Court Refuses Quick Decision on La. Insurance Suit Extensions

August 4, 2006

A decision on the constitutionality of new state laws giving hurricane-affected homeowners in Louisiana an extra year to sue their insurance companies will not be expedited by a court, the state’s top insurance regulator says.

The move will make it difficult to get a court ruling by the Aug. 29 anniversary of Hurricane Katrina, which, before the Legislature acted, was the deadline for homeowners affected by that storm to sue, Insurance Commissioner Jim Donelon said.

U.S. Magistrate Judge Stephen Riedlinger on Aug. 1 denied the state’s request for a quick hearing on whether the constitutionality of the two new laws will be settled in state court or federal court.

Although the case was originally sent to U.S. District Court Judge James Brady of Baton Rouge, a federal judge can assign initial legal motions to a magistrate for review.

Donelon said he expects the attorneys for the state to reissue their request for an expedited hearing, either to Brady or Riedlinger. Officials in the state attorney general’s office declined to comment on the next step.

At issue are two laws giving homeowners until Sept. 1, 2007, to file lawsuits against their insurance companies for damages incurred by Hurricane Katrina, and through Oct. 1, 2007, to sue for damages incurred in Hurricane Rita.

The new laws essentially give consumers 12 months longer than old standards allowed.

Attorney General Charles Foti office filed a lawsuit in state court asking for a declaration that the new laws are legal. Allstate Corp. has asked a federal court to take jurisdiction.

Information from: The Times-Picayune,

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