MRGO suit update

For awhile immediately after Katrina I posted a lot about the disaster.   I imagined people who had lost all their possessions and were displaced by hundreds of miles, separated from their friends, and that finally at some point they would be able to get onto the internet, and it might be some small service to research and find links that would lead them to useful resources.  So (apart from making some modest donations to charities) that's what I did. 

In the same spirit, here's a link to an update on a class action lawsuit in New Orleans against the Army Corps of Engineers arising from the construction of MRGO.    The link is to a website called the Levee Litigation Group, which appears to be set up by a consortium of plaintiffs' lawyers who are signing people up to be part of one or more class actions against the Army Corps of Engineers based on MRGO, or the 17th Street levee, or the London Ave. canal.  If you are one of the folks in New Orleans who were more or less wiped out by Katrina, there are all sorts of lawyers and law firms to contact for legal advice.  Looks like if you want in on the class action, you may need to take action by the end of this monthSo there isn't a moment to lose.

[Later:  here is one place to get an SF95 form.]

[March 1:  The New Orleans Times Picayune reports that the deadline is really March 1, and that the Army Corps of Engineers is accepting the claim forms at all its regional offices.

Late Wednesday afternoon, the corps announced that the claims forms would be accepted until the deadline at any of its offices around the nation. A list of corps offices is available at on the Internet.

Click here for the story.  Also, even if you miss the March 1 deadline, you still should file the form, because under another statute there is another deadline that expires two years after the occurrence and that deadline is in August.  Click here for more explanation.]

Generally, about a year ago I decided to step back from writing about Katrina issues.  Although fascinating, those issues are really far beyond the scope of my firm's practice or what I want to do with this blog.         


Suit against the Army Corps of Engineers for negligence in building "MR GO"

Here is a report concerning a pending class action lawsuit in federal court in Louisiana, alleging that the flooding of New Orleans was caused by the Army Corps of Engineers' malpractice in designing and constructing "MR GO" [the Mississippi River Gulf Outlet].   Doug Simpson posted about this a few days ago.  Most probably, MR GO was a pork project from yesteryear, which may have been opposed by some civic groups in New Orleans, but which undoubtedly was pushed through by the political elite of Louisiana at the time, and probably the state government as well.  I wonder how the suit can survive sovereign immunity defenses?  Can every business who supported the construction of MR GO be brought in as a defendant?

One must also wonder whether it makes sense to distract the Army Corps of Engineers with this lawsuit at the very time you are counting on it to rebuild critical facilities. 

Putting that aside, there is that $12 billion dollars that the National Flood Insurance Plan has already paid out in cash for Katrina flooding damages in New Orleans.

It seems to me that the NFIP should be subrogated to the rights of the plaintiffs in the class action to the tune of $12 billion dollars.  If the NFIP's policyholders are not part of the class as defined by the suit, they should be -- I don't see how they could reasonably be excluded.  The NFIP, as we all painfully know at this point, is bankrupt and survives only because by law it can tap directly into the United States Treasury to pay claims.  See the links provided by Doug Simpson on the NFIP.

On the other hand, generally an insurer may not assert subrogation rights unless its insured has been fully compensated.  Therefore the NFIP's subrogation rights probably do not arise until a particular policyholder has been fully compensated.

Insurers accused of being Nazis

Mississippi Attorney General Jim Hood has likened insurers in Mississippi to Nazis.  I don't have a dog in this fight -- my firm doesn't do any work for State Farm or Allstate, and we are not involved in hurricane-related litigation.  And I've taken my lumps from insurance companies too.  But this is a bit much.  Many billions of dollars have been paid out in Mississippi and Louisiana by private insurers and the National Flood Insurance Program as a result of Katrina.  Many more billions have been spent by the federal government.

Later:  According to the Mississippi Insurance Department, insurers have paid in excess of nine billion dollars in claims in Mississippi as a result of Katrina.  Of which six billion was paid out in the three coastal counties of Mississippi that were hardest hit.  The NFIP has paid out about 14.5 billion dollars in flood claims resulting from Katrina; 12 billion of those payments were in Louisiana, so probably about 2 billion dollars of that was paid in Mississippi.  Also in early April, a 3.4 billion dollar HUD grant program for Mississippi was announced.


Flood Exclusion upheld

A federal judge in Mississippi has declined to find that a flood exclusion is ambiguous or unenforceable.    However, the judge earlier ruled in this case that the insurer was not entitled to summary judgment, as there is an issue of fact as to what damage was caused by wind and what damage was caused by water.  So neither side can truly claim victory at this point.

Here are the two Buente decisions by Judge Senter:

Buente I Download buente_decision.pdf -- denying Allstate's motion for judgment

Buente II Download buente_ii.pdf -- denying plaintiffs' motion for summary judgment

Hurricane Law Blog

When one considers that Hurricane Katrina devastated an area about the size of England, and everything has to be rebuilt or fixed, it makes perfect sense that a law firm with offices in Mississippi, Louisiana, and Texas (and elsewhere) has started up a Hurricane Law Blog.  The Hurricane Law Blog intends to offer readers "a central repository for current information about hurricane-related legislation, litigation, and regulatory issues affecting Louisiana, Mississippi, Texas and Alabama."  They are working hard on it, but that's a big task to fill.