La. Judge Sets Aug. 17 Hearing on New Insurance Deadlines

A federal judge has decided to speed up the process of determining the legality of two new Louisiana laws giving homeowners and additional year to sue their insurance companies for damages from hurricanes Katrina and Rita.

The immediate question to be decided is whether a hearing on the constitutionality of the laws should be held in federal or state court.

U.S. District Judge James Brady issued an order late on Aug. 3 granting the state’s request to speed up the process. State Attorney General Charles Foti has asked a state district court in Baton Rouge to make the determination, but Allstate Corp. contends that task should be performed by a federal judge.

Earlier, a federal magistrate denied the state’s motion for a quick hearing. But Brady set oral arguments for Aug. 17 in his court.

Louisiana Insurance Commissioner Jim Donelon said earlier that the magistrate’s decision not to fast-track the hearing could delay the legal process and leave consumers confused as to how long they have to file suits against their insurance companies.

This year, the Legislature passed two laws that give homeowners until Sept. 1, 2007 to file lawsuits against their insurance companies for damages incurred by Hurricane Katrina, and Oct. 1, 2007 to sue for damages incurred in Hurricane Rita.

Each extension gives consumers about 12 months longer than the old law allowed.

Allstate officials said they were unaware of the Aug. 3 ruling and declined comment.

Warren Byrd, general counsel for the state insurance department, said his agency was pleased by the ruling. But he said once jurisdiction is determined, a hearing on the constitutionality of the two laws must be held.

Information from: The Times-Picayune, www.timespicayune.com.