Federal Appeals Court Takes on Louisiana’s Case Against Insurers

June 6, 2008

A federal appeals court agreed to hear a lawsuit that Louisiana’s former attorney general filed against some of the nation’s largest insurance companies after Hurricane Katrina.

The 5th U.S. Circuit Court of Appeals in New Orleans will consider whether the case belongs in state or federal court.

Former Attorney General Charles Foti teamed up with private lawyers to file the case in state court last year, only days before he was voted out of office.

In April, however, U.S. District Judge Jay Zainey ruled that the suit is a class action that belongs in federal court. Foti’s successor, James “Buddy” Caldwell, is appealing that decision.

The lawsuit accuses Allstate, State Farm and other insurers of conspiring to shortchange policyholders and engaging in an elaborate price-fixing scheme after hurricanes Katrina and Rita struck the Gulf Coast in 2005.

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