A $2 million fine, sanctions by federal courts and state bar orders that prevent its partners from practicing law do not change the fact that McClenny Moseley Associates filed more lawsuits in 2022 than any other US law firm.
That distinction was noted by legal analytics firm Lex Machina in its annual Insurance Litigation report, released last week. The report says MMA filed 2,766 lawsuits. That was more than double the number of the second-most active law firm, Cox Cox Filo Camel Wilson & Brown, which filed 1,047 cases.
Insurance defense attorney Steve Badger, a partner with the Zelle law firm in Dallas, said no one should be surprised.
“The number of lawsuits filed by MMA is far beyond what any single law firm can handle,” he said in an email. “And, sadly, their thousands of Louisiana clients are now suffering the consequences. The lesson from this debacle is clear – the mass-torts model does not work in first-party insurance litigation.”
New Orleans defense attorney Matthew Monson, the lawyer who is most responsible for state and federal investigations into MMA’s mass filings, had this to offer: “MMA ranks number one all time in the number of improperly sourced lawsuits.”
The Lex Machina report shows that even without MMA’s help, insurance litigation surged in 2022. Lex Machina said 18,912 insurance cases were litigated in federal courts, a 30% increase from the prior year.
The number of federal insurance cases has been rising steadily since 2017, when 10,006 cases were filed, the report shows. The number of federal insurance cases filed hovered near 10,000 in each of the preceding four years.
MMA’s handiwork shows up in the statistics in several ways. The report says that in the three-year period from 2020 to 2022, the Western District of Louisiana had the largest number of insurance lawsuits filed: 8,169. The Western District’s Judge James D. Cain Jr. presided over more insurance cases during that three-year period than any other district court judge: 6,877.
At good number of those cases were filed by McClenny Moseley. It was a complaint by Monson — the New Orleans defense attorney — about “mass filings” by MMA that brought to Cain’s attention the fact that the Houston-based law firm had filed 1,641 lawsuits against insurers over a period of several days.
An inquiry by Cain and other judges revealed that MMA had paid $3.9 million to a marketing firm called Velawcity for “pre-screened client leads.” The firm used robotexts and disaster-restoration websites to find people with potential hurricane damage claims and a call center to sign them on as MMA clients. MMA also filed lawsuits on behalf of restoration contractors who found clients by walking door to door in hurricane-damaged neighborhoods. The law firm represented to insurers that it represented the homeowners.
Insurance Commissioner James Donelon fined the law firm $2 million for its misrepresentations. Cain and other federal judges in Louisiana sanctioned the law firm for violating rules of procedure. The Louisiana State Bar indefinitely suspended the law license R. William Huye III, managing partner of MMA’s New Orleans office. The Eastern District of Texas suspended for 90 days the law licenses of MMA founding partners John Zachary Moseley and James Marshall McClenny.
Federal judges in Louisiana have barred MMA from prosecuting most of the hurricane lawsuits it filed. A competing law firm, Morris Bart in New Orleans, has taken on many of MMA’s former clients and filed a lawsuit against MMA to prevent it from interfering with its efforts to take over those claims.
In a memorandum filed with the Eastern District of Louisiana on June 12, Morris Bart said it has retained more than 1,200 of MMA’s former clients.
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