Forum Selection Provision Not Binding in Louisiana

    The insurer’s motion to dismiss based upon the policy’s forum selection provision was denied. Oak Haven Mgmt., LLC v. Starr Surplus Lines Ins. Co., 2021 U.S. Dist. LEXIS 171611 (W.D. La. Sept. 9, 2021).

    The insured retirement home suffered property damage from Hurricane Laura and Hurricane Delta. After disagreements with Starr over the amount of the damage, the insured filed suit in the federal district court in Louisiana. Starr moved to dismiss, seeking to enforce the forum selection clause which required suits to be filed in New York. 

    The insured argued the clause violated a strong public policy expressed in a Louisiana statute, which forbid forum selection clauses and arbitration clauses in insurance policies. The statute was amended in 2020, resulting in a clear limitation on forum selection clauses. Starr argued that the prior version of the statute applied, rather than retroactively applying the amended statute.   

    The Louisiana Supreme Court had held, however, that laws prohibiting forum selection clauses were procedural in nature and could be retroactively applied to causes of action accruing before their effective date. Moreover, the Louisiana legislature’s prohibition against forum selection clauses in insurance policies reflected a strong public interest in having disputes over policies covering Louisiana residents or property decided locally. Accordingly, the forum selection clause was unenforceable in this matter. 

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