How the bases loaded for the Fifth’s Opinion in Harrington v State Farm

Once State Farm strikes out at Fifth Circuit with the bases loaded posted, Sop commented, I’d like to know who these magistrate judges are that can’t get these simple rulings right Nowdy.

After several other comments, including my reply that I had not intended to suggest magistrate judges made the decisions in Harrington, Sop came back with I’d still like the names of the district court judges on these three cases.

With that second request, I began thinking about sending Sop a message in a bottle – a bottle of OPI.

Had I not picked up the Editilla’s MRGO story and needed the Order, I might be wrapping a package instead of writing this post; but, while I was on PACER, I looked around and found Sop’s answer.

The bases were loaded when Judge Porteous walked two and Judge Feldman walked one.

However, neither Judge made a simple ruling.  Judge Porteous said as much, in fact, according to the Transcript of the last hearing he held on the matter:

I understand your position, but I’ve got different bodies now reading the documents. Again, I don’t read any attempt to deceive, bad faith, I don’t read any of that. Nothing about this suggests to me that I have a bad faith situation. I personally know all of the attorneys in this thing so I can’t believe you would come in here and intentionally try to confuse me, although I am easily confused sometimes.

Since I don’t know the the judges of the Fifth Circuit, much less well enough to suggest they were thinking this is why the letters W, T, and F were invented as they were reading,  I’ll just compliment them for writing an Opinion that was appropriately circumspect and move on to a review of the documents I read.

In the Memorandum in Support of Plaintiffs’ Motion for Relief from Judgment Pursuant to Rule 60(a) and (b) FRCP, I learned more about the background on Harrington and Benit.

The six Harrington plaintiffs filed suit in St. Tammany Parish on August 28, 2007, seeking damages related to Hurricane Katrina from State Farm Fire and Casualty Company (“State Farm”), their homeowners’ insurer. The 31 plaintiffs in the Benit case filed suit in St. Bernard Parish on August 21, 2007, seeking Katrina-related damages from State Farm, which was also their homeowners’ insurer. State Farm removed the Harrington case on October 29, 2007, rec.doc. 1 (Harrington), and the Benit case on October 11, 2007, rec.doc. 1 (Benit). State Farm filed in each of the two cases a virtually identical motion to dismiss under Rule 12(b)(6), Fed.R.Civ.P., and both motions were set for hearing on Wednesday, January 16, 2008. rec.doc. 4 (Harrington), rec.doc. 5, 9 (Benit). State Farm filed its Answer in both cases on January 3, 2008. rec.doc. 8 (Harrington), rec.doc. 10 (Benit).

I can’t begin to explain what else I learned about these cases that led to Harrington on first base and Benit on second when the Fifth Circuit panel rendered its Opinion.  The best explanation of how that happened was found in the exhibits enclosed with the Memorandum, specifically in the unsworn statement of Plaintiffs’ attorney Stuart Thomas Barasch quoted in its entirety at the end of this post.

Although the Fifth Circuit agreed with Barasch, it’s instructive to read the Defendant’s Memorandum in Opposition to Plaintiffs’ Rule 60 Motion for Relief from Judgment that State Farm filed in Benit, presumably with a straight face and honorable intent.

The plaintiffs argue that they are entitled to relief from judgment based on Rule 60(a), which provides a means for the court to correct a clerical error or mistake, or in the alternative, pursuant to Rule 60(b)(1), for alleged mistake, inadvertence, surprise, or excusable neglect, or pursuant to the “catch-all” provision of Rule 60(b)(6).   However, as will be shown below, the plaintiffs are not entitled to relief from this Court’s judgment dismissing their case for failure to state a claim.

The quoted text above introduces the section III Law and Arguments that begins on page 5 of the Defendant’s 19- page Memorandum and includes only this one paragraph on page 16 referencing Plaintiffs’ problem; i.e. failure to state a claim for anything other than flood damage.

Allowing plaintiffs to file the Amended Complaint which they attempted to file on January 8, 2008 would be futile. Another division of this court has already held that identical Amended Complaints filed by plaintiffs’ counsel in two other Hurricane Katrina cases fail to state a valid cause of action against State Farm. See Exhibit A, Judge Wilkinson’s Orders Re Plaintiffs’ Motions for Leave to File Amended Complaints. As previously argued, the First Amended Complaint does not cure the plaintiffs’ problem – it still asserts claims for flood requires that the moving party make a showing of unusual or unique circumstances justifying such relief”…The plaintiffs have failed to allege any unusual or unique circumstances justifying such relief. Instead they merely show continuous disregard for clear distinctions from the local rules and the clerk of court.

This section continues to the also-named-section-III Conclusion on page 19 and is followed by Exhibit A, two Orders from Magistrate Judge Wilkinson that appear to support Plaintiffs’ position, Anderson v State Farm and Aguda v State Farm.

The motion is granted in part insofar as plaintiffs seekto amend their complaint to clarify thatwind and/or wind-driven rain (i.e., covered risks under plaintiffs’ State Farm policy) proximately caused damage to plaintiffs’ property beyond the amounts paid by State Farm. The motion is denied insofar as the proposed amendment asserts claims that flood dalllage to their property is covered by plaintiffs’ insurance policy with State Farm or that plaintiffs have some sort of claim under Louisiana’s Valued Policy Law, since these kinds of claims are futile under recent Fifth Circuit decisions.

Interestingly, both of the the exhibited cases were recently dismissed on similarly worded orders of Judge Duval indicating State Farm settled with the Plaintiffs in both.  Text from his Order in Anderson provides an example:

IT IS ORDERED that all of the above-referenced “mass joinder” cases are hereby DISMISSED, as follows: (1) without prejudice as to all claims that have been reasserted via severed amended complaint, pursuant to the court’s severance order; (2) as to all settled claims, without prejudice to the right, upon good cause shown within ninety (90) days, to seek summary judgment enforcing the compromise or to reopen the action if settlement is not consummated, the court having approved the settlements, incorporated them into its dismissal order, and retained jurisdiction for enforcement purposes; and (3) with prejudice for failure to prosecute as to all claims that have not been settled, previously dismissed or reasserted via severed amended complaint.

The Docket Report for Aguda v State Farm documents the similar course of the exhibited cases and those addressed by the Court’s Harrington Opinion.  The Order and Reasons issued by Judge Feldman put Arceneaux on third base.

All that said, read the unsworn statment of Plaintiffs’ attorney and see if you don’t agree with the Opinion of the Fifth Circuit in Harrington – State Farm simply struck out.

My name is Stuart Thomas Barasch. I am a person of the age of majority and am competent in all respects to make this declaration. I am providing this declaration in support of plaintiffs’ Motion for Relief from Judgment Pursuant to Rule 60(a) and (b), Fed.R.Civ.P. I have been a member in good standing of the Louisiana State Bar Association and of the bar of the United States District Court for the Eastern District of Louisiana since 1991. I have also been a member in good standing of the State Bar of California and the Florida Bar Association since 1977, the State Bar of Texas since 1991, and the State Bar of Georgia since 1992.

I am lead counsel for the six plaintiffs in Harrington v. State Farm Fire and Casualty Insurance Company, No. 07-7600 T-1 (“Harrington”), and for the 31 plaintiffs in Benit v. State Farm Fire and Casualty Insurance Company, No. 07-6738 T-5 (“Benit”),both pending in the U.S. District Court for the Eastern District of Louisiana.

After the defendant State Farm Fire & Casualty Company (“State Farm”) filed its Rule 12(b)(6) Motion to Dismiss in the Harrington case onDecember 11, 2007, I decided to amend plaintiffs’ pleading in an effort to render moot the arguments State Farm had put forth in its motion to dismiss. My law firm, the Hurricane Legal Center, filed the First Amended Complaint on Tuesday, January 8, 2008 without seeking leave of court to do so, as we had overlooked the fact that State Farm had filed an Answer three business days earlier, on Thursday, January 3, 2008. The next day, the Clerk’s Office issued (and entered on the docket sheet) a Notice of Deficient Document (“deficiency notice”) as to the First Amended Complaint, stating that “Leave of court is required to file this document.”

The clerk’s notations further stated: “Attention: Document must be refiled in its entirety within five (5) working days. Otherwise, it may be stricken by the court without further notice. Deficiency remedy due by 1/16/08.”

I interpreted this notice to mean what it said, and understood that plaintiffs had until Wednesday, January 16th in which to refile the First Amended Complaint, along with the required request for leave of court. On Tuesday, January 15, 2008, one day before the deficiency cure deadline and one day before the hearing on State Farm’s motion to dismiss, my law firm filed a Supplemental Opposition to Motion to Dismiss, rec.doc. 14. Although we labeled the document as a “Supplemental Opposition,” plaintiffs requested in that document leave to file their First Amended Complaint, and that the previously filed First Amended Complaint “be deemed filed as of the date of the Court’s order.” I honestly believed that the request for leave to file the First Amended Complaint contained within plaintiffs’ “Supplemental Opposition to Motion to Dismiss” filed January 15th would cure the clerk’s deficiency notice (which would expire at midnight on January 16, 2008).

On Wednesday, January 16, 2008, the Clerk’s Office issued a deficiency notice as to plaintiffs’ Supplemental Memorandum, citing that “Leave of court is required to file this document.” The Clerk’s notation further provided: “Attention: Document must be refiled in its entirety within five (5) working days. Otherwise, it may be stricken by the court without further notice. Deficiency remedy due by 1/24/08.” See Clerk’s notation on docket sheet following rec.doc. 14.

Once again, I understood from the plain language of the clerk’s deficiency notice that plaintiffs had until Thursday, January 24th in which to seek leave of court to refile their “Supplemental Opposition” wherein they requested leave to file their First Amended Complaint. On Wednesday, January 16, 2008, Judge Porteous heard oral argument on State Farm’s motion to dismiss and granted the motion as to plaintiffs’ Louisiana Valued Policy Law claims only, and deferred ruling as to all other claims. Co-counsel Lawrence Joseph Centola, Jr. appeared for plaintiffs.

Following oral argument, Mr. Centola advised me that Judge Porteous had dismissed plaintiffs’ Louisiana Valued Policy Law claims, and had deferred ruling on the remaining claims pending a ruling on plaintiffs’ request for leave to amend their pleading. I saw the Court’s minute order for January 16, 2008, rec.doc. 15, which confirmed that Judge Porteous had deferred ruling as to all other claims, and did not mention any specific deadline for re-filing our request for leave to file First Amended Complaint, or for obtaining a hearing date or a ruling on the motion.

As of the oral argument on January 16th, plaintiffs had until Thursday, January 24th to cure the January 16th deficiency notices directed to their “Supplemental Opposition to Motion to Dismiss Case 2:07-cv-07…

Therefore, I was shocked when I received on January 24, 2008, a copy of Judge Porteous’s order, signed two days earlier, granting in full State Farm’s motion to dismiss. rec.doc.18. With all due respect to the Court, I believe that the January 22nd order of dismissal and the January 24th final judgment were issued prematurely. My belief that they were issued prematurely is based on the fact that (1) the outstanding deficiency notice did not expire until midnight on January 24, 2008, and (2) the district court had informed counsel at oral argument that he would defer ruling until the magistrate judge ruled on plaintiffs’ request to amend their pleading. I declare under penalty of perjury that the foregoing is true and correct. Executed on March 12, 2008. /s/ Stuart Thomas Barasch