On his way out the door as Louisiana’s Attorney General, Charles Foti tossed a Hurricane Katina lawsuit into State court along with contracts to private attorneys. With that, Foti set off a storm behind the storm and left the newly elected “Buddy” Caldwell treading water in his wake.
Apparently, Caldwell has been treading water for over a year instead of conducting the investigation needed. In his absence, the defendants filled the leadership role and a federal judge in New Orleans declare this the official Buck up Buddy day with an Order for Caldwell to sink the case or swim in with an appeal.
New Orleans City Business is reporting the suit was dismissed today.
A federal judge today dismissed an antitrust lawsuit Louisiana’s former attorney general filed against some of the nation’s largest insurance companies after hurricanes Katrina and Rita.
The suit, filed in 2007 by former Attorney General Charles Foti Jr., accused Allstate Insurance Co., State Farm Fire and Casualty Co. and other insurers of conspiring to shortchange policyholders after the hurricanes struck the Gulf Coast in 2005.
The companies asked U.S. District Judge Jay Zainey in New Orleans to throw out the case, which Attorney General James “Buddy” Caldwell inherited from Foti. Zainey said he agreed with insurers that the suit failed to present evidence of a conspiracy among competing companies.
Obviously, Zainey is one of the brightest lights on the federal bench.
“So does this conclude this litigation?” Zainey asked after ruling.
Not a soul was reported as saying, “Yes, sir, that ought to about do it!” but the champions of justice for us were there to speak up.
“We felt these allegations were completely unfounded from the outset, and we’re pleased the court today agreed with our position,” said State Farm spokesman Phil Supple.
“Allstate agrees with the judge’s ruling to dismiss the case,” said company spokesman Mike Siemienas. “As we stated from the beginning, these are unfounded allegations.”
Also named as defendants in the suit were Lafayette Insurance Co., USAA Casualty Insurance Co., Farmers Insurance Exchange, The Standard Fire Insurance Co., Xactware Solutions Inc., Marshall & Swift/Boeckh and McKinsey & Co.
Foti’s suit accused McKinsey & Co., a consulting firm, of advising insurers to “stop ‘premium leakage’ by undervaluing claims using the tactics of deny, delay, and defend.”
Rebecca Mowbray had the story behind today’s ruling, Foti’s lawsuit targeting insurers faces uphill fight (Times Picayune; November 11, 2007)
The antitrust lawsuit that lame-duck Attorney General Charles Foti filed this week against major insurance companies will be an ambitious undertaking complicated by the impending leadership change in the office, leaving many to wonder why Foti waited so long to tackle the hurricane insurance issues facing the state.
On Wednesday, Foti filed a petition in Orleans Parish Civil District Court alleging an elaborate price-fixing conspiracy between six homeowners insurance companies, two claims software companies, a claims data aggregating firm and a consulting firm that violated the Louisiana Monopolies Act.
The effort came more than two years after Hurricanes Katrina and Rita precipitated 538,177 homeowners insurance claims in the state and nearly three weeks after Foti failed to make the runoff for a second term as attorney general.
The 538, 177 policyholders filing claims after the storms are left to ponder the words of Caldwell spokeswoman Tammi Arender Herring.
…Herring could not say whether the ruling will be appealed. “We’re going to have to confer with the attorneys to see where we go from here,” she said.
If Caldwell had been confering with the attorneys prior to the ruling, perhaps Caldwell would have known before it became Buck up Buddy day in federal court.
Foti teamed up with private lawyers to file the case about a month after he finished third in an October 2007 primary, ending his re-election bid. The suit accused insurers of working together to fix prices, manipulate storm-damage estimates and low-ball claim payments.
So, Buck up Buddy, show the good people of Louisiana you can swim!