# Supreme Court of Louisiana

FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #021

FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 8th day of May, 2019 , are as follows:

BY CRICHTON, J. :

2018

- CC

- 0748 CREEKSTONE JUBAN I, L.L.C. v. XL INSURANCE AMERICA, INC. (Parish of Livingston) We granted this writ to resolve the question of whether La. R.S. 22:868(A)(2) prohibits the enforcement of the forum selection clause in dispute. For the reasons set forth below, we find that the statute does not prohibit enforcement of the forum selection clause to which these parties contractually agreed. Accordingly, we reverse the ruling of the trial court and remand the matter to the trial court for further proceedings pursuant to La. Code Civ. P. art. 121. REVERSED AND REMANDED. JOHNSON, C.J., additionally concurs and assigns reasons.
WEIMER, J., concurs and assigns reasons. HUGHES, J., dissents with reasons.
GENOVESE, J., dissents for the reasons assigned by Justice Hughes.05/08/19

SUPREME COURT OF LOUISIANA
No. 2018
- CC
- 0748 CREEKSTONE JUBAN I, L.L.C.
VERSUS XL INSURANCE AMERICA, INC.
ON SUPERVISORY WRITS TO THE TWENTY
- FIRST JUDICIAL DISTRICT COURT, PARISH OF LIVINGSTON

CRICHTON, J. We granted this writ to resolve the question of whether La. R.S. 22:868(A)(2) prohibits the enforcement of the forum selection clause in dispute. For the reasons set forth below, we find that the statute does not prohibit enforcement of the forum
selection clause to which these parties contractually agreed . Accordingly, we reverse the ruling of the trial court and remand the matter to the trial court for further proceedings pursuant to La. Code Civ. P. art. 121.
FACTS AND HISTORY
Th i s case concerns a disagreement over a claim for flood damage submitted by Plaintiff

- Respondent Creekstone/Juban I, LLC ( “ Creekstone ” ), a Delaware limited liability company, under a commercial property and casualty insurance policy ( “ Policy ” ) issued by Defendant

- Appellant XL Insurance America, Inc. ( “ XL
Insurance ” ) , a Delaware corporation

. The Policy was issued to named insured
MRMG Commercial and delivered to MRMG Commercial in Lufkin, Texas. According to the parties, though not evident from the record, Creekstone was one of 20 unrelated additional insureds who obtained coverage under the Policy, which covers over 100 pr operties in more than 20 states

. 1

1 Th e parties have explained that MRMG is a program put together by an insurance broker in order to pool together groups of unrelated insureds with common operations to form risk

- purchasing2 Creekstone is the owner of the insured property (commonly known as Juban Crossing ) , locate d in Livingston Parish, which consists of high

- end, multi

- use facilities for retail sales, restaurants, and a theater. Creekstone is a Delaware limited liability company . It is a single asset company that has no business other than Juban Crossing . The mana ging member of Creekstone is a Louisiana resident , and Creekstone’s principal business office is in Baton Rouge. XL Insurance is a Delaware corporation, licensed within Lou isiana and admitted by the Louisiana Department of Insurance to issue various lines of insurance, including property and casualty insurance

. XL Insurance ’s address on file with the Louisiana Department
of Insurance is in Connecticut

. The Policy includes a forum selection clause, whereby the parties agreed that

“ any disagreement ” related to the Policy “ shall ” be brought exclusively in the State
of New York. The clause states , in pertinent part : 19. SERVICE OF SUIT AND CHOICE OF LAW In the event that any disagreement arises between the “ insured ” and the

“ Company ” requiring judicial resolution the “ insured ” and the

“ Company ” each agree th at any suit shall be brought an d heard in a court of competent jurisdiction within the State of New York. The

“ Insured ” and the “ Company ” further agree to comply voluntarily with all the requirements necessary to give such court jurisdiction.

. . . The “Insured” and the Company” further agree that New York law shall control the interpretation, application and meaning of this contract, whether in suit or otherwise

. In August 2016, as a result of a massive flood, Juban Crossing sustained extensive flood damage to th e buildings and their contents, including loss of revenue. Before the lawsuit was filed, XL Insurance forwarded to Creekstone $5,000,000. However, due to various issues in dispute that a re not before this Court, XL

groups and obtain more favorable insurance terms. No party disputes that Creekstone is a named insur ed under the Policy.3 Insurance did not immediately pay Creekstone certain additional requested sums , and Creekstone filed suit in the Twenty

- First Judicial District Court, Parish of Livingston. In response, XL Insurance filed a Declinatory Excepti on of Improper Venue, Peremptory Exception of No Cause of Action, and Moti on to Dismis s. XL Insurance argued that in the forum selection clause, the parties agreed to litigate all issues involving the contract exclusively in the State of New York

. Creekstone opposed the motion, contending that the forum selection clause was invalid under La. R.S.
22:868 , which provides that no insurance contract “delivered or issued for delivery”
in Louisiana and covering subjects in Louisiana shall contain any prov ision “[d]epriving the courts of this state of the jurisdiction o f action against the insurer

. ”
Pursuant to La. R.S. 22:868, any such provision would be void. After a hearing, the
trial court overruled XL ’ s exceptions and motion, finding that upholding the forum
selection clause would violate Louisiana ’ s public policy. 2 XL Insurance filed an application for supervisory writs, and the Court of Appeal , First Circuit, granted certiorari. After full briefing an d argument, a five

judge panel denied the writ in a split decision and without opinion. Creekstone Juban I, LLC v. XL Insurance America, Inc. , No. 17

- 1223 (La. App. 1 Cir. 4/9/18). Judge Crain wrote separately, stating that he favored denying the writ, bec ause the forum
selection clause “effectively de prives Louisiana courts of the ability to exercise

2 In a supplemental brief, XL Insurance disputes whether La. R.S. 22:868 applies in this case, asserting that the policy was not “delivered or issued for delivery” to Creekstone in Louisiana, but was instead “issued for delivery to MR MG Commercial” in Texas. By contrast, Creekstone argues it has always maintained the policy was delivered in Louisiana and points out XL had never before disputed this contention. We agree with Creekstone that the statute applies here. T he trial court’s ju dgment demonstrates that it found La. R.S. 22:868 applies to this case, thereby implicitly demonstrating the court made a factual finding that the policy was delivered or issued for delivery in Louisiana. Although we disagree with the trial court’s analysi s regarding R.S. 22:868(A)(2), as set forth further herein, we find no manifest error in the trial court’s factual finding that R.S. 22:868 is applicable to this case.4 jurisdiction over this case.” Id. p. 2. Judge Guidry and Judge Holdridge dissented
from the writ denial, stating they would grant the writ applica tion and reverse the trial court because, in their opinion, the contractual forum selection clause does not deprive the court of jurisdiction and does not violate Louisiana public policy.
This Court thereafter granted XL Insurance ’ s application for supervisory
writs

. 2018

- 0748 (La. 9/28/18), 252 So. 3d 918.
DISCUSSION Legislation is the solemn expression of the legislative will; thus, the interpretation of legislation is primarily the search for the legislative intent. Cat ’ s Meow, Inc. v. City of New Orleans, 98

- 0601, p. 15 (La. 10/20/98), 720 So. 2d 1186,
119 8

. See also La. R.S. 24:177(B)(1). The starting point for interpretation of any statute is the language of the statute itself. Id. When a law is clear and unambiguous, and its application does not lead to absurd consequences, it shall be applied as
written , with no further interpretation made in search of the legislative intent. Id. ; La. R.S. 1:4. Further, a statute must be interpreted and applied in a manner consistent with logic a nd the presumed fair purpose and intention of the legislature in passing
it

. MAW Enterprises, L.L.C. v. City of Marksville , 14

- 0090 , p. 12 (La. 9/3/14), 149 So. 3d 210, 218. It is presumed that the intention of the l egislative branch is to
achieve a consistent body of law

. Id
With these principles in mind, we turn to the st atute at issue in this case. The narrow legal question presented is whether the forum selection clause in the XL Insurance policy , which requires that litigation be brought in New York state,
violates La

. R.S. 22:868 and Louisiana public policy

. Revised Statute 22:868 provides , in pertinent part:5 A. No insurance contract delivered or issued for delivery in this state and covering subjects located, resident, or to be performed in this state,

. . . , shall contain any condit ion, stipulation, or agreement either: (1) Requiring it to be constru ed according to the laws of any other state or country except as necessary to meet the requirements of the motor vehicle financial responsibility laws of such other state or country. ( 2) Depriving the courts of this state of t he jurisdiction of action against the insurer. Contractual forum selection clauses are prima facie valid and are enforced in
Louisiana “ unless the resisting party can ‘ clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such r easons as fraud or overreaching . . . [or that] enforcement would contravene a strong public policy of the forum in which suit is brought, whether declared by statute or by judicial
decision. ’ ” Shelter Mutual Ins. Co. v. Rimkus Consulting Group, Inc. of La

. , 2013

- 1977 , p. 16

- 17 (La. 7/1/14), 148 So. 3d 871 , 881 (Johnson, C.J.) (quoting Bremen v. Zapata Off

- Shore Co. , 407 U.S. 1, 13 (1972)). In Shelter Mutual , th is Court explained the evolution of forum selection clauses, noting that they w ere historically
found to be invalid as against public policy or that their effect was t o impermissibly “oust the jurisdiction” of a court

. 2013

- 1977, p. 4, 148 So. 3d at 874. However, a shift occurred after the Supreme Court’s decision in Bremen v. Zapata Offshore Co. , in which the Supreme Court described this view as a “vestigial legal fiction ,” that
has “ little place in an era when all courts are overloaded and when businesses once essentially local now operate in world markets .” 407 U.S. at 12. T he Bremen Court
held that forum selection clauses “ should be deemed presumptively valid and ordinarily enforceable, unless enforcement would be unreasonable, or the consent of the party challenging the clause was obtained through fraud or und ue influence, or the chosen forum is unreasonable and seriously inconvenien t.” Shelter Mutual , 2013

- 1977, p.4

- 5, 148 So. 3d at 874 (describing Bremen holding)

. This Court6 adopted the Bremen view in Shelter Mutual , holding that “[t]he right of parties to freely contract must encompass the correlative power to agree to bring suit under that contract in a particular forum.” Shelter Mutual , 2013

- 1977, p. 17, 148 So. 3d at
882. Creekstone argues that the Legislature expressed a clear public poli cy, by way
of La. R.S. 22:868, to prohibit the operation of forum selection clauses in Louisiana,
and that the forum selection clause violates La. R.S. 22:868 (A)(2) because it divests the Louisiana court of the ability to hear the dispute and thereby vitia tes jurisdiction in Louisiana. XL Insurance argues, to the contrary, that the statute’s plain language
addresses jurisdiction only and forum selection clauses do not deprive the Louisiana
court of jurisdiction over the action . Rather, the clause at issue sets forth a contractual agreement that New York is the proper venue for any action under the Policy, and leaves the court’s subject matter jurisdiction unaffected.
A. The Plain Language of the Statute Favors the Insurer
The Code of Civil Procedure defines “jurisdiction” as “ the legal power and authority of a court to hear and determine an action or proceeding involving the legal relations of the parties, and to grant the relief to which they are entitled.” La. C.C.P.
art. 1. This Court has previously explai ned that jurisdiction and venue are distinct legal concepts: “If jurisdictional requirements are met, courts throughout the state have the legal power and authority to hear the case; however, not all courts with jurisdiction are in the proper venue. ” Turne r v. Leslie , 96

- 2288, p.2 (La. 12/6/96), 684 So. 2d 395, 396 (emphasis added). Accordingly , where the parties have
contracted for a particular forum or venue for litigating disputes, this does not mean they have deprived the courts of this state of the legal authority to hear the dispute ( i.e. , the jurisdiction). And, as noted above, the Court cited Bremen in Shelter Mutual7 for the proposition that “ the traditional view that forum selection clauses impermissibly oust courts of jurisdiction” is a “vestigi al legal fiction.” Shelter
Mutual , 2013

- 1977, p.4

- 5, 148 So. 3d at 874

. Thus, it is apparent that the plain language of La. R.S. 22:868(A)(2) does not prohibit the forum selection clause at issue in this case, as it chooses New York as the venue for the dispute, and does not deprive Louisiana courts of jurisdiction

. Our interpretation of the plain language is reinforced by the Court’s recent analysis in Shelter Mutual

. Shelter M utual addressed the validity of a forum
selection clause in a busine ss contract and resolved a split in the appellate courts
over whether the clause violated public policy. In evaluating the statute at issue in that case, this Court recognized that the legislature has enacted a limited number of statutes making forum selection clauses unenforceable in certain specific situations. The Court singled out several statutes , observing that the legislature has been “unequivocal” in enacting such statutes in at least three instances: (a) cases brought
under the Louisiana Unfair Trade Practices Act ; 3 (b) construction contracts involving a Louisiana domiciliary in which the work to be done is in Louisiana; 4 and

3 La. R.S. 51:1407(A) ( “ It being against the public policy of the state of Louisiana to allow a contractual selection of venue or jurisdiction contrary to the provisions of the Louisiana Code of Civil Procedure, no provision of any contract which purports to waive these provision s of venue , or to waive or select venue or jurisdiction in advance of the filing of any civil action, may be enforced against any plaintiff in an action brought in these courts. ” ) (emphasis added).
4 La. R.S. 9:2779(A) ( The legislature finds that, with res pect to construction contracts, subcontracts, and purchase orders for public and private works projects, when one of the parties is domiciled in Louisiana, and the work to be done and the equipment and materials to be supplied involve construction projects in this state, provisions in such agreements requiring disputes arising thereunder to be resolved in a forum outside of this state or requiring their interpretation to be governed by the laws of another jurisdiction are inequitable and against the public policy of this state ) (emphasis added). See also La. R.S. 9:2779(B)(2) ( “ The legislature hereby declares null and void and unenforceable as against public policy any provision in a contract, subcontract, or purchase order, as described in Subsection A, whi ch . . . [r]equires a suit or arbitration proceeding to be brought in a forum or jurisdiction outside of this state. . . ” ) (emphasis added).8 (c) cases involving employment contracts. 5 Shelter Mutual , 2013

- 1977, p. 7

- 9, 148
So. 3d at 879

- 82. After reviewing these statutes, the Shelter Mutual Court held:
I t is clear the legislature has only declared forum selection clauses unenforceable and against public policy in very limited circumstances

. We reject a blanket application of the public polic y stated in these statutes to every contractual forum selection clau se. The legislature has clearly provided for a more limited application, and has recognized Louisiana ’ s public policy only militates against the use of forum selection clauses in these par ticular circumstances . The legislature has been unequivocal in these specific contexts to establish that forum selection clauses contravene a strong public policy in Louisiana

. . . . 2013

- 1977, p. 16

- 17, 148 So. 3d at 881 (emphasis added)

. We reemphasize this point her e
. It is presumed that the intention of the legislative branch is to achieve a consistent body of law

. MAW Enterprises , 14

- 0090 , p. 12, 149 So. 3d at 218

. When the legislature has acted to prohibit forum selection clauses, it has been unequivocal , employing the terms “venue” or “forum, ” thereby distinguishing the concepts from jurisdiction. Thus, the legislature is plainly aware of how to draft laws that unambiguously prohibit forum selection clauses , does so in very limited and specific contexts, and did not do so in La. R.S. 22:868(A)(2)

. 6
We also find it persuasive that a unanimous three

- judge panel of the United States Court of Appeals for the Fifth Circuit , sitting in diversity and applying
Loui siana law, recently cited Shelter Mutual in making the same conclusion regarding R.S. 22:868. Al Copeland Investments, LLC v. First Specialty Ins. Corp. , 884 F.3d 540 (5th Cir. 2018). In Al Copeland , as here, the insurer moved to dismiss
the federal court case brought in the United States District Court for the Eastern District of Louisiana based upon the fact that the policy’s forum

- selection clause

5 R.S. 23:921(A)(2) ( “ The provisions of every employment contract or agreement

. . . [that] includes a choice of forum clause or choice of law clause in an employee ’ s contract . . . shall be null and void

. . . ” ) (emphasis added).
6 Notably, the legislature did not amend this statute after this Court ’ s decision in Shelter Mutual

.9 required litigation in a New York state court. The Fifth Circuit acknowledged that
the narrow issue of R.S. 22:868 was unresolve d by this Court, but held that R.S.
22:868 “d oes not indicate that Louisiana has a strong public policy against forum

selection clauses in insurance contracts” and found the clause at issue enforceable.
Id. at 545. In so holding, the c ourt r ejected the plaintiff’s argument conflating jurisdiction and venue, reasoning:
A forum

- selection clause is a provision in a contract that mandates a particular state, county, parish, or court as the proper venue in which the parties to an action mus t litigate any future disputes regarding their contractual relationship. Section 22:868 says nothing about venue. As the district court recognized, venue and jurisdiction are “separate and distinct.” We, too, will not stretch the definition of jurisdiction to include venue

— a feat with no legal footing.
884 F.3d at 543

- 44. We agree with this analysis, and decline to extend the definition of “jurisdiction”

— which is clearly defined in the Civil Code

— to include “venue” or
“forum.” 7
B. No Absurd Consequences Will Result Creekstone argues that if the law is applied as written, absurd consequences
will result , because a dispute over any insurance policy, “no matter how small,” will have to be litigated in a foreign forum. This argument is not persuasive. I n

7 In supplemental briefing, Creekstone argues that the forum selection clause, which also contains a choice of law provision requiring application of New York law, is void pursuant to R.S. 22:868(A)(1). R.S. 22:868(A)(1) prohibits any condition that requires the contract to be “const rued according to the laws of any other state or country. . .” XL Insurance filed in the trial court a Declinatory Exception of Improper Venue based upon the forum selection clause in the Policy. Therefore, venue was the issue properly before the trial cou rt. Creekstone made no argument as to how R.S. 22:868(A)(1) would invalidate an otherwise valid forum selection clause, and instead merely made the conclusory argument that the section is “void altogether.” Even if the Policy’s choice of law provision is i nvalid due to Louisiana’s public policy concern as expressed in R.S. 22:868(A)(1)

— an issue we decline to decide here

— R.S. 22:868(C) expressly states that the voiding of any condition under R.S. 22:868(A) “shall not affect the validity of the other provisio ns of the contract.” Thus, even if the choice of law provision were to be invalidated, that invalidation, by the terms of the statute, would not affect the validity of the forum selection clause. See , e.g. , Al Copeland Investments, LLC v. First Specialty Ins. Corp

. , 16

- 16346, 2017 WL 2831689 (E.D. La. June 29, 2017).10 determining whether enforcement of a forum selection clause would be unreasonable and unjust, courts generally require the party see king to avoid its enforcement to bear the burden of showing that the chosen forum is “ unreasonable or seriously
inconvenient.” Shelter Mutual , 2013

- 1977, p. 5 , 148 So. 3d at 874 (quoting Bremen , 407 U.S. at 16

- 17 ). B ecause the claimed inconvenience is fore seeable at the time the parties negotiated the contract, it is incumbent on the party seeking to escape the
contract to show that trial in the contractual forum will be “ so gravely difficult and
inconvenient that he will for all practical purposes be deprived of his day in court.”
Bremen , 407 U.S. at 17

- 18.
Creekstone has not met its high burden in this case

. The parties to this contract

are s ophisticated Delaware entities engaging in a commercial transaction , and they exercised contractual freedom to resolve any dispute related to the contract in a particular forum in arm’s

- length negotiations. See Shelter Mutual , 2013

- 1977, p. 18, 148 So. 3d at 882 (“The parties in this case are commercially sophisticated entities who have a history of conducting business together.”) ; Bremen , 407 U.S. at 16

- 17 (noting that this was a freely negotiated “commercial transaction ”)

. 8 In any event, at the exceptions hearing, Creekstone offered no evidence whatsoever of difficulties it

wo uld encounter in litigating in another forum , much less any evidence sufficient meet its high burden of establishing “grave difficulties .” Indeed, f reedom to contract is itself a countervailing important public policy in Louisiana, and the right to freely contract “must encompass the correlative power to agree to bring suit under that contract in a particular forum.” Shelter Mutual , 2013

- 1977, p. 17 , 148 So. 3d at 88 2

. As in Shelter Mutual , upholding the trial court’s

8 This case does not present us with a situation involving a single Louisiana resident in a dispute with a residential property or motor vehicle insurer , and we decline to resolve that situati on here.11 ruling in this case would undermine the ability of the parties to freely engage in sophisticated contractual agreements and thereby impair the ability of companies to
do business in this state. Id. Contractually selecting a forum for resolving disagreements provi d es cer tainty and consistency for parties engaged in enterprises
in multiple states, and t he elimination of uncertainty “relative to the location of litigation by agreement in advance of an acceptable forum to both parties is an indispensable element of trade, commerce and contracting .” Shelter Mutual , 2013

- 1977, p. 18 , 148 So. 3d at 882

. CONCLUSION For the reasons assigned, the judgment of the trial court is reversed insofar as it denied the exception of improper venue. The exception of i mproper venue is hereby granted. The case is remanded to the trial court for further proceedings pursuant to La. Code Civ. P. art. 121.1 05/08/19

SUPREME COURT OF LOUISIANA No. 201 8
- CC
- 0 7 48 CREEKSTONE JUBAN I, L.L.C. VERSUS XL INSURANCE AMERICA , INC. ON SUPERVISORY WRIT S TO THE TWENTY
- FIRST JUDICIAL DISTRICT COURT, PARISH OF LIVINGSTON
JOHNSON , Chief J ustice , additionally concurs and assigns reasons. I agree with the majority opinion, granting XL Insurance’s exception of improper venue. “A forum selection clause is a provision in a contract that mandates a particular state , county, parish, or court as the proper venue in which the parties to an action must litigate any future disputes regarding their contractual relationship.” Shelter Mut. Ins. Co. v. Rimkus Consulting Grp., Inc. of Louisiana , 13

- 1977 (La. 7/1/14), 148 So. 3d 871, 873

– 74 (citing Fidelak v. Holmes European Motors, L.L.C ., 13

– 06 91 (La. 12/10/13), 130 So. 3d 851, 853) ( e mphasis added). The policy language in this case, mandat ing suit b e brought exclusively in the State of New York, is clearly a forum selection clause. I have long been in favor of upholding the enforceability of forum selection clauses, absent some specific legislative prohibition. This court has followed the lead
of t he United States Supreme Court in Bremen v. Zapata Off

– Shore Co ., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). In Bremen , the Court acknowledge d that
f

orum selection clauses had not been historically favored by American courts and
had generally not been enforced as against public policy. 407 U.S. at 9

. However,

t he Bremen Court rejected that viewpoint a nd found such clauses should be deemed
presu mptively valid and ordinarily enforceable, unless enforcement would be2 unreasonable, or the consent of the party challenging the clause was obtained through fraud or undue influence, or the chosen forum is unreasona ble and seriously
inconvenient. Id . at 13

. I authored this court’s opinion i n Lejano v. Bandak , 97

- 388 (La. 12/12/97),
705 So. 2d 158, cert. denied , Lejano v. K.S. Bandak Assuranceforeningen Gard , 525 U.S. 815, 119 S.Ct. 52, 142 L.Ed.2d 40 (1998), wherein, based on Bremen , this court upheld enfo rcement of a forum selection clause in a federal law maritime context, stating that such clauses a re “prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the
circumstances. ” Lejano , 705 So. 2 d at 166. I also authored this court’s opinion in
Shelter Mutual , wherein we held , for the first time , that forum selection clauses are generally enforceable and are not per se violative of public policy in Louisiana.
Shelter Mut. Ins. Co

. , 148 So. 3d at 878.
Consistent with my actions in Lejano and Shelter Mutual , I agree with the majority in this case that the sophisticated entities involved were engaged in a
commercial trans ac tion , and they exercised contractual freedom to resolve any
di spute related to that contact in a particular forum. As I explained in Shelter Mutual , “t he elimination of uncertainties relative to the location of litigation by agreement in advance on an acceptable forum to both parties is an indispensable element of tr ade, commerce and contracting .” 148 So. 3d at 882

. Thus, absent any legislative
declaration of a wholesale public policy prohibiting enforcement of forum selection
clauses , or prohibiting forum selection clauses in commercial insurance contracts, I
find the forum selection clause in this insurance policy must be enforced.

### 0 5/0 8 /1 9
SUPREM E CO URT O F LO UISIANA

No . 2 0 1 8 -CC-0 7 4 8
CREEKSTONE J UBAN I , L.L.C.

VERSUS
X L I NSURANCE AMERI CA, I NC.
On S u p er vi s o r y W ri t s t o t h e Twen t

y-Fi r st Ju d i ci a l Di s t r ict Co u r t, Pa r i s h o f Li vi ng s to n

W EI MER, J
. , co ncu rri ng
. I co ncu r in t h e m ajo ri t y o p i n i o n i n th i s cas e an d wr i t e s ep arat el y to p ro v i d e ad d it i o n al an al y s i s an d t o ad d res s J u s t i ce Hu g h es ’ t ho u g h t fu l an d en l i g h t en i n g

ex am i n at i o n o f t h e l eg i sl at i v e h i s t o ry o f La. R.S. 2 2 : 8 6 8. Creek s to ne J uba n I , L.L.C. v . XL I ns ura nce Am eri ca , I nc. , 18 -0 7 4 8, s l i p o p
. at 2 n .3 (La.

_ _ /

_ _ / 2 0 1 9 ) (Hu gh es , J

. , d i s sen ti n g ).
A ci v i l i an ap p ro ach t o an al y zi n g t h e st at u t e at i s s ue i n th i s cas e d i rect s t h at t h e

co u rt at t em

p t t o as cert ai n i t s m ean i n g fi rs t b y l o o k i n g t o t h e l an g u ag e o f t h e s t at u t e.
La. C.C. art

. 9 ; s ee al s o To ucha rd v . W il l i a m s , 6 1 7 So .2 d 88 5 , 8 8 8 ( L a. 1 9 9 3 ). If

t h at l an gu ag e i s n o t c l e ar an d u nam b ig uo u s , t h en i t i s ap p ro p ri at e t o res o rt to
l eg i s lat i v e h i s t o ry
. La. C.C. art

. 1 0 , see al s o To ucha r d , 6 1 7 S o .2 d at 88 8

. In t h i s

cas e, I ag ree t h at an ex am i n at i on o f t h e l eg is l at i v e h i st o ry o f La. R.S. 2 2: 8 68 (A)(2 )
i s ap p ro p ri a t e , b e cau s e I fi n d t h at a k ey p h ras e t h erei n , “ ju ri s d i ct i o n o f act i o n ,” i s

am bi g uo u s
. Ho wev er, I res p ect fu ll y d i s ag ree w it h m y co l l eag u e’ s as s es s m en t o f t h e

co n cl u s i o n s t o b e d rawn fro m t h e l eg i s l at iv e h i s t o ry
. Th e d i s s en t fo cu s es it s at t en t i on an d an al y s i s o n a s in g l e wo rd i n La. R.S.
2 2 : 8 6 8 (A)(2 ): t he wo rd “ ju ri s d i ct i o n .” Ho wev er, t h at wo rd c a n n o t b e read ini s ol at i o n ; i t m u s t b e read i n co n t ex t

. See La. C.C. art

. 1 2 (“ W h en t h e wo rd s o f a l aw

are am bi g u o u s , th ei r m ean in g m u s t b e s o u gh t b y ex am i n in g t h e co n t ex t i n wh i ch t h ey

o ccu r an d t h e t ex t of t h e l a w a s a w h ol e.”). Fro m m y p ers p ect i v e, t h e cri t i cal
l an g u ag e i n t he s t at u te i s t h e p h ras e “ ju ri s d i ct i o n o f act i o n .”
Lo u i s i an a R.S. 2 2 : 8 68 (A)(2 ) p ro h i b i t s “ an y co n d it i o n , st i pu l at i o n , o r
ag reem en t ” i n an y

“ i n su ran ce co n t ract d el i v ered o r i s s ued fo r d el i v ery i n t hi s s t at e”

t h at wo u ld “ [d ] ep ri v [e] t h e co u rt s o f t h i s s t at e o f t h e ju ri s d i ct i o n o f act io n ag ai n s t t h e i n s u rer.” (Em

p h as i s su p p li ed .) Th i s p h ras e i s cru ci al an d p ro v id es t h e pro p er co n t ex t
fo r as cert ai n i n g th e leg i s l at i v e i n t en t , becau s e, as t h e d i s s en t ex p lai n s, u n d er t h e
Lo u is i an a Co d e o f Pract i ce o f 1 8 7 0 , ju ri s di ct i o n had t h ree co m p on en t s: (1 ) t h e o b

ject

o r am o u n t i n d is p u t e (ju ri s d i ct i o n r a ti o n e ma t er ia e ); (2 ) t h e p ers o n of t h e d efen d an t (ju ri s d i ct i o n r at i o n e p er s o n a e ); an d (3 ) t he p l ace wh ere t h e act i o n i s b ro u g ht (ju ri s d i ct i o n r a t i o n e p er

s o n a e ). See Creek s to ne J uba n I , L.L.C. , 1 8 -0 7 4 8 , s l i p o p.
at 2 n .3 (Hu g h es , J ., d i s s en t i n g ). “ [P] ri o r t o t h e en act m en t o f th e 1 9 60 Co d e o f Ci v i l
Pro ced ure, t h e t erm ‘ j u ri s d ict io n ’ was u s ed t o refer t o ei t h er th e s u b ject m at t er ju ri s d i ct i o n of th e co u rt (ju ri sd i ct i o n rat i o n e m at eri ae) or t h e p l ace wh ere t h e act i o n

co u ld b e b ro u g h t (ju ri s d i ct i o n rat i o n e p ers o nae).” I d
. W hi l e t h e d i s s en t reas o n s t h at

t h e u se o f t h e wo rd “

ju ri s d i ct i on ” in th e p red eces s o r st at ut e t o La. R.S. 2 2 : 8 6 8 (A)(2 ),
S e ct i o n 1 4 .1 9 o f t h e 1 9 4 8 In s u ran ce Co d e, m u st lo g i cal l y carry t h i s du al m e a n i n g (en co m p as s i n g b o t h ju ri s d i ction ratione m ate riae a n d j u r isdict i o n r at i o n e p er s o n ae ), 1
i t o v erl o ok s t h e fact t h at t he l eg i s l at ure, i n en act in g t h e s t at u t e, d i d n o t us e t h e t erm

1 See id ., slip op. at 3 n.3
2“

ju ri s d i ct i o n ” s t an d i n g al o n e. Rat h er, t h e l eg is lat u re u s ed t h e p h ras e “ ju ri sd i ct i o n o f

act i on ,” i n di cat i n g an i n t en t t o ad d res s a s p eci fi c t y pe o f ju ri s d ict i o n
. 2
Th i s i s s i g n i fi can t wh en t h e h i st o ri cal c o n t ex t o f 1 94 8 L a. Act s 1 9 5 , t h e
p red eces s o r t o L a. R.S. 2 2 : 8 68 , i s ex am i n ed

. As ex pl ai n ed i n Co urv i l l e v . Al l i ed
Pro fes s i o na l I ns . Co
. , 1 3 -0 9 7 6 (La.Ap p
. 1 Ci r. 6 / 5 / 15 ), 1 7 4 So .3 d 6 59 , th e Fed eral
A r b i t r a t i o n Act (“ FAA”) was en act ed i n 1 9 24

. See id
. , 1 3 -0 9 7 6 at 6 , 1 7 4 So .3 d a t
6 6 4

. Un d er t h e FAA, wh i ch m ak es n o ex cep t io n fo r i n s u ran ce co n t ract s , arb i t rat i o n cl au s es i n co nt ract s a re en fo rceab l e an d s h o u l d p reem p t o r s u p erced e an y

s t at e l aw
t o t h e co n t rary
. See i d
. , 13 -0 9 7 6 at 6 -7 , 1 74 So .3 d a t 6 6 5. In 1 9 4 5, h o w ev er, in

res p o n s e t o Uni ted Sta t es v . So uth-Ea s tern Underw ri ters As s o ci a ti o n , 3 2 2 U.S.
5 3 3 (1 9 4 4 ) (“ wh i ch h el d t h at t h e b u s i n es s o f i n s uran ce is su b j ect t o fed eral reg u l at i o n

u n d e r t he Co m

m erce [Cl au s e] ”), “ Co n g res s en act ed th e M cCarro n -Ferg u so n Act ” (“ M FA”). “ Th e M FA h ad t h e eff e c t o f r e s t o ri n g t h e reg u l at o ry d o m ai n t h e St at es
t rad i ti o n al l y h ad ex erci s ed o ver t he i n s u ran ce i n d u s t ry p ri o r t o So uth-Ea s tern
Underw ri ters

... b y p ro v i di ng t h at an y s t at e law en act ed fo r t h e p u rp o s e of reg u l at i n g i n s u ran ce wi l l t ru m

p , o r ‘ rev ers e p reem

p t ,’ an y co nt rary fed eral l aw t h at d o es n ot
rel at e s p eci fi cal ly t o i n su ran ce.” I d
. , 1 3-0 9 7 6 at 7 , 1 7 4 So .3 d at 6 6 5. In 1 9 4 8, s h o rt l y aft er p as s ag e o f t h e M FA, t h e Lo u i s i an a Leg i s l at u re t o o k u p Co n g res s ’ s i n v i t at i o n to

rev ers e-p reem

pt t h e FAA, pas si n g t h e p red eces s o r t o La. R.S. 2 2 : 8 6 8 as p art o f t h e
In s u ran ce Co d e. See 1 9 4 8 La. Act s 1 95 § 1 4 .1 9

. W h i l e an an al y s is o f t h e l an g u ag e an d pu rp o s e of t h e p ro vi s i o n is d is p o s i t i ve,

cas es d eci d ed aft er t h e en act m en t o f Sect io n 1 4.1 9 o f t h e 1 9 48 In s uran ce Co d e h av e

2 Such an interpretation is consistent with the well-settled presumption that every w ord, sentence, or p rovision in a law was intended to serve some useful purpose, that some effect is to be g iven to each such provision, and that no u nnecessary words o r provisions were e mploy ed. Sultana Corporation v. Jew e lers Mutual Insurance Com pany , 03-0360, p. 9 ( L a
. 12/3/03), 860 So.2d 1112, 1119.
3co n fi rm ed it s p u rp o s e as an an ti -arb i t rat i o n s t at u t e. Ma ca l us o v . W a ts o n , 1 7 1 So .2 d

7 5 5 (La.Ap p
. 4 Ci r. 1 9 6 5), was t h e fi rs t cas e t o i n v al id at e an arb i t rat i o n cl au s e i n an i n s u ran c e c o n t r a c t p u rs u an t t o t h e s t at u te. I d
. at 75 7

. In Ma ca l us o , t h e co u rt

co n cl u d ed th at an arb i t rat i o n ag reem en t b et w een an i n su red an d h i s i n s u rer was “ v o id

an d u nen fo rceab l e” b eca u s e “ i t s effect [was ] t o d ep ri v e t h e co u rt s
... o f t h e ju ri s d i ct i o n o f t h e [i n s u red ] p l ai n t i ff’ s act i o n ag ai n s t t h e in s u rer,” in vi o l at i o n o f La.
R.S. 2 2 : 6 2 9 (A)(2 ), n ow La. R.S. 2 2 : 8 6 8 ( A )(2 ). I d
. In reach i n g i ts co n cl u s i o n , t h e

co u rt ex p l ai ned :

Th at th e arb i t rat i o n ag reem en t

... h as th e effect o f “ [d ] ep ri v i n g th e c o u r t s of t h i s s t at e o f t h e j u ri s d i ct i o n o f act i o n ag ai n s t th e i n s u r e r ” ad m i t s of n o arg u m en t

. It u n eq u i v o cal l y p r o v i d es t h at t h e i ss u e o f l i ab i l i t y as wel l as q uan t u m b e s u b m i t t ed t o arb i t r a t i o n i n acco rd an ce wi t h t h e ru l es o f t he A m eri can Arb it rat i o n As s o c i a t i o n an d t hat th e p art i es “ each ag ree t o co n s i d er i t s el f [t hem s el v e s ] bo u nd an d t o be b o u n d b y an y award m ad e b y t h e arb i t rat o rs .” It p ro v id es fu rt h er t hat

“ ju d g m en t up o n t h e award ren d ered by t h e arb i t rat o rs m ay b e en t ered i n an y co urt h av i n g ju ri s d i ct i o n th ereo f.” Th us t h e f u n ct i o n of th e co u rt i s l i m i t ed t o t h at o

f a s h er i ff o r en f o r cemen t o

f fi cer t o execu t e t h e a wa rd , wh et h er o r n ot i t i s i n a g r eemen t

wi t h i t

. Ma ca l us o , 1 7 1 So .2 d at 7 5 7 -7 5 8 (em p h as is s u p p l i ed ).
Ma ca l us o co n fi rm s t h at t h e p hras e “ d ep ri v i n g th e co u rt s
... o f t he j u ri s d i ct i o n

o f act i o n ” i s d i rect ed at ag reem en t s t hat h av e t h e effect o f ex cl u d i n g ju d i ci al

rem ed ies

. 3 Th e fo ru m s el ect i o n cl au s e at i s s u e i n t h i s cas e d o es n o t hav e t h at effect

. Si n ce t h e d eci s io n i n Ma ca l us o , i n t erm ed i at e ap p el l at e co u rt s i n th i s s t at e h av e

co n si s t en t l y co nfi rm ed Ma ca l us o ’ s i n t erp ret at i o n of La. R

. S

. 22:868( A ) ( 2 ) a s an an t i

arb i t rat i on p ro vi s io n, d i rect ed at n ul l i fy i ng an y ag reem en t th at wo u l d h av e th e effect

3 Law rence v. Continental Ins. Co. , 199 So.2d 398 (L a .App. 3 Cir. 1967), a case r elied on by the dis s e n t , i s n o t to the contrary

. I n Law rence , the c ourt of appeal held that a provision in an automobile insuran c e policy requiring the insured making a claim under the uninsured motorist coverag e to join the nonresident u ninsured motorist as a party defendant was unenforceable because the L ouisiana court did not have p ersonal jurisdiction over the nonr e s i d e n t motorist, thereby preventing L ouisiana courts from enforcing a c laim under the L ouisiana-issued policy

. Id
. at 398.
4o f d ep ri v i n g t h e co u rt s o f ju ri s d i ct i o n of act io n s a g a i n s t an i n su rer by ex cl u d i n g

ju d i ci al rem ed i es
. See C o u r v i l l e v . Al l i ed Pro fes s i o na l s I ns . Co
. , 1 6-1 3 5 4 , p
. 5 (La.Ap p . 1 Ci r. 4 / 1 2 /1 7 ), 2 1 8 So .3 d 1 4 4 , 1 4 8 , wri t d en i ed , 1 7 -0 7 8 3 (La. 1 0 / 2 7 / 1 7 ),
2 2 8 So .3 d 1 2 2 3 (“ In Lo ui s ian a, co m p u l s o ry arb i t rat i o n p r o v i s i o ns i n i n s u ran ce

co n tract s are p ro h i b i t ed as a m at t er o f p u b l i c p o l i cy b ecau se t h ey o perat e to d ep ri v e
Lo u is i an a co u rt s o f ju ri s d i c t i o n ov er act i o n s ag ai n st t h e i n su rer; fu rt h er, s u ch

p ro v is i o n s d en y Lo ui s i an a ci t i zen s o f free acces s t o i t s co u rt s , a ri gh t gu aran t eed by

t h e s t at e’ s co n s t i t u t i o n.”); Ho bbs v . I GF I ns . Co
. , 0 2 -2 6 , p
. 3 (La.Ap p
. 3 Ci r.
1 0 / 2 3 / 0 2 ), 8 3 4 So .2 d 1 0 69 , 1 07 1 (“ Lo ui s i an a co u rt s hav e co n si s ten t l y h e l d t h a t

co m p u l s o ry arb i t rat i o n cl au s es i n co n t ract s o f i ns u ran ce are u nen fo rceab l e u n d er t h i s

s t at u te b ecau se th ey op erat e t o d ep ri v e Lo u i s i an a co u rt s of ju ri s di ct i o n o f th e act i o n
ag ai n s t t he i n s u rer.”). Th i s co u rt reach ed t h e s am e co n cl us i o n i n Do ucet v. Denta l
Hea l th Pl a ns Mg m t. Co rp. , 4 1 2 So .2 d 1 3 83 , 1 38 4 (La. 1 9 8 2 ) (ci t i n g M a ca l us o , 1 7 1
So .2 d 7 5 5 ) (“ Cl as s ifi cat i o n o f t h e co n t ract at i s s u e as an i n s u ran ce co n t ract ren d ers
t h e arb i t rat i o n p ro v i s io n s o f t h at co n t ract u n en fo rceab le.”). Cf

. L a. C.C. a r t

. 9 ; L a
. R.S. 1 : 4

. Th u s , I ag ree wi t h t h e co n cl u s i o n th at an al y s i s b eg i ns wi t h t h e l an g u ag e o f La.
R.S. 2 2: 8 6 8

. Ho wev er, I fi n d t h e l an g u ag e i s no t cl ear an d u n am b i g u o u s
. Co n s eq u en t l y , a res o rt t o l eg i s l at i v e h i st o ry i s ap p ro p ri at e i n as cert ai n i n g t h e l eg i s lat i v e i n t en t

. I am co n v i n ced t h at La. R.S. 2 2 :8 6 8 (A)(2 )’ s p ro h i b i t i o n i s d i rect ed

at ag reem en t s , l i k e co m

p u l s o ry arb i t rat i o n p ro v i s i o ns , t h at w o u ld d ep ri v e Lo u i s i an a

co u rt s o f t h e l eg al p o wer an d au t h o ri ty t o h ear a di s p u t e. A fo ru m s el ect i o n cl au s e,

s u ch as t h e o n e a t i s s u e i n t h i s cas e, d o es no t d ep ri v e t h e co u rt s of “ ju ri s di ct i o n o f

act i on ag ai n s t t h e i n s u rer” wi t h i n t h e m ean i n g o f La. R.S. 2 2 :8 6 8 (A)(2 ).

5A d d i t i on al l y , al t h o ug h t h e cl au s e at i s su e i n t he i ns u ran ce co n t ract d o e s n o t

s p eci fi cal l y u s e t h e wo rd “ v en u e,” t h at fact d o es no t neg at e t h e cl ear m ean i n g a n d
i m p o rt o f t h e cl au s e. Th e co n t ract s t at es th at “ an y s u i t s h al l b e b ro u g h t an d h eard in

a co u rt o f co m

p et en t ju ri s d ict i o n wi t h i n th e S t a t e of New Y o r k .” (Em p h as i s ad d ed .)
Th ere is no req u i rem en t t h at t h e w o rd “ v en u e” ap p e a r i n a cl au se fo r t h at cl au s e to
i d en t i fy t h e p l ace wh ere t h e cas e i s t o b e t ri ed

. “ Ven u e m ean s t h e [p l ace o r l o cat i o n ]
wh ere an act i o n o r pro ceed i n g m ay p ro p erl y be b ro u g h t an d t ri ed .” See La. C.C.P.

art

. 4 1

. Acco rd i n g t o t h e i n s u ran ce co n tract at i s s u e, t h at p l ace i s “ wi t h i n t h e St at e

o f New Yo rk ,” i n acco rd an ce wi t h New Yo rk ’ s v en ue ru les

.

605/08/19
S UPREME COURT OF LOUISIANA
No . 2018
- CC
- 0748 CREEKSTONE JUBAN I, L.L.C.
VERSUS XL INSURANCE AMERICA, INC.
ON SUPERVISORY WRITS TO THE TWENTY
- FIRST JUDICIAL DISTRICT COURT, PARISH OF LIVINGSTON

HUGHES, J. , dissenting.
It is ridiculous that a Louisiana business with Louisiana customers and employees that suffers millions of dollars in damages requiring millions of dollars of repairs by Louisiana carpenters, plumbers, and painters in Louisiana in sured by an insurance policy delivered in Louisiana should be required to litigate against the insurer in New York when it has been the public policy of Louisiana since 1948 that such matters should be litigated in Louisiana and that “any condition” to the contrary contained in an insurance policy is prohibited. The disdain for Louisiana business and the Louisiana Legislature is remarkable. In reversing the trial court and the court of appeal , t he majority opinion is wrong for three separate reasons: failure to recognize public policy, false dichotomy between “big sophisticated” business and “single” Louisiana residents, and an unsupportable reformation of the contract to enable the desired r esult.

Public Policy This case involves an insurance contract . Louisiana Revised Statu t e 22:868 (A)(2) and its predecessors since 1948 have provided that no insurance contract delivered in this state shall contain any condition depriving the courts of t his state of jurisdiction of action against the insurer . The law contains no exception for forum selection clauses. The United States Supreme Court in Bremen v Zapata and the Louisiana Supreme Court in Shelter Mutual v Rimkus note the relatively recent

a scendency of forum selection clauses, but neither involved an insurance contract , and both recognized a public policy exception to enforcement of a forum selection clause.2 In Lawrence v Continental Insurance Company , 199 So.2d 398 (3 rd Cir. 1967), a cas e that did involve an insurance contract, perhaps the most respected judge in Louisiana history, Al Tate, explained that the provision at issue expresses a public policy: The statute incorporates a public policy determination that no contract issued in Lou isiana covering a Louisiana subject shall deny the Louisiana insured the benefit of a practical remedy in Louisiana courts, thus prohibiting a requirement that he litigate his claim in an inconvenient foreign forum or submit to its adjudication by some private tribunal. The statute’s command must be enforced, by reason of which the policy condition is voi d as violating the statutory prohibition. (Emphasis added.)
The majority’s failure to recogn ize this public policy is illustrated in footnote s 4, 5, and 6 in the opinion. Noting public policy exceptions to forum selection clauses for construction contra cts and employment contracts, the opinion “notably” comments that the Legislature did not “amend” 22:868 after this court’s decision in Shelter Mutual , apparently with little recognition that Shelter Mutual did not involve an insurance contract and that th e language of 22:868 has been on the books for 66 years prior to the decision in Shelter Mutual . It was, in fact, the granddaddy of contractual public policy pronouncements, at a time when similar provisions to keep insurance litigation in the state where the risk was insured were enacted all across the United States. I t is only common sense that the court where the damage occurred and the repairs are to be made is best suited to hear the claim. There was no need to “amend” what was already in place.

“S ophisticated” Businesses versus “Single” Residents The majority opinion makes much of the fact that these were “sophisticated” companies registered in Delaware ( obviously for tax purposes ) exercising their freedom to contract. But the opinion also recogn izes that the sole business of plaintiff is as the owner of a high

- end mall in Louisiana. The opinion acknowledges a factual finding that the policy was delivered or issued for delivery in Louisiana. It is important to r ecogniz e that the statute focuse s on the type of contract, in this case insurance. As noted, other statu t es have stated a public policy to litigate Louisiana construction contracts and employment contracts in Louisiana. These statutes all focus on the type of contract , not the character of the parties . The majority implies that big, sophisticated parties are not protected by the insurance3 statute, while “single” Louisiana residents are given a pass. What about married couples? Churches? Schools? Small businesses? Medium

- si zed businesses? Is this a slippery slope or an abyss? The statute is meant to apply to all Louisiana insurance contracts, regardless of the size or character of the parties.

Reformation of the Contract The underlying analysis for the majority opinion r elies on the idea that “jurisdiction” and “venue” are separate and distinct concepts. The opinion contains this remarkable sent ence on page 6: Rather, the clause at issue sets forth a contractual agreement that New York is the proper venue for any action under the Policy, and leaves the court’s subject matter jurisdiction unaffected. (Emphasis in original)

The “clause at issue” is set forth on page 2 of the opinion: In the event that any disagreement arises between the “insured” and the “Company” requiring judicial resolution the “insured” and the “Company” each agree that any suit shall be brought and heard in a court of competent jurisdiction within the State of New York. The “Insured” and the “Company” further agree to comply voluntarily with
a ll requirements necessary to give such court jurisdiction...

I have searched in vain for venue in th is claus e . As best I can understand, it works like this: Even though the contract does not contain the word venue, but rather says “jurisdiction”, this co urt has determined that what the parties really meant was venue, and because jurisdiction and venue are different concepts, and the statute does not refer to venue, it does not apply to this contract. Really.

Conclusion It is difficult to figure what pu rpose the Legislature had in mind with this statute other than preventing what is happening here. Louisiana Civil Code Article 2049 provides that “a provision susceptible of different meanings must be interpreted with a meaning that renders it effective and not with one that renders it ineffective.” I am concerned that large sophisticated Louisiana bu sinesses may find themselves litigating insurance claims in New York or some other foreign jurisdiction. And the “it ’s not really jurisdiction, they mean venue, but the statute only says jurisdiction” argument is droll

. For these reasons, I respectfully dissent.05/08/19

S UPREME COURT OF LOUISIANA No. 201 8- CC -07 48 CREEKSTONE JUBAN I, L.L.C. VERSUS XL INSURANCE AMERICA, INC. ON SUPERVISORY WRIT S TO THE TWENTY- FIRST JUDICIAL DISTRICT COURT, PARISH OF LIVINGSTON

GEN OVESE, J. , dissents for the reasons assigned by Justice Hughes.