U.S. Supreme Court Refuses to Review Louisiana Citizens’ Case

The nation’s highest court won’t review rulings that require Louisiana’s property insurer of last resort to pay an estimated $110 million to individuals whose claims were not timely addressed after Hurricanes Katrina and Rita.

The June 25 U.S. Supreme Court ruling is one of the last hurdles before policyholders could start receiving their money from the judgment, although Louisiana Citizens Property Insurance Corp. has related lawsuits on appeal in the state court system.

The company provides insurance coverage to homeowners and businesses unable to obtain it from private companies. The judgment was levied against the company for its slow movement in paying hurricane damage claims in 2005.

Insurance Commissioner Jim Donelon told the Times-Picyaune that he hasn’t discussed the ruling with Citizens’ officials or attorneys and was unclear of the company’s next step.

Donelon said there’s a lawsuit still pending in the 1st Circuit Court of Appeal in Baton Rouge that contends Citizens is a state agency and cannot have its assets seized to satisfy the judgment. That lawsuit was filed by Regions Bank, one of the banks where Citizens has deposits.

One of the attorneys representing the 18,753 policyholders who are part of the class action case said he expects a ruling in that lawsuit “in a matter of days.” That ruling can be appealed to the state Supreme Court, but Fred Herman said the end is in sight for all ongoing litigation.

“If this was a patient who is dying, then we are at the end stages of life support,” he said.

Herman said he thinks the plaintiffs in the class action lawsuit could receive their money by the end of this year.

Citizens CEO Richard Robertson said he knew the U.S. Supreme Court reviews only a small percentage of the cases requested.

“We’re disappointed but not surprised,” Robertson told The Advocate.

A district court judge ruled in 2009 that Citizens did not adjust insurance damage claims within 30 days after Katrina and Rita as state law requires. The ruling in favor of the policyholders was for $93 million but has grown to about $110 million with interest.

Citizens appealed to the U.S. Supreme Court in April, alleging that the state agency was denied due process throughout the ongoing state court litigation.

Before the money can be paid to claimants, the Jefferson Parish district court will have to “establish a plan of distribution,” Herman said.

Topics Lawsuits USA Louisiana