Lower Cameron Hospital Service District v. Independent Specialty Insurance Co.

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA LAKE CHARLES DIVISION

LOWER CAMERON HOSPITAL SERVICE CASE NO. 2:22-CV-05433 DISTRICT ET AL VERSUS JUDGE JAMES D. CAIN, JR. INDEPENDENT SPECIALTY INSURANCE MAGISTRATE JUDGE LEBLANC CO ET AL MEMORANDUM ORDER Before the court are a Motion to Opt Out of Streamlined Settlement Process [doc.

13] and a Motion to Compel Arbitration and Stay Litigation [doc. 14] filed by defendants Independent Specialty Insurance Company and Interstate Fire & Casualty Company, which were stayed pending completion of discovery. See doc. 19. Also before the court is a Motion to Lift Stay and Reset Briefing Deadlines [doc. 29] filed by plaintiff Lower Cameron Hospital Service District. In the meantime, the Louisiana Supreme Court held in Police Jury of Calcasieu Parish v. Indian Harbor Insurance Co., 395 So.3d 717 (La. 2024), that (1) La. R.S. § 22:868(D) does not repeal Subsection A’s prohibition against arbitration clauses in insurance policies and (2) under state law, a domestic insurer may not use equitable estoppel to enforce an arbitration clause through the Convention. The Fifth Circuit then under consolidated appeals from this court in Town of Vinton v. Indian Harbor Insurance Company, 161 F.4th 282 (5th Cir. 2025), that its prior decision, Bufkin Enterprises v. Indian Harbor Insurance Co., 96 F.4th 726 (5th Cir. 2024), was “flawed and not supported by Louisiana law.” Town of Vinton, 161 F.4th at 288 (quoting Calcasieu Parish, 395 So.3d at 729)). As explained in Calcasieu Parish, La. R.S. § 22:868 “prohibits the use of arbitration clauses in Louisiana-issued insurance policies” and “because equitable estoppel cannot contravene Louisiana positive law, [the statute] precludes the use of estoppel to compel arbitration here.” /d. (internal quotations omitted).

The legal issues decided in Calcasieu Parish and Town of Vinton are dispositive of those presented in defendants’ Motion to Stay and Motion to Compel Arbitration.

Accordingly, the court requires no further briefing and hereby ORDERS that both motions [doc. 14] be DENIED while the Motion to Lift Stay [doc. 29] 1s GRANTED and the Motion to Reset Briefing Deadlines [id.] is DENIED AS MOOT. Due to the age of this case, the court sees no need for the parties to proceed under the streamlined settlement process outlined in the Case Management Order [doc. 4]. Thus, IT IS FURTHER ORDERED that the Motion to Opt Out [doc. 13] be GRANTED. A separate scheduling order will be issued, setting this matter for bench trial before the undersigned on August 10, 2026.

THUS DONE AND SIGNED in Chambers on the 20th day of January, 2026.

UNITED STATES DISTRICT JUDGE