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Sheppard v. Liberty Mutual Insurance Co.

United States District Court, E.D. Louisiana

February 2, 2017


         SECTION “R” (3)



         Jesse Frank Sheppard alleges that he suffers from lung cancer caused by asbestos exposure. He brings claims against his former employer, several manufacturers and distributors of asbestos-containing products, and related insurers. The parties have filed several motions, and the Court resolves seven of them as follows.

         I. BACKGROUND

         This suit was originally filed in the Civil District Court for the Parish of Orleans.[1] Defendant Mosaic Global Holdings Inc. removed the action to this Court on March 22, 2016.[2] In his complaint, Sheppard alleges that he was exposed to asbestos “[o]n a daily basis” as an employee of Mosaic's predecessor company, Freeport Sulphur Company.[3] This exposure allegedly caused Sheppard to develop asbestos-related cancer, lung cancer, and/or mesothelioma.[4] Although Sheppard stopped working for Freeport in the early- to mid-1990s, [5] Sheppard's asbestos-related ailments were first diagnosed in October 2015.[6]

         In addition to Freeport/Mosaic, Sheppard sues several defendants involved in the manufacture, distribution, and sale of asbestos-containing products that Sheppard allegedly encountered in the course of his work.[7]Sheppard also brings claims against insurance companies that allegedly provided coverage to defendants for asbestos-related claims and withheld information from Sheppard about the danger of asbestos.[8]

         Sheppard brings claims for “negligence, intentional tort, fraud, and strict liability, ” and alleges that all defendants are “jointly, severally, and in solidio liable.”[9] He seeks damages for, among other things, physical and mental pain, loss of life, loss of income, and medical expenses.[10]


         A. Motion to Strike Gayla McCluskey (R. Doc. 187)

         Sheppard moves to strike Gayla McCluskey on the grounds that defendant Reilly Power never offered McCluskey for deposition. In response, Reilly Power points to an email sent by its counsel to Sheppard's counsel on December 27, 2016. In the email, “Riley Power, Inc. offers Gayla McCluskey for deposition by telephone at 1:00 pm EST on January 3, 2017.”[11]This date is before the close of discovery, [12] and plaintiffs have offered no further briefing to suggest this dispute remains live. Accordingly, the motion is DENIED AS MOOT.

         B. Motion to Exclude Evidence Regarding Settlements (R. Doc. 198) and Motion to Exclude Evidence Regarding Collateral Sources (R. Doc. 199)

         In these two motions, Sheppard argues that evidence that he settled claims with other defendants in this case is inadmissible under Federal Rule of Evidence 408 and that evidence of collateral sources of compensation, such as insurance benefits, is inadmissible under the collateral source rule. Under Rule 408, evidence of compromise of a claim is inadmissible for purposes of establishing liability. Fed.R.Evid. 408. Similarly, “the collateral source rule operates to exclude evidence of collateral benefits because it may unfairly prejudice the jury.” Trico Marine Assets Inc. v. Diamond B Marine Servs. Inc., 332 F.3d 779, 794 n.7 (5th Cir. 2003).

         Defendants respond that both settlement agreements and evidence of collateral sources may be admissible to show bias or prejudice in a witness, to explain why the plaintiff's testimony regarding settling defendants has changed, or for other limited purposes. Defendants are correct that Rule 408 is not a blanket ban on settlement evidence. See Fed. R. Evid. 408(b); 2 McCormick On Evid. § 266 (7th ed. 2016). However, “[i]n evaluating the ‘another purpose' exception to Rule 408, the district court must balance the exception against the policy of encouraging settlements, and take care that an ‘indiscriminate and mechanistic' application of the exception does not undermine the rule's public policy objective.” Marine Power Holding, L.L.C. v. Malibu Boats, LLC, No. 14-912, 2016 WL 4218217, at *4 (E.D. La. Aug. 8, 2016) (quoting Gulf S. Mach., Inc. v. Am. Standard, Inc., No. 97-065, 1999 WL 102752, at *2 (E.D. La. Feb. 22, 1999)). A similar balancing standard applies to the collateral source rule. Trico Marine, 332 F.3d at 794 n.7. (“[I]n certain circumstances, [collateral source] evidence could be admitted for a limited purpose if there is little risk of prejudice and the court gives the jury a limiting instruction.”).

         The parties have argued these motions in generalities rather than specifics. Neither party identifies which specific settlements should be excluded or admitted. Sheppard does not outline why evidence of settlements with any party would be prejudicial. Defendants, meanwhile, list reasons why a settlement might be admissible, but offer no argument tailored to the facts of this case. The parties' briefing regarding collateral sources is similarly academic.

         Accordingly, the Court finds that a blanket ban on these categories of evidence is unwarranted, and Sheppard's motions are DENIED. However, in view of the potential prejudice associated with evidence of prior settlements or collateral sources of compensation, no such evidence will be admissible at trial without express permission of the Court. Parties seeking to introduce evidence relating to settlements or collateral sources shall provide written briefing on the issue, no later than midnight on the day before the proposed offer.

         C. Motion in Limine Regarding Experts That Have Not Yet Been Deposed (R. Doc. 201)

         Sheppard represents that he was unable to depose all of defendants' experts before the Court's deadline for Motions in limine regarding the admissibility of expert testimony. He has accordingly filed the instant motion “in order to preserve the plaintiff's ability to supplement this motion if, following the deposition of the remaining expert witnesses, it appears that a motion in limine regarding the admissibility of the experts' testimony is warranted.”[13] This is not a proper use of a motion in limine, and the motion is therefore DENIED.

         D. Motion for Judicial Admission Regarding Asbestosis (R. Doc. 211)

         In this motion, Sheppard argues that in moving for summary judgment on Sheppard's purported claims for asbestosis, defendants made a judicial admission that Sheppard in fact has asbestosis. Defendants deny making any such admission.

         The Fifth Circuit defines a judicial admission as “a formal concession in the pleadings or stipulations by a party or counsel that is binding on the party making them.” Martinez v. Bally's Louisiana, Inc., 244 F.3d 474, 476 (5th Cir. 2001). A judicial admission is conclusive and withdraws a fact from contention. See Id. Further, a statement by counsel during the course of trial may qualify as a judicial admission if counsel intended to release the opponent from proof of a fact. See id. An ordinary evidentiary admission, on the other hand, is “‘merely a statement of assertion or concession made for some ...

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