Smith v. Transp. Servs. Co. of Ill.

148 So.3d 903

Tenesha SMITH, et al.

v.TRANSPORT SERVICES COMPANY OF ILLINOIS, et al.

No. 2013–CC–2788.

Supreme Court of Louisiana.

July 1, 2014.

Rehearing Denied Aug. 25, 2014.

Opinion

KNOLL, J.

This procedurally complex writ concerns the tolling of prescription in a class action entitled Fulford v. Transport Services Co.¹ (Fulford/Abram ), filed in Louisiana state court, then removed to federal court where class certification was denied. After class certification was denied and the case was still pending in federal court, other putative class members filed individual claims in a Louisiana state court, entitled Smith v. Transport Services Co. (Smith ), which is the present case before us.² In its simplest terms, the specific issue is whether Louisiana Code of Civil Procedure Article 596A(3)³ continues to suspend prescription for putative class members, plaintiffs herein, when a class action filed in a Louisiana state court is removed to federal court. For the following reasons we find under Article 596 prescription was suspended for the putative class members (Smith et al.) upon the filing of the Fulford/Abram class action in a Louisiana state court, and none of the three triggering events contained in Article 596 to resume the tolling of prescription occurred. Thus, we reverse the Court of Appeal and overrule defendants' exception of prescription.

FACTUAL BACKGROUND

On August 7, 2002, Dan Davis (Davis), who was employed as a driver for Transport Services Company of Illinois (Transport), parked a tanker truck containing pressurized “spent caustic” vapors at his parents' home near the intersection of Leonidas and Green Streets in New Orleans. While Davis was eating dinner, a hissing sound began emitting from the top of the tractor-trailer's dome area, and these spent caustic vapors leaked into the neighborhood.

Exactly one year later, on August 7, 2003, two separate class action petitions for damages arising out of this incident were filed in Civil District Court for the Parish of Orleans (Fulford/Abram, collectively). Thereafter, defendant removed these matters to the United States District Court for the Eastern District of Louisiana, and the cases were consolidated. Following a hearing in federal court on June 1, 2004, class certification was denied. Defendants took no action to notify putative class members of the denial of class certification. The Fulford/Abram plaintiffs sought to provide notice to putative class members via U.S. Mail on September 7, 2004, and published notice in the Times Picayune on ten consecutive days, from September 19, 2004, through September 29, 2004.

PROCEDURAL HISTORY

On June 8, 2004, three of these putative class members, Tenesha Smith, Melvin Porter, Sr., and Wallace Dixon (“plaintiffs,” collectively), filed the instant action in Civil District Court for the Parish of Orleans against Transport, Davis, and Transport's insurer, Protective Insurance Company (“defendants,” collectively), making the same class action allegations as were contained in Fulford/Abram. Defendants filed a declinatory exception of lis pendens, seeking a stay of the proceedings pending the resolution of Fulford/Abram in federal court. On September 20, 2004, following a hearing, Judge Robin M. Giarrusso granted defendants' exception of lis pendens as it related to the purported class action claim but held the plaintiffs were permitted to pursue their claims individually. The District Court further gave plaintiffs

30 days from the date of the signing of this Judgment, within which to amend their pleadings to add additional plaintiffs to this lawsuit, which additions will not affect or extend any prescriptive periods that have already run as to any new plaintiffs, with defendants reserving all available defenses and exceptions.

Accordingly, plaintiffs filed an amended petition on October 4, 2004, adding approximately 500 additional plaintiffs to the case. The District Court granted plaintiffs leave to amend on October 7, 2004.

In their answer, defendants raised, inter alia, an exception of prescription, arguing the claims of the roughly 500 plaintiffs added in the amended petition were prescribed because they were added on October 4, 2004, more than thirty days after the entry of the federal court's June 1, 2004 order denying class certification in Fulford/Abram. The District Court overruled this exception, holding the amended petition was timely filed because “prescription remains suspended upon the filing of a class action until thirty (30) days after putative class members are notified that a court has denied class certification,” under Louisiana Code of Civil Procedure Article 596A(3). Thereafter, defendants sought and were denied writs in the Fourth Circuit and in this Court. Smith v. Transport Services Co., 05–0428 (La.App. 4 Cir. 4/18/05), writ denied, 05–1291 (La.6/17/05), 904 So.2d 707.

Following a trial on the issues of liability and general causation,⁴ the District Court entered judgment on these issues in favor of the plaintiffs. On appeal of this judgment, defendants, inter alia, reurged the exception of prescription. The Fourth Circuit affirmed the District Court's decision to overrule the exception, finding “the liberative prescription that was suspended with the filing of the class action petition, commenced to run again thirty (30) days ‘after publication of notice’ to the putative class members, or on October 7, 2004”—30 days from the day notice of the denial was first mailed to putative class members. Smith v. Transport Services Co., 10–1238, pp. 7–8 (La.App. 4 Cir. 5/4/11), 67 So.3d 487, 491, writ denied, 11–1147 (La.9/16/11), 69 So.3d 1146. Thus, the Fourth Circuit held “the filing of the amended petition on October 4, 2004 was within the 30 days allowed by La. C.C.P. art. [596A(3) ] and was also filed within the 30 days provided by the September 20, 2004 trial court judgment.” Id. at 8, 67 So.3d at 492. Accordingly, the Court of Appeal remanded the case for further proceedings.

Defendants reurged their exception of prescription once more on remand, arguing plaintiffs' claims were prescribed on their face and should be dismissed under this Court's decision in Quinn v. Louisiana Property Insurance Corporation, 12–0152 (La.11/2/12), 118 So.3d 1011. The District Court again overruled the exception, holding its earlier denial of the exception precluded consideration of the present exception pursuant to the doctrine of res judicata. Defendants applied for supervisory review of the District Court's denial of their peremptory exception of prescription which the Fourth Circuit granted and reversed, dismissing plaintiffs' entire case with prejudice, finding pursuant to Quinn, “the entire Smith suit had prescribed because prescription was never suspended by the [Fulford/Abram ] cases.”

We granted certiorari on plaintiffs' application to review the correctness vel non of the Court of Appeal's ruling. Smith v. Transport Services Co., 13–2788 (La.2/28/14), 134 So.3d 1167.

DISCUSSION

The present case requires us to determine what effect, if any, removal of a Louisiana state filed class action to a federal court has on the suspension of prescription provided by Louisiana Code of Civil Procedure Article 596. This article is a special provision, the purpose of which is to prevent prescription from accruing against the claims of members of a putative class action until such point as the propriety of the class action or the member's participation in the class action is determined. Duckworth v. Louisiana Farm Bureau Mut. Ins. Co., 11–2835, p. 14 (La.11/2/12), 125 So.3d 1057, 1065. In other words, the article rests on the premise that members of a putative class are treated as parties to the action and, thus, for prescription purposes as having instituted their own actions, for as long as they remain members of the class. Id. Because Article 596 concerns prescription, it is “strictly construed against prescription and in favor of the obligation sought to be extinguished.” Quinn, 12–0152 at p. 9, 118 So.3d at 1017 (quoting Taranto v. Louisiana Citizens Property Ins. Corp., 10–0105, p. 5 (La.3/15/11), 62 So.3d 721, 726 ); Bailey v. Khoury, 04–0620, p. 9 (La.1/20/05), 891 So.2d 1268, 1275. Ordinarily, the party urging prescription bears the burden of proof at trial of the exception; however, if the petition is prescribed on its face, the burden shifts to the plaintiff to show the action is not prescribed. Quinn, 12–0152 at p. 9, 118 So.3d at 1017 ; Taranto, 10–0105 at p. 5, 62 So.3d at 726 ; Cichirillo v. Avondale Industries, Inc., 04–2894, 04–2918, p. 5 (La.11/29/05), 917 So.2d 424, 428.

Article 596A, the subsection at issue, has two complementary facets, one involving the suspension of prescription, and the other its recommencement. First, Article 596 extends the benefits of suspension to the claims of all members of a class described in a class action petition filed in a Louisiana State court: “Liberative prescription on the claims arising out of the transactions or occurrences described in a petition brought on behalf of a class is suspended on the filing of the petition as to all members of the class as defined or described therein.” La.Code Civ. Proc. art. 596A. As we explained in Quinn,

According to its plain terms, to receive the benefit of the suspension of prescription provided in La. C.C.P. art. 596... an individual filing an independent suit must establish three predicate facts: (1) the existence of a timely filed class action proceeding against the defendant, (2) that he or she is a member of the class described or defined in the identified class petition, and (3) that the claims asserted in the independent action arise “out of the transactions or occurrences described” in that petition.

Quinn, 12–0152 at p. 8, 118 So.3d at 1016.

Plaintiffs allege the timely filing of the Fulford/Abram class action petitions in Louisiana state court suspended prescription as provided by Article 596. It is undisputed the Fulford/Abra...