Background
On May 23, 2024, minor child Allie Morgan allegedly encountered a straight-edge razor at a Hilton Garden Inn in West Monroe, Louisiana, operated by Southern Hospitality Services, LLC, sustaining injuries. Her parents, Molly and Robert Morgan, filed a petition for damages on May 14, 2025, naming both the hotel and its liability insurer, Arch Insurance Company, as defendants — asserting Arch was individually and jointly liable under Louisiana’s Direct Action Statute, La. R.S. 22:1269.
Arch moved to dismiss via a peremptory exception of no right of action, arguing that an August 1, 2024 amendment to the Direct Action Statute had eliminated the general right to sue an insurer directly. Because the Morgans did not file suit until May 2025 — after the amendment’s effective date — Arch contended plaintiffs belonged to no class of persons the amended statute entitled to bring a direct action. Arch also moved to strike its name from the caption and pleadings as required by the amended statute.
The trial court overruled the exception and denied the motion to strike, reasoning that plaintiffs’ right to sue Arch vested at the time of Allie’s injuries in May 2024, before the amendment took effect, and that retroactive application of the amendment would impair that vested right. Arch sought supervisory review by the Second Circuit.
The Court’s Holding
The Second Circuit reversed, holding that the Direct Action Statute confers a procedural — not substantive — right of action against an insurer. Applying Louisiana Civil Code Article 6, the court explained that procedural laws apply both prospectively and retroactively in the absence of contrary legislative expression. Because the Louisiana Supreme Court has characterized the Direct Action Statute as granting a “procedural right of action” (Green v. Auto Club Grp. Ins. Co., 24 So. 3d 182 (La. 2009)), the 2024 amendments eliminating that right applied retroactively to all suits filed on or after August 1, 2024.
The court aligned itself with two sister circuits — the Fourth and Fifth — that had reached the same conclusion on materially identical facts. Because the Morgans filed suit on May 14, 2025, well after the amendment’s effective date, they had no right of action against Arch regardless of when the underlying injury occurred. The court sustained Arch’s exception of no right of action and dismissed plaintiffs’ claims against the insurer with prejudice.
The court also granted Arch’s motion to strike, directing the Clerk of Court to remove Arch Insurance Company from the case caption and all pleadings in accordance with La. R.S. 22:1269(B)(4)(a) and (b), which prohibit naming an insurer in the caption and bar disclosure of insurance coverage to the jury.
Key Takeaways
- Louisiana’s amended Direct Action Statute (effective August 1, 2024) eliminated the general right to sue a liability insurer directly; plaintiffs who filed suit after that date cannot bring a direct action against the insurer, even if the underlying injury predates the amendment.
- The Direct Action Statute creates a procedural right of action, not a substantive one; under La. C.C. art. 6, procedural laws apply retroactively absent a contrary legislative directive, so no vested-right protection shields plaintiffs from the amendment.
- The Second Circuit joins the Fourth and Fifth Circuits in a uniform interpretation, signaling that Louisiana appellate courts are settled on this question pending any contrary ruling from the Louisiana Supreme Court.
- Insurers sued directly after August 1, 2024 should promptly file an exception of no right of action and a motion to strike their names from the pleadings and caption under La. R.S. 22:1269(B)(4).
Why It Matters
This decision confirms a significant shift in Louisiana insurance litigation practice. For decades, plaintiffs could sue an insurer directly alongside its insured, giving injured parties immediate access to the insurer at trial. The 2024 amendment reversed that default, and this ruling — consistent with decisions from two other Louisiana circuits — makes clear that the change applies to all suits filed from August 1, 2024 onward, regardless of when the accident occurred. Plaintiffs’ attorneys handling claims that arose before the amendment must be aware that they lost direct-action rights the moment they filed suit after the effective date.
For insurers and defense counsel, the ruling provides a reliable procedural weapon to exit litigation at the pleadings stage and, critically, to keep the insurer’s identity from the jury entirely. The practical effect is to restore a measure of the insulation from direct liability that insurers enjoyed before Louisiana adopted its broad direct-action framework, and it will likely reshape settlement dynamics and trial strategy in personal injury cases throughout the state.