http://www.newsinferno.com/archives/7155

Decision in Katrina Levee Breach Case Gives Policyholders More Time To File Lawsuits

Date Published: Tuesday, June 23rd, 2009

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Typically, insurance does not cover damage to a business or home if it is caused by flood. But plaintiffs in the Katrina Canal Breaches Consolidated Litigation have argued that flood damage that resulted from levee breaches which occurred after Hurricane Katrina made landfall should be covered by insurance, since such flooding was not specifically excluded by insurance policies.

Last Tuesday in New Orleans, U.S. District Court Judge Stanwood R. Duval Jr. granted a request by insurers to be severed from the consolidated litigation. According to the Times-Picayune, the Judge ruled that disputes against insurers were individual, and not suitable to be handled as part of a class action.

When a class action petition fails to get certified, or as in the case with the Katrina litigation, some defendants are severed from the proceedings, individual plaintiffs can file their own lawsuits. According to the Times-Picayune, the deadline for filing such suits will depend upon the amount of time that remained between when the insurance portion of the levee breach litigation was filed and the original Aug. 30, 2007, deadline for filing suits.

In his decision, Judge Duval rejected a request from the plaintiffs committee to require insurers to inform their policyholders that they can now file individual lawsuits, saying he had no power to issue such an order.