Illinois Central Railroad Co. v. Willie Harried, e
2012 U.S. App. LEXIS 10761
| 5th Cir. | 2012Background
- Illinois Central sued Guy and Brock for fraud and bad-faith in inducing settlements of Eakins/Allen asbestos claims.
- Guy and Brock represented Turner, Harried, and about 170 others; settlements pursued under a 2002–2004 agreement with controlled settlement decisions.
- Omissions by Guy and Brock included Turner/Harried’s participation in the Cosey case and Tyler’s omissions; Tyler’s letter was later shown to be false.
- Illinois Central discovered the omissions in 2004–2005, pursued relief in the Eakins litigation, and later joined Guy and Brock in separate actions (2008) to pursue fraud claims.
- A Mississippi state-court settlement framework and subsequent Mississippi Supreme Court appeals (Acuff and McDaniel) shaped related rulings, but did not dispose of the instant federal fraud claims.
- A jury trial in the district court awarded Illinois Central substantial damages for fraud and bad faith; Guy and Brock challenged jurisdiction, abstention, statute limitations, and waiver defenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rooker-Feldman applicability | IC contends district court jurisdiction remains despite state judgments. | Guy and Brock argue district court should be barred under Rooker-Feldman. | Rooker-Feldman does not apply; no final Mississippi state judgment is being reviewed. |
| Burford abstention applicability | IC argues federal damages action fits MS state-regulatory context with need for local expertise. | Guy and Brock contend abstention is appropriate to defer to MS processes. | Burford abstention not warranted; damages action proceeds in federal court. |
| Fraudulent concealment tolling (accrual date) | Concealment by defendants tolled accrual; discovery occurred on Feb. 13, 2004, with tolling through Feb. 4, 2005. | Tolling not proven; due diligence failed to uncover earlier misconduct. | Sufficient evidence supported tolling; accrual date tied to February 13, 2004, with tolling through February 4, 2005. |
| Due diligence requirement for tolling | Illinois Central exercised reasonable diligence after discovery of the omissions. | IC failed to pursue timely investigation after August 2004 deposition and other notices. | Record supports reasonable diligence; IC did not need to intensify investigation beyond reasonable measures. |
| Waiver after discovery | IC did not ratify or affirm settlements to waive fraud claims; pursued independent actions. | Turner and Bogy framework suggests continuing performance could waive rights. | No waiver; continued pursuit of related actions did not amount to ratification or waiver of fraud claims. |
Key Cases Cited
- Acuff v. Illinois Cent. R.R. Co., 950 So.2d 947 (Miss. 2006) (Mississippi Supreme Court decisions on settlement procedures and related appeals)
- McDaniel v. Illinois Cent. R.R. Co., 951 So.2d 523 (Miss. 2006) (Mississippi Supreme Court decisions on related appeals)
- Turner v. Wakefield, 481 So.2d 846 (Miss. 1985) (fraudulent inducement waiver rule in Mississippi)
- Spann v. Diaz, 987 So.2d 443 (Miss. 2008) (fraudulent concealment due diligence standard)
- Bullard v. Guardian Life Ins. Co. of Am., 941 So.2d 812 (Miss. 2006) (due diligence prerequisite for tolling under Miss. code § 15-1-67)
- Meador, 81 So.3d 1112 (Miss. 2012) (Mississippi tolling due diligence interpretation)
- Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (U.S. 1996) (limits of Burford abstention; damages action can be stayed)
- New Orleans Pub. Serv., Inc. v. City Council of New Orleans, 491 U.S. 350 (U.S. 1989) (limits and scope of Burford abstention)
- Burford v. Sun Oil Co., 319 U.S. 315 (U.S. 1943) (abstention doctrine foundations)