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Louisiana District Court Grants Defendant’s Motion for Reconsideration, But Orders Re-Filing

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U.S. District Court for the Eastern District of Louisiana, May 6, 2020

The plaintiff’s decedent, Callen L. Dempster, was allegedly exposed to asbestos-containing products while employed at the Avondale Shipyards from 1962 to 1994. Before the case was removed to federal court, the state court denied the defendant, General Electric Company, motion to bar the plaintiff’s claims based upon res judicata, and to dismiss the plaintiff’s survival claim and the decedent’s wrongful death claim. Once the case was venued in federal court, General Electric sought reconsideration of that motion.

By way of factual background, in 1991, Mr. and Mrs. Dempster, along with several thousand other plaintiffs, sued multiple defendants for asbestos-related injuries in In re Asbestos, Plaintiffs v. Borden, Inc., et al., in the Civil District Court for the Parish of Orleans. Defendant General Electric settled with Mr. and Mrs. Dempster and executed a “Release of General Electric Company.” During that time, Mr. Dempter had been diagnosed with asbestosis, not lung cancer.

On March 14, 2018, Mr. Dempter filed a Petition for Damages in the Civil District Court for the Parish of Orleans, State of Louisiana. This matter was removed to the U.S. District Court for the Eastern District of Louisiana for the first time on June 21, 2018. A motion to remand was filed by plaintiffs and the court granted the remand. Mr. Dempster passed away on November 24, 2018. On January 9, 2020, defendant Avondale removed the case for a second time to the U.S. District Court for the Eastern District of Louisiana. This time the court denied plaintiff’s motion to remand, finding that this case was properly removed to federal court under the federal officer removal statue.

On February 18, 2020, General Electric filed this instant Motion for Reconsideration. General Electric indicated that the state district court denied General Electric’s original motion on October 10, 2019, finding that the claims were not barred by res judicata because the prior release agreement Mr. and Mrs. Dempster signed did not include the words “lung cancer.” However, General Electric argued that on January 29, 2020, the Louisiana Supreme Court issued its opinion in Gistarve Joseph, Sr., et al v. Huntington Ingalls Incorporated in which the court rejected the rationale that a release must expressly refer to the specific disease at issue in order to be effective. Therefore, General Electric argued that the court should reconsider the state district court’s order overruling General Electric’s exception of res judicata. General Electric further argued that by the unambiguous terms of the agreement, Mr. Dempster and Mrs. Dempster agreed to settle all future claims against General Electric, including claims arising out of Mr. Dempster’s alleged exposure to asbestos or any future malignancies Mr. Dempster might develop as a result of his alleged asbestos exposure.

The plaintiff opposed General Electric’s motion and argued that Joseph does not support their position. The plaintiff contended that for res judicata to apply, the intent of the parties to the compromise must be clear, unambiguous and unequivocal. They further argue that Mr. Dempster only received payment for an asbestosis claim, not for lung cancer.

The court noted that a party may challenge a judgment or order under Federal Rules of Civil Procedure 54(b), 59(e) or 60(b). The court has considerable discretion in deciding whether to grant a motion for reconsideration but must “strike the proper balance between two competing imperatives: (1) finality and (2) the need to render just decisions on the basis of all the facts.”

The court granted General Electric’s motion for reconsideration because the sole reason provided by the state district court for denying General Electric’s exception for res judicata was that the settlement release did not explicitly mention “lung cancer.” The court also indicted if that were the sole reason that General Electric’s motion was denied, the holding is inconsistent with Louisiana law.

The court further noted that under Louisiana Code of Civil Procedure article 927, a peremptory exception of res judicata is recognized as a means of dismissing a matter in Louisiana state courts. However, a peremptory exception is not a procedural device recognized by the Federal Rules of Civil Procedure.Therefore, to the extent General Electric seeks reconsideration on the merits of the state court’s ruling, it must file a motion that is recognized by the Federal Rules of Civil Procedure.

The court therefore found that reconsideration of the state district court’s judgment is appropriate. However, it cannot consider an exception of res judicata because such a procedure is not authorized by the Federal Rules of Civil Procedure. The court granted permission for General Electric to file an authorized motion.