Waguespack v. Avondale Industries, Inc. (2021)

Our plain-English summary of Waguespack v. Avondale Industries, Inc. (U.S. District Court, Eastern District of Louisiana, May 26, 2021).

Lana Waguespack sued Avondale Industries and others in Louisiana state court in September 2019, alleging she developed mesothelioma from asbestos carried home on the work clothes of her father, brother and ex-husband, beginning in 1944, the year she was born. She died in October 2019, and her heirs joined the case to pursue her claims and their own. The case was in federal court in the Eastern District of Louisiana. Lamorak Insurance Co., sued as the alleged insurer of certain Huntington Ingalls executive officers, had been declared insolvent and placed into liquidation. Lamorak, joined by Huntington Ingalls, asked the court to enforce a stay under a Pennsylvania court order and a Louisiana statute, and to stay the whole case. The plaintiffs accepted a stay as to Lamorak but opposed staying everything. The court followed two other judges in its district and granted the motion. It stayed and administratively closed the entire case until September 12, 2021, and vacated the pretrial and trial dates, reasoning that proceeding against the other defendants would likely cause piecemeal adjudication.

We wrote this summary from the court's opinion with the help of AI. It is not the court's wording, and it is not legal advice. The full opinion is below.

The decision

• Court: U.S. District Court, Eastern District of Louisiana
• Decided: May 26, 2021
• Docket: Civil Action No. 20-1986
• Stage: Other
• State: Louisiana

Outcome. The court granted Lamorak Insurance Co.'s motion (joined by Huntington Ingalls) to enforce a stay, staying and administratively closing the entire case until September 12, 2021, over the plaintiffs' objection to staying the whole action.

What the court held. Where an insurer defendant is insolvent and subject to a six-month stay under La. R.S. 22:2068(A), the court may stay the entire case, because letting the rest proceed risks piecemeal adjudication; the court would do so under its discretion even if the statute does not apply in federal court.

Issues decided: Insurance Coverage, Trial Procedure and Discovery.

The people and their exposure

• Lana Waguespack (family member): mesothelioma; died

The defendants

• Avondale Industries, Inc.
• Huntington Ingalls Inc.
• Lamorak Insurance Co. (insurer)

Other decisions in this case

Other rulings from the same court in the same case, in our library:

• Waguespack v. Avondale Industries, Inc. (September 3, 2020). The court denied the plaintiffs' motion to remand, holding that Huntington Ingalls and Lamorak (Avondale) timely removed the case under the federal officer removal statute and did not waive removal.

Decisions this opinion cites

Earlier decisions in our library that the court cited:

• Gooding v. Liberty Mutual Insurance Co. (U.S. District Court, Eastern District of Louisiana, 2021). The court granted insurer Lamorak's motion to stay the action because of its Pennsylvania liquidation, administratively closed the case, and denied the plaintiffs' motion to sever the claims against Lamorak and its insureds.

The court's opinion

The text below is Google Scholar's copy of the court's opinion, a public record. Numbers in brackets, such as [*921], mark where each page of the printed reporter begins.

LANA WAGUESPACK, ET AL.,

v.

AVONDALE INDUSTRIES, INC., ET, SECTION: "A" (2). AL.

Civil Action No. 20-1986.

May 26, 2021.

United States District Court, E.D. Louisiana.

ORDER

JAY C. ZAINEY, District Judge.

The following motion is before the Court: Motion to Enforce Stay (Rec. Doc. 57) filed by Lamorak Insurance Co., and joined by defendant Huntington Ingalls Inc. Plaintiffs, the statutory heirs of Lana Waguespack, oppose the motion. The motion, submitted for consideration on May 26, 2021, is before the Court on the briefs without oral argument. In September 2019 Ms. Lana Waguespack initiated this action in state court against Avondale and others asserting that she contracted mesothelioma after being exposed to asbestos brought home on the work clothes of her father, brother, and exhusband, starting in 1944 (time of her birth) and for many years thereafter. Ms. Waguespack died in October 2019 from mesothelioma, and thereafter her heirs joined the case as plaintiffs to pursue both her claims and their own. (Rec. Doc. 1-2). Lamorak was sued in this action as the alleged insurer of certain executive officers of Huntington Ingalls. Lamorak has now been declared insolvent and placed into liquidation. Lamorak urges the Court to enforce the permanent stay of claims against it made by the Commonwealth Court of Pennsylvania and the automatic statutory stay of claims against it and any party it is obligated to defend as set forth by La. R.S. § 22:2068(A). Pursuant to that same statute, the movants argue that the entire case should be stayed.

Plaintiffs do not dispute that a stay as to the claims against Lamorak, and perhaps its insureds in this matter, may be appropriate. Plaintiffs do dispute, however, the movants' contention that this entire action should be stayed pursuant to La. R.S. § 22:2068(a), which Plaintiffs argue should not apply in a federal court.[1]

The question presented via the instant motion has already been addressed by at least two other judges in this district both of whom have determined that the stay should apply to the entire action for the six month period provided in the state statute. Gooding v. Liberty Mut. Ins. Co., No. 20-1133, 2021 WL 2002463 (E.D. La. May 19, 2021) (Brown, C.J.); Cortez v. Lamorak Ins. Co., No. 20-2389, Rec. Doc. 244 (May 20, 2021) (Vance, J.). As those judges have pointed out, the stay undisputedly extends to Lamorak and its insureds, and to allow the rest of the case to proceed while the stay is in effect as to those defendants will likely lead to piecemeal adjudication of this action. Thus, even if § 22:2068(A) does not apply in a federal court (an issue the Court need not decide), the Court would nonetheless exercise its discretionary authority to stay the entirety of this matter for the period prescribed in the statute.

Accordingly, and for the foregoing reasons;

IT IS ORDERED that the Motion to Enforce Stay (Rec. Doc. 57) is GRANTED. This matter is STAYED and

ADMINISTRATIVELY CLOSED until September 12, 2021, after which date any party may file a motion to reopen the case to have it restored to the trial docket. If the motion is contested by any party then it must be noticed for submission in accordance with the Local Rules.

IT IS FURTHER ORDERED that the pretrial conference and jury trial dates in this matter, September 9, 2021 and September 27, 2021, are VACATED.

[1] La. R.S. § 22:2068, Stay of Proceedings, states in relevant part:

All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this state shall be stayed for six months and such additional time as may be determined by the court from the date the insolvency is determined to permit proper defense by

the association of all pending causes of action.

La. R.S. § 22:2068(A).

Sources

• The opinion on Google Scholar
• Louisiana asbestos laws
• Louisiana asbestos exposure sites