282 So.3d 1042
La.2019Background
- Creekstone Juban I, LLC (Delaware LLC; owner of Louisiana property) sued XL Insurance America, Inc. for unpaid flood-loss claims under a commercial policy issued to a program sponsor; the policy covers multiple insureds and designates New York as exclusive forum and New York law to govern.
- XL moved to dismiss/declinatory exception for improper venue, relying on the policy’s forum-selection clause requiring suits be brought in New York.
- Creekstone opposed, arguing La. R.S. 22:868(A)(2) (prohibiting insurance provisions that “depriv[e] the courts of this state of the jurisdiction of action against the insurer”) renders the forum clause void as against Louisiana public policy.
- Trial court denied XL’s exceptions; Louisiana First Circuit denied writ relief (split). The Louisiana Supreme Court granted writs to resolve whether R.S. 22:868(A)(2) prohibits enforcement of the clause.
- The Supreme Court held R.S. 22:868(A)(2) does not bar enforcement of the forum-selection clause here, reversed the trial court, and granted the exception of improper venue; case remanded for proceedings under La. C.C.P. art. 121.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether La. R.S. 22:868(A)(2) voids a policy forum‑selection clause requiring suit in another state | R.S. 22:868(A)(2) embodies Louisiana public policy forbidding any contract term that deprives Louisiana courts of jurisdiction over insurance actions, so the clause is void | The statute addresses jurisdiction (subject‑matter/personal) not venue; a forum clause specifies venue and does not strip Louisiana courts of jurisdiction, so it is enforceable | The clause is enforceable; R.S. 22:868(A)(2) does not prohibit forum‑selection clauses that specify an out‑of‑state venue and do not eliminate Louisiana courts’ jurisdiction |
| Burden to avoid enforcement | Creekstone must show enforcement is unreasonable, unjust, procured by fraud/overreaching, or contravenes a strong forum public policy | XL: clause is presumptively valid under Bremen and Shelter Mutual; Creekstone produced no evidence of grave inconvenience | Court applied Bremen/Shelter Mutual framework and found Creekstone did not meet the heavy burden to avoid enforcement |
| Whether legislative history or statutory text controls interpretation of “jurisdiction of action” | Creekstone: text should be construed to effectuate statute’s protective purpose | XL: statute’s plain language and precedent distinguish jurisdiction from venue; legislature knows how to prohibit forum clauses when intended | Majority: textual plain‑meaning/precedent control — statute targets jurisdictional deprivation (e.g., arbitration clauses), not venue selection; legislative examples show when legislature meant to prohibit forum clauses |
| Effect if choice‑of‑law clause invalidated under R.S. 22:868(A)(1) | Creekstone suggested the choice‑of‑law might nullify the forum clause | XL: even if choice‑of‑law were void, R.S. 22:868(C) preserves other contract provisions; venue clause stands | Court declined to decide choice‑of‑law issue; noted R.S. 22:868(C) would preserve the forum clause even if other provisions were void |
Key Cases Cited
- Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum‑selection clauses presumptively valid; enforceable unless unreasonable, procured by fraud, or seriously inconvenient)
- Shelter Mut. Ins. Co. v. Rimkus Consulting Group, Inc. of La., 148 So. 3d 871 (La. 2014) (adopts Bremen approach under Louisiana law, recognizing parties’ freedom to contract for forum selection)
- Al Copeland Investments, LLC v. First Specialty Ins. Corp., 884 F.3d 540 (5th Cir. 2018) (applying Louisiana law, held R.S. 22:868 does not clearly prohibit forum‑selection clauses in insurance contracts)
- Lejano v. Bandak, 705 So. 2d 158 (La. 1997) (upheld forum‑selection clause in maritime/federal‑law context; clauses presumptively valid)
- Doucet v. Dental Health Plans Mgmt. Corp., 412 So. 2d 1383 (La. 1982) (discussing unenforceability of arbitration provisions in insurance contracts under statute)
- Macaluso v. Watson, 171 So. 2d 755 (La. App. 4th Cir. 1965) (interpreting predecessor statute as invalidating arbitration clauses that deprive courts of judicial remedies)