260 December 2009 / January 2010

BANKRuPTCY TO TRuSTS

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Bankruptcy Law

equitable Mootness Doctrine

In re San Patricio County Comm. Action Agency, 575 F.3d 553 (5 Cir. 2009).

In San Patricio County, the 5th Circuit reversed the ruling by the United States District Court for the Southern District of Texas that an appeal of a settlement agree-ment by the Chapter 7 debtor’s lenders was equitably moot. The 5th Circuit recog-nized that the application of the equitable mootness doctrine is normally applied in Chapter 11 bankruptcy cases. The court noted that “[w]hether the doctrine has much if any relevance to a bankruptcy under a Chapter 7 liquidation, as this one, is a threshold issue.” Rather than broadly holding that the equitable mootness doc-trine did not apply in Chapter 7 liquidation cases, the 5th Circuit found that under the traditional equitable mootness analysis, the appeal of the entry of the settlement agreement was not equitably moot. The 5th Circuit focused on the fact that no plan of reorganization existed that would need to be “unraveled” if the settlement agreement in this case were set aside. The 5th Circuit also noted that while some creditors who received payment under the settlement agreement would need to repay those funds if the settlement agree-ment were set aside, “[t]hat difficulty is not of the same nature or magnitude as the undoing of a complicated plan of reorganization.”

evidentiary Deficiencies

In re Farve, 08-61003 (July 1, 2009 5 Cir.) (not selected for publication).

In Farve, the 5th Circuit affirmed the ruling of the United States District Court for the Southern District of Mississippi holding that the bankruptcy court did not err in granting Lyndon Property Insurance Co.’s motion for partial summary judg-ment. Lyndon issued performance bonds for two construction projects with the debtor’s company as the principal under the bonds. Rather than use the funds for the construction projects, the debtor disbursed

the funds to himself and repaid loans of his company. After the bankruptcy was filed, Lyndon filed a motion for partial summary judgment, arguing that the debt owed to Lyndon was non-dischargeable because the debtor committed “a defalcation while in a fiduciary capacity under 11 U.S.C. § 523(a)(4).” The bankruptcy court granted the motion because the documentation submitted by the debtor did not meet sum-mary judgment standards under Rule 56 of the Federal Rules of Civil Procedure. The debtor submitted unsworn affidavits and affidavits that provided “nothing more than conclusonal allegations and legal

Louisiana Bar Journal Vol. 57, No. 4 261

arguments.” Thus, the 5th Circuit held that the bankruptcy court was within its discretion to strike the affidavits.

The 5th Circuit also found that the bankruptcy court did not abuse its discre-tion in denying the debtor’s motion for reconsideration because the debtor was represented by counsel and had sufficient time to reply to the motion for partial sum-mary judgment. Instead, the debtor waited eight months to address the evidentiary deficiencies, and then, once he admitted to the defects, he failed to correct the deficiency or offer evidence that created a question of material fact.

—Tristan E. MantheyChair, LSBA Bankruptcy Law Section

andCherie D. Nobles

Member, LSBA Bankruptcy Law SectionHeller, Draper, Hayden, Patrick & Horn, L.L.C.

Ste. 2500, 650 Poydras St.New Orleans, LA 70130

Corporate and Business Law

Noncompetition Clause invalidated Due to

Superfluous Language

Century 21 Richard Berry & Associates, Inc. v. Lambert, 08-0668 (La. App. 5 Cir. 2/25/09), 8 So.3d 739, reinforces the impor-tance of savings and severability clauses to the enforceability of a noncompete agree-ment in Louisiana. In Lambert, the court of appeal affirmed the trial court’s denial of an injunction sought by an employer to end a former employee’s competitive business in violation of a noncompetition clause in the parties’ employment agreement. The court found that superfluous language “[t]his clause shall survive termination of this agreement” in the last sentence of the non-compete clause expanded the term of the noncompete agreement beyond the permis-sible two-year statutory limit and held the

noncompete clause unenforceable. The Broker-Independent Contractor

Agreement signed by the employee when she became a real estate agent with Cen-tury 21 contained a noncompete clause prohibiting the employee from carrying on real estate or other similar business to that conducted by Century 21 or solicit-ing Century 21 customers in six specified parishes for two years from the date of termination of employment. The court of appeal agreed with the trial court’s finding that the employee did engage in competitive business in parishes covered by the noncompetition clause in violation of the agreement. Despite express language in the agreement limiting the term of the noncompete to two years, the court found that the language “[t]his clause shall survive termination of this agreement” in the last sentence of the clause was an impermissible extension of the two-year period allowed by Louisiana law. The court declared the noncompete clause unenforceable due to its overly broad temporal scope and affirmed the trial court’s denial of the injunction.

The Lambert court did not address the existence of a savings or severability clause in the employment agreement. There is no evidence in the court’s decision or the appellate brief filed by the employer that suggests that such a clause existed. Savings clauses and severability clauses, stating that an entire agreement shall not be unenforce-able due to one unenforceable provision, paragraph or sentence, are enforceable in Louisiana in the noncompetition context. SWAT 24 Shreveport Bossier, Inc. v. Bond, 00-1695 (La. 6/29/01), 808 So.2d 294, 309. When a noncompetition agreement con-tains a severability clause, Louisiana courts

will strike an unenforceable provision and enforce a noncompete agreement without the prohibited language, to the extent the remaining language can be enforced as written. Id. The Lambert decision dem-onstrates the benefit of a savings or sever-ability clause in a noncompete agreement governed by Louisiana law. Although the survival language in the Lambert agreement was certainly not intended to expand the noncompete agreement beyond two years, a well-drafted savings or severability clause in the agreement could have led the court to discard the offending language and enforce the remaining portions of the noncompete clause as written.

—Megan C. RiessMember, LSBA Corporate and

Business Law SectionFishman Haygood Phelps Walmsley

Willis & Swanson, L.L.P.201 St. Charles Ave., 46th Flr.

New Orleans, LA 70170

Environmental Law

Greenhouse Gas Developments

Climate change has been a hot topic for the past couple years. In the 2007 United States Supreme Court decision of Massa-chusetts v. EPA, the court found that car-bon dioxide and other greenhouse gases (GHG) met the definition of pollutants

262 December 2009 / January 2010

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under the Clean Air Act. 127 S.Ct. 1438 (2007). Now, two and a half years later, both Congress and the Environmental Protection Agency (EPA) have proposed methods of lowering GHG emissions. The 2nd Circuit recently issued a decision that reinstates federal nuisance claims against utility companies that were dismissed by the district court based on a non-justicia-ble political question in 2005. Conn. v. Am. Elec. Power Co., 582 F.3d 309 (2 Cir. 2009). The 2nd Circuit held that until new federal laws and regulations pre-empt the field of federal common law of nuisance, federal courts are empowered to hear suits alleging the creation of a public nuisance by greenhouse gases. The 5th Circuit held that a group of private property owners in Mississippi also can proceed with global warming-related claims. Comer v. Mur-phy Oil Co., ____ F.3d ____ (5 Cir. 2009). Although the final form of GHG emission rules has yet to be seen, two proposed bills have been introduced since June 2009 and, now, the EPA has proposed its own rule under the Clean Air Act.

Congressional Climate Change Bills

On June 29, 2009, the House intro-duced its version of proposed federal climate legislation that utilizes cap-and-trade regulation of GHGs. H.R. 2454. The Senate introduced its version on Sept. 30, 2009. Both the House and Senate versions rely primarily on cap-and-trade to reduce GHG emissions. Capped entities would be required to obtain emission allowances or credits for each ton of GHG that they directly emit, or that is embedded in the fossil fuels they produce or distribute. The caps would take effect in stages, with natural gas and coal-fired electric utilities as well as petroleum and coal-based liq-uid fuel producers required to comply in 2012. Industrial sources would be covered in 2014, and local natural gas distributors in 2016. Like the House bill, the Senate bill would reduce total GHG emissions to 83 percent of the 2005 levels by 2050. The Senate bill, however, has more ag-gressive short-term goals, with 20 percent

of those reductions by 2020 as compared with the 17 percent by 2020 proposed in the House.

Likewise, both the House and Senate bills directly allocate the majority of the allowances to specific sectors of GHG emitters. For example, the House bill pro-vides 35 percent of the credits to the elec-tric utility industry. The Senate bill also proposes to allocate to various sectors, but leaves the actual percentages open for fur-ther discussion.

The most substantial difference be-tween the House and Senate bills is the power left to the EPA. The Waxman-Mar-key Bill, introduced by Representatives Henry Waxman and Edward Markey, prohibits the EPA from listing greenhouse gases as criteria air pollutants or hazard-ous air pollutants under the Clean Air Act. The House bill also exempts greenhouse gases from New Source Review and Title V permit requirements. The Kerry-Boxer Bill, introduced by Senators John Kerry and Barbara Boxer, removes these restric-tions on the EPA. The Senate version has

Louisiana Bar Journal Vol. 57, No. 4 263

no affirmative pre-emption and would allow the EPA to set emissions standards when issuing permits for existing sources, such as power plants, under the agency’s New Source Review program.

environmental Protection Agency

The EPA has not waited for Congress to act. On Sept. 22, 2009, the agency is-sued the final draft of its mandatory GHG reporting rule, which requires all entities that emit more than 25,000 tons of carbon-dioxide equivalents to monitor and report to the EPA the amount of GHGs emitted annually. The monitoring obligation be-gins Jan. 1, 2010. The EPA estimates that approximately 85 percent of the nation’s GHG emissions, originating from 10,000 facilities, will be covered under the new rule.

On Sept. 29, 2009, the EPA announced a proposed rule that would require reduc-tions to GHG emission for any new or existing facility that undergoes a major modification that triggers the Preven-tion of Significant Deterioration (PSD) to install best available control technol-ogy (BACT). The PSD program is an air pollution permitting program intended to ensure that air quality does not diminish from the construction of new facilities, or from changes to existing ones.

The Sept. 29 proposal also would im-pact Title V permits. Facilities that emit 25,000 tons per year of carbon dioxide or equivalent gases would be a “ma-jor source” required to obtain a Title V permit. Facilities that are already major sources would be required to include their GHG emissions in their renewal-permit applications. New or modified facilities with GHG emissions that trigger PSD would be required to install the BACT and implement energy-efficient measures to minimize GHG emissions. At this time, however, there is no set BACT for GHG emissions, and the EPA’s proposed tech-nology standards are presently devoid of ambient air quality standards.

The agency estimates that approxi-mately 14,000 facilities nationally will have to obtain a Title V permit or modify their existing Title V permits to include

GHG emissions. Louisiana currently has more than 700 Title V permit hold-ers that may be affected should they un-dergo any modification to their facilities or when their permits are up for renewal. The Louisiana Department of Environ-mental Quality states that a large number of minor-source permit holders could be elevated to a major source and forced to obtain a Title V permit from GHG emis-sions alone.

The Sept. 29 proposal has not been published in the Federal Register; howev-er, once published, there will be a 60-day comment period.

—Sarah S. BrehmMember, LSBA Environmental

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Family Law

Custody

Cramer v. Tuttle, 08-0940 (La. App. 3 Cir. 2/4/09), 11 So.3d 503.

Three years after a Texas custody order allowed the mother to reside in Louisiana with the child, she sought to modify the order in Louisiana. The father argued that she had no right of

action and that Louisiana lacked subject matter jurisdiction under the PKPA. The trial court and court of appeal ruled that Louisiana had jurisdiction and that Texas had lost jurisdiction because Louisiana was now the home state under both the PKPA and the UCCJL, especially as the original Texas order allowed them to live in Louisiana.

L.E.P.S. v. R.G.P., 08-1349 (La. App. 3 Cir. 6/3/09), 11 So.3d 633, writ denied, 09-1429 (La. 7/1/09), 11 So.3d 498.

The trial court erred in excluding testi-mony and evidence of the father’s arrests for carnal knowledge of and contributing to the delinquency of a juvenile and for possession of drug paraphernalia, and in naming him domiciliary parent, albeit subject to his mother’s supervision, of the three teenage daughters. The trial court’s failure to order drug tests of the father or to apply negative inferences due to his claiming the Fifth Amendment privilege 31 times during his testimony was moot due to other overwhelming evidence of his unfitness for custody. The court of appeal affirmed the joint custody but reversed to name the mother as the domiciliary parent and also reversed the trial court’s denial of her request to relocate. The court al-lowed her to relocate with the children to Arizona. The court of appeal ruled that: “Even if relocation is not ideal, it would be outweighed by the fact that the best interests of the child are served by resid-ing with a relocating parent.” The matter was remanded to fix a physical custody schedule for the father.

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Bingham v. Bingham, 44,292 (La. App. 2 Cir. 5/13/09), 12 So.3d 448.

The court of appeal affirmed this sec-ond denial by the trial court of the mother’s request to relocate with the two children to Wyoming, finding that the children’s environment was stable and they were prospering. The mother’s argument that her child with her second husband would be deprived of the relationship with the two children at issue here was misplaced, as the focus must be on the children, and they had relationships with the father’s children and with other family here. The trial court’s denial of Mr. Bingham’s request for sanctions was affirmed.

Parker v. Parker, 44,246 (La. App. 2 Cir. 5/13/09), 12 So.3d 485.

The court of appeal affirmed the trial court’s denial of Ms. Parker’s request to relocate to Mississippi with her new husband (her fourth), whom she had met only twice before becoming engaged, and whom she had known for only six months. Her complaints were as to discretionary rulings, and her desire to move to her new

husband’s residence in Mississippi did not outweigh the advantages to the children of remaining in Louisiana regarding the father’s access, the children’s educational needs and other family relationships.

Black v. Simms, 08-1465 (La. App. 3 Cir. 6/10/09), 12 So.3d 1140.

In this custody case between two former lesbian partners where one had a child by artificial insemination while they were together, the court stated:

In an initial custody dispute be-tween a parent and non-parent, the non-parent bears the burden of first proving that granting custody to the parent would cause substantial harm to the child; if the non-parent meets that burden of proof, the non-parent must then prove that joint or sole custody in the non-parent is in the best interest of the child in order to prevail.

The mother’s decision to cut off the access between the child and the other

woman and her family did not rise to substantial harm to the child sufficient to find sole custody to the mother inap-propriate, especially given the mother’s parental right to make decisions regarding the child.

Garner v. Thomas, 08-1448 (La. App. 4 Cir. 5/28/09), 13 So.3d 784.

The court of appeal affirmed the trial court’s award of visitation rights to the maternal grandparents after the mother died during the marriage, relying, in large measure, on the trial court’s finding that the father’s testimony as to why he did not want them to have visitation was “disingenuous.”

Child Support

Durfee v. Durfee, 44,281 (La. App. 2 Cir. 5/13/09), 12 So.3d 984.

After Mr. Durfee’s child support to Ms. Durfee was reduced, Ms. Durfee, feeling unable to support the children, entered a consent judgment giving him

Louisiana Bar Journal Vol. 57, No. 4 265

sole custody and providing that neither parent would owe child support to the other. Less than one year later, he sought and was granted child support from her. The trial court found that Mr. Durfee’s wife quitting her job to care for his two children as well as her own two constituted a change of circumstances. The court of appeal found the part of the consent judgment regarding non-payment of child support was null and void as against public policy. The court reversed the child sup-port judgment, however, finding that Mr. Durfee failed to carry his burden to show a change of circumstances; he failed to show that his wife’s quitting her job was “involuntary or that it was voluntary but still warranted.”

Property

Salassi v. Salassi, 08-0510 (La. App. 5 Cir. 5/12/09), 13 So.3d 670.

During the marriage, Mr. Salassi bought his aunt’s interest in family prop-erty. His wife executed an acknowledge-ment that the property was his separate property. He later gratuitously donated a fractional interest in the property to his wife. After they divorced, she sought unsuccessfully to annul her acknowl-edgement based on fraud and duress. Mr. Salassi then successfully sued to revoke the donation, contending the accusations in the petition to annul constituted ingrati-tude. The court of appeal affirmed.

Procedure

Lirette v. Wickramasekera, 08-0575 (La. App. 4 Cir. 5/13/09), 13 So.3d 744.

The appropriate method to ask the court to revise a judgment to address an issue not addressed in the judgment is by a motion for new trial or appeal, not by a “motion for clarification.”

—David M. PradosMember, LSBA Family Law Section

Lowe, Stein, Hoffman, Allweiss& Hauver, L.L.P.

Ste. 3600, 701 Poydras St.New Orleans, LA 70139-7735

Fidelity, Surety and Construction Law

Statutory Employer

In 1997, the Louisiana Legislature codi-fied the doctrine of “statutory employer” in La. R.S. 23:1061 to provide a “rebut-table presumption of a statutory employer relationship between the principal and the contractor’s employees.” This allows the principal (the person or entity hiring the contractor) to resist a tort claim and have the ability to assert workers’ compensation defenses against negligence claims by the contractor’s employees. Per the statute, the manner by which an employee would overcome this presumption would be to show that the work performed is not “an integral part of or essential to the ability of the principal to generate that principal’s goods, products, or services.”

The law as amended in 1997 requires that the contracting principal have in its contract between it and the contractor lan-guage that specifically declares that there is a statutory employer-employee relationship between the principal and any of the con-tractor’s employees performing work under the contract. When effective, the import of the statute is to insulate the principal from suit by the contractor’s employees for negligence, relegating those employees to workers’ compensation remedies.

Even when such a statutory employer

clause is used, it isn’t always effective. In Prejean v. Maint. Enters., 08-0364 (La. App. 4 Cir. 3/25/09), 8 So.3d 766, an em-ployee of a contractor hired by Murphy Oil sued Murphy for injuries received when a plug blew out of a pipe and struck the plaintiff in the face. Murphy sought to be extricated from the claims of negligence on the basis that it occupied the role of statu-tory employer of the plaintiff, citing to a statutory-employer clause in the Murphy Oil subcontract at issue. The plaintiff op-posed Murphy on the point, arguing that his employer’s subcontract with Murphy contained limiting language that obligated Murphy to pay workers’ compensation only if certain other parties otherwise responsible to the plaintiff for workers’ compensation were “unable to meet their obligation under the Louisiana Compensation Statute....” The trial court agreed with the plaintiff and rejected Murphy’s motion seeking dismissal of negligence claims against it, whereupon Murphy sought writs to the Louisiana 4th Circuit Court of Appeal.

The court of appeal phrased the issue be-fore it as “whether the terms and conditions of the contract, which purports to confer the statutory benefits of being an ‘employer,’ i.e., immunity from tort liability, may none-theless disregard the statutory obligations of the employer.” [Emphasis in original.] Maintaining the original judgment of the trial court against Murphy, the court of ap-peal determined that the limitation inserted in the Murphy subcontract constituted “an impermissible and unlawful condition to relieve Murphy Oil, the purported statutory employer, of its direct obligation to the injured worker.” Holding that the statutory employer contract clause must confer “a

266 December 2009 / January 2010

benefit, i.e., an unconditional right to im-mediately prosecute a claim for workers’ compensation benefits” against either the statutory employer, the actual employer, “or both,” the court of appeal rejected Murphy’s appeal. Two judges of the five-judge panel dissented from the plurality opinion, and a third judge concurred with the result, although apparently not the reasoning, of the opinion.

Stored Materials

In Boh Bros. Constr. Co. v. State, 08-1793 (La. App. 1 Cir. 3/27/09), 9 So.3d 982, writ denied, 09-0856 (La. 6/5/09), 9 So.3d 870, the general contractor on a state-owned bridge project in Louisiana suffered damages when a storm surge from Hurricane Katrina inundated a warehouse in Pearlington, Miss. The warehouse was owned by a fabricator, and certain fabri-cated materials had been manufactured and stored there. At the time the storm hit, the state had already paid the general contractor for the stockpiled materials, and the general contractor had paid the

manufacturer/supplier.When the damage occurred, the general

contractor requested, to no avail, that the Louisiana Department of Transportation and Development (DOTD) (the public owner) pay the cost of refabricating the damaged materials. The DOTD took the position that materials stored offsite were not a part of the “work” until incorporated into the project, and all responsibility and risk, therefore, remained with the general contractor. The general contractor sued.

In the litigation, the general contractor urged that a document incorporated into the general contract — the Louisiana Standard Specifications for Roads and Bridges, 2000 Edition (the Red Book) — contained within it a provision that adjusted the rights of the parties differently than proposed by the DOTD. Section 107.19 of the Red Book contained the general declaration that the general contractor maintained “charge and care of the work” and would “bear the ex-pense” of damages, including theft and van-dalism, to the work before final acceptance, but excepting the following: “Damage due to Acts of God such as earthquake, tidal

wave, tornado, hurricane or other cataclys-mic phenomenon of nature....” Despite this provision, the DOTD argued that Section 109.07 of the Red Book declaring that the DOTD obtained no ownership interest in stockpiled materials — even if the DOTD had already paid for those materials — eliminated any responsibility of the DOTD to pay for damage to the materials.

Ruling in favor of the general contractor and against the DOTD (and requiring the DOTD to absorb the cost for replacing the damaged materials), the court — reading together the two potentially conflicting Red Book provisions — held that the exception regarding Acts of God was controlling, noting that nothing in the provisions in Section 109 of the Red Book dealing with stored materials touched in any manner on the more specific provisions in Section 107.19 dealing with damage to the work. A single judge dissented, opining that the Act of God provision should have been applied only to materials at the work site (and not materials “stored by an out-of-state manufacturer in its warehouse”).

Louisiana Bar Journal Vol. 57, No. 4 267

Securities Arbitration/Litigation

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electronic Bids

La. R.S. 38:2212.1 was amended in 2008 to provide contractors the option to submit bids for public contracts by electronic means. After its enactment (as Act 590 of the 2008 Regular Legislative Session), the author of the House bill sought the opinion of the Louisiana attorney general on the extent to which the provisions of the Act applied to all contracts requiring any type of competitive bidding. In particular, the state legislator inquired as to the applicability of the electronic bidding procedures to certain competitive bids under La. R.S. 38:2212.1 for purchases of materials and supplies. Underpinning the inquiry is apparently the aspect of the new law governing electronic bids that obliges political subdivisions with high-speed Internet access to provide bidders with the option to submit bids for public contracts through an electronic interactive system.

In Opinion No. 08-0222, the Louisiana attorney general stated that the new law gov-erning electronic bids, although applicable generally to La. R.S. 38:2212.1 governing bids for purchases of materials or supplies, would not be applicable to subpart A(1)(b) of that statute dealing with purchases valued between $10,000 and $20,000. That subpart of the statute provides that pur-chases between the stated dollar amounts may be accomplished outside the normal bidding strictures “by obtaining not less than 3 telephone or facsimile quotations” and also makes certain exceptions for ac-ceptance of bids higher than the lowest received. According to the attorney general, because the new law governing electronic bidding is limited specifically to the “formal competitive bidding process” — which is not at issue with the “informal expedited procurement process outlined in” subpart A(1)(b) procurement of this statute — the electronic-bidding requirements imposed on public entities are not applicable to purchases of materials and supplies in the $10,000-$20,000 range.

—Daniel Lund IIIMember, LSBA Fidelity, Surety and

Construction Law SectionShields Mott Lund, L.L.P.Ste. 2600, 650 Poydras St.

New Orleans, LA 70130

Insurance, Tort, Workers’ Compensation & Admiralty Law

Admiralty: Characterization of Contracts

Alleman v. Omni Energy Servs. Corp., 580 F.3d 280 (5 Cir. 2009).

Omni and W&T Offshore, Inc. had a contract, under which Omni would provide services to W&T. The contract contained a mutual indemnity clause, under which each company agreed to indemnify the other against claims made by its employees, and a choice of law clause that stated, “The general maritime law of the United States shall govern this Contract.” According to the terms of a letter addendum to the contract, Omni agreed to provide “certain aircraft services.”

An Omni helicopter was flying three W&T subcontractors between W&T offshore platforms. During a landing, the helicopter’s main rotor struck the platform, causing the aircraft to skid about the helipad before falling into the Gulf of Mexico. Alleman and another passenger were injured, while the third passenger, Bert Hollier, was in the water for two hours and died of a heart attack during rescue.

Several cases were consolidated and, on cross-motions for summary judgment, the district court held that the contracts between Omni and W&T are governed by the Outer

Continental Shelf Lands Act (OCSLA), not maritime law. Under OCSLA, Louisiana law, and specifically the Louisiana Oilfield Indemnity Act (LOIA), applies, making the indemnity provisions invalid. The court further held that Hollier’s tort claims are governed under the Death on the High Seas Act (DOHSA), not OCSLA.

Applying its three-part test enunciated in Union Texas Petroleum Corp. v. PLT Engineering, Inc., 895 F.2d 1043, 1047 (5 Cir.1990), the 5th Circuit found no dispute that the controversy arose “on a situs covered by OCSLA, i.e., the subsoil, seabed, or artific[i]al structures permanently or temporarily attached thereto,” or that Louisiana law is not inconsistent with federal law. The sole remaining question was whether federal “maritime law applies to the contract of its own force. If so, OCSLA would not apply.” If, however, OCSLA does apply, LOIA would bar the indemnity provision of the contract. “Parties cannot choose to be governed by maritime law when OCSLA applies.”

Citing Hoda v. Rowan Cos., Inc., 419 F.3d 379, 380 (5 Cir. 2005), the 5th Circuit stated in a masterpiece of understatement: “Determining whether a contract is maritime is a well-trod but not altogether clear area of the law.” The court began its analysis by citing several 5th Circuit and U.S. Supreme Court opinions that lean heavily on the “nature and subject matter” of the contract and whether it has “reference to maritime service or maritime transactions.” The 5th Circuit looks to:

268 December 2009 / January 2010

six fact-specific factors: 1) What does the specific work order in effect at the time of the injury provide? 2) What work did the assigned crew . . . actually do? 3) Was the crew assigned to work aboard a vessel in navigable waters? 4) To what extent did the work being done relate to the mission of that vessel? 5) What was the principal work of the injured worker? and 6) What work was the injured worker actually doing at the time of injury?

“[I]t is clear that Omni was instructed to fly workers to an oil platform, and that the workers were simple passengers on their way to a platform.” Affirming the district court’s judgment on the maritime contract issue, the court concluded that “as the subject matter of this contract is aviation services, which are not governed by maritime law, . . . a contract to ferry workers to offshore oil platforms is not a maritime contract.”

As to Hollier’s tort claims, the 5th Circuit, reversing the district court, cited Smith v. Pan Air Corp., 684 F.2d 1102 (5 Cir. 1982):

We have applied OCSLA and, consequently, state law, to incidents in which platform workers who were the victims of torts originating on these artificial islands were not actually injured or killed until they fell, jumped, or were pushed into the surrounding seas.

Hollier’s claims were governed by OCSLA, not DOHSA.

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international Law

World Trade Organization

United States-Subsidies on Upland Cotton, (WT/DS267/ARB/1) and (WT/DS267/ARB/2).

On March 21, 2005, the WTO Dispute Settlement Body adopted certain findings of the dispute-settlement panel regarding Brazil’s complaints about U.S. cotton subsidies that violated the Subsidies and Countervailing Measures Agreement. The United States enacted several measures to bring the subsidies into compliance with the ruling. However, Brazil challenged those measures as falling short of full com-pliance. The Appellate Body agreed, and Brazil sought to institute countermeasures in the form of import tariffs on U.S. goods and additional suspension of obligations

Louisiana Bar Journal Vol. 57, No. 4 269

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under the WTO intellectual-property agreement, including a request to produce certain pharmaceutical products under patent. The United States objected to the amount and type of countermeasures, and the matter was referred to arbitration.

The arbitrator faced an important issue with respect to Brazil’s request to retaliate by producing goods under patent. The violation in this case involved trade in goods, but Brazil sought to retaliate not just by increasing tariffs on U.S. goods, but also to cross-retaliate under DSU article 22.3 on intellectual property. DSU article 22.3 allows cross-retaliation where it is not “practicable or effective to suspend concessions or other obligations” with respect to the same sector or other sec-tors under the same agreement. In that instance, the party may suspend conces-sions or other obligations under another covered agreement. Any suspension of concessions allowing for manufacture of patented pharmaceuticals could have a major impact on an important U.S. industry. The arbitrator concluded that Brazil is entitled to retaliate on a yearly basis in the amount of U.S. $294.7 mil-lion. However, that amount may change up or down depending upon the amount of subsidies provided by the United States and the total amount of imports into Bra-zil. If the adjusted amount is below that monetary threshold, the arbitrator ruled that Brazil could sufficiently retaliate in the goods sector. However, if the amount is above that monetary threshold, Brazil could cross-retaliate and suspend con-cessions or obligations under the WTO intellectual-property agreement.

United States

Presidential Determination No. 2009-29 (Sept. 11, 2009).

Despite pledges by the United States and other members of the Group of 20 de-veloped countries to refrain from enacting protectionist measures in response to the worldwide economic recession, President Obama became the first president to use a China-specific law to increase tariffs on imported tires from China. Section 421 of the Trade Act of 1974 allows the President, upon recommendations from

the International Trade Commission, to unilaterally impose tariffs on goods from China without any evidence of injury to the domestic industry. The threshold standard is that the goods are being im-ported into the country in such increased quantities that they cause or threaten to cause market disruption to the domestic manufacturers. The Presidential Deter-mination imposes tariffs on imports of certain passenger vehicle and light truck tires from China for a period of three years. The increased tariff amount is 35 percent in the first year, 30 percent in the second year and 25 percent in the third year.

China responded quickly to the Presi-dential action by immediately requesting consultations with the United States at the WTO. China also immediately ordered a domestic antidumping investigation regarding U.S. exports to China of poultry and auto parts.

Foreign Manufacturers Legal Ac-countability Act of 2009 (S. 1606, 111th Congress, 1st Session).

In the wake of the outcry over allegedly defective products manufactured overseas and the inability of U.S. consumers to obtain jurisdiction over the manufactur-ers for potential liability, the U.S. Senate introduced bipartisan legislation in the 111th Congress aimed at securing juris-diction over foreign manufacturers. The proposed legislation applies to drugs, devices and cosmetics under the Federal

Food, Drug and Cosmetic Act (21 U.S.C. 321); biological products under the Public Health Service Act (43 U.S.C. 262(i)); consumer products under the Consumer Product Safety Act (15 U.S.C. 2052); chemical substances under the Toxic Sub-stances Control Act (15 U.S.C. 2602); and pesticides under the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136). Foreign manufacturers or produc-ers of covered products are required to establish a registered agent for service of process for purposes of consenting to jurisdiction for all civil and regulatory actions in state and federal courts. The Department of Homeland Security is charged with prohibiting imports from any manufacturer that fails to establish a registered agent.

—Edward T. HayesMember, LSBA International

Law SectionLeake & Andersson, L.L.P.Ste. 1700, 1100 Poydras St.

New Orleans, LA 70163

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270 December 2009 / January 2010

Labor and Employment Law

Criminal Prosecution for employers Who Hire

Illegal Aliens

In his speech to Louisiana residents at a town hall meeting in New Orleans on Oct. 15, 2009, President Obama announced that his administration will redouble efforts to prosecute employers who purposefully hire illegal immigrants. The President’s remarks concerning the government’s worksite-enforcement strategy did not mark a change in the law. Hiring undocumented workers is illegal. See 8 USC § 1324. Employers who hire undocumented workers may either be subject to civil liability, or fined and imprisoned for up to five years. See 8 USC §§ 1324 et seq.

But the President’s remarks do indicate a change in the government’s efforts to fight illegal immigration. In the past, the government typically did not prosecute the employers who hired illegal aliens; rather, the government fought illegal immigration mainly by arresting and deporting undocumented workers. Now, however, the President said the government will fight illegal immigration by directly prosecuting business owners and managers who violate federal immigration laws.

The government’s worksite-enforcement strategy has already

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succeeded in convicting employers who violate federal immigration laws. In fall 2008, four Lake Charles businessmen were convicted of criminal conspiracy to harbor aliens following a 10-day jury trial in the Western District of Louisiana. See United States v. Ryder, W.D. La., No. 2:06-cr-20103 (2008). On Aug. 7, 2009, Shipley Do-Nut Flour and Supply Co., Inc., a Houston company with operations in Louisiana, was sentenced to three years’ court supervision, a criminal fine of $250,000 and forfeiture of $1.334 million in profits to U.S. Immigration and Customs Enforcement (ICE) for harboring illegal aliens. See U.S. Immigration and Customs Enforcement, News Releases, Houston-based Doughnut Company Ordered to Pay Criminal Fines and Forfeit $1.334 Million to ICE, available at http://www.ice.gov/pi/nr/0908/090807houston.htm. Some of the company’s managers even pleaded guilty to misdemeanor charges of hiring or continuing to hire illegal aliens and were sentenced to probation and criminal fines. In September 2009, an Arkansas poultry processing company paid a $450,000 fine as part of a settlement resolving charges that followed a worksite-enforcement action. See United States v. George’s Processing Inc., W.D. Mo., No. 3:09-cv-05069-RED, consent decree approved 9/10/09. The settlement was reached shortly after the U.S. Attorney for the Western District of Missouri sued the company and convicted some of the company’s managers for harboring illegal aliens. See 23 BNA 38 (9/24/09) at 1518.

Each of these cases illustrates the worksite-enforcement policy that President Obama promoted in his New Orleans

speech. Rather than simply arresting and deporting the illegal aliens who come to the United States to work, the government will now specifically target the CEOs and human-resources professionals who hire them. ICE recently stated that “the criminal prosecution of employers is a priority of ICE’s worksite enforcement program and interior enforcement strategy.” See Worksite Enforcement Strategy Memorandum, U.S. Immigration and Customs Enforcement (4/30/09), available at http://www.immigrationsolution.net/immigration-solutions-blog/?tag=4302009-ice-memo-and-worksite-enforcement-strategy. To accomplish this goal, the government has committed itself to prioritizing the criminal prosecution of the actual employers who knowingly hire illegal workers because “employers are not sufficiently punished or deterred by the arrest of their illegal workforce.” Id.

Because the government will refocus immigration enforcement activities toward business owners and managers who hire illegal aliens, employers must comply with federal immigration laws to avoid civil and criminal liability. First, employers must complete within three days of an employee’s hire an I-9 Form for each employee who is hired. 8 CFR § 274. To complete an I-9 Form, an employer must review the employee’s work authorization documents (i.e., Social Security cards, green card, employment authorization document, etc.) to confirm that the employee is lawfully authorized to work in the United States. 8 CFR § 274a.2. Employers who properly complete I-9 Forms have a rebuttable affirmative defense if they are prosecuted for violating federal immigration laws. 8 CFR § 274a.4.

Second, employers should enroll in the government’s E-Verify program. E-Verify is an Internet-based system that allows an employer, using information reported on an employee’s Form I-9, to determine the eligibility of that employee to work in the United States. See E-Verify User Manual, U.S. Citizenship and Immigration Service (March 2009), available at http://www.uscis.gov/files/nativedocuments/E-Verify_Manual.pdf. Although E-Verify is mandatory for certain employers who do business with the government as

Louisiana Bar Journal Vol. 57, No. 4 271

federal contractors and subcontractors, the program is currently optional for all other employers. See Labor Law Reports 868 (9/16/09) at 1. Until comprehensive immigration reform is achieved, E-Verify is one of the few tools employers may use to protect themselves from federal liability concerning undocumented workers.

Presently, the U.S. Citizenship and Immigration Services (USCIS) expects (1) that comprehensive immigration reform will mandate E-Verify to all U.S. employers and (2) that comprehensive immigration reform will include a path to citizenship for the estimated 12 million undocumented immigrants already in the United States. 23 BNA 37 (9/19/09) at 1465. Although President Obama expected a comprehensive immigration bill to be introduced this year, it is more likely that the legislation will move forward in 2010 due to delays associated with economic recovery and health-care reform. See 23 BNA 33 (8/18/09); see also 23 LRW 1071 (7/2/09). Until comprehensive immigration reform is achieved, employers will likely continue to be subjected to the government’s worksite-enforcement activities on an escalating basis (see Employment Law Daily Document Updates, Grassley seeking employer accountability in H-1B visa program – Immigration News, ¶ 69945D (10/1/09)), and, therefore, should immediately implement programs to comply with federal immigration laws.

—Brandon E. DavisMember, LSBA Labor and Employment Law Section

Phelps Dunbar, L.L.P.Ste. 2000, 365 Canal St.

New Orleans, LA 70130-6534

Mineral Law

employees of Operators are not Liable for Lessors’ Property Contamination

Claims

In Kling Realty Co., Inc. v. Chevron U.S.A., Inc., 575 F.3d 510 (5 Cir. 2009), plaintiffs brought suit in state court against Chevron and two other defendants, alleging that oil and gas activities of Chevron’s predecessor had contaminated the plaintiffs’ land. The plaintiffs were Louisiana citizens, as were the two defendants other than Chevron, which was not a Louisiana citizen. Chevron removed the case to federal court, arguing that the non-diverse defendants had been improperly joined, and the plaintiffs responded by moving to remand. The district court denied the plaintiffs’ motion and dismissed the plaintiffs’ claims based on prescription. The plaintiffs appealed.

The United States 5th Circuit affirmed. The plaintiffs had waived any argument that one of the non-Chevron defendants had been properly joined, so the court’s analysis of the remand issue focused on the other non-Chevron defendant, who had been a supervisor for oilfield operations. The 5th Circuit noted that if a case would be removable in the absence of a defendant who has been joined improperly, the case may be removed notwithstanding that defendant. A defendant is improperly joined if (1) the plaintiff commits fraud in pleading jurisdictional facts or (2) the plaintiff has no reasonable possibility of establishing a cause of action against the defendant.

The 5th Circuit stated that the Louisiana Supreme Court’s decision in Canter v. Koehring Co., 283 So.2d 716 (La. 1973), sets forth the requirements a plaintiff must satisfy to establish personal liability against an employee-defendant for harms arising from that defendant’s employment. The 5th Circuit further noted that it previously had held that Canter liability applies only to bodily injury claims and not to property

damage claims. Because the Kling plaintiffs alleged only property damages, they had no reasonable possibility of establishing liability against the non-diverse employee-defendant. Therefore, removal was proper. The court then went on to affirm the dismissal of plaintiffs’ claims based on prescription.

Act 312’s Scheme for Involving DNR in

Remediation Plans and Burford Abstention

In C.S. Gaidry, Inc. v. Union Oil Co., 2009 WL 2765814 (E.D. La. 2009), plaintiffs who were citizens of Louisiana filed suit in state court against three corporations who were not citizens of Louisiana, as well as against four corporate employees who were citizens of Louisiana. The plaintiffs sought damages for alleged contamination of their land. The defendants removed the case to federal court, asserting that the employee-defendants had been improperly joined, and that without those defendants complete diversity existed. The plaintiffs moved to remand. Relying on the U.S. 5th Circuit opinion in Kling, the district court agreed that the employee-defendants had been improperly joined and, therefore, removal was proper.

The plaintiffs also argued that the court should remand under Burford abstention. The Burford abstention doctrine originated in Burford v. Sun Oil Co., 63 S.Ct. 1098 (1943), in which a party challenged an oil-well drilling permit issued by the Texas Railroad Commission. Burford noted that regulation of oil fields was a matter of great public importance, that Texas had established a comprehensive system of administrative and judicial review, and that federal court action would interfere with that system. Accordingly, although federal jurisdiction existed in Burford, it was appropriate for the federal court to decline to exercise its jurisdiction. Subsequent decisions have concluded that factors relevant to deciding whether Burford abstention is appropriate include the difficulty of state law issues involved in the case and whether the state has established a special forum for judicial review of the type of case at issue.

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272 December 2009 / January 2010

See, e.g., Moore v. State Farm Fire & Cas. Co., 556 F.3d 264, 272 (5 Cir. 2009).

The C.S. Gaidry plaintiffs argued that Burford abstention was proper because Louisiana law mandates involvement by the Louisiana Department of Natural Resources (DNR) when landowners successfully sue oil and gas operators for contamination of land. Driven by concern that some plaintiffs might collect a money judgment based on contamination, but not remediate their land, the Louisiana Legislature enacted La. R.S. 30:29 in 2006. The statute requires a defendant found liable for contamination to submit a plan for remediation to DNR. Plaintiffs are allowed to submit their own plans to DNR or submit comments on the plan submitted by the defendants who were found liable. After DNR approves a plan, the court must approve either that plan or another plan shown by a preponderance of the evidence to be superior, and the defendants found liable must then fund the court-approved remediation plan.

In C.S. Gaidry, the court stated that the case did not involve difficult questions of state law and that Louisiana had not created a special forum for adjudication of suits involving contamination claims. State law simply established procedures for DNR to approve a remediation plan and for the trial court to accept either that plan or another plan shown by a preponderance of the evidence to be superior. In the event a defendant in federal court was found liable for contamination, the federal district court could follow the same procedures as a state district court. This would have little or no “potential to disrupt highly centralized State administrative mechanisms.” Accordingly, Burford abstention was not appropriate and the federal court continued to exercise jurisdiction.

—Keith B. HallMember, LSBA Mineral Law Section

Stone Pigman Walther Wittmann, L.L.C.546 Carondelet St.

New Orleans, LA 70130

Professional Liability

Physician, Nurse Contest Trial Court’s Grant of Summary Judgment

Grimes v. La. Med. Mut. Ins. Co., 09-0292 (La. App. 1 Cir. 9/11/09), ____ So.3d ____.

Shoulder dystocia was encountered during delivery, and the child then suf-fered a brachial plexus injury. Following a medical-review panel’s finding that there was no breach of the standard of care by either of the two attending obstetricians (Solar and Andrus) or Woman’s Hospi-tal of Baton Rouge, a lawsuit was filed against all three. One of the negligence allegations was that a hospital-employee nurse was “ordered and/or permitted” to apply inappropriate abdominal pressure

Louisiana Bar Journal Vol. 57, No. 4 273

in an attempt to deliver the child.Woman’s Hospital filed a motion for

summary judgment in which it contended that Dr. Solar was in control of the nurses during the delivery; thus, the hospital could not be liable for the negligence of its nurse-employee. Both physicians and LAMMICO opposed the motion. The court rendered judgment in favor of the hospital and dismissed plaintiffs’ claims against it. The physicians and LAM-MICO appealed, relying in part on Hol-lingsworth v. Bowers, 96-257 (La. App. 3 Cir. 12/30/96), 697 So.2d 825, for the proposition that Dr. Solar was in control of the nurses and, as such, was vicariously liable for their alleged negligence.

The court discussed the “captain of the ship” doctrine, noting that it developed at a time when hospitals were shielded from liability for their own employees’ negligence because of the “charitable immunity” defense. The concept of chari-table immunity for hospitals was rejected in Garlington v. Kingsley, 289 So.2d 88 (La. 1974). Prior to the Garlington deci-sion, the Supreme Court decided Grant v. Touro Infirmary, 223 So.2d 148, 154 (La. 1969), in which it limited the captain of the ship doctrine and focused instead on the importance of supervision and control by the surgeon before vicarious liability could be imposed under a borrowed ser-vant theory. The borrowed servant theory was rejected in Grant. However, Grant was decided under early law with respect to borrowed servants — the “one master” rule repudiated in Lejeune v. Allstate Ins. Co., 365 So.2d 471 (La. 1978), which held that both the general and special employer could be solidarity liable to third parties injured by the negligence of a borrowed employee. See, Morgan v. ABC Manufacturer, 97-0956 (La. 5/1/98), 710 So.2d 1077, 1080, 1082. The Supreme Court in Morgan reaffirmed the two masters/dual employer rule “as the more sensible rule, supported by the continu-ing development in the law of employer liability or respondeat superior.” While the borrowed servant doctrine focuses on which employer controlled the em-ployee’s actions, “modern justification” for employer liability was based less on the employer’s control than on the “concept of enterprise liability.” The Morgan court,

quoting Emert v. Hartford Ins. Co., 559 So.2d 467 (La. 1990), said:

The master’s vicarious liability for the acts of the servant rests not so much on policy grounds consistent with the governing principles of tort law as in a deeply rooted sentiment that a business enterprise can not justly disclaim responsibility for accidents which may be fairly be said to be characteristic of its activities.

The Grimes court held that when the general employer’s business is to lend employees or equipment to others, its business “is being furthered even if it does not control the details of the work.” Also, the special employer derives benefits because its work is being done as well: “Therefore, both the general and special employer are liable in solido for damages occasioned by the borrowed employee.” (See Morgan, 710 So.2d at 1082-83.)

Based on these principles, the Grimes court ruled that whether Dr. Solar was in charge of the delivery room and whether the hospital’s employees were under her immediate supervision and control were not the controlling issues. Rather, the prin-cipal issue was whether the hospital was the general employer during the delivery and, therefore, jointly liable with Dr. Solar for any alleged negligence.

There was no dispute that the hospital was the general employer of the nurses at the time of delivery, which led the court to conclude that:

if it is determined that the nurses were negligent in providing medical care during Zavian’s delivery, even if determined to be at the direction of Dr. Solar, Woman’s Hospital could still be found vicariously li-able jointly with Dr. Solar under the legal precepts outlined above.

The Grimes court concluded that the trial court erred in absolving the hospital of any potential vicarious liability and reversed the granting of summary judg-ment in the hospital’s favor.

2009 Legislation

HB 517, Act 372, adds La. R.S. 40:1299.35.9 and 1300.291 and allows health-care workers to refuse to par-ticipate in abortions, stem-cell research and human embryo cloning on religious grounds without civil or criminal liability or adverse employment actions.

HB 890, Act 314, adds La. R.S. 40:962.1(E), 962.1.1(F), 964(E), 1006(E) and (F), and R.S. 40:1049.1-1049.11, and repeals R.S. 40:9621.1.1(D) and 962.1.2. Immunity is provided for pharmacists, certified pharmacy technicians or phar-macy employees for any act or omission resulting in damage, injury or loss arising out of the sale and monitoring of non-prescription products containing ephed-rine, pseudoephedrine or phenylpropa-nolamine, except for gross negligence or willful or wanton misconduct.

SB 106, Act 231, adds La. R.S. 29:735.5. Immunity is provided for any health-care provider or health-care personnel who render or fail to render health-care services, first aid, ambulatory assistance or transportation anywhere in Louisiana in the course of and resulting

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from an evacuation, sheltering, transpor-tation or repopulation of a health-care provider facility during a declared state of emergency, unless the damages are caused by gross negligence or willful and wanton misconduct. This immunity extends for 30 days after the end of the ini-tial declared state of emergency. “Health care personnel” includes all employees and volunteers of a health-care provider facility, a mobile medical unit, and the officers, directors, shareholders, partners, members or managers of legal entities that own or operate such a facility.

SB 107, Act 397, adds La. R.S. 29:781-792 and repeals R.S. 29:735.2(A). The Uniform Emergency Volunteer Health Practitioner’s Act creates an interstate recognition of medical licenses held by volunteer medical professionals who register with a multi-state compact. Im-munity is provided for such personnel during emergency periods, and the statute

defines “volunteer health practitioner” as one who provides health services, regardless of compensation, as long as the person receiving the health services does not pay. The practitioner is immune except in instances of willful misconduct or wanton, grossly negligent, reckless or criminal conduct. There is no vicarious liability for damages if the practitioner is not also liable.

HB 671, Act 14, amends La. R.S. 40:1299.39(A)(1)(a)(ii) and 1299.41(A)(10). Nurse practitioners and clinical nurse specialists are now included under the protections of the Medical Malpractice Act.

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Amendment of Code of Civil Procedure Articles

Relating to Small Successions

Act No. 81 of the 2009 Louisiana legislative session, which amends articles 3421 et seq. of the Louisiana Code of Civil Procedure, significantly changes the procedures to be followed in connection with a small succession.

Currently, La. C.C.P. art. 3421 defines a small succession as “the succession of a person who dies leaving property in Louisiana having a gross value of fifty thousand dollars or less.” Effective Jan. 1, 2010, however, a small succession will be defined as “the succession of a person who dies leaving property in Louisiana,

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Trusts, estate, Probate & immovable Property Law

Louisiana Bar Journal Vol. 57, No. 4 275

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the deceased’s interest in which has a gross value of seventy-five thousand dollars or less.” The distinction between the two definitions is a subtle but important one. Under the current definition, the $50,000 limit applies to the entire property. But under the definition that will take effect on Jan. 1, 2010, the increased limit of $75,000 will apply only to the deceased’s interest in the property. Unfortunately, it is not clear whether the $75,000 limit is applicable to all of the deceased’s property, or just the deceased’s immovable property.

Other important changes to the statu-tory mechanism take effect immediately. Under prior law, a small succession was not required to be opened judicially as long as the decedent owned no immovable property (other than, grimly, an owner-ship interest in his or her cemetery plot). Under the new law, a small succession may be opened non-judicially even if it includes an ownership interest in “small succession immovable property,” defined as “a single lot or contiguous lots on which is situated a single building... that contains not more than four dwelling units, each of which has as its primary use as a residence.” La. C.C.P. art. 3431. The law also requires that such property shall have been the residence of either the deceased or surviving spouse (or last place of residence of either the deceased or surviving spouse if neither was resid-ing in that residence on the date of death because of illness, incapacity, natural disaster or destruction). The references to a natural disaster or destruction are most likely included in the legislation as a result of the myriad problems created by Hurricanes Katrina and Rita.

What would happen if an individual evacuates his or her home ahead of a storm that ultimately creates widespread dam-age, but spares that individual’s residence? And what happens if that individual is ill or elderly and chooses to live out the remainder of his or years in another state? Would a court hold that such individual was not residing in the home from which he or she evacuated as a result of a natural disaster, even if the residence was not damaged at all?

Under the new law, the affidavit of death, domicile and heirship must now be signed by at least two persons, in-

cluding the surviving spouse, if any, and one or more competent major heirs of the deceased. In addition to the current requirements, the new law requires that the affidavit set forth, among other things, the following:

(i) the names and last known ad-dresses of the heirs of the deceased, their relationship to the deceased, and a statement that the heir not signing the affidavit (a) cannot be located after the exercise of reasonable diligence, or (b) was given ten days’ notice by U.S. mail of the affiants’ intent to execute an affidavit for small succession and did not object;

(ii) a statement describing the re-spective interests in the property which each heir has inherited and whether a legal usufruct of the surviving spouse attaches to the property; and

(iii) an affirmation . . . that the affi-ants swear under penalty of perjury that the information contained in the affidavit is true, correct and complete to the best of their knowl-edge, information and belief. If the deceased had no surviving spouse and only one heir, the affidavit must also be signed by a second person who has actual knowledge that the matters stated therein are true, correct and complete to the best of his/her knowledge, information and belief.

After at least 90 days following the date of the deceased’s death, a multiple original of the affidavit, together with a certified copy of the deceased’s death certificate, shall be recorded in the con-veyance records of the parish where any small succession immovable property is situated. La. C.C.P. art. 3434. The recorded affidavit shall be admissible as evidence in any action involving small succession immovable property to which it relates, and shall be prima facie evidence of the facts stated therein, including the relationship to the deceased of the parties recognized as heir, surviving spouse or

usufructuary, as applicable, and of their rights in the small succession immovable property of the deceased.

An action by a person who claims to be a successor of a deceased person but who has not been recognized as such in the affidavit to assert an interest in small succession immovable property against a third person who has acquired an inter-est in such property is prescribed in two years from the date of the recording of the affidavit.

—Chad P. MorrowMember, LSBA Trusts, Estate, Probate and Immovable Property Law Section

Sher Garner Cahill RichterKlein & Hilbert, L.L.C.

909 Poydras St., 28th Flr.New Orleans, LA 70112