A Federal Judge In Sinkhole Litigation Applies Louisiana Law To One Excess Insurance Policy

Case: Lisa Leblanc, et al v. Texas Brine Co., LLC, et al. U.S. District Court for the Eastern District of Louisiana No. 12:12-2059 & Consolidated Cases (E.D. La. November 23, 2015)

This litigation involves a consolidated $80 million class action to recover damages resulting from the development of a sinkhole on property allegedly belonging to and or under the Defendants, Texas Brine Co., LLC and Occidental Chemical Corporation in Assumption Parish, Louisiana. The sinkhole was allegedly caused by Texas Brine's operations, and in response to Plaintiffs' claims, Texas Brine sued numerous insurers that issued liability policies to the company over the past 20 years. In the demands, Texas Brine seeks defense and indemnity, and with respect to one excess carrier, Liberty Insurance Underwriters (Liberty), Texas Brine also seeks damages, penalties and attorneys fees under La. R.S. Section 22:1973, one of Louisiana's bad faith statutes. The putative class of Plaintiffs also filed claims against Texas Brine's insurers under the Louisiana Direct Action Statute, La. R.S. 22:1269.

Texas Brine moved for summary judgment against all of the insurers (23 different carriers and 113...