Ep. 8 Medical Marijuana in Louisiana, Uber, and the State Budget

Show Description

Leah Neupert digs into the recent marijuana legislation in Louisiana and she interviews Senator Fred Mills about some finer points of the marijuana legislation he sponsored. Senator Eric Lafleur calls in to discuss the state budget with Taylor Boudreaux. Also, Lauren Brink talks about the Uber case in New Orleans.

Show Notes

 

 

 

Ep. 7 Hon. Beth Foote on Judge Recusal and Hon. Lee Rosenthal on FRCP Amendments

Alex and Taylor find out in this episode they they’re getting booted off the show. Lauren Brink stops by with another Current Events, this one about the Apple encryption cases in New York and California. This show also features two interviews with two federal judges. Judge Beth Foote from the Western District of Louisiana stops by at 17:26 to talk about judge recusal. After that, Judge Rosenthal from the Southern District of Texas stops by at 32:53 to give us an in-depth discussion of the amendments to the FRCP pertaining to discovery.

Show Notes

 

Bring Your Own Bill? Reimbursing Employee Use of a Personal Cell Phone for Work-Related Purposes

By Taylor Crousillac, Senior Associate

March 21, 2016

Introduction

Bring-your-own-device (“BYOD”) refers to the increasing trend of employers allowing employees to use their own personal cell phones in lieu of employer-provided devices to access company computer networks and email systems. This trend does not appear to be slowing down, and some experts are predicting that by 2017, half of employers will require employees to supply their own personal cell phone for work-related purposes.[1] BYOD programs can increase employee productivity and satisfaction in the workplace, but such programs come with their own risks, including privacy concerns for the employee and security concerns for the employer.[2] Even the U.S. Supreme Court recognizes the unique legal challenges posed by modern cell phones.[3] Currently, there are no statutes at the federal or state level—including Louisiana—directly addressing BYOD policies and practices, and there is limited—but developing—case law on BYOD.[4] Whether the employee or employer has the responsibility to pay for the work-related use of an employee’s personal device is an unresolved issue in Louisiana. But a creative attorney might be able to construct an argument for employee reimbursement on the basis of Louisiana Civil Code article 2298.

I. The Potential Payment Problem

The most basic reason why an employer would object to paying for part of an employee’s cell phone bill is that the employer believes that the employee would be paying for the phone regardless. That argument is not unfounded. For example, 64% of Americans owned a smart phone in 2015.[5] Aside from phone calls, text messaging, and internet use, email is the most common use for cell phones; topping social networking, playing videos, and using maps and navigation.[6] Thus, if an employee is likely to have a smart phone and is also already using the device for personal emails, then why should employers spend money subsidizing an employee’s phone bill? One California state court of appeals has addressed this issue directly.

 II. A Starting Point: Cochran v. Schwan’s Home Service, Inc.[7]

Cochran, a California appellate court decision, involved a plaintiff who filed a class action against his employer on behalf of himself and other employees who were not reimbursed by their employer for expenses pertaining to the work-related use of their personal cell phones.[8] The plaintiffs based their argument for reimbursement on Section 2802(a) of California’s Labor Code, which states that, “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.”[9] According to the legislative history of Section 2802, the section was “designed to prevent employers from passing their operating expenses on to their employees.”[10] The appellate court reversed the trial court’s decision to deny class certification based on its interpretation of Section 2802(a).[11]

According to Cochran, Section 2802(a) of California’s Labor Code called for a straightforward solution. Under the statute, an employer is always obligated to reimburse an employee for his or her use of that employee’s personal cell phone for work-related reasons.[12] The court appeared to base its decision on the face of the statute itself and equitable principles. It stated that reimbursement was always required because “[o]therwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee.”[13]

Additionally, the court noted that it is irrelevant if a third party is paying the employee’s bill and that the specific details of the employee’s cell phone plan are likewise irrelevant—for example, unlimited calls or texts.[14] The specific damages may prove difficult to determine in a case like this. The court, however, found that under Section 2802, “the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was necessary.”[15] Importantly, the court also made reference to the significant privacy concerns that an employee has related to his or her personal cell phone. By refusing employers the ability to question who is paying an employee’s cell phone bill and the specifics of the plan, it “prevents [employers] from digging into the private lives of their employees to unearth how they handle their finances vis-à-vis family, friends and creditors.”[16] In light of this interpretation of Section 2802, the appellate court remanded the case to the trial court to reconsider the plaintiffs’ motion.[17]

III. Potential Impacts of Cochran to BYOD Law in Louisiana

Although Cochran has an important impact on California’s BYOD law, its potential impact on other states, such as Louisiana, remains unclear. For instance, the holding of Cochran is narrow as it comes from only one California appellate circuit and interprets a particular California state statute. Thus, even the persuasive authority of the decision is limited. That is not to say, however, that it could not be used in another jurisdiction as the basis for a reimbursement claim for an employee’s work-related use of a personal cell phone, especially in a jurisdiction with a statute similar to Section 2802 of California’s Labor Code.

Louisiana does not have an equivalent state statue, but there is an argument for employee reimbursement on the basis of Louisiana Civil Code article 2298.[18] Article 2298, the state’s codification of the doctrine of unjust enrichment, states, “[a] person who has been enriched without cause at the expense of another person is bound to compensate that person.”[19] On its face, an argument under Civil Code article 2298 would appear to implicate the same equitable concerns espoused in Cochran.[20] In particular, the employee would be using his or her personal finances to benefit the employer. It is worth noting here that an employee’s argument for compensation would be significantly weakened if an employee signed an employment agreement making it clear that the employee would be expected to use his or her personal phone for these work related purposes. The argument for reimbursement is best suited for an instance in which there was no mention of this situation in the employment contract, or if there was no employment agreement at all between the parties.

Finally, Civil Code article 2298 handles damages in much the same way as Cochran. Article 2298 states in its second paragraph, “[t]he amount of compensation due is measured by the extent to which one has been enriched or the other has been impoverished, whichever is less.”[21] This approach calls for a facts and circumstances inquiry similar to the approach the Cochran Court espoused in its discussion on damages under Section 2802.[22]

Conclusion

The issue of reimbursement for use of an employee’s personal cell phone for work-related purposes has the potential to generate litigation in Louisiana, and the chances of litigation will only increase in the future as personal cell phones continue to invade the workplace. Although there is no current Louisiana state statue or case law on the subject, one could potentially combine Civil Code article 2298 and the reasoning in Cochran to create a blueprint for an employee reimbursement claim in Louisiana.

[1] See Gartner Predicts by 2017, Half of Employers Will Require Employees to Supply Their Own Device for Work Purposes, Gartner (May 1, 2013), http://www.gartner.com/newsroom/id/2466615 [https://perma.cc/R3K2-MMHV].

[2] See generally Melinda L. McLellan et al., Wherever You Go, There You Are (with Your Mobile Device): Privacy Risks and Legal Complexities Associated with International “Bring Your Own Device” Programs, 21 Rich. J.L. & Tech. 11 (2015).

[3] See Riley v. California, 134 S. Ct. 2473, 2488–89 (2014) (noting that modern cell phones implicate privacy concerns far beyond those implicated in the search of other objects that might be kept on an arrestee’s person).

[4] See McLellan et al., supra note 2, at 6.

[5] Aaron Smith, U.S. Smartphone Use in 2015, Pew Res. Center (Apr. 1, 2015), http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/ [https://perma.cc/C3TQ-9MK6]. This number has risen sharply in recent years. In the spring of 2011, only 35% of Americans owned a smartphone. Id.

[6] Id.

[7] Cochran v. Schwan’s Home Serv., Inc., 176 Cal. Rptr. 3d 407 (Ct. App. 2014).

[8] Id. at 409.

[9] Cal. Lab. Code § 2802(a) (West, Westlaw 2016).

[10] See Gattuso v. Harte-Hanks Shoppers, Inc., 169 P.3d 889, 893 (Cal. 2007).

[11] Id. at 413.

[12] Id. at 412.

[13] Id. (emphasis added).

[14] Id. at 413 (The court stated that “it is no concern to the employer that the employee may pass on the expense to a family member or friend, or to a carrier that has to then write off a loss. It is irrelevant whether the employee changed plans to accommodate work-related cell phone usage. Also, the details of the employee’s cell phone plan do not factor into the liability analysis.”).

[15] Id. (internal quotations omitted).

[16] Id.

[17] Id.

[18] La. Civ. Code art. 2298 (2016).

[19] Id.

[20] See Cochran, 176 Cal. Rptr. 3d at 412 (arguing that without reimbursement, the employer would be receiving a windfall at the expense of the employee).

[21] La. Civ. Code art. 2298.

[22] See supra note 15.

Volume 76, Issue 3

 Complete Index of Volume 76, Issue 3 


Articles

Closing the Deal in the Bayou State: The Purchase and Sale of Producing Oil and Gas Properties

Patrick S. Ottinger

This Article presents a broad overview of the most important rules and legal issues surrounding the purchase and sale of producing properties in Louisiana. Part I considers the fundamentals of the purchase and sale of producing properties, including the nature of producing properties and the factors that motivate a party to sell its producing mineral leases. As the Article examines this topic in the Bayou State, attention is given to the sources of laws. Part II examines pertinent provisions of the Louisiana Mineral Code as they relate to the assignment of mineral leases. Part III expands the examination of applicable law to include the relevant provisions of the Louisiana Civil Code, particularly the nominate contract of sale. As the purchase and sale of producing oil and gas properties is to be evidenced by a written agreement, Part IV takes up the contractual provisions typically encountered in purchase and sale agreements. This Part also explains in detail the steps taken in anticipation of a closing. Finally, the Article considers the range of remedies available to the parties in the regrettable circumstance that a transaction is not consummated as contemplated by the PSA.


Employing a Reservoir Community Analysis to Define and Marshal Correlative Rights in the Oil and Gas Reservoir

David E. Pierce

The quest for a more complete definition of property in oil and gas begins with the foundational concepts created by the ad coelum doctrine and the rule of capture, followed by qualifying principles created by correlative rights and conservation regulation. The contours of correlative rights are explored in the context of subsurface boundary disputes that require a precise delineation of rights in oil and gas reservoirs lacking physical boundaries. The study is completed with the author’s “reservoir community” analysis that defines and marshals each owner’s positive and negative correlative rights in a reservoir.


Fracking in Louisiana: The Missing Process/Land Use Distinction in State Preemption and Opportunities for Local Participation

Alex Ritchie

Even strong home rule must yield to significant state interests that create real conflicts. State interests in uniformity, the prevention of waste, the protection of correlative rights, and implications to the rule of capture make limitations on local authority to regulate oil and gas operations necessary. But the spirit of the movement that led to home rule suggests that local governments should have a meaningful voice in matters that impact their local communities. A meaningful local voice not only requires a procedural right to raise concerns, but also requires the state to listen and acknowledge those concerns and to address reasonable concerns when appropriate. Certainly, the state should not be obligated to address all local concerns in a substantive manner before issuing a permit. The state would not be overly burdened, however, by transparently conveying to the public how the state addresses local concerns that it decides to address and its reasons for not addressing other concerns that have been raised, particularly when at least some local concerns may be addressed in a balanced manner that preserves the state’s interest in the production of its resources.


Minimizing Counterparty Bankruptcy Risk

Mitchell E. Ayer

Part I of this Article discusses the treatment of claims in bankruptcy proceedings generally as well as the significance of a creditor’s unsecured claims in particular, providing background information for discussions of the consequences of bankruptcy for specific contractual relationships. Parts II through VI discuss the consequences of bankruptcy for parties to sales contracts for oil and gas production, joint operating agreements, oil and gas leases, purchase and sale agreements, and farmout agreements, respectively, as well as furnish relevant, practical strategies. Part VII discusses a final strategy that can be applied to various types of relationships—“Bad Boy” guaranties. This Article concludes with a summary of advice for protecting a party to oil and gas contracts from the consequences of counterparty credit risk.


Comments

Saving Sportsman’s Paradise: Article 450 and Declaring Ownership of Submerged Lands in Louisiana

Jacques Mestayer

Part I of this Comment introduces the growing controversy involving submerged coastal lands in Louisiana and illustrates the unique significance that these lands offer to the people of Louisiana. Part II focuses on the origin and historical treatment of submerged lands in Louisiana, specifically concentrating on the scope of Louisiana Civil Code article 450 and the jurisprudence dealing with its categories, namely “natural navigable water bottoms,” “arms of the sea,” and “seashore.” Part III recognizes that the State owns submerged lands that became natural navigable water bottoms, sea bottoms, and seashore prior to alienation by the State.[1] Further, Part III argues that no sound reason exists to distinguish natural navigable water bottoms, sea bottoms, and seashore that existed before state alienation and those that came into existence following state alienation. Finally, Part IV contemplates potential remedies to this arbitrary distinction regarding submerged lands and then proposes a legislative amendment that will clearly assert the State’s ownership over those submerged lands, thereby ensuring that private landowners shall no longer reap fruits lawfully belonging to the State of Louisiana.

Offer at Your Own Risk: Why Louisiana Employers Who Withdraw an Offer of Employment May Find Themselves Liable Under Civil Code Article 1967

Taylor Crousillac

In Part I, this Comment gives an overview of the approaches and solutions that various American jurisdictions have taken toward handling withdrawn offers of employment, then turns its focus to the Louisiana jurisprudence regarding reliance on an offer of at-will employment. Part II outlines Louisiana’s at-will employment doctrine and also discusses the evolution of detrimental reliance as a basis for recovery in Louisiana. Part II concludes with a discussion of the various aspects of Louisiana law that make reliance on an offer of employment even more reasonable in Louisiana than in common law states. Part III highlights the problems with the failure of Louisiana courts to apply detrimental reliance in the context of a withdrawn offer of employment. Finally, Part IV applies a solution to Bob’s problem that removes the categorical bar of recovery for claims of detrimental reliance.


Legislatively Capping an Energy Lawsuit: Problems Posed by Stripping a Pending Suit Against Ninety-Seven Oil and Gas Companies

Taylor Boudreaux

This Comment suggests that Act 544, though an unusual law, is both legally sound and appropriate. The law has legislative precedent, backed by jurisprudential support, which leads to the conclusion that Act 544 is constitutional. The legislature did not overstep its authority simply because a pending suit was affected, nor did the law improperly violate the flood protection authority’s constitutional protections. The SLFPA-E’s particular constitutional and statutory origins make the authority susceptible to this type of legislative action. Further, the entity’s actual purpose within the state’s regulatory scheme supports the conclusion that the legislature acted appropriately despite counterbalancing policy concerns.

Part I of this Comment sets out facts surrounding the board’s lawsuit and the legislature’s response, and provides context by comparing Act 544 to similar laws. Part II describes and analyzes the legality of retroactive laws that apply to a particular target involved in pending litigation, ultimately concluding that Act 544 does not violate any constitutional prohibitions. Lastly, Part III argues that, in light of the alternatives to this legislative response, both Act 544’s means and its end are legitimate. A survey of this lawsuit’s role within the established regulatory framework surrounding the oil and gas industry reveals that Act 544 was the preferred solution when considering the destructive alternatives.

Staying Out of Treble: A Comprehensive Civilian Approach to the Louisiana Mineral Code Provisions on Damages for Unpaid Royalties

Nathan Telep

This Comment seeks to end the debate over the interpretation of Mineral Code articles 138.1, 139, 140, and 212.23 by showing that treble damages are not appropriate for a lessee’s failure to pay royalties. Part I gives a brief overview of the applicable laws regulating the oil and gas industry, including a short history of how the Louisiana Supreme Court molded the body of mineral law through its decisions, which were later codified in the Louisiana Mineral Code. Part II uses civilian interpretive methods to illustrate the two conflicting interpretations of the Mineral Code articles. Part III concludes that the Mineral Code provides for double damages and proposes two possible legislative actions to make this abundantly clear.

Email and the Threat of Inadvertent Compromise or Settlement

By Mark Macmurdo, Senior Associate

March 15, 2016

As any practitioner knows, negotiations for compromise—or “settlement”—do not just take place in an office setting. Increasingly, deals are ironed out from laptops, tablets, and cellphones. Practitioners would do well to remember that, in the eyes of the law, these informal forms of communication could have the same consequences as a formal letter. In particular, the risk of an inadvertent agreement to settle looms over any such correspondence.

I. Email May Meet the Form Requirements of a Signed Writing, Even if the Agreement is Pieced Together from Multiple Messages

An email may qualify as a signed writing, creating an enforceable agreement. A writing meets the form requirement for a valid compromise.[1] Implicit in the writing requirement set forth in Civil Code article 3072 is a requirement that both parties sign the agreement.[2] Louisiana Revised Statutes section 9:2707 states that, where the law requires a writing or a signature, an electronic record or electronic signature satisfies those requirements. Thus, an email with a corresponding electronic signature is sufficient to meet the form requirements for a compromise.[3]

Louisiana law defines an “electronic signature” as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”[4] A court may require that any compromise established through email include such an electronic signature.[5] In determining whether an email has satisfied the implied requirement that a compromise agreement be signed, a court has found that an ordinary closing with the sender’s name at the end of an email message is insufficient to indicate intent to create an electronic signature for the purposes of a compromise or contract.[6]

Although a single communication by one party stating its understanding of an agreement is insufficient to establish a compromise because both parties must sign an agreement,[7] the agreement need not be written in a single document.[8] Where two instruments may be read together to outline the obligations and agreement of the parties, there is a valid compromise.[9] A court could find that a compromise has been reached through an exchange of writings, even though there is a lack of clarity as to incidental matters.[10]

II. Email May Evidence Intent to Compromise, Even when a Subsequent, More Formal Document is Contemplated

There are no magic words that conclusively determine whether a party intended to make an offer for compromise. A court may find that the specificity of terms contained in a writing indicates the party’s intent to compromise.[11] Even where a more formal future agreement is contemplated, a preliminary agreement that meets the form requirements and indicates consent as to particular terms may be upheld as a valid compromise.[12] By contrast, when the terms of an offer are confusing or contradictory, a court may find that no offer to establish a valid compromise has been made.[13] In addition, where an exchange indicates further negotiation or discussion regarding the terms of a compromise is contemplated, no compromise is established.[14]

III. Informal Electronic Communication in Holt v. Ace American Insurance Co.

Holt v. Ace American Insurance Co.[15] serves as an example of a court finding that an exchange of a long series of emails establishes a valid compromise. Because the emails established the compromise, the time for payment of the compromise was based on the date of the emails, even where a more formal settlement and release document was clearly contemplated and subsequently executed.[16]

In that case, the plaintiff’s attorney received a message from the mediator indicating that the defendant would be willing to settle at a particular price.[17] The plaintiff’s attorney replied to the mediator with a message stating that he had advised his clients “of the following facts,” apparently stating the parties’ obligations under the proposed compromise.[18] The plaintiff’s attorney asked the mediator to have the “[the defendant], through their counsel, confirm the terms of the compromise settlement to insure [sic] that it is an enforceable compromise agreement.”[19] The mediator forwarded the message to defendant’s counsel, asking the attorney to “please confirm asap.”[20] The attorney replied stating that his message “will confirm [that the defendant] agrees to the settlement per the e-mail string below” and that he would send a “draft Settlement and Release Agreement” to the plaintiff’s attorney.[21] The court found that the trial court did not manifestly err in finding that a valid compromise had been established.[22]

IV. Disclaimers May Be Effective in Preventing an Inadvertent Compromise

Practitioners should not let the informal nature of email fool them; electronic messages exchanged by attorneys could become enforceable if they meet the form requirements and evidence intent to compromise. This rule not only applies to emails sent from the office but extends to messages sent from any portable device. Regardless of whether the attorneys in an email exchange actually intended to reach a compromise, a court may nonetheless find a valid compromise based on the circumstances. To avoid inadvertent agreements to compromise, or any other agreement that requires a signature, a disclaimer located in all electronic correspondence might be an effective method of precluding a finding that the message contains an electronic signature. Because intent is a requirement for a valid electronic signature, such a disclaimer could state “nothing in this message may be construed as evidencing intent to provide an electronic signature for the purposes of Louisiana Revised Statutes section 9:2602.” Such a disclaimer, however, might be overly inclusive and be used as a way to invalidate other agreements. Alternatively, a disclaimer stating that “nothing in this message may be construed as evidencing intent to compromise” may be more effective for these purposes.

[1] La. Civ. Code art. 3072 (2016).

[2] Felder v. Ga. Pac. Corp., 405 So. 2d 521, 523 (La. 1981) (“Obviously, to serve as written proof of the agreement and obligations of both parties, and their acquiescence therein, the written agreement must be signed by both parties, obligating both to do what they have agreed on.”).

[3] La. Civ. Code art. 3072 cmt. d; Regions Bank v. Cabinet Works, L.L.C., 92 So. 3d 945, 956 (La. Ct. App. 2012).

[4] La. Rev. Stat. Ann. § 9:2602 (Supp. 2015).

[5] Regions Bank v. Cabinet Works, L.L.C., 92 So. 3d 945, 956 (La. Ct. App. 2012) (citing La. Rev. Stat. Ann. § 9:2602) (dictum). But see Holt v. Ace Am. Ins. Co., 149 So. 3d 886, 889–91 (La. Ct. App. 2014) (where attorney stated that his message “will confirm [that his client] agrees to the settlement” in the email string, the electronic signature was apparently valid).

[6] Regions Bank, 92 So. 3d at 956.

[7] Id.; Scott v. Green, 621 So. 2d 1, 2 (La. Ct. App. 1993); Barnes v. West, 159 So. 3d 1075, 1078 (La. Ct. App. 2015).

[8] Felder v. Ga. Pac. Corp., 405 So. 2d 521, 523 (La. 1981); Jacobson v. Harris, 503 So. 2d 540, 542 (La. Ct. App. 1987).

[9] Felder, 405 So. 2d at 524; Elder v. Elder & Elder Enters., Ltd., 948 So. 2d 348, 351 (La. Ct. App. 2007) (“In deciphering when separate instruments satisfy the writing requirement of [Louisiana Civil Code article] 3071, the Supreme Court has reasoned that where two instruments, when read together, outline the obligations each party has to the other and evidence each party’s acquiescence in the agreement, a written compromise agreement . . . has been perfected.”).

[10] See, e.g., Klebanoff v. Haberle, 978 So. 2d 598, 604 (La. Ct. App. 2008) (where parties had not agreed upon indemnification language to accompany the settlement, and the party demanding such language was assured that the opposing party would sign any such language, it was an “incidental matter” to the settlement of the lawsuit). But see Collins v. Mike’s Trucking Co., 934 So. 2d 827, 833 (La. Ct. App. 2006) (where a party wrote “this is not true!” in response to proposed indemnification language, it was fatal to the agreement because there was no “meeting of the minds”).

[11] First Nat’l Bank of Jefferson Parish v. Manor Heights Co., 576 So. 2d 61, 64 (La. Ct. App. 1991) (where an attorney-agent stated that his client “would like to explore . . . the possibility of settling” a dispute, detailed a list of terms it would be willing to accept, and asked for “thoughtful consideration of the foregoing settlement proposal,” the court found that a compromise had been reached).

[12] LeBlanc v. State Farm Ins. Co., 878 So. 2d 715, 720 (La. Ct. App. 2004).

[13] Soileau v. Allstate Ins. Co., 857 So. 2d 1264 (La. Ct. App. 2003).

[14] Regions Bank v. Cabinet Works, L.L.C., 92 So. 3d 945, 956 (La. Ct. App. 2012).

[15] 149 So. 3d 886 (La. Ct. App. 2014).

[16] Id. at 889–90.

[17] Id. at 888.

[18] Id. at 888–89.

[19] Id. at 888.

[20] Id. at 889.

[21] Id.

[22] Id. at 890. The court did not address the lack of signatures by the parties or the sufficiency of the language to indicate consent.