors who demonstrated long standing,
symbiotic relationships with the farmers/fishermen and reasonable,
recurring and investment-based expectations of an economic interest
in the annual crawfish crops which, as a matter of law, made their
damages particularly foreseeable and established material issues as to
the existence of a sufficient interest to be worthy of legal protection.

6. The trial court committed manifest error by concluding that
even the claims of “hybrids” should be summarily dismissed because
many of them had “settled” their claims in a companion Class Action
settlement in 2004 between these Defendants and the
farmer/fishermen group of claimants, even though the final judgment
in that matter expressly reserved the right of all settling
farmers/fishermen “to pursue their respective claims as buyers and/or
processors of crawfish.”

Defendants contend that this Court’s previous decision in Phillips I has

already decided the legal issues raised in this appeal, and thus, the “Law of the

Case” doctrine applies.

ANALYSIS

A. Law of the Case Doctrine.

We will first address Defendants’ argument that this Court’s decision in

Phillips I is law of the case, and should not be revisited. For the following reasons,

we do not find the law of the case doctrine applicable here.

8

Generally, the law of the case doctrine applies to prior rulings of the

appellate court and an appeals court will not reconsider its own ruling in the same

case. Gentry v. Biddle, 05-61 (La.App. 3 Cir. 11/2/05), 916 So.2d 347. However,

the application of this doctrine is discretionary and an appellate court may

reconsider an issue if the prior decision was “palpably erroneous or its application

would result in manifest injustice.” Id. at 352 (quoting Griggs v. Riverland Med.

Ctr., 98-256, p. 6 (La.App. 3 Cir. 10/14/98), 722 So.2d 15, 19, writ denied, 99-385

(La.5/28/99), 735 So.2d 622).

We note that earlier in the procedural history of this case, Defendants filed

an exception of no cause of action asserting, for Plaintiffs to maintain a delictual

action, they must first demonstrate some proprietary interest in the damaged

property. The trial court overruled the exception, rejecting the per se

exclusionary/proprietary interest rule of Robins Dry Dock in favor of the policy

driven duty/risk analysis set forth by the Louisiana Supreme Court in PPG

Industries. A three member panel of this Court unanimously denied writs, finding

no error in the trial court's decision. However, on appeal a five-judge panel (with

one dissenting judge) reached an opposite conclusion, finding “the plaintiff’s case

[sic] must fail” because they “failed to prove a proprietary interest in the crawfish

crop.” Phillips I, 10 So.3d at 344. Finding this Court’s previous rulings on this

issue are equivocal, we choose not to apply the law of the case doctrine.

B. Proprietary Interest.

We initially make the following observations at the outset of our discussion

on proprietary interest: (1) the trial court unquestionably based its ruling granting

the summary judgments solely on this Court’s prior decision in Phillips I, 10 So.3d

339; (2) although the opinion in Phillips I discussed PPG and the duty-risk

method, it did not engage in any such duty-risk analysis; instead it resurrected the

9

bright-line litmus test that required a proprietary interest in the damaged property

that was abrogated in PPG.

The issue in this case boils down to whether Louisiana will apply a bright-

line litmus test mandating proprietary interest in damaged property as a

prerequisite to recovery, or do Louisiana courts apply a multi-factor, policy-driven,

duty-risk analysis when determining the scope and extent of a defendant's duties

under the Louisiana Products Liability Act for particularly foreseeable economic

damages. Finding our previous opinion in Phillips I failed to consider the

instruction of the Louisiana Supreme Court's opinion in PPG, which directed that a

duty-risk analysis should be performed to determine the scope and extent of a

particular defendant's duties,2 we decline to follow it, and instead adhere to the

dictates of our state’s highest judicial court. We find the course of action taken in

Phillips I, can, in certain instances, deprive an innocent person of any remedy for

damage suffered in direct contrast to our fundamental civil law principal that

obliges a person to fully repair damage caused by his fault. La.Civ.Code art. 2315.

Our review of the jurisprudence of this State indicates that the per se

exclusionary/proprietary interest rule illustrated in Robins Dry Dock is not the law

of this state. Rather, a duty-risk analysis was adopted by the Louisiana Supreme

Court in PPG.

In PPG, the defendant’s dredging operations damaged a gas pipeline owned

by Texaco. Texaco had a contract to supply gas to PPG. As a result of the damage

to the pipeline, PPG was forced to obtain gas from other sources. PPG sued Bean

Dredging, seeking recovery of the additional costs expended to obtain gas.

2
We are cognizant that the Supreme Court denied writs in Phillips I. However, even
though writs were denied, there was, of course, no discussion by the Supreme Court explaining
the reasons for the writ denial. In contrast, we have the Supreme Court opinion in PPG
Industries, which as Justice Dennis later noted in 9 to 5 Fashions, 538 So.2d at 234, “abrogat[ed]
the rule that flatly prohibited recovery for intangible economic loss produced by negligent
conduct.” We choose this day to follow the express dictates of PPG Industries rather than the
implied message of a writ denial in Phillips I.
10

Although the supreme court ultimately held PPG’s damages did not fall within the

scope of the duty not to damage a pipeline owned by Texaco, it did so after

undertaking a duty-risk analysis to determine whether that particular risk fell

within the scope of the duty. The court stated:

Policy considerations determine the reach of the rule, and there
must be an ease of association between the rule of conduct, the risk of
injury, and the loss sought to be recovered. Hill v. Lundin & Assoc.,
Inc., 260 La. 542, 256 So.2d 620 (1972). A judge, when determining
whether the interest of the party seeking recovery of damages is one
that falls within the intended protection of the rule of law whose
violation gave rise to the damages, should consider the particular case
in the terms of the moral, social and economic values involved, as
well as with a view toward the ideal of justice. See Entrevia v. Hood,
427 So.2d 1146 (La.1983).

PPG Indus., Inc., 447 So.2d at 1061.

The court in PPG did caution that a party who negligently causes injury to

property will not always be held legally responsible to all persons for all damages

flowing in a “but for” sequence, because the list of possible victims might be

“expanded indefinitely.” Thus, the court must “necessarily make a policy decision

on the limitation of recovery of damages.” Id. at 1061-62.

In his dissent in PPG, Justice Calogero “applaud[ed] the majority’s applying

a duty risk analysis in the consideration of tort recovery . . . and [in] abandoning

the per se exclusion of such damages which our courts have heretofore adopted on

the heels of Robins and Forcum-James [Co. v. Duke Transportation Co., 231 La.

953, 93 So.2d 228 (1957) ].”3

The cases since have consistently followed the duty-risk analysis set forth in

PPG. In Cleco Corp. v. Johnson, 01-175 (La.9/18/01), 795 So.2d 302, a negligent

truck operator backed into a utility pole causing a power surge that ultimately

caused damages to the property of Cleco’s customers. Cleco then paid for the

3
Justice Calogero dissented, not because of the implementation of a duty-risk analysis,
but rather because he disagreed with the majority’s determination that PPG’s economic loss,
from added fuel cost, was not a risk encompassed within the duty not to negligently injure
Texaco’s pipelines.
11

customers’ damages and filed suit to recover those payments. The supreme court

examined whether the law afforded Cleco’s customers a cause of action. The

supreme court utilized the case by case, duty-risk analysis set forth in PPG, and

found that the law extended a remedy to both Cleco and its customers. In her

concurring opinion, Justice Kimball specifically noted “[t]he majority today has

chosen to handle these claims on a case by case basis using the duty-risk analysis,

which in my view is the preferable approach.” Id. at 307. Even the dissent in

Cleco did not question the majority's decision to utilize a duty-risk analysis as set

forth in PPG, but rather believed the duty allegedly violated in that case did not

encompass the particular risk of injury sustained by Cleco and/or its customers.

The court in Cleco, cited with approval this Court’s decision in Istre v.

Fidelity Fire & Casualty Ins. Co., 628 So.2d 1229 (La.App. 3 Cir.1993), writ

denied, 634 So.2d 852 (La.1994). In Istre, a backhoe operator working for a

construction company came into contact with electrical lines causing a power

outage that knocked out electrical power to a traffic signal four miles away.

Approximately one hour later, the plaintiff was involved in an accident due to the

traffic light outage. The plaintiff subsequently filed suit against several parties,

including the construction company. After utilizing a duty-risk analysis, this Court

found the construction company liable, stating:

The construction company’s main argument is that its duty to
avoid knocking out electrical power does not extend to the risk that
one hour later, a driver at an intersection four miles away, will fail to
see that traffic lights are not working and that other drivers were
treating the intersection as a four-way stop, out of turn, and hurt
another driver who was entering the intersection in obedience to a
four-way stop rotation. To this it pleads that the company could not
have known that engaging this one power line would create a general
outage affecting signal lights four miles away.

We reject this argument. This backhoe operator knew the risk
of his backhoe knocking out power. His construction company knew
or should have known the risks to people and property caused by
power outages, and the predictability of widespread effects and delays
in restoring power. The increased risk of an accident caused by this

12

defendant’s conduct was still present when the accident occurred.
This accident to this plaintiff was reasonably foreseeable. This
defendant is liable to the plaintiffs for the breach of its duty.

Id. at 1232.

As noted by Judge Saunders in his dissent in Phillips I, the supreme court in

9 to 5 Fashions, Inc. v. Spurney, 538 So.2d 228, 234 (La.1989), specifically found

that “the PPG case abrogat[ed] the rule that flatly prohibited recovery for

intangible economic loss produced by negligent conduct.”

In Roberts v. Benoit, 605 So.2d 1032 (La.1991), the supreme court reiterated

that the extent of protection owed a particular plaintiff is determined on a case-by-

case basis to avoid making a defendant an insurer of all persons against all harms.

The Roberts court found that “[r]egardless if stated in terms of proximate cause,

legal cause, or duty, the scope of the duty inquiry is ultimately a question of policy

as to whether the particular risk falls within the scope of the duty.” Id. at 1044.

We also note the comments of several commentators, that have expressed

both the conclusion that PPG’s utilization of a case by case duty-risk analysis is

the law in Louisiana, and that it is the preferable approach. Justice Dennis, in his

opinion in Pitre v. Opelousas General Hospital, et al., 530 So.2d 1151, 1155-56,

citing Prosser and Keeton, stated:

The duty risk approach is most helpful, however, in cases
where the only issue is in reality whether the defendant stands in any
relationship to the plaintiff as to create any legally recognized
obligation of conduct for the plaintiff’s benefit.

Plaintiffs also call this Court’s attention to the following language from a

leading treatise on tort law in this state:

Neither a blanket denial nor an unlimited approval of recovery
is appropriate. One of the fears is that allowing recovery may subject
defendants to liability for an indeterminate amount of damages to a
potentially indeterminate class of claimants. Another is that in some
cases, allowing recovery will result in double compensation because
the plaintiff has already protected himself from the risk of the
economic harm through contract, such as insurance, indemnity or the
increased price for his goods. Also, in some cases, the economic

13

harm the plaintiff suffers is an ordinary risk of the enterprise in which
he is participating. However, where none of these factors is justified,
recovery should be permitted. Thus a case-by-case analysis appears
superior to the > Robins "no duty" rule.

Frank L. Maraist & Thomas C. Galligan, Louisiana Tort Law, § 5.09 (1996).

Our review of the jurisprudence establishes that the Louisiana Supreme

Court in PPG, and the cases that followed, abandoned the per se no duty rule

espoused in Robins Dry Dock and Forcum-James in favor of a duty-risk analysis.

Rather than “taking a mechanical approach to the unreasoned conclusion that the

petition for economic loss caused by negligent interference with contractual

relations fails to state a cause of action,” the supreme court concluded a more

nuanced, case specific, duty-risk analysis was preferable. PPG, 447 at 1061. PPG

clearly shows the supreme court did not intend to close the door to recovery for all

claims of economic harm arising out of damage to what is technically a third

person’s property, i.e., "proprietary interest." It made such recovery available in

certain circumstances for limited groups of people with a special interest in or

relationship with the damaged property, whose damages were a particularly

foreseeable result of the tortious conduct of the defendant. Although the opinion in

Phillips I discussed PPG and its utilization of a duty-risk method of analysis, the

court failed to perform any such duty-risk analysis, and instead concluded the

“plaintiffs’ cause must fail” because they failed to prove a proprietary interest in

the damaged property. Phillips I, 10 So.3d at 344. This was contrary to the law.

CONCLUSION

For the foregoing reasons, we reverse the trial court’s grant of the summary

judgments because a per se proprietary interest rule is not the law of Louisiana in a

products liability case. Our Louisiana Supreme Court in PPG Indus. Inc., 447

So.2d 1058, mandates a case specific duty-risk analysis be undertaken to determine

the scope and extent of the defendants’ duties in this case. As the trial court based

14

its granting of the summary judgments solely on this Court’s opinion in Phillips I,

we now reverse and remand this case back to the trial court for further proceedings

consistent with this opinion. As this case is before us on grants of summary

judgment, it is not appropriate for this Court to determine or even speculate on the

result of the required duty-risk analysis. Our determination on this issue renders

Plaintiffs’ other assignments of error moot. All costs of this appeal are assessed to

Defendant-Appellees.

REVERSED AND REMANDED.

THIBODEAUX, Chief Judge, concurring for additional reasons.

I fully agree with the majority opinion. I add this brief comment to provide

an additional reason for reversal. While I do not agree that the proprietary interest

rule is the law in Louisiana, the plaintiffs did not attempt to prove proprietary

interest in Phillips I. This case is properly remanded to allow them to prove that

standard, if they choose to do so, as an additional supplement to a duty-risk

analysis.

15

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

10-1405

PATRICK E. PHILLIPS, JR., ET AL.

VERSUS

G & H SEED CO., ET AL.

THIBODEAUX, Chief Judge, concurring for additional reasons.

I fully agree with the majority opinion. I add this brief comment to

provide an additional reason for reversal. While I do not agree that the

proprietary interest rule is the law in Louisiana, the plaintiffs did not attempt to

prove proprietary interest in Phillips I. This case is properly remanded to allow

them to prove that standard, if they choose to do so, as an additional supplement to

a duty-risk analysis.

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

10-1405

PATRICK E. PHILLIPS, JR., ET AL.

VERSUS

G & H SEED CO., ET AL.

DECUIR, J., dissenting.

I dissent for the reasons assigned by Judge Pickett, and for the additional

reasons herein.

This is certainly not a new issue for this court. In PPG Industries, Inc. v.

Bean Dredging Corp. (La.App. 3 Cir. 1982), 419 So.2d 23, 24-25, this court said:

The issue, as posed by appellee, is whether the law as expressed in
Robin’s Dry Dock & Repair Company v. Flint, 275 U.S. 303, 48 S.Ct.
134, 72 L.Ed. 290, 1927, and Louisiana’s adoption thereof, Forcum-
James Co. v. Duke Transportation Co., 231 La. 953, 93 So.2d 228
(La.1957), should be overruled.

Robin’s Dry Dock, supra, is on point. Hence, the question
becomes, is it time to re-examine the doctrine announced therein, and
if so, which court should examine the wisdom of that decision.

....

Defendant’s position, representing the orthodox view, is the
general recognition of non-liability for negligent interference in
existing contracts or with prospective contractual relations. The rule
relieves an unwary tortfeasor from potentially ruinous liability for
indirect economic losses. As was noted in James, Limitations on
Liability for Economic Loss Caused by Negligence: A Pragmatic
Appraisal, 25 Vand.L.Rev. 43 (1972), under the rule, “The insurer of
A’s life has no action against one who negligently causes A’s
premature death; the employer has no action for sums that he has had
to pay because defendant has negligently injured his employee; a
ship’s time charterer has no action for loss of the ship’s use while it is
laid up for repairs necessitated by defendant’s negligence; and a

workman has no action for loss of wages during a layoff resulting
from damage negligently caused to his employer’s plant.”

In each of the aforementioned examples of the doctrine’s
application the loss is indirect and economic. Furthermore, serious
problems face insurers in handling insurance against potentially wide,
open-ended liability. On the other hand, plaintiff could have
contracted for Texaco to indemnify appellant for economic loss
occasioned by third party negligence, but apparently failed to do so.
The rule provides a simple, clear and predictable rule for the
commercial world to follow, make its plans and insure accordingly.

Appellant’s position, although representing the minority view
in this country, is equally persuasive. PPG has undisputably suffered
damage, through no fault of their own, as a result of defendants’
negligence and they submit that the rule of Robin’s Dry Dock is
extremely archaic, arbitrary, and unfair and should not be maintained
in our modern society. In support thereof, PPG contends that
difficulty in proof of causation in damages and the possibility of
fraudulent claims is not a valid reason to refuse recognition of an
otherwise valid cause of action, nor is limiting defendants’
commercial liability of itself valid grounds for denying plaintiff its
day in court. Instead, liability should be a function of foreseeability
and nature of loss. Such a rule would lessen the burden of placing
such losses upon innocent plaintiffs and shift the responsibility to
insure to the negligent defendant. Comment, 88 Harv.L.Rev. 444
(1974).

Preliminarily we address the question of whether the Robin’s
Dry Dock doctrine has acquired the status of jurisprudence constante.
We believe it has. Our research has revealed no substantial deviation
from the doctrine, under the circumstances presented herein, since its
Louisiana adoption in 1957. Courts of Appeal are bound to follow
decisions of the Supreme Court. United States Fidelity and Guaranty
Co. v. Green, 252 La. 227, 210 So.2d 328 (La.1968), overruled on
other grounds, Creech v. Capitol Mack, Inc., 287 So.2d 497
(La.1974). When jurisprudence has consistently established a uniform
interpretation, we are obliged to follow that rule absent mandate to the
contrary. Garrett v. Pioneer Production Corp., 390 So.2d 851
(La.1980).

We are constrained to follow this rule of loss distribution.
Accordingly the judgment appealed from is affirmed at appellant’s
cost.

The supreme court affirmed our decision. However, without overruling

Forcum-James, the majority discussed the policy reasons which barred recovery

under a duty risk analysis. PPG Industries, Inc. v. Bean Dredging, 447 So.2d 1058

2

(La.1984). Despite comments by Justice Calogero in his dissent that the majority

was abandoning the rule, and the majority’s characterization in 9 to 5 Fashions,

Inc., v. Spurney, 538 So.2d 228 (La.1989), of PPG as abrogating the per se

exclusionary rule, Forcum-James has not been overruled.

Accordingly, we are constrained to follow the actual holdings of the

supreme court. Just as the five-judge panel of this court did in Phillips, 08-934

(La.App.3 Cir. 4/8/09), 10 So.3d 339, writ denied, 09-1504 (La. 10/30/09), 21

So.3d 284, and just as the federal court did in Wiltz v. Bayer Crop Science, 645

F.3d 690 (5th Cir. 2011). Today as in 1982, we are not the appropriate court to

change this rule of law.

The trial court should be affirmed.

3

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

10-1405

PATRICK E. PHILLIPS, JR., ET AL.

VERSUS

G & H SEED CO., ET AL.

PICKETT, J., dissenting.

I dissent for the reasons assigned by Judge Decuir, and for the additional

reasons herein.

Having reviewed the materials and the transcript of the hearing on the

motion for summary judgment in the court below, I continue to believe that the

analysis in Phillips v. G & H Seed Co., Inc., 08-934 (La.App. 3 Cir. 4/8/09), 10

So.3d 339, writ denied, 09-1504 (La. 10/30/09), 21 So.3d 284, is correct. In that

case, we dismissed the claims of three bellwether plaintiffs after a full jury trial,

finding that they had no cause of action. These three plaintiffs were chosen

because their claims were representative of the claims of the defendants before us

today. On remand, the remaining plaintiffs had an opportunity to show that they

had a proprietary interest in the crawfish and were differently situated than the

bellwether plaintiffs. Though the trial court noted that he disagreed with our

previous decision, he rightly found that he was bound to follow it and granted the

motion for summary judgment and dismissed the claims. The trial court was

correct. These buyers and processors of the crawfish cannot recover from the

defendants. There were no genuine issues of material fact and there were strictly

legal arguments presented below. The trial court should be affirmed and the

plaintiff’s claims should be dismissed.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

10-1405

PATRICK E. PHILLIPS, JR., ET AL.

VERSUS

G & H SEED CO., ET AL.

PAINTER, JUDGE, CONCURRING.

I feel that a duty risk analysis is applicable here. The question is how far the

risk extends. All parties were not in the same relationship with the crawfish

farmers. Many of these cases have different relationships and should not be lumped

together. Issues of fact remain. Therefore, summary judgment is not appropriate. I

therefore concur in the majority opinion herein..