I thought this might be a joke headline in my feedreader when I saw it: "Louisiana sues insurers, alleges price-fixing, conspiracy, in hurricane claims payments." (Here’s a link to a longer, better version of the story). You know why?
1. The Attorney General of Louisiana, Charles Foti, lost in the primary election in October, finishing third out of three candidates. Didn’t make it to the run-off election held this month. Why would he bother filing a lawsuit when he is, to borrow a phrase from Dickie Scruggs, "political toast"?
2. In April, Foti contrasted himself with Mississippi Attorney General Jim Hood and said he wouldn’t sue insurers because he didn’t think it would be productive.
3. Foti took on a couple high-profile Katrina criminal cases and got his lunch handed to him, as the public hooted in derision: check out the comments at the bottom of this Times-Picayune story, which by the way, is from August and says that Foti was furiously preparing to sue insurers to beat an August 29 filing deadline on Katrina claims.
4. Foti already sued insurance companies back in September, in a lawsuit that was so rife with foolishness that even some advocates of suing insurers were taken aback. I mean, check out this paragraph from the story, it makes the AG’s Office sound like Amateur Hour:
The suit claims that the insurance companies drafted "vague, ambiguous and unclear limitations on coverage, thereby violating the rule that exclusions must be clearly and explicitly drafted." The state, however, has based its sweeping claims on an argument already knocked down by the federal courts: that all damage from the 2005 hurricanes be declared the result of "windstorm," rather than flooding.
5. And as this story in the Times-Picayune points out, the basis for that earlier lawsuit is a statistical anomaly — insurers paid less money than the state had counted on, leaving it embarrassingly way short of money to pay out to Katrina victims under the Road Home program. However, there was no evidence to say whether the underpayments were because insurers cheated people or because people had less insurance than the state thought. So what is this new lawsuit, a mulligan?
Perhaps some of you Louisiana readers can help me understand what is going on with this.
UPDATE: One of the Times-Picayune’s many embedded ads got caught in the code I imported when copying an excerpt of the story, and I briefly had the ad in the middle of my post. I’ve removed the code and Insurance Coverage Law Blog is once again free of commercial interruption. With this post, I wrote it last night and scheduled it to publish automatically this morning, so I don’t always see something wrong with a post until I get up in the morning.
SECOND UPDATE: Randy Maniloff is quoted in this story as saying this lawsuit smacks of "grassy knoll" conspiracy theories. Sounds like he may be right, but there is a difference: in Dallas, at least we know someone committed a crime, here, seems like there’s a good chance this is all hooey.