United States: The Louisiana Supreme Court Issues New Decision Addressing Scope Of Claims For Negligent Infliction Of Emotional Distress Absent Physical Damage

On January 27, 2023, the Louisiana Supreme Court issued a ruling involving claims for negligent infliction of emotional distress ("NIED") absent physical damage. In Spencer v. Valero Refining Meraux, LLC, 2022-00469 (La. 1/27/23), — So. 3d –,¹ the Court reversed several lower court decisions that awarded the plaintiffs damages for NIED absent physical damage. In doing so, the Court reaffirmed that NIED absent physical injury is a valid tort in Louisiana and addressed the scope of such claims.

In Spencer, several residents sued Valero Refining Meraux, LLC ("Valero") for NIED after an explosion occurred at the nearby Valero oil refinery in Meraux, Louisiana.² Importantly, the explosion did not release a significant level of harmful chemicals; indeed, the plaintiffs only sought damages for the general fear and anxiety that the explosion caused them. The trial courts and Louisiana Fourth Circuit found in favor of the plaintiffs, in large part, and awarded them damages for NIED. Valero applied for supervisory writs to the Louisiana Supreme Court, arguing that a defendant cannot be liable for NIED absent physical damage, unless (1) the defendant owed a special, direct duty to the plaintiff; (2) the defendant breached the duty through outrageous conduct; and (3) the plaintiffs' emotional distress was severe and debilitating. The Court granted writs and ultimately rejected Valero's proposed standard, but the Court agreed with Valero that the plaintiffs failed to prove that they suffered "serious" emotional distress.

In an opinion authored by Justice Genovese, the Court reaffirmed the existence of NIED claims for emotional distress directly inflicted on a plaintiff absent physical injury and clarified the standard for proving such claims. Because it is first and foremost a negligence claim, the Court opined that the plaintiff must first satisfy the traditional duty-risk analysis by proving five separate elements: (1) the defendant had a duty to conform his conduct to a specific standard; (2) the defendant breached that duty; (3) the defendant's substandard conduct was a cause-in-fact of the injury; (4) the defendant's substandard conduct was the legal cause of the injury; and (5) actual damages.

Additionally, special to NIED claims absent physical damage, the plaintiffs must satisfy a more stringent damages inquiry; a plaintiff must prove "the especial likelihood of genuine and serious mental distress, arising from the special circumstances, which serves as a guarantee that the claim is not spurious." The Court made clear that lower courts must "stringently" apply this standard to NIED claims absent physical damage because of the inherently speculative nature of such claims and because evidence "of generalized fear or evidence of mere inconvenience is insufficient" to meet the standard.

In its analysis, the Court found that Valero owed a duty to the residents in the community surrounding the refinery and that Valero breached that duty because of the explosion, which caused the plaintiffs to suffer mental distress. Nevertheless, the Court found that the plaintiffs failed to offer sufficient evidence to prove that their emotional distress was "serious" enough to support a claim for NIED absent physical damage. The Court also rejected the plaintiffs' theory that the doctrine of nuisance applied to the dispute because Valero did not substantially interfere with the plaintiffs' property rights, and nuisance liability cannot provide a substitute remedy where plaintiffs fail to prove NIED absent physical damage. Accordingly, the Court found in favor of Valero and reversed the plaintiffs' damages award.

Although the justices voted six to one in favor of reversal, the Court fractured as to the legal reasoning compelling the result. Indeed, three justices concurred in the result but applied a different legal standard. In contrast to the majority, Chief Justice Weimer and Justice Crain opined that "serious" emotional distress means distress that is "severe, debilitating, and foreseeable," analogizing the standard to that of NIED bystander damages under Louisiana Civil Code article 2315.6.³ In the end, the majority rejected defining "serious" by way of analogy to the standard in article 2315.6, stating that the "emotional distress suffered by a plaintiff need not be 'reasonably foreseeable,' nor 'severe and debilitating.'"

The Spencer ruling is a significant development in Louisiana tort law regarding claims for NIED absent physical damage. Based on the opinion, Louisiana refineries should be mindful of their duty to the surrounding community when conducting operations, and courts must stringently scrutinize NIED claims absent physical damage to prevent spurious claims. This decision—and particularly the concurrences of Chief Justice Weimer and Justice Crain—also underscores the need for possible legislation to clarify that the same standard for recovery of bystander damages under Civil Code article 2315.6 should apply equally to NIED claims without corresponding physical harm. As Chief Justice Weimer aptly noted, the reasons "for limiting recovery in this case are no different" than in a case involving bystander damages under article 2315.6.

*Editor's Note: Kelly Becker and Mark Deethardt of Liskow & Lewis represented the International Association of Defense Counsel in submitting an amicus brief to the Supreme Court in support of Valero.

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Footnotes

1. https://www.lasc.org/opinions/2023/22-0730.CC.OPN.pdf.

2. The Court consolidated three separate suits for briefing and argument because the suits arose from the same facts and shared the same theory of liability.

3. Justice McCallum agreed with the legal analysis of the concurring justices but expressed reservations with creating a "judicial doctrine," thus usurping the role of the legislature.

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