streamlined or steamrolled – Judge Martin Feldman’s influence on Katrina litigation

Although I’d learned enough about “Who Dat” Judge Martin Feldman… to write the post, I’d found nothing to adequately explain how such an obviously bright man would embarrass himself with the errors he made in deciding Versai.  Credit for my increased understanding goes to the SLABBED reader who sent a link to reporter Kim Quillen’s August 27, 2008, story Insurers use federal cash to help pay claims that included this additional background on Judge Feldman:

Judge Martin Feldman, who took the lead developing procedures to streamline the flow of cases in federal court, said the pace of settlement has been uneven. He signed 50 dismissal orders last week, for example, but said his efforts to resolve several hundred State Farm and Allstate cases swiftly have not paid off…

But Feldman said once the major questions of law created by the storm have been settled, cases should not go to trial.

“No great principle, other than ‘I bought insurance and I want my money,’ are at stake, and those tend to settle,” Feldman said. “They basically only involve issues of money and not issues of deep social and moral principle. Cases of deep social principle should go to trial. Cases of money should settle.”

“Who Dat” elitist?

Judge Martin Feldman showed his colors in Versai – a true blue outcome-oriented judicial activist who led the law where he wanted it to go.  Otherwise, were he to allow the law to lead, his decisions would not be consistent with his perspective on Katrina litigation or his “procedures to streamline” the litigation process.

In form, however, Feldman’s procedures were textbook classic – detailed, well-constructed and comprehensive.  Much of that is likely due to the influence of Duke law professor Francis McGovern:

Professor McGovern has the unusual ability to integrate practical experience, abstract thinking, and teaching which has earned him the “triple crown” in the legal community as premier practitioner, scholar, and teacher in the field of alternative dispute resolution… His name is virtually synonymous with “mass claim” litigation–the often tens of thousands of tort claims arising out of a major disaster or major product liability issue.

The first Case Management Order was issued by Judge Feldman on February 12, 2007 and, reportedly six additional Orders followed.  I say reportedly because Case Management Order No.3 is nowhere to be found.  Interestingly, it is the Order specific to NFIP flood claims, an apparent result of Gerald Nielsen’s advocacy – or his footing the bill for Professor McGovern’s initial trip to the State:

The expenses incurred with respect to the work of Professor McGovern shall be negotiated with Liaison Counsel and the Court. Expenses of Professor McGovern for his first meeting in New Orleans with the NFIP counsel will be paid by Nelsen Law Firm L.L.C.

Associating the highly regarded, heavily credentialed McGovern; however, lent the credibility needed to cloak Feldman’s activist intent as a “mass claim” when, in fact, there was simply a mass of claims.

Quillen’s article reported, “Some 12,565 Katrina suits were filed in…[Louisiana’s eastern district]… federal court”.  Over a 1000 Katrina cases alone for each 12 active Judges and twice that for the six Magistrates provided abundant evidence of the need for a case management system. In that light, when Judge Feldman stepped forward and proposed the development of streamlined procedures, the need was beyond question.

On its face, Feldman’s three-track system had certain logic:

  • Settlement Track
  • Common Claims Track
  • Fast Track

However, what What Judge Feldman conceptualized as Case Management procedures to streamline the litigation process, instead steamrolled policyholders in ways that extended his influence to other courts, even to courts in other states.  Precedent matters and in early 2007 when Feldman began issuing Case Management Orders, there were thousands of policyholder cases on the dockets of federal court judges in Louisiana and Mississippi.  “Courts look first to how they have decided cases in the past, not only because it saves time in the judicial reasoning process when a similar question arises again, but also to ensure that litigants close in time receive roughly the same interpretation of the law.”

The sheer number of cases made the three tracks a precedent in terms of how other judges conceptualized the distinctions in policyholder claims.  In that respect, judges were no different from others overwhelmed by the Katrina – looking for a handle, something to hang onto that created order from the disorder created by the storm.  However, Feldman’s system excluded class actions and flood claims and those distinction also became precedent-setting thinking.  While he was neither the first or only judge who saw the various distinctions, to my knowledge, he was both the first and only judge to formalize those distinctions and apply them to his docket in a series of related Case Management Orders.

In many ways, these distinctions represented his activist view – the type of thinking Walter Lippman had in mind when he said, “If facts don’t fit the theory, change the facts.”  For example, Feldman’s second order addressed the “price lists used by the estimatics software to adjust claims” and required defendant’s to produce them ” only to Plaintiffs Liaison Counsel and Professor McGovern, but not to individual Plaintiffs’ attorneys”.  However, he restricted the dissemination of the lists given to “individual plaintiffs’ attorneys” to ” the price list…used on that attorney’s client’s claim”.  This restriction, in turn, made it difficult for policyholders to determine to what, if any extent, their insurer had treated their claim differently from other similar claims.

Initially, Judge Feldman also limited the use of streamlined procedures to a single insurer, Allstate, but, subsequently, also included State Farm. and created another precedent-setting thought – deference to these two large companies reminiscent of that shown the “too big to fail” (or too well-connected to fail) AIG.  Save it to say, Judge Feldman’s robe is not cut from the same cloth as that of Judge Jed Rakoff,  introduced to SLABBED readers in Bam Bam’s post, What can happen when one honest judge takes on a major corporation.

Instead of a Rakoff-like examination of the bulging dockets created by two of government’s largest WYO contracting companies, Feldmen implement procedures that held policyholder claims up to scruitny and shielded the claims handling policies and procedures of the two insurance companies with a Protective Order and his protective decisions.  His Case Management Protective Order was issued March 28, 2007, around six weeks after he issued the first stating his intent to streamline the litigation procedures applying to Katrina cases in his court.

Notwithstanding the foregoing…[terms of this Protective Order]…the following documents shall be treated as “Confidential” in accordance with this Order without further notice or designation, subject to the ability of a party to challenge confidentiality pursuant to paragraph 11, above: (1) all internal documents (i.e. documents not provided to, from, or on behalf of plaintiffs) contained in any claims files that have been or will be produced by Allstate in any of the cases covered by this Order, including, but not limited to, all documents prepared by Pilot Catastrophe Services, Inc. on behalf of Allstate, and (2) all underwriting files produced by Allstate in any of the cases covered by this Order; provided, however, that nothing herein shall be construed to restrict the plaintiffs’ use of any documents that are otherwise publicly available or documents that were generated by or on behalf of the plaintiff and submitted to Allstate in connection with the claim.

At once both Constitutional scholar and judicial activist, Feldman recognized plaintiffs had the right to challenge the confidentiality of the blanket protection he threw over claims files – and also recognized his own authority to make policyholders fight for the right.  Here, is Order established both a precedent as well as precedent-setting thinking adopted by Magistrate Shushan in the Branch Qui Tam case recently reported on SLABBED.

There are other examples that reflect Feldman’s decisions and thinking and set precedent in both law and thought that influenced the outcome of Katrina litigation. His Case Management Orders. with the exception of the previously mentioned no-where-to-be-found CMO#3,  are listed and linked at the end of this post for interested readers two review.  Be assured, such a review is well worth the time of anyone interested in Katrina litigation and, in my opinion, significantly more important for those involved and/or interested in the comparably small number of active cases in this fifth year following the storm.

As reader NRB’s comment on Evidence of bad faith is not a trade secret or highly confidential… suggests, the decisions of Magistrate Judge “Sally ‘That’s a Lot of Money for People like Them’ Shushan” reflect the precedent of thought established by the elitist, activist Martin Feldman just as her decisions in Branch reflect the precedent in law established in his Case Management Orders.

In addition to the previously mentioned examples of Feldman’s streamlining procedures, I found two other particularly disturbing for the clarity with which they illustrate how Feldman’s conceptualization of streamlining steamrolls justice:

The first appears to be a Constitutionally prohibited “pay-to-play” requirement that limits the right to a jury trial of plaintiffs who of economic necessity either filed pro se or were represented pro bono:

Those cases involving only pro se litigants or attorneys representing a claimant for no fee are exempt from the case assessment provision of this CMO if they initially elect to enter the settlement track and resolve their case in that track. (CMO#5)

The second is such an affront to justice that I find it stunning at every reading.

A Plaintiff in the Fast Track litigation program foregoes written discovery propounded to a Defendant on institutional and corporate issues and Fed. R. Civ. P. 30(b)(6) depositions of Defendants. However, Plaintiffs are entitled to permitted to seek written discovery and depositions of claim specific adjusters and experts, in accordance with this Order.

With the poor streamlined and steamrolled into the settlement track, those on the fast track had to play by a Feldman-streamlined version of the Federal Rules that steamrolled discovery.  Any rights and rules he didn’t limit in his Case Management Orders, he disposed of on a case by case basis:

As previously stated, Feldman’s first Case Management Order excluded several named cases filed as a class action.  Among those was Henry et al v Allstate on his active docket.

December 21, 2006, the Henry Plaintiffs filed the Complaint  making the allegations Judge Feldman summarized in his Order. Less than 30-days later (January 16, 2007), they filed a notice of related cases documenting their related claims in Gillard; and, on the 26th of the month, they filed a Motion to Transfer that would have consolidated all claims under Gillard:

Although one matter, Gillard, is a standard homeowners’ claim against those plaintiffs’ insurers for unpaid wind damages relating to Hurricane Katrina, and the foregoing class action is a claim for fraud against Allstate, both cases involve the adjustment practices of defendant Allstate and should be consolidated.

Not only do the Henry plaintiffs establish the shared issues and facts between their case and Guillard, Allstate’s Opposition filed February 12, 2007, does not state a claim to the contrary.  Instead, Allstate argues another case would be a better fit:

Because Henry and Aguilar have similar issues, allegations and facts, as well as the same defendants, the cases are sufficiently “related” for purposes of Local Rules 3.1. Based on a comparison of the subject matter and allegations, Henry is more closely related to Aguilar than Gillard. For this reason, if the captioned case is to be consolidated pursuant to LR 3.1 and 3.1.1, it would be more appropriately consolidated with Aguilar than with Gillard.

Allstate’s Opposition also includes this additional statement of interest self-interest:

Because both Henry and Aguilar are pending in this Court, no transfer is necessary. To the extent that consolidation with Gillard is also appropriate, Gillard should be transferred here.

While Aguilar was on Judge Feldman’s docket, Gillard was assigned to Judge Eldon Fallon, and clearly Allstate prefers to have Feldman over its cases.

On Februay 21, 2007, Allstate filed a Motion to Dismiss and Motion to Strike Class Allegations. Two days later, Feldman set an April 25th hearing on the Motion and, then, on the 8th of March denied the Henry plaintiffs’ Motion for Transfer.  A motion for reconsideration was filed on March 15, 2009; however, a Voluntary Motion of Dismissal without Prejudice was filed on the 29th of March indicating the parties had settled.

But for the holidays, Henry v Allstate might have been a 90-day wonder.  The docket in Arguila was similar to that of Henry; however, the case ended “not with a bang but a whimper”. The Arguila plaintiffs moved to dismiss the case in May 2007 after electing not to file the amended complaint allowed by Feldman when he denied class status claims under Louisiana law in early March.

Gillard had a different end.  On March 14, 2007, Judge Fallon issued an Order severing the case into individual cases. While the cases from Fallon’s docket moved forward with plaintiffs’ rights and procedural rules in tact. The only viable option available to the Henry plaintiffs at the end of March 2007 was to jump from a class action to Feldman’s Settlement Track.

Judge Feldman is not the only judge who has used his power to forced plaintiffs into settlement – a state of denial not limited to the State of Louisiana.  Other judges using the power likewise may share Feldman’s belief that cases should settle once major questions of law are decided.

However, the streamlined procedures and three-track system put major question of law on a sidetrack and the rule of an elitist, judicial activist “Who Dat” steamrolled past the Rule of Law.

With justice for all, Nowdy

Case Management Order #1

Case Management Protective Order

Case Management Order #2

Case Management Order #3  NA

Case Management Order #4

Case Management Order #5

Case Management Order #6

Case Management Order #7

6 thoughts on “streamlined or steamrolled – Judge Martin Feldman’s influence on Katrina litigation”

  1. Great work!

    If it wasn’t for this site we would have no way of exposing the inurance company aiders and abbetors that disguise themselves as judges and magistrates.

    Its a shame when plaintiffs are outnumbered 2-1.

  2. Thanks, Sop. Judge Feldman, shall we say, “sees with a different pair of eyes”. I’m so concerned for the present of those policyholders who got slabbed by Katrina and steamlined by Feldman, that I haven’t given much thought to his future. Actually, that’s not totally accurate. I confess that several times while I was writing, it struck me that this was a man who had no post-retirement future as a WalMart greeter.

  3. Thank you, NRB. I saw your comment as I was about to turn out the lights. There was so much I wanted to include but couldn’t because there was so much that needed to be included.

    It was really hard to leave the limits on 30(b)(6) depositions and move on, for example. What I wanted to say, however, should have been obvious – there was really nothing policyholders or their attorneys could do about any of his “rules” but go along and hope for the best.

  4. This is one of the finest analytical posts I’ve seen. During his mass Katrina discovery conference, all the “heavy hitters” were liason counsel (Allen Kanner, Judy Barrasso, Jerry Nielsen, Rick Fenton, etc.). None of these lawyers really would have a clue as to what an individual plaintiff would want in discovery in order to prove a bad faith claim, or a systematically corrupt claims process. I don’t think Professor McGovern, brilliant as he might be, would have a clue about litigating an individual bad faith claim either.

    Judge Feldman made it clear at this time that he wanted all of these cases to settle, and in Feldman-world, that means the party he perceives as forcing the case to trial likely will pay for doing so. An unafraid lawyer got up and dared to suggest something to the effect that this kind of consolidated discovery would not benefit him if he wanted to prove his bad faith claim at trial. True to form, Feldman attempted to embarrass the lawyer by being very rude and condescending. And although Judge Feldman was playing to a forced audience of subordinates (like the old Morton Downey show audience), this lawyer did not seem to give a shit. For me it was the highlight of the conference.

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