Opinion
2:24-CV-00342
04-09-2024
CALCASIEU PARISH POLICE JURY v. CERTAIN UNDERWRITERS AT LLOYDS, LONDON, INDIAN HARBOR INSURANCE COMPANY, LEXINGTON INSURANCE COMPANY, QBE SPECIALTY INSURANCE COMPANY, STEADFAST INSURANCE COMPANY, UNITED SPECIALTY INSURANCE COMPANY, GENERAL SECURITY INDEMNITY COMPANY OF ARIZONA, HDI GLOBAL SPECIALTY SE, OLD REPUBLIC UNION INSURANCE COMPANY, AND SAFETY SPECIALTY INSURANCECOMPANY
DEUTSCH KERRIGAN, LLP SEAN P. MOUNT, BRYCE M. ADDISON, TALBOT M. QUINN, Counsel for defendants, Indian Harbor Insurance Company, Lexington Insurance Company, QBE Specialty Insurance Company, Steadfast Insurance Company, United Specialty Insurance Company, General Security Indemnity Company of Arizona, Old Republic Union Insurance Company, and Safety Specialty Insurance Company
DEUTSCH KERRIGAN, LLP SEAN P. MOUNT, BRYCE M. ADDISON, TALBOT M. QUINN, Counsel for defendants, Indian Harbor Insurance Company, Lexington Insurance Company, QBE Specialty Insurance Company, Steadfast Insurance Company, United Specialty Insurance Company, General Security Indemnity Company of Arizona, Old Republic Union Insurance Company, and Safety Specialty Insurance Company
JAMES D. CAIN, JR. JUDGE
DEFENDANTS' OPPOSITION TO MOTION TO CERTIFY
DAVID J. AYO MAGISTRATE JUDGE
TABLE OF CONTENTS
TABLE OF CONTENTS.......................................................................................................................................i
TABLE OF AUTHORITIES...................................................................................................................................ii
BACKGROUND.....................................................................................................................................................1
ARGUMENT...........................................................................................................................................................2
I. FACTORS FOR CONSIDERING WHETHER TO CERTIFY A QUESTION TO A STATE SUPREME COURT ARE NOT SATISFIED....................................................................................................................................................................2
II. BINDING FIFTH CIRCUIT PRECEDENT IN Bufkin CONTROLS THE. INSURERS' MOTION TO COMPEL ARBITRATION, RENDERING CERTIFICATION UNNECESSARY AND IRRELEVANT..................................................................................................................................................................4
III. Belmont Commons IS HIGHLY PERSUASIVE AUTHORITY AND SUFFICIENT TO GUIDE THE COURT'S DETERMINATION OF THE INSURERS' MOTION TO COMPEL ARBITRATION.....................................................................................................8
IV. THE LOUISIANA SUPREME COURT HAS ON MULTIPLE RECENT OCCASIONS DENIED SIMILAR REQUESTS TO CERTIFY.............................................................................................................................................................................9
V. CALCASIEU'S REQUEST FOR CERTIFICATION SHOULD BE DENIED WHERE IT IS REQUESTED ONLY AFTER MULTIPLE UNFAVORABLE RULINGS FROM THE FIFTH CIRCUIT...........................................................................................................................................................................11
CONCLUSION...........................................................................................................................................................12
i
TABLE OF AUTHORITIES
Bufkin Enterprises LLC v. Indian Habor Ins. Co., No. 2:21-CV-04017, 2023 WL 2393700 (W.D. La. Mar. 7, 2023).......5
Bufkin Enterprises v. Indian Harbor Insurance Co., No. 23-30171, - F.4th --, 2024 WL 1262225 (5th Cir. Mar. 26, 2024)..............................PASSIM
Cajun Conti LLC v. Certain Underwriters at Lloyd's, London, No. 21-0343 (La.App. 4 Cir. 6/15/22), 366 So.3d 221......7
City of Columbus, Ohio v. Hotels.com, L.P., 693 F.3d 642 (6th Cir.2012)..............................................................................11
Dickie Brennan & Co. v. Zurich Am. Ins. Co., No. 21-30776, 2022 WL 3031308 (5th Cir. Aug. 1, 2022)...............................8
Enfield v. A.B. Chance Co., 228 F.3d 1245 (10th Cir.2000)......................................................................................................11
FDIC v. Abraham, 137F.3d264 (5th Cir. 1998)...........................................................................................................................7
Fla. ex rel. Shevin v. Exxon Corp., 526 F.2d 266 (5th Cir. 1976)...............................................................................................2
Free v. Abbott Lab'ys, Inc., 164 F.3d 270 (5th Cir. 1999)............................................................................................................7
Goux Enters, v. Indian Harbor Ins. Co., No. 22-4330, 2023 WL 2955305 (E.D. La. Apr. 14, 2023)..........................................5
Grigson v. Creative Artists Agency, L.L. C., 210 F.3d 524 (5th Cir. 2000)..................................................................................4, 8, 9
Hogue v. Johnson, 131 F.3d 466 (5th Cir. 1997)............................................................................................................................5
Indian Harbor Insurance Co. v. Belmont Commons, L.L.C., No. 23-30246, 2024 WL 962376 (5th Cir. Mar. 6,2024)............................................................................................................................................................................................PASSIM
Jefferson v. Lead Indus. Ass'n, Inc., 106F.3d 1245 (5th Cir. 1997)...............................................................................................3
La. Bone & Joint Clinic, L.L.C, v. Transp. Ins. Co., No. 21-30300, 2022 WL 910345 (5th Cir. Mar. 29, 2022)............................7
Mancuso v. Starr Surplus Lines Insurance Co., No. 2023-959 (La. 2023), 370 So.3d 1048.........................................................3, 9, 10
Mancuso v. Starr Surplus Lines Insurance Co., No. 21-03947, 2023 WL 6458549 (W.D. La. July 12, 2023)...............................9
Perkins v. Clark Equip. Co., Melrose Div., 823 F.2d 207 (8th Cir. 1987).......................................................................................12
ii
PHI Group v. Zurich Am. Ins. Co., 58 F.4th 838 (5th Cir. 2023)......................................................................................................5-8
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967)...........................................................................................3
Q Clothier New Orleans, L.L.C, v. Twin City Fire Ins. Co., 29 F.4th 252 (5th Cir. 2022)......................................................................................................................................................................................................6,7
Safety Nat'l Cas. Corp. v. Certain Underwriters at Lloyd's London, 587 F.3d 714 (5th Cir. 2009).......................................................................................................................................................................................................5,9
Southland Circle, LLC v. Independent Specialty, 2023-990 (La. 2023), 370 So.3d 1047...............................................................10
Southland Circle, LLC v. Independent Specialty, No. 23-855, 2023 WL 6450425 (E.D. La. July 17, 2023)....................................10
State Auto Property and Cas. Ins. Co. v. Hargis, 785 F.3d 189 (6th Cir. 2015)................................................................................11
Swindol v. Aurora Flight Sciences Corp., . 805 F.3d 516 (5th Cir. 2015)..........................................................................................2
Terry Black's Barbecue, L.L.C, v. State Auto. Mut. Ins. Co., 22 F.4th 450 (5th Cir. 2022)...............................................................8
Thompson v. Paul, . 547 F.3d 1055 (9th Cir.2008).............................................................................................................................11
Transcon. Gas Pipeline Corp. v. Transp. Ins. Co., 958 F.2d 622 (5th Cir. 1992)...............................................................................7
United States v. AMC Entm ‘t, Inc., 549 F.3d 760 (9th Cir. 2008)......................................................................................................5
United States v. Simkanin, 420 F.3d 397 (5th Cir. 2005)......................................................................................................................5
United States v. Torres-Jaime, 821 F.3d 577 (5th Cir. 2016)................................................................................................................8
Williamson v. Elf Aquitaine, Inc., 138 F.3d 546 (5th Cir. 1998)..........................................................................................................2
STATUTES
LA. REV. STAT. § 22:868.............................................................................................................................................................Passim
LA. REV. STAT. § 9:2778.................................................................................................................................................................4, 9
LA. REV. STAT. §22:446...................................................................................................................................................................5
THE CONVENTION ACT, 9 U.S.C. §201,..................................................................................................................................Passim
MCCARRAN-FERGUSON ACT, 15 U.S.C. §1012....................................................................................................................5,9
iii
MAY IT PLEASE THE COURT:
Defendants (“Insurers”) oppose Calcasieu's motion to certify questions to the Louisiana Supreme Court. The motion should be denied because (a) binding and persuasive Fifth Circuit precedent independently warrant and require enforcement of the arbitration agreement notwithstanding Louisiana law pursuant to Bufkin Enterprises v. Indian Harbor Insurance Co., No. 23-30171, - F.4th --, 2024 WL 1262225 (5th Cir. Mar. 26, 2024) and Indian Harbor Insurance Co. v. Belmont Commons, L.L.C, No. 23-30246, 2024 WL 962376 (5th Cir. Mar. 6, 2024); (b) the questions presented can easily be answered under existing state law; (c) the Louisiana Supreme Court has recently rejected similar questions from this Court and the Eastern District, and (d) the timing of Calcasieu's motion and its prior conduct in the litigation should foreclose certification. . The motion should be denied.
BACKGROUND
Over the last three years, the issues presented by the Insurers' motion to compel arbitration have been presented on dozens of occasions to the various federal courts sitting in Louisiana. Indeed, every federal district court and the Fifth Circuit have, on multiple occasions, considered identical disputes. The language in Calcasieu's surplus lines commercial property Policy, including the arbitration clause, the Service of Suit clause, and the Contract Allocation Endorsement, is identical to, or substantively the same as, that presented in various other matters where insurers' efforts to compel arbitration have been opposed by insureds. Not one determinative question presented on the Insurers' motion to compel is unique to this case.
Recently, in Bufkin Enterprises v. Indian Harbor Insurance Co., No. 23-30171, - F.4th - -, 2024 WL 1262225 (5th Cir. Mar. 26, 2024) and Indian Harbor Insurance Co. v. Belmont Commons, L.L.C., No. 23-30246, 2024 WL 962376 (5th Cir. Mar. 6, 2024), the Fifth Circuit resolved these disputed questions. In Bufkin, the Fifth Circuit held that “the arbitration agreement 1 between, the parties is subject to the Convention through equitable estoppel.” Id. at 5. The Bufkin court further established that in enforcing the arbitration agreement under the Convention “[t]here is no tension between this position and Louisiana law,” - “§ 22:868 does not come into play.” Id.
In Belmont Commons, a different panel of the Fifth Circuit established, under identical circumstances, that the same arbitration agreement was enforceable independent of the Convention and equitable estoppel, notwithstanding La. R.S. § 22:868. In sum, these recent Fifth Circuit decisions establish the law of this geographic area: the arbitration agreement contained in the surplus lines Policy is independently enforceable under federal or state law, notwithstanding § 22:868.
ARGUMENT
I. Factors for considering whether to certify a question to a state supreme court are not satisfied.
Factors that guide federal courts in deciding whether to certify a question to a state supreme court include: (1) the closeness of the question and the existence of sufficient sources of state law;
(2) the degree to which considerations of comity are relevant in light of the particular issue and case to be decided; and (3) practical limitations of the certification process: significant delay and possible inability to frame the issue so as to produce a helpful response on the part of the state court. See, Swindol v. Aurora Flight Sciences Corp., 805 F.3d 516, 522. (5th Cir. 2015) (citing Williamson v. Elf Aquitaine, Inc., 138 F.3d 546, 549 (5th Cir.1998) (quoting Fla. ex rel. Shevin v. Exxon Corp., 526 F.2d 266, 274-75 (5th Cir.1976). The Fifth Circuit has coined these factors the Shevin factors. Id. In this case, none of the Shevin factors justify certifying the questions to the Louisiana Supreme Court.
First, the Fifth Circuit has already issued both controlling and persuasive authority directly on point and, in so doing, rejected a similar request to certify questions to the Louisiana Supreme
Court. As discussed below, even before the Fifth Circuit's decisions in Bufkin and Belmont Commons, the Louisiana Supreme Court rejected substantively identical requests to certify. In the only opinion authored by a Justice in the majority, Justice Griffin provided a concurrence which explicitly stated that “answers to the certified questions may be sufficiently ascertained through the statutory language and existing jurisprudence to enable to the district court to make an ‘‘Erie guess.'” Mancuso v. Starr Surplus Lines Insurance Co., No. 2023-959 (La. 2023), 370 So.3d 1048. These circumstances evidence that the Fifth Circuit and the Louisiana Supreme Court have, by their respective decisions on other substantively identical motions to compel arbitration, determined there are ample sources of state law on these same issues and considerations of comity are not prohibitive of the federal court's determination of these questions. Last, as it relates to the third Shevin factor, federal courts have acknowledged “the unmistakably clear congressional purpose that the arbitration procedure, when selected by the parties to a contract, be speedy and not subject to delay and obstruction in the courts.” Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 (1967). The “significant delay” accompanying certification to the Louisiana Supreme Court is explicitly presumed in the Shevin factors. Such delay is contrary to “the unmistakably clear congressional purpose” underlying the federal statutes the Fifth Circuit relied upon in Bufkin to decide a substantively identical motion to compel arbitration. Therefore, the practical limitations of the certification process are directly contrary the Supreme Court's instruction that adjudication of motions to compel “be speedy and subject to delay and obstruction in the courts.” Id.
Because the Shevin factors all weigh against certification, the Court should “not lightly abdicated [its] mandate to decide issues of state law when sitting in diversity” and instead exercise its “judgment, restraint, and discretion,” as requested by Justice Griffin in Mancuso, by denying Calcasieu's motion. Jefferson v. Lead Indus. Ass'n, Inc., 106 F.3d 1245, 1247 (5th Cir. 1997).
II. Binding Fifth Circuit precedent in Bufkin controls the Insurers' motion to compel arbitration, rendering certification unnecessary and irrelevant.
Considering the Fifth Circuit's recent decision in Bufkin, Calcasieu's request cannot meet the threshold requirement of demonstrating the existence of a question or proposition of Louisiana law which is determinative of the motion to compel arbitration independent of any other questions. In Bufkin, the Fifth Circuit clearly and unequivocally decided the determinative question presented by the Insurers' motion to compel arbitration, holding that an identical arbitration clause contained in an identical insurance policy issued by the same Insurers was “subject to the Convention” and could be enforced by identical domestic insurers “on Grigson estoppel grounds”. Bufkin, 2024 WL 1262225, at *5.
The Bufkin court does not explicitly rely upon any question or proposition of Louisiana law. When it holds that the arbitration agreement is “subject to the Convention through equitable estoppel,” Id. at 5, it invokes, first, the Convention and, second, its decision in Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 528 (5th Cir. 2000). Id. at *5 (“Having resolved this appeal on Grigson estoppel grounds, § 22:868's impact is not a live issue in this dispute”). Neither of these legal authorities, which reflect international and federal law and Fifth Circuit jurisprudence, can be usurped by an opinion of the Louisiana Supreme Court. Indeed, the Fifth Circuit denied the plaintiffs request for certification in Bufkin finding it “unnecessary” because it “resolved this appeal on Grigson estoppel grounds,” Bufkin, 2024 WL 909600, at *5, and does not otherwise indicate that its decision relies upon an Erie guess. Therefore, the Louisiana Supreme Court cannot obviate the Fifth Circuit's holding in Bufkin, which is controlling.
Additionally, each of the questions presented by Calcasieu invoke and rely upon interpretation of state laws, i.e., La. R.S. §§ 22:868, 9:2778, all of which are preempted by the Convention, an international treaty. Indeed, the Fifth Circuit clearly reiterated in Bufkin, “[T]his court has already held that § 22:868 does not reverse preempt the Convention because the McCarran-Ferguson Act does not apply to treaties. Safety Nat'l Cas. Corp. v. Certain Underwriters at Lloyd's London, 587 F.3d 714, 718 (5th Cir. 2009) (en banc).” Id. at *5. The Fifth Circuit's holding that the same arbitration agreement is subject to the Convention necessarily means that Louisiana law “does not come into play.” See, Id. at 5.
In support of its motion, Calcasieu relies upon the district court's decision in Bufkin Enterprises LLC v. Indian Habor Ins. Co., No. 2:21-CV-04017, 2023 WL 2393700 (W.D. La. Mar. 7,2023), Mot. at 1 -2, which denied the same Insurers' motion to compel arbitration. Calcasieu does not address the resulting Fifth Circuit opinion reversing the district court's decision and instructing the district court to grant the motion to compel arbitration. By relying upon the district court's decision in Bufkin, Calcasieu acknowledges that the issues presented by the motion to compel arbitration in that case were analogous, if not identical, to the issues presented in this matter. Indeed, Bufkin involved an identical dispute, an identical coverage arrangement, identical occurrences, and identical Insurers. Calcasieu thus does not and cannot argue that the Fifth Circuit's subsequent reversal of the district court in Bufkin is distinguishable.
When a federal court of appeals issues an opinion, “the pronouncements become the law of that geographic area.” United States v. AMC Entm't, Inc., 549 F.3d 760, 771 (9th Cir. 2008); see also Hogue v. Johnson, 131 F.3d 466, 491 (5th Cir. 1997). “The Fifth Circuit's ‘rule of orderliness' provides that not even a later panel of the Fifth Circuit, much less a district court, can overturn a previous panel's decision, unless the law has been changed by statutory amendment, the Supreme Court, or the Fifth Circuit en banc." Goux Enters, v. Indian Harbor Ins. Co., No. 22-4330, 2023 WL 2955305 at *4 (E.D. La. Apr. 14, 2023) (citing United States v. Simkanin, 420 F.3d 397, 420 n.25 (5th Cir. 2005); See also, PHI Group v. Zurich Am. Ins. Co., 58 F.4th 838, n.3 (5th Cir. 2023) (“The rule of orderliness means “one panel of our court may not overturn another panel's decision, absent an intervening change in the law, such as by a statutory amendment, or the Supreme Court, or our en banc court.”).
On this matter, the Fifth Circuit's “rule of orderliness” and its binding precedent in Bufkin prescribe that a district court follow the Fifth Circuit's analysis and holding in Bufkin, even if it were to disagree with the Fifth Circuit's decision. See, PHI Group, 58 F.4th, 842.
In PHI Group, an insured sought to recover economic losses for the partial interruption of its business during the CO VID pandemic. Id. at 839-40. The district court dismissed PHI's claims because its losses were not caused by a physical loss or damage to corporeal property. Id. at 840. On appeal, PHI requested the Fifth Circuit certify several questions of law to the Louisiana Supreme Court on the grounds that state courts had not issued a definitive answer on the particular issue, even though the Fifth Circuit had previously “analyz[ed] almost identical policy language... [and] concluded that business closures and suspensions related to the pandemic did not trigger coverage because CO VID did not cause the required tangible alteration or deprivation of covered property.” Id. at 842 (citing Q Clothier New Orleans, L.L.C, v. Twin City Fire Ins. Co., 29 F.4th 252 (5th Cir. 2022)). The Fifth Circuit denied PHI's request to certify on the grounds that “the rule of orderliness prescribes that we follow our analysis in Q Clothier New Orleans, L.L.C, v. Twin City Fire Ins. Co., 29 F.4th 252.” Id. The Fifth Circuit held “Q Clothier remains controlling,” Id. at 843, and noted:
We revisit those holdings only after a “clearly contrary subsequent holding of the [state's] highest court,” a series of “unanimous or near-unanimous holdings from several-preferably a majority-of [the state's] intermediate appellate courts,” or a “squarely on point” statutory amendment.Id., n. 3.
The Fifth Circuit demonstrated in PHI Group that a request to certify is not an appropriate mechanism to challenge the Fifth Circuit's rule of orderliness, and that such requests must be denied when controlling Fifth Circuit precedent exists. As applied here, PHI Group demonstrates that the district court must deny the request to certify where Fifth Circuit instruction on the matter exists. In this case, the Fifth Circuit has issued binding instructions regarding application of the Convention in Bufkin and highly persuasive instruction on § 22:868 in Belmont.
Similarly instructive, at the time of the appeal in PHI Group there had been an intervening decision of a state intermediate court in Cajun Conti LLC v. Certain Underwriters at Lloyd's, London, 21-0343 (La.App. 4 Cir. 6/15/22), 366 So.3d 221, which the Fifth Circuit acknowledged “may question our circuit's Erie guess in Q Clothier.” PHI Group, 58 F.4th at 843. Despite the state court's decision bringing into question the correctness of the Fifth Circuit's Erie guess, the Fifth Circuit made clear:
“Requests to certify questions to the highest court of a state are generally denied when the primary reason for certification is that state courts have not issued a definitive answer on the particular issue.” Free v. Abbott Lab'ys, Inc., 164 F.3d 270,274 (5th Cir. 1999) (citing Transcon. Gas Pipeline Corp. v. Transp. Ins. Co., 958 F.2d 622, 623 (5th Cir. 1992)). “Certification is not a panacea for resolution of those complex or difficult state law questions which have not been answered by the highest court of the state.” Id. (quoting Transcon. Gas Pipeline, 958 F.2d at 623).
In this case, there has been no intervening decision of a state intermediate court, let alone “unanimous or near-unanimous holdings from several... of [the state's] intermediate appellate courts.” FDIC v. Abraham, 137 F.3d 264, 268 (5th Cir. 1998). As such, if the PHI Group court were determined to deny the plaintiffs request to certify questions despite an intervening intermediate court decision, this Court is even more so called to deny Calcasieu's request where no such intervening decisions exist.
In PHI Group, the Fifth Circuit observed:
PHI is not the first plaintiff to ask our court to certify these very questions;
we have rejected every request. Because PHI has not presented any novel reasons for our court to deviate from past refusals, we deny its request.PHI Group, 58 F.4lh at 844 (citing prior denials of requests to certify in Q Clothier, 29 F.4th at 259 n.3; La. Bone & Joint Clinic, L.L.C, v. Transp. Ins. Co., No. 21-30300, 2022 WL 910345, at *2 n.l (5th Cir. Mar. 29,2022) (unpublished); Dickie Brennan & Co. v. Zurich Am. Ins. Co., No. 21-30776, 2022 WL 3031308, at *3 (5th Cir. Aug. 1, 2022) (unpublished); Terry Black's Barbecue, L.L.C, v. State Auto. Mut. Ins. Co., 22 F.4th 450, 455 n.5 (5th Cir. 2022)).
Similarly, Calcasieu is not the first insured-plaintiff to ask a federal court sitting in Louisiana to certify these questions. In Bufkin, the insured-plaintiff requested the Fifth Circuit to certify “[w]hether La. R.S. § 22:868 prohibits the enforcement of arbitration clauses in insurance contracts for surplus lines insurers.” Bufkin, 2024 WL 909600, at *5. The Fifth Circuit denied the request, holding that these same Insurers were empowered to enforce the same arbitration clause “on Grigson estoppel grounds, [thus] § 22:868's impact is not a live issue in this dispute.” Id. Following the Fifth Circuit's rule of orderliness, this Court is similarly called to deny Calcasieu's request to certify for the same reasons expressed in PHI Group and Bufkin.
For the reasons set forth above, the Fifth Circuit's decision in Bufkin is controlling and instructs this Court to grant the Insurers' motion to compel arbitration. Accordingly, Calcasieu's request for certification to the Louisiana Supreme Court, which cannot invalidate Bufkin, should be denied.
III. Belmont Commons is highly persuasive authority and sufficient to guide the Court's determination of the Insurers' motion to compel arbitration.
Although not binding, the Fifth Circuit's decision in Belmont Commons is highly persuasive authority. See United States v. Torres-Jaime, 821 F.3d 577, 582 (5th Cir. 2016). In Belmont Commons, the Fifth Circuit answered the precise question submitted by Calcasieu regarding La. R.S. § 22:868, finding that “the carve-out contained in La. R.S. § 22:868(D) unambiguously includes arbitration clauses,” and thus arbitration agreements contained in surplus lines policies can be enforced, La. R.S. § 22:868(A) notwithstanding. Belmont Commons, 2024 WL 962376 at *4. The Fifth Circuit's decision in Belmont Commons squarely addresses the precise question submitted by Calcasieu, and thus this Court does not require further instruction on the law.
Notwithstanding the foregoing, Calcasieu's question regarding La. R.S. § 22:868 is not determinative of the Insurers' motion to compel arbitration by virtue M Bufkin, which is controlling. As detailed above, in Bufkin, the Fifth Circuit resolved an identical motion to compel arbitration “on Grigson estoppel grounds,” holding that the same arbitration agreement was subject to the Convention. The Fifth Circuit noted that “this court has already held that § 22:868 does not reverse preempt the Convention because the McCarran-Ferguson Act does not apply to treaties.” Bufkin, 2024 WL 909600, at *5 (citing Safety Nat'l Cas. Corp. v. Certain Underwriters at Lloyd's London, 587 F.3d 714, 718 (5th Cir. 2009) (en banc). The holding in Safety Nat'l was a determination of the application of the federal McCarran-Ferguson Act, and thus does not involve state law within the purview of any Louisiana Supreme Court certification. Further, the Bufkin court held that for purposes of its decision, “§ 22:868 does not come into play.” Id. Even if the court were inclined to disregard the highly persuasive authority of the Fifth Circuit's § 22:868 analysis in Belmont Commons, Calcasieu's question invoking §§ 22:868 and 9:2778 is not determinative of the motion to compel arbitration because it is preempted by the Convention.
For these reasons, Calcasieu's request for certification to the Louisiana Supreme Court should be denied, IV. The Louisiana Supreme Court has on multiple recent occasions denied similar requests to certify.
In Mancuso v. Starr Surplus Lines Insurance Co., No. 21-03947, 2023 WL 6458549 (W.D. La. July 12, 2023), this court certified nearly identical questions to the Louisiana Supreme Court. The three questions certified to the state court in Mancuso each related to La. R.S. §§ 9:2778 and 22:868, as do the three questions raised by Calcasieu. However, the Louisiana Supreme Court denied the certification. Mancuso v. STARR Surplus Lines Ins. Co., 2023-00959 (La. 2023), 370 So.3d 1048. In pertinent part, Justice Griffin wrote in her concurrence in Mancuso:
[I]n my view, answers to the certified questions may be sufficiently ascertained through the statutory language and existing jurisprudence to enable the district court to make an “Erie guess.” I further note that this denial does not prevent certification from the United States Court of Appeals for the Fifth Circuit at a later date should the litigation proceed to that point.Mancuso, 370 So.3d at 1048-49.
Similarly, in Southland Circle, LLC v. Independent Specialty, No. 23-855, 2023 WL 6450425, (E.D. La. July 17, 2023), the Eastern District of Louisiana, granted a request to certify the applicability of La. R.S. § 22:868 to surplus lines insurers. Once again, the Louisiana Supreme Court denied certification. Southland Circle, LLC v. Independent Specialty, 2023-990 (La. 2023), 370 So.3d 1047.
Contrary to Calcasieu's argument that these questions “should be answered by the Louisiana Supreme Court,” Mot. at 2, the Louisiana Supreme Court has already issued multiple decisions- in Southland Circle and Mancuso- indicating that the questions presented to this Court should be decided by this Court. In fact, in the one opinion authored by a Justice in the certification-denying majority, Justice Piper instructed that the answers to these questions may be sufficiently ascertained through the statutory language and existing jurisprudence. Justice Piper essentially instructed “the district court to make an ‘‘Erie guess.'” Mancuso, 370 So.3d at 1048.
The Louisiana Supreme Court's decisions in Mancuso and Southland Circle suggest that even prior to Bufkin and Belmont Commons the Louisiana Supreme Court did not find certification warranted, and at least one Justice in the majority opined that the district courts were adequately equipped to perform their respective Erie guesses. Since then, the Fifth Circuit has issued decisions in Bufkin and Belmont Commons further equipping the district courts with binding and highly persuasive legal authority on the matter. In consideration of the foregoing, certification is not warranted.
V. Calcasieu's request for certification should be denied where it is requested only after multiple unfavorable rulings from the Fifth Circuit.
Calcasieu requests certification of these questions for the first time only after the Fifth Circuit's decisions in Bufkin and Belmont Commons. This matter was initially removed to this Court on January 6, 2023, and the Insurers filed their initial motion to compel arbitration on January 9, 2023. On February 3, 2023, Calcasieu filed its opposition to the motion to compel arbitration, and requested this Court conduct a hearing on the motion to compel arbitration. This Court granted the request for hearing. After the case was stayed for a matter of months, on January 25,2024, Calcasieu again requested this court conduct a hearing on the motion to compel arbitration. Again, this Court granted the request for hearing. Before a hearing was conducted, this Court remanded the matter to state court. At no time during the twelve months when this matter was initially before this Court did Calcasieu request certification of any issues to the Louisiana Supreme Court.
Only after the Fifth Circuit issued decisions in Bufkin and Belmont Commons on March 4 and March 6, 2024, did Calcasieu change course from requesting this Court decide the motion to compel arbitration to arguing that the Louisiana Supreme Court needs to decide these issues. The timing of Calcasieu's motion to certify, coincidental or not, is relevant because certification is disfavored and discouraged when it is sought only after an adverse or unfavorable ruling. See, State Auto Property and Cas. Ins. Co. v. Hargis, 785 F.3d 189, 194 (6th Cir. 2015).
The appropriate time for a party to seek certification of a state-law issue is before, not after, the federal court has resolved the issue. See, City of Columbus, Ohio v. Hotels.com, L.P., 693 F.3d 642, 654 (6th Cir.2012) (citing Thompson v. Paul, 547 F.3d 1055, 1065 (9th Cir.2008) (“There is a presumption against certifying a question to a state supreme court after the federal district court has issued a decision.”); Enfield v. A.B. Chance Co., 228 F.3d 1245, 1255 (10th Cir.2000) (denying certification where party did not seek certification until adverse decision and stating “[t]hat fact alone persuades us that certification is inappropriate”); Perkins v. Clark Equip. Co., Melrose Div., 823 F.2d207, 209-210 (8th Cir.1987) (discouraging requests for certification made by a party after summary judgment has been decided against that party because “[otherwise, the initial federal court decision will be nothing but a gamble with certification sought only after an adverse decision”)).
Although Calcasieu was not a party to Bufkin or Belmont Commons, it certainly followed similar procedural tactics (i.e. unilaterally dismissing foreign insurers in an attempt to evade its arbitration obligations) and availed itself of substantively identical arguments in opposing the Insurers' motion to compel arbitration. The concerns expressed by the various federal circuits are present in this case where Calcasieu requests certification of questions to the Louisiana Supreme Court after previously positing that this Court should decide the same questions and only after the Fifth Circuit issued two adverse decisions rejecting the same arguments Calcasieu initially relied upon in opposing the Insurers' motion to compel. These facts and circumstances should “alone persuade[ this Court] that certification is inappropriate.”
CONCLUSION
The motion should be denied.