“Mammas Don’t Let Your Babies Grow Up to Be Loggers”: Child Labor Law Violations and Workers’ Compensation Tort Immunity

by Bradley Guin, Managing Editor

Introduction

Fifteen-year-old Mark Reese Franklin did not know that May 13, 1975 would be his last day alive.[1] Instead, he was preoccupied with filling his older brother’s shoes. On that day, an employee of H & H Pulpwood, Donald Holm, stopped at the Franklin household to recruit Mark’s older brother to accompany him in the woods and assist him in hauling pulpwood.[2] But the older brother was unavailable, and Donald accepted Mark in his brother’s place.[3] Donald and Mark embarked into the woods and began the arduous job of cutting and loading wood.[4] They were assisted by a “Pack-a-Back,” a machine-powered vehicle used to carry pulpwood from the forest to the road where the loading truck was located.[5] As Donald was driving the Pack-a-Back, the machine collided with an electric line.[6] He stopped the machine and turned to warn Mark of the danger of boarding the Pack-a-Back,[7] but it was too late. Mark did not hear the warning, attempted to get on the machine, and was immediately electrocuted and killed.[8]

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The Fifth Circuit’s Need to Clarify its Test Set Forth in In re Larry Doiron, Inc.—After All, the Southern District of Texas Already Has

by David Scotton, Senior Associate

I. Introduction

A contract’s classification as “maritime” has significant ramifications for parties to a contract. For instance, in In re Larry Doiron, Inc. (“Doiron”), general maritime law (“GML”) governed, which allowed the court to uphold the contract’s indemnity provision.[1] Alternatively, if Louisiana law governed, the indemnity agreement would have been “null and void and against public policy.”[2] Because a contract’s classification as “maritime” can have significant repercussions for parties to a contract, and because parties want predictability in contracts, a judicial mechanism to simplify contract classification is preferable. On January 8, 2018, the U.S. Fifth Circuit Court of Appeals issued an en banc decision designed to simplify maritime contract classification.[3] Post-Doiron, a contract is maritime if it accomplishes two things: (1) it provides services to facilitate the drilling or production of oil and gas on navigable waters; and (2) it provides or the parties also expect that a vessel will play a “substantial” role in the completion of the contract, or the parties so expect.[4] Although designed to simplify maritime contract classification, the opinion’s language conflates all maritime contracts with those involving oil and gas.[5] Post-Doiron, parties to contracts involving vessels and oil and gas can likely expect maritime classification, but those within the Fifth Circuit’s jurisdiction whose contracts may traditionally be “maritime,” but which do not involve oil and gas, are faced with uncertainty as to whether GML or Louisiana law will govern their contracts.

II. Background of the Case

In Doiron, Apache Corporation (“Apache”) entered into a master service contract (“MSC”) with Specialty Rental Tools & Supply (“STS”) to work on Apache’s offshore platform.[6] Apache later placed a work order for STS to remove obstructions from a well.[7] The MSC contained an indemnity provision in favor of Apache and its contractors.[8] The work order did not require a vessel, nor did the parties expect a vessel would be required.[9] After an unsuccessful attempt to perform the work order, however, STS employees discovered they needed a vessel—a crane barge—to perform the work; Apache then contracted with plaintiff Doiron to provide the vessel.[10] STS employees remained unsuccessful and said they needed more equipment; when rigging down, Larry Doiron Incorporated’s (“LDI”) crane operator struck an STS employee.[11] LDI, as a contractor of Apache, filed suit against STS, arguing the contract was maritime and thus the indemnity provision was enforceable.[12]

III. How Should Courts Apply this New Test?

The Fifth Circuit said the new test set forth in Doiron was for maritime contract classification, which is broader than just the oil and gas context, but the opinion’s text qualified the adoption of this test to “this context”: a contract involving the exploration, drilling, and production of oil and gas.[13] The Fifth Circuit also broadly discussed contract classification, which suggests application should, or at least may, extend beyond oil and gas contracts. For instance, the court purports to replace the six-factor test set forth in Davis & Sons Inc. v. Gulf Oil Corp., but Davis & Sons involved a contract covering “onshore and offshore facilities.”[14] The court further said that the Davis & Sons test—the test it claimed to replace—determined whether a contract was maritime; it did not say that the Davis & Sons test determined whether an oil and gas contract was maritime. This statement means the court in Doiron claimed to replace the test designed for maritime contract classification with a two-pronged test regarding oil and gas-specific contracts. Furthermore, the court in Doiron left open the possibility for this test to apply outside the oil and gas field: “If an activity in a non-oil and gas sector involves maritime commerce and work from a vessel, we would expect that this test would be helpful in determining whether a contact is maritime.”[15]

The Fifth Circuit reaffirmed this new approach in In re Crescent Energy Services, the only Fifth Circuit ruling to date regarding this issue of maritime contract classification. In Crescent Energy, the Fifth Circuit stated, “[A]n affirmative answer to both questions [factors set forth in Doiron] is necessary before the label ‘maritime’ may be applied to the contract.”[16] The contract, however, involved plugging and abandoning three offshore wells.[17] The court also stated, “Finally, regardless of what other Fifth Circuit case law there may be, nothing in such case law detracts from the clarity of our 2018 en banc decision in Doiron.”[18] This case likewise involved oil and gas, leaving future parties to contracts involving vessels—but not involving oil and gas—unsure of whether their contracts will be “maritime” post-Doiron. To further confuse the issue, the Eastern District of Louisiana in Mays v. C-Dive L.L.C. acknowledged Doiron and Crescent Energy and said that the Doiron test “requires the court to consider just two questions [the two factors set forth in Doiron] in determining whether a contract is maritime.”[19] Notably, the court did not say that courts should use Doiron only to determine whether oil and gasrelated contracts are maritime.[20]

Clarity to this test began in Texas. In Lightering L.L.C. v. Teichman Group, L.L.C., the Southern District of Texas addressed whether Doiron applied outside of the oil and gas context.[21] In Lightering, OSG Lightering, L.L.C. (“OSG”) sought a declaratory judgment that the MSA did not govern its relationship with T&T Offshore, Incorporated (“T&T”) because the MSA had expired before the accident, and therefore, it did not have a duty to indemnify T&T for its employee’s negligence.[22] T&T cited Doiron and argued that the Agreement was fundamentally not a maritime contract and that the court therefore lacked subject matter jurisdiction.[23] T&T also relied on Norfolk Southern Railway Co. v. Kirby to argue that the court must look at the principal objective of the contract.[24] OSG argued that the agreement was fundamentally a maritime contract and that Doiron’s two-step test was inapplicable because Doiron was limited to maritime contracts involving oil and gas exploration, drilling, and production.[25] Rather, OSG argued its contract was maritime because the proper test came from Kirby, which “require[d] a holistic evaluation of the nature and character of the Agreement, looking at whether its principal objective is maritime commerce.”[26] T&T, on the other hand, argued that Doiron applied because the Fifth Circuit stated that the Doiron test “would be helpful” in other, non-oil and -gas contexts and because it drew support for its holding from other circuits’ considerations of non-oil and -gas contracts in light of Kirby, explaining that those decisions were “not inconsistent” with the Fifth Circuit’s test.[27]

Ultimately, the court held in Lightering that the contract was non-maritime after attempting to reconcile Doiron’s uncertainty with the rationale behind Kirby: the case upon which the Doiron court heavily relied.

Although Doiron limited its holding to the facts of the case, which came from the oil-and-gas sector, the court expressly noted, en banc, that it would expect the same test to apply in a non-oil-and-gas context. Outside the oil and gas context, the test first requires the court to ask whether the activity ‘involves maritime commerce and work from a vessel.’ If so, then the court asks whether a vessel plays a substantial role in completing the contract . . . if . . . satisfied, then the contract’s principal objective is maritime commerce and the contract is maritime in nature.[28]

The court in Doiron did not expressly say it would “expect the same test to apply in a non-oil-and-gas context.” Rather, it said it would “expect that this test would be helpful” in such a situation.[29] Despite that textual distinction between what Doiron said and what Lightering asserted that Doiron said, the Southern District of Texas still took a necessary step in clarifying application of the two-pronged Doiron test.

IV. Conclusion

To help parties predict whether GML or state law will govern contracts that do not involve oil and gas but do involve at least a vessel, the Fifth Circuit should clarify its two-step test set forth in Doiron. By creating a test with an express purpose to “simplify maritime contract classification” and using language limiting it to oil and gas maritime activities, but expecting it to be “helpful” in determining non-oil and -gas activities, the Fifth Circuit made maritime contract classification more confusing. Because of this confusion, the Southern District of Texas applied Doiron to a non-oil and -gas contract, and reverted back to the traditional maritime classification scheme in place of the first oil- and gas-related factor. That approach seems sensible but defeats Doiron’s purpose of creating a new test. To elucidate its own test designed to clarify contract classification, the Fifth Circuit should expressly state that Doiron applies only to maritime contracts involving oil and gas or textually support Lightering’s approach to handling non-oil and -gas contracts in lieu of Doiron.


[1] In re Larry Doiron, Inc., 879 F.3d 568, 571 (5th Cir. 2018).

[2] Id. See also La. Rev. Stat. § 9:2780 (referred to as the “Louisiana Oilfield Indemnity Act”).

[3] Doiron, 879 F.3d at 568.

[4] Id. See also Jean F. Rydstrom, Comment note.—admiralty jurisdiction in matters of contract, 29 A.L.R. Fed. 325 (originally published in 1976).

[5] See generally Doiron, 879 F.3d 568.

[6] Id. at 568.

[7] Id.

[8] Id. at 569.

[9] Id. at 570.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313, 316 (5th Cir. 1990).The six factors originally set forth in Davis & Sons involved analyzing: (1) what the specific work order in effect at the time of injury provided; (2) the work actually done by the crew assigned under the work order; (3) whether the crew was assigned to work aboard a vessel in navigable waters; (4) the extent that the work being done related to the mission of that vessel; (5) the principal work of the injured worker; and (6) what work the injured worker was actually doing at the time of injury. Id.

[15] Doiron, 879 F.3d 577, n.52.

[16] In re Crescent Energy Servs., L.L.C. for Exoneration from or Limitation of Liab., 896 F.3d 350, 355 (5th Cir. 2018).

[17] Id. at 352.

[18] Id. at 359.

[19] Mays v. C-Dive LLC, No. 16-13139, 2018 WL 3642005, at *2 (E.D. La. Aug. 1, 2018).

[20] Like in Crescent, the contract the court deemed maritime in Mays had a principal obligation to plug and abandon an underwater pipeline used to transport natural gas. Id. at *3.

[21] Lightering LLC v. Teichman Grp., LLC, CV H-17-3374, 2018 WL 3428561, at *1 (S.D. Tex. July 16, 2018).

[22] Id. at *1, *3.

[23] Id. at *3, *8.

[24] Id. at *8 (citing Norfolk S. Railway Co. v. Kirby, 543 U.S. 14 (2004)).

[25] Id.

[26] Id.

[27] Id. at *10.

[28] Id. at 577 n.5, internal citations omitted.

[29] In re Larry Doiron, Inc., 879 F.3d 568, 577 (5th Cir. 2018).

Forcing the Issue: It’s Time for the Legislature to Clarify What art. 1493(E) Legitime-tely Means

by Bill Milburn, Senior Associate

I. Introduction

John Doe has twins, Jane and John Jr. John is an oil tycoon who always fancied himself as a sort of renaissance man. In order to emboss his name in history, he draws up a testament leaving everything he owns to his state’s flagship university. Jane and John Jr. are deeply hurt and quickly challenge the testament under the laws of forced heirship. Jane and John Jr. are both 30 years old and afflicted with mental illnesses. Jane currently works as a file clerk for a local law firm, but she struggles to keep a job because of her bi-polar disorder, which she likely inherited from her father, that renders her bedridden once every 6–12 months. John Jr. is a war veteran who suffers from Post-Traumatic Stress Disorder (“PTSD”). Similar to Jane, he struggles to sustain employment due to bouts of permanent incapacitation relating to his PTSD. Jane and John Jr. have the same fundamental problem: their mental illnesses prevent them from effectively taking care of themselves and administering their estates.[1] A layperson applying common sense may very well believe that no matter what the law of forced heirship is, it likely treats both Jane and John Jr. the same—either they are both forced heirs, or neither is a forced heir. Sadly, this is not the case. In the eyes of the law, only Jane is a forced heir. Why? Not because she needs the assistance more than her brother, but merely because her mental illness is inherited.[2]

A. Constitutional Provision Providing for Forced Heirship

First and foremost, forced heirship is a constitutional right[3] enshrined in article XII, § 5. In pertinent part, it reads:

The legislature shall provide for the classification of descendants, of the first degree, twenty-three years of age or younger as forced heirs. The legislature may also classify as forced heirs descendants of any age who, because of mental incapacity or physical infirmity, are incapable of taking care of their persons or administering their estates. The amount of the forced portion reserved to heirs and the grounds for disinherison shall also be provided by law.[4]

B. Forced Heirship in the Civil Code

Elaborating on the Louisiana Constitution, Louisiana Civil Code article 1493(A) provides that forced heirs include descendants of the first degree who (1) are under 24 years old or (2) “because of mental incapacity or physical infirmity, are permanently incapable of taking care of their persons or administering their estates at the time of the death of decedent.”[5] In order to protect those descendants who, at the time of the death of the decedent, have an incurable disease that will in the future, but has not yet rendered them “permanently disabled,” the legislature added subpart (E) to article 1493 in 2003:[6]

For the purposes of this Article “permanently incapable of taking care of their persons or administering their estates at the time of the death of the decedent” shall include descendants who, at the time of the death of the decedent, have, according to medical documentation, an inherited, incurable disease or condition that may render them incapable of caring for their persons or administering their estates in the future.[7]

Subpart (E) grants a legitime[8] to a descendant who has, for instance, ALS or muscular dystrophy but has not yet been incapacitated, thereby expanding forced heirship rights.[9] Yet scholars and judges, even those who support forced heirship generally, have found subpart (E) substantively and structurally lacking.[10]

II. Addressing Questions of Constitutionality, Determinability, and Public Policy

The problems with article 1493(E) discussed here are threefold: first, is subpart (E) constitutional; second, assuming constitutionality, is the language of subpart (E) determinable and capable of consistent application; and third, is the policy underlying forced heirship aided by subpart (E).

A. The Constitutional Question

In 2014, the Louisiana State Law Institute recommended that article 1493(E) be repealed as unconstitutional.[11] Professor Max Nathan, the reporter for the law of successions, argued that the forward looking language of article 1493(E) did not comport with the constitutional requirement that the incapacity of the descendant be present at the time of the death of the decedent.[12] The unconstitutionality, however, is not so patently obvious, as none of the appellate courts that have applied 1493(E) raised the constitutional question, notwithstanding the fact that appellate courts may notice constitutional problems on their own.[13]

B. Determinability of Article 1493(E)

Though early critics of article 1493(E) claimed “incurable” and “inheritable” were indeterminate terms, courts have not had trouble applying them.[14] Judges and practitioners have found “may” to be a troublesomely indeterminate term.[15] For instance, alcoholism is an inheritable and incurable disease.[16] If a descendant’s father and grandfather battled alcoholism, then he could argue that alcoholism may render him incapable in the future.[17] Even admitting that common usage of “may” indicates something more than 1/100 or 1/1000 chance does not make it a workable standard.[18] How much more than 1/100 chance does “may” require? 1/50? 1/25? 1/10? In the case of the descendant with alcoholic ascendants, what if the descendent received a DUI five years ago, ten years ago, or twenty years ago? When does a person cross the threshold of “may”? It depends on who is answering the question.[19] The legislature should solve this problem by replacing the “may render” standard with either a clear and convincing standard[20] or a more probable than not standard.[21] While either would increase the determinability of article 1493(E) and the predictability of its application, thus furthering the public policy of “warding off intra-family litigation,”[22] the lesser threshold is preferable because it better protects additional public policy goals.[23]

C. Article 1493(E) and Public Policy

Forced heirship should further the state’s interest in “warding off intra-family litigation, promoting family solidarity,”[24] and protecting the public fisc.[25] Remembering that article 1493 was amended with subpart (E) to eliminate the arbitrariness of withholding forced heirship from a person who had a debilitating disease but was not yet permanently incapable at the time of death of the decedent,[26] the requirement that a descendant have an inherited disease should be purged. Family solidarity is served by giving to those who are permanently disabled regardless of whether their disability is inherited. Remember John Jr. from the hypothetical above: what about having PTSD makes him unworthy for forced heirship?[27] Moreover, without a legitime, someone like John Jr. will likely need to rely on the state, thus burdening the public fisc. Distinguishing forced heirs according to whether a disease is inherited fails to uphold the public policy of forced heirship and must be changed.

III. Conclusion

Permanently disabled descendants, under the public policy of this state as embodied in its Constitution[28] and its jurisprudence,[29] legitimately deserve a legitime. Adding subpart (E) to article 1493 was a good first step towards protecting those who are unable to take care of their persons and their estate, but its work is incomplete due to its arbitrary and indeterminate language. Four years ago, Senate Judiciary Committee A was presented with potential amendments to article 1493(E) but voted to defer action until its members could properly evaluate the situation.[30] It has been long enough, and a new amendment should be brought. Judges, lawyers, and most importantly, successors probating testaments deserve a clear standard: “may render” should be replaced with “will, more probably than not, render.” Additionally, the requirement that the incapacitating disease must be inherited should be abolished as its arbitrary and discriminatory nature is anathema to the public policy underlying forced heirship, namely, the promotion of family solidarity.


[1] This language comes from Louisiana Civil Code article 1493(E).

[2] See In re Succession of Ardoin, 957 So. 2d 937, 943 (La. Ct. App. 2007) (finding expert testimony demonstrated bi-polar disorder is likely an inherited disease); Telephone Interview with Dr. Milo Milburn, Professor, Franciscan University of Steubenville (Oct. 14, 2018) (stating that bi-polar disorder, at least to a certain extent, is an inherited disease).

[3] See, e.g., La. Const. art. XII, § 5 (1995); Succession of Lauga, 624 So. 2d 1156, 1163 (La. 1993).

[4] La. Const. art. XII, § 5(B).

[5] La. Civ. Code art. 1493(A) & (E) (2018).

[6] See Louisiana State Senate Broadcast Archives, La. St. Senate (May 13, 2004), http://senate.la.gov/video/videoarchive.asp?v=senate/2014/05/051314JUDA.

[7] La. Civ. Code art. 1493(E) (emphasis added).

[8] See id. art. 1494 (“A forced heir may not be deprived of the portion of the decedent’s estate reserved to him by law, called the legitime, unless the decedent has just cause to disinherit him.”).

[9] See La. St. Senate, supra note 6.

[10] See infra Part II; J.R. Trahan, Successions & Donations, 64 La. L. Rev. 315, 359–75 (2004) (defending in part and criticizing in part article 1493(E)); S.B. 182, Leg., Reg. Sess. (La. 2004) (recommending that article 1493(E) be amended); H.B. 573, Leg., Reg. Sess. (La. 2014) (recommending that article 1493(E) be amended); H.B. 1114, Leg., Reg. Sess. (La. 2014) (recommending that article 1493(E) be repealed); La. St. Senate supra note 6 (bringing H.B. 573 at the request of judges).

[11]H.B. 1114, Leg., Reg. Sess. (La. 2014).

[12] See La. St. Senate, supra note 6; La. Const. art. XII, § 5 (referring to descendants who are incapable of administering their estates, not descendants who are or may become incapable of administering their estates). Article 1493(E) could also be unconstitutional due to vagueness, see Joseph A. Prokop, Jr., Louisiana Successions (2018), but vagueness should be solved by clarifying article 1493(E), not by abolishing it. Changing “may render” to “will, more probably than not, render” will eliminate the vagueness without throwing the article-1493(E)-baby out with the bathwater. See infra Part II.B

[13] See La. St. Senate, supra note 6; see also, e.g., In re Succession of Ardoin, 957 So. 2d 937 (La. Ct. App. 2007); Stewart v. Estate of Stewart, 966 So. 2d 1241 (La. Ct. App. 2007); In re Succession of Forman, 37 So. 3d 1081 (La. Ct. App. 2010); In re Succession of Carroll, 125 So. 2d 505 (La. Ct. App. 2013).

[14] See Trahan, supra note 10, at 365–69. Critics of the legislation also thought the word “incurable” would cause problems. Id. The courts have correctly, and without any apparent struggle, distinguished curability from treatability. See, e.g., In re Succession of Forman, 37 So. 3d at 1084. For more on how treatability affects determining whether a descendent is permanently incapable of taking care of her estate, see Trahan, supra note 10, at 369–371; In re Succession of Ardoin, 957 So. 2d at 943; In re Succession of Forman, 37 So. 3d at 1083–84.

[15] See La. St. Senate, supra note 6.

[16] See Telephone Interview with Dr. Milo Milburn, supra note 2. Alcoholism, like bi-polar disorder, depression and other mental disorders, is not inherited in the sense that the son of an alcoholic will necessarily be an alcoholic, but it is more likely. See id.

[17] See La. St. Senate, supra note 6.

[18] See Trahan, supra note 10, at 371.

[19] Another example that highlights the indeterminacy issue is heart disease. Heart disease is incurable and inheritable, but, at least in some instances, very treatable with medicine. Still, if the individual with heart disease does not adjust their diet or take their medicine, he may become incapable of administering his estate. The same could be said of very high functioning bi-polar individuals. Some individuals with bi-polar may never be incapacitated to the level required by article 1493(E). See generally Telephone Interview with Dr. Milo Milburn, supra note 2. The court in Stewart v. Estate of Stewart, 966 So. 2d 1241 n.2 (La. Ct. App. 2007), stated that descendants who had bipolar disorder were not automatically forced heirs under article 1493(E), but this merely revives the determinability question: bi-polar plus what carries descendants over the “may render” threshold?

[20] See S.B. 182, Leg., Reg. Sess. (La. 2014) (allowing forced heirship for “descendants of the first degree who, at the time of death of decedent, have an incurable disease or condition which as shown by clear and convincing evidence will render them permanently incapable in the future of caring for their persons or administering their estates”) (emphasis added).

[21] See H.B. 573, Leg., Reg. Sess. (La. 2014) (allowing forced heirship when “according to medical documentation, an inherited, incurable disease or condition that will, more probably than not, render them incapable of caring for their persons o administering their estates in the future”) (emphasis added).

[22] See Interview with J.R. Trahan, Professor, Paul M. Hebert Law Center at Louisiana State University, in Baton Rouge, La. (Sept. 27, 2018); but see La. St. Senate, supra note 6 (Professor Katherine Spaht arguing that using the more probable than not standard would add nothing, because it is already the civil burden of proof and persuasion). As article 1493(E) currently stands, the burden of proof requires that it is more likely than not that the inherited, incurable disease may render the individual incapacitated. Under the more probable than not standard proposed in 2014, the burden of proof would require that it is more likely than not that the disease will render the individual incapacitated. Thus, the change is not a distinction without a difference.

[23]See infra Part II.C.

[24] Succession of Lauga, 624 So. 2d 1156, 1165 (La. 1993). It should be noted that Succession of Lauga was decided before forced heirship was abolished and redefined by constitutional amendment in 1995, reflecting the current law. Even with the amendment to the Constitution, the public policy underpinning forced heirship has not changed in kind, rather it has changed by degree. Thus, forced heirship should still ward of intra-family litigation and promote family solidarity even if it cannot do so to the same degree as it did before the amendment. See generally Trahan, supra note 10, at 359.

[25] See La. St. Senate, supra note 6; Trahan, supra note 10, at 359, 373.

[26] See La. St. Senate, supra note 6.

[27] See In re Succession of Carroll, 125 So. 2d 505 (La. Ct. App. 2013) (finding evidence that prostate cancer may render plaintiff incapable in the future was not relevant as there was insufficient evidence to show that the prostate cancer was an inherited disease).

[28] La. Const. art. XII, § 5.

[29] See Succession of Lauga, 624 So. 2d at 1165.

[30] See La. St. Senate, supra note 6.

“The Long and Winding Road” to Compensation: The Music Modernization Act of 2018

by: Briana Falcon, Senior Associate

On September 17, 2018, Ross Golan, multi-platinum song writer, published a letter in Variety.[1] The letter was addressed to Liberty Media, parent company to SiriusXM, and, in the letter, Golan expressed concern for SiriusXM’s opposition to the Music Modernization Act.[2] Golan did not speak alone. Some of the most prolific songwriters and recording artists in history signed on to the letter to show their support for the MMA.[3] Notable among the list are Sir Paul McCartney, Don Henley, Stevie Nicks, Mick Fleetwood, and Steven Tyler. As Golan correctly noted in the letter, SiriusXM remained the lone holdout to the “historic law.” The Act received widespread, bipartisan support and, less than one month after Golan’s letter was published, President Trump signed into law the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (the “Act”).[4] For the first time, the Copyright Act of 1976 makes honest efforts to address the new challenges raised by Digital Service Providers (“DSPs”) like SiriusXM and Pandora. The MMA represents the largest reform to the Copyright Act in decades.

First, Title I of the Act creates a centralized entity called a Mechanical Licensing Collective.[5] The Collective will be funded by DSPs who, in turn, will be granted blanket mechanical licenses for downloads and streaming. Second, and most notably for legacy artists like Sir Paul McCartney, the Classics Protection and Access Act (the “CPA Act”), provides federal copyright protection for sound recordings fixed before 1972.[6] The CPA Act is incorporated as Title II of the Act. Third, the MMA directs the Copyright Royalty Board (“CRB”) to set the statutory rate for compulsory licenses under the willing buyer, willing seller standard of valuation.[7] Finally, under the Act, district judges in the Southern District of New York would form the “wheel” of district judges authorized to settle resolve rate setting disputes.[8] Before the Act was enacted, licensees and performing rights organizations alike were assigned to a single judge for the purpose of rate setting disputes.[9] Notably, Title III of the Act–the Allocation for Music Producers Act—makes important changes to royalty allocations to producers and engineers. Title III will not be discussed in this blog post.

I. The Mechanical Licensing Collective

Title I overhauls Section 115(b) of the Copyright Act and attempts to improve compensation to rights holders by creating a new, centralized database called the Mechanical Licensing Collective (“MLC”).[10] The MLC functions to issue blanket mechanical licenses—grants of the right to produce and release a work in exchange for a royalty[11]—to DSPs. The new licensing system is intended to eliminate the need for song-by-song licensing negotiations. Significantly, at least in theory, the creation of the MLC could make litigation over mechanical royalties obsolete—like the $1.6 billion infringement action currently pending against Spotify.[12]

In a petition filed on December 29, 2017, Wixen Music Publishing (“Wixen”) accused Spotify of repeated violations of federal copyright law.[13] According to commentators and attorneys familiar with the matter, Wixen’s copyright suit has merit.[14] Wixen is an exclusive licensee of songs like Tom Petty’s “Free Fallin,” the Doors’ “Light My Fire,” and Weezer’s “(Girl We Got a) Good Thing.”[15] The petition alleges Spotify failed to acquire either direct or compulsory licenses from Wixen that would allow for reproduction and distribution of the songs.[16]

Wixen’s allegations make sense. Before passage of the Act, high transactional costs prevented DSPs and third-party agencies from tracking down and compensating the rights holders for the millions of songs that make up the catalogs of DSPs, like SiriusXM. The MLC aims to solve this problem. DSPs that follow Section 115’s requirements and are still unable to locate copyright owners will receive a blanket license to use the repertoire. The DPS will turn over any accrued royalties for unmatched works to the Collective and will avoid penalty and the risk of liability for copyright infringement. In theory, costly litigation will be avoided and rights holders are assured compensation.

II. The Classics Protection and Access Act

The Classics Protection and Access Act (“CPA Act”) provides important compensation for copyright owners of sound recordings made before 1972.[17] Prior to its passage, the public performance right for sound recordings fixed before February 15, 1972 were outside of federal purview. As a result, pre-1972 sound recordings were covered by the legal regimes of the various states.

In 2011, the United States Copyright Office released its findings on the desirability of and means federalizing sound recordings fixed before February 15, 1972.[18] Registrar of Copyrights, Maria A. Pallante, urged that bringing pre-1972 sound recordings into the federal copyright system would serve the interests of consistency and certainty.[19] The newly enacted CPA Act, incorporated as Title II of the Act, achieves this end. Sound recordings of all ages are afforded a term of 95 years of protection measured from the date of first publication.[20]

III. The Willing Buyer, Willing Seller Standard

Section 115 of the Copyright Act allows individuals to obtain a compulsory license to reproduce a work in exchange for a statutory rate.[21] Before the Act was passed, the Copyright Royalty Board used inequitable standards, like the now unnecessary discount for “pre-existing services,” to set the statutory rate.[22] The Act replaces this standard with a uniform willing buyer, willing seller rate that is meant to approximate rates that would be negotiated in a free market. To determine the appropriate rate, the Copyright Royalty Judges will consider economic, competitive and programing information presented by the parties.[23] The new standard will benefit rights holders who have, until now, been prevented from introducing relevant evidence in rate court proceedings.

IV. The “Wheel” Approach

Before the Act, performance rights societies, like the American Society of Composers, Authors, and Publishers (“ASCAP”) and Broadcast Music Inc. (“BMI”), were each assigned to a single, respective rate court judge for the purpose of resolving rate disputes.[24] Under the new “wheel” approach, a district judge in Southern District of New York would be randomly assigned from a set of district judges to resolve rate disputes. This new system will ensure that judges approach each dispute “without impressions derived from prior cases.”[25] This will, in hope, benefit to licensees and performance rights societies alike.

Rapid technological changes and evolving consumer preferences have long outpaced United States copyright law. The Act aims to eliminate inconsistent rules that place certain technologies at a disadvantage and result in inequitably variable compensation for creators. There is work yet to be done, but the Act represents a positive step forward.


[1] Shirley Halperin, Paul McCartney, Don Henley, Katy Perry, More Pen Letter to SiriusXM: ‘We Will Boycott, Variety (Sept. 17, 2018, 1:30 PM), https://variety.com/2018/music/news/katy-perry-pink-max-martin-artist-letter-siriusxm-boycott-music-modernization-act-1202944141/ [https://perma.cc/3SSS-HENC]; see also Variety Staff, SiriusXM Responds to Artists’ Letter Threatening Boycott, Variety (Sept. 17, 2018, 3:21 PM), https://variety.com/2018/biz/news/siriusxm-responds-artists-letter-boycott-1202945226/ [https://perma.cc/WF84-Q4XS] (“Contrary to new reports and letters, this is really not about a SiriusXM victory, but implementing some simple, reasonable and straightforward amendments to MMA. There is nothing in our ‘asks’ that gut the MMA or kills the Act.”).

[2] S. 2823, 115th Cong. (2018) (Music Modernization Act of 2018).

[3] Halperin, supra note 1.

[4] Orrin G. Hatch-Bob Goodlatte Music Modernization Act, Pub. L. No. 115-364, 132 Stat. 3676 (2018); Remarks by President Trump at Signing of H.R. 1551, the “Orrin G. Hatch-Bob Goodlatte Music Modernization Act” (Oct. 11, 2018), https://www.whitehouse.gov/briefings-statements/remarks-president-trump-signing-h-r-1551-orrin-g-hatch-bob-goodlatte-music-modernization-act/ [https://perma.cc/98SP-NJ3A].

[5] S. 2823, 115th Cong. (Music Modernization Act of 2018).

[6] Emmanuel Legrand, US Music Modernization Act Becomes “The Law of the Land”; A Boost for Songwriter Compensation, Intell. Prop. Watch, 2018 WL 4939276 (Oct. 12, 2018).

[7] Id.

[8] Id.

[9] The Music Modernization Act, House of Representatives Judiciary Committee, https://judiciary.house.gov/wp-content/uploads/2018/04/MMA.pdf [https://perma.cc/J5XW-6MKV] (last visited Oct. 18, 2018).

[10] S. 2823, 115th Cong. (2018) (Music Modernization Act of 2018).

[11] Mechanical license, Black’s Law Dictionary (10th ed. 2014).

[12] Complaint, Wixen Music Publishing Inc. v. Spotify USA Inc., No. 17-cv-9288, 2017 WL 6663826 (C.D. Cal. Dec. 29, 2017).

[13] Id.

[14] Patrick H.J. Hughes, Copyright Suit Against Spotify Has Merit, Attorneys Say, Wixen Music Publishing v. Spotify USA, 24 Westlaw J. Intell. Prop. 2 (Jan. 17, 2018).

[15] Spotify hits with $1.6 billion copyright lawsuit, Reuters (Jan. 2, 2018), https://www.reuters.com/article/us-spotify-lawsuit/spotify-hit-with-1-6-billion-copyright-lawsuit-idUSKBN1ER1RX [https://perma.cc/HT7A-ZF95].

[16] Id.

[17] Patrick H.J. Hughes, Music Modernization Act gets Senate approval, 36 Westlaw J. Computer & Internet 09 (Oct. 5, 2018).

[18] U.S. Copyright Office, Federal Copyright Protection for Pre-1972 Sound Recordings (2011).

[19] Id.

[20] 17 U.S.C. §1401(a)(2)(A). Sound recordings are also protected during a transition period of 3 to 15 years. Id.

[21] 17 U.S.C. § 115 (2010) (entitled “Scope of exclusive rights in nondramatic musical works: Compulsory license for making and distributing phonorecords”).

[22] H.R. Rep. No. 115–651 (“The Committee finds no current justification for such 40-year old discounts that harm

copyright owners as well as competitors of such pre-existing services.”).

[23] Id.

[24] Summary of H.R. 1551, the Music Modernization Act (MMA), Copyright Alliance, https://copyrightalliance.org/wp-content/uploads/2018/09/CA-MMA-HR1551-Summary.pdf [https://perma.cc/5ZYE-PDHB] (last visited Oct. 18, 2018); Overview of the Music Modernization Act, House of Representatives, https://lieu.house.gov/sites/lieu.house.gov/files/Overview%20of%20the%20Music%20Modernization%20Act.pdf [https://perma.cc/MHD6-UXVQ] (last visited Oct. 18, 2018).

[25] Id.

The Blame Game: Inconsistency in the Application of Louisiana’s Comparative Fault Regime

by Thomas C. Naquin, Senior Associate

I. Introduction

 Courts in Louisiana are split on whether or not comparative fault, a mechanism through which a party may effectively shift blame onto another party, applies to actions arising in contract, or merely to actions in tort. This split creates uncertainty in the law and should be resolved by the Louisiana Supreme Court when the issue again presents itself.

II. The Circuit Split

In 1996, in reforming Louisiana’s tort law scheme, the Louisiana Legislature amended and adopted the current version of Louisiana Civil Code article 2323.[1] Under its current construction, Louisiana Civil Code article 2323 creates a pure comparative fault system in Louisiana, providing in paragraphs A and B:

A. In any action for damages where a person suffers injury, death, or loss, the degree or percentage of fault of all persons causing or contributing to the injury, death, or loss shall be determined . . .. If a person suffers injury, death, or loss as the result partly of his own negligence and partly as a result of the fault of another person or persons, the amount of damages recoverable shall be reduced in proportion to the degree or percentage of negligence attributable to the person suffering the injury, death, or loss.

B. The provisions of Paragraph A shall apply to any claim for recovery of damages for injury, death, or loss asserted under any law or legal doctrine or theory of liability, regardless of the basis of liability.[2]

In the aftermath of the 1996 tort reform, courts have struggled with the language of paragraph B that applies comparative fault to “any claim for recovery of damages” made “under any law or legal doctrine or theory of liability, regardless of the basis of liability.”[3] The seemingly broad scope of article 2323 has led to a circuit split on the issue of whether comparative fault applies merely to delictual actions,[4] or to contractual actions as well.[5] Although the Louisiana Supreme Court has recognized the circuit split, it has yet to resolve it.[6] If and when the Louisiana Supreme Court does address the circuit split, the solution is clear¾comparative fault applies only in delictual actions.

III. The Resolution

In Hanover Insurance Co. v. Plaquemines Parish Government, the United States District Court for the Eastern District of Louisiana conducted a well-reasoned analysis of the application of comparative fault.[7] The Hanover court concluded that comparative fault applied only to delictual actions and, in doing so, provided two main reasons: (1) the Louisiana Supreme Court discussed, at length, the 1996 revision and referred only to tort law; and (2) the structure of the Louisiana Civil Code supports the notion that comparative fault applies only to delictual actions.[8]

A. Evaluating the Louisiana Supreme Court’s Discussion of the 1996 Revision

In Dumas v. State ex rel. Department of Culture, Recreation & Tourism, the Louisiana Supreme Court discussed the 1996 revision of Louisiana Civil Code article 2323.[9] The Supreme Court’s analysis of the 1996 revision made references only to tort law.[10] The Court observed that the amendment’s purpose was “to abolish solidary liability among non-intentional tortfeasors and to place Louisiana in a pure comparative fault system.”[11 The Court further characterized the amendments as “effect[ing] a total shift in tort policy.”[12] The opinion made no mention of the amendments altering other theories of recovery.[13] The Dumas court’s references to the 1996 amendments as changing tort law support the application of comparative fault to delictual actions only.[14]

B. The Structure of the Louisiana Civil Code

Further, a finding that comparative fault applies only to delictual actions has even greater support in the structure of the Louisiana Civil Code. Unlike statutes enacted in common law jurisdictions, “the articles of a civil code are carefully organized according to their subject matter.”[15] The Louisiana Supreme Court has long held that courts should construe Civil Code articles in accord with their subject matters.[16] It is imperative, then, to consider article 2323’s placement within the Louisiana Civil Code to interpret its meaning.

Notably, article 2323 is in Title V of Book III, addressing obligations that arise without agreement.[17] It is specifically located in Chapter 3, which houses Louisiana’s tort law.[18] Contract law, however, is in Title IV of Book III.[19] This placement suggests that drafters intended article 2323 to apply only to tort law.

A close examination of the Code further supports the conclusion that comparative fault applies only to delictual actions. Title IV of Book III contains rules governing the calculation of damages in contract cases.[20] Contractual provisions, in part, allow a court to reduce the damages one owes for breaching a contract in cases in which the obligee’s own negligence contributed to his damages.[21] The fact that the contract section of the Code contains its own set of rules regarding damages discourages importing a tort article into contract cases.

A provision in Title III of Book III, however, most strongly counsels against the application of comparative fault in contract cases. Article 1804 provides:

Among solidary obligors, each is liable for his virile portion. If the obligation arises from a contract or quasi-contract, virile portions are equal in the absence of agreement or judgment to the contrary. If the obligation arises from an offense or quasi-offense, a virile portion is proportionate to the fault of each obligor.[22]

Article 1804—unsurprisingly found in the general obligations provisions—provides that courts allocate damages in one manner among co-obligors to a contract and in a different manner among co-obligors to an offense or quasi-offense. Indeed, the comments to the article explicitly state that the allocation of damages “depend[s] on the source of the obligation.”[23] In light of the distinction article 1804 makes between damages in actions arising in contract and of those arising in tort, the legislature likely intended to create separate legal regimes governing the allocation of damages in contract and tort actions.

IV. Conclusion

 If and when the Louisiana Supreme Court resolves the current circuit split, it should adopt the reasoning of the Hanover court and hold that Louisiana’s comparative fault regime applies only to delictual actions. This conclusion is supported by both the purpose of the 1996 revisions and the structure of the Louisiana Civil Code.

_______________________________

[1] La. Civ. Code art. 2323 (2018).

[2] Id.

[3] Id.

[4] The following sources reject the application of comparative fault to contractual actions: Justiss Oil Co., v. Oil Country Tubular Corp., 216 So. 3d 346 (La. Ct. App. 2017), writ denied, 227 So. 3d 830 (La. 2017); Hoffmann v. B & G, Inc., 215 So. 3d 273, 282 (La. Ct. App. 2017); Hanover Ins. Co. v. Plaquemines Par. Gov’t, No. CIV.A. 12-1680, 2015 WL 4167745, at *4–6 (E.D. La. July 9, 2015); Dual Constr., Inc. v. City of Alexandria, No. 10–1039, 2011 WL 759604, at *3 (W.D. La. Feb. 24, 2011); Hollybrook Cottonseed Processing, LLC v. Carver, Inc., CIV.A. 09-0750, 2010 WL 1416781, at *1 (W.D. La. Apr. 1, 2010); Touro Infirmary v. Sizeler Architects, 900 So. 2d 200 (La. Ct. App. 2005); Merlin v. Fuselier Constr., Inc., 789 So.2d 710, 717 (La. Ct. App. 2001).

[5] The following sources appear to recognize that something resembling comparative fault can reduce contractual liability: Chevron U.S.A. Inc. v. Aker Mar., Inc., No. 03–2027, 2008 WL 594648, at *1 (E.D. La. Feb. 29, 2008), rev’d on other grounds, 604 F.3d 888 (5th Cir. 2010); Touro Infirmary v. Sizeler Architects, 900 So. 2d 200, 207 (La. Ct. App. 2005) (Murray, J., dissenting); Petroleum Rental Tools, Inc. v. Hal Oil & Gas Co., 701 So. 2d 213, 217–18 (La. Ct. App. 1997) (holding that “liability for the redhibitory ‘defect’ qualifies as ‘fault’ under Article 2323 A”); Frank L. Maraist & Thomas C. Galligan, Jr., Burying Caesar: Civil Justice Reform and the Changing Face of Louisiana Tort Law, 71 Tul. L. Rev. 339, 382 (1996) (“Given the breadth of the language of new Article 2323(B), comparative fault may apply not only to a tort action but to a contract claim (including redhibition), a property claim, and perhaps others.”) (emphasis added).

[6] Aucoin v. S. Quality Homes, LLC, 984 So.2d 685, 693 n.12 (La. 2008).

[7] Hanover, 2015 WL 4167745, at *5–6.

[8] Id.

9] Dumas v. State ex rel. Department of Culture, Recreation & Tourism, 828 So. 2d 530 (La. 2002).

[10] Id.

[11] Id. at 535 (emphasis added).

[12] Id. at 538.

[13] Id.

[14] See generally id.

[15] Hanover Ins. Co. v. Plaquemines Par. Gov’t, CIV.A. 12-1680, 2015 WL 4167745, at *5 (E.D. La. July 9, 2015). See generally Robert Anthony Pascal, Of the Civil Code and Us, 59 La. L. Rev. 301 (1998); James L. Dennis, Capitant Lecture, 63 La. L. Rev. 1003 (2003); Katie Drell Grissel, The Legal Fiction of “Clear Text” in Willis–Knighton v. Caddo–Shreveport Sales and Use Tax Commission, 67 La. L. Rev. 523, 525–40 (2007).

[16] Compare Citizens & Taxpayers of De Soto Parish v. Williams, 21 So. 647, 654 (La. 1897) with Pociask v. Moseley, 122 So. 3d 533, 540 (La. 2013).

[17] La. Civ. Code art. 2323 (2018).

[18] Id.

[19] See, e.g., id. art. 1906.

[20] Id. arts. 1994–2004.

[21] Id. art. 2003 (“If the obligee’s negligence contributes to the obligor’s failure to perform, the damages are reduced in proportion to that negligence.”).

[22] Id. art. 1804.

[23] La. Civ. Code Ann. art. 1804 cmt. b.