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Written by Christopher K. “Chris” Jones

When the Stakes are High: Class Actions in Louisiana

They make movies about “class actions” exactly because they can involve high stakes, with millions, even billions of dollars on the line. The class action procedure can create exposure at this level because of the large numbers of potential claims involved. Class actions are used to address losses experienced from unfair or fraudulent business practices, natural disasters, industrial explosions, or any event or action which is alleged to have damaged a large group in a similar way.  

 As a procedural device, the class action combines several claims (often hundreds or thousands) into a single action. A key battle in most Louisiana class actions is whether the proposed claim can properly be “certified” as a class action under Louisiana procedure. The recent Fourth Circuit decision in Duhon v. Harbor Homeowners’ Ass’n., Inc., 2016 WL 3551620 (La. App. 4 Cir. 6/30/16) addressed whether the lower court’s class “certification” was proper under Louisiana Code of Civil Procedure Article 591.  

 Duhon involved damages experienced following hurricanes Katrina and Rita.  In particular, the class representatives sought damages against the Harbor View Condominium Association and its insurers claiming that the association was guilty of faulty repairs following these two hurricanes. In deciding whether certification was proper, the Duhon court considered the following elements, all of which must be present to certify a proper class action: 

 Numerosity- the class must be so numerous that joinder of all involved persons would prove impractical;

 Commonality- the case must present questions of law and fact that are common to the class; 

 Typicality- the claims and defenses of the representative parties must be typical of the claims or defenses of the class; and, 

 Adequacy of representation- the representative parties must be positioned to fairly and adequately protect the interest of the class.

 After analyzing each of these “elements,” the Duhon court upheld the Trial Court’s certification of the claim as a class action. Further, the court concluded that the questions of law and fact common to the members of the class predominated over any questions affecting only individual members such that a class action was superior to other available methods to fairly and efficiently adjudicate the controversy.  

 While the class action procedure has its detractors, it is sometimes the only real option to address a harm to a large group. Now that the class in Duhon has been certified, the case will proceed through discovery and towards trial on the merits. Who knows, they may make a movie about it someday.

 

AFTER THE WATER IS GONE: What My Flood Insurer Owes

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The catastrophic flooding of Baton Rouge, Livingston, Ascension, and surrounding areas has caused its own flood of insurance claims with flood insurers. However, flood insurance policies (almost all of which are underwritten by the federal government) are different from the more-familiar homeowner’s policies. The following are a number of points you should keep in mind as you make a claim with your flood insurer.

  1. Although you may think your flood insurance policy is with a private insurer, almost all policies are underwritten by the federal government and are part of the National Flood Insurance Program (NFIP) and governed by the National Flood Insurance Act (NFIA). Whereas the private insurer, such as Wright National Flood Insurance Company or Allstate, is responsible for adjusting your claim, any funds paid as a result of the claim are paid by the federal government.
  2. Because these private insurers (also called “Write Your Own” or “WYO” insurers) are merely servicing policies that are underwritten by the federal government, and payments are made directly from the federal treasury, they (or FEMA in the case of a policy placed directly by that agency) are entitled to the protection of federal laws that govern these policies under the NFIA.
  3. Federal law requires that you make a proof of claim for your loss under your flood policy within 60 days of the loss.  The Standard Flood Insurance Policy (SFIP) Proof of Loss form can be found at http://www.fema.gov/media-library-data/1404745070512-4523e347d5c3d5dd8a463ab3c6c9e15f/FEMA%20Form%20086-0-9.pdf
  4. In cases of natural disasters, FEMA often extends the 60 day period. However, you should assume there is no extension and submit the required proof of loss within 60 days. Unfortunately, courts usually strictly enforce this deadline resulting in the loss of flood coverage. Supplemental proof of loss should be submitted as new damages are discovered.
  5. Because federal law applies to disputes for damages under a flood insurance policy issued by FEMA or a WYO insurer, state law claims for bad faith or extra-contractual damages are not available. Instead, a policyholder cannot recover any damages incurred as a result of the manner in which their flood claim was adjusted, and can only recover damages owed under the policy.
  6. Likewise, policyholders cannot even recover interest if they are ultimately successful in a claim against FEMA or a WYO insurer.
  7. Attorneys’ fees are also not recoverable under the NFIA; however, they may be available pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(b).
  8. Aside from the 60 day proof of loss requirement, a lawsuit filed pursuant to the NFIA must be filed within one year from the date of the denial of the claim, 42 U.S.C. § 4072.
  9. In the event of the denial of an entire claim, or even parts of it, a policyholder is entitled to an appraisal and appeal process that is designed to resolve any disagreement about monies owed under the policy. If there is a dispute concerning causation, scope of damages, or coverage, appraisal is not available. If an appeal is filed, the policyholder waives the right to request an appraisal.
  10. In suits filed against either FEMA (when the policy is issued directly by that agency) or WYO insurers, there is no right to a trial by jury.

The flood has harmed so many and so much; don’t let delay add to the total.

 

The “Great Flood of 2016”–Update and Resources

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“Disaster Declaration” Expanded. The list of parishes now declared disaster areas by the federal government has increased to include the following parishes: Acadia, Ascension, East Feliciana, Iberia, Lafayette, Pointe Coupee, St. Landry, and Vermilion.

 

http://gov.louisiana.gov/news/additional-parishes-added-to-federal-disaster-declaration-8-16-16

Potential Tax Implications for Flood Victim. For those insured, it is critical that you document your losses with as much detail as possible; serial numbers, make/model/description—the more detail the better. Keep receipts and credit card statements. Time-dated photos are also important. Even those without flood insurance should do the same as it may assist in obtaining FEMA assistance. However, the same documentation of your losses could also help to reduce your tax exposure. The attached link provides key information and outlines the impact the flooding may have on tax-filing and other deadlines.

 

https://www.irs.gov/uac/tax-relief-for-victims-of-severe-storms-flooding-in-louisiana

 

 

2016 Historic Flood

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Thousands of people are currently dealing with the devastating flooding in the Baton Rouge and surrounding areas.  Here are a few pieces of information that may assist you as you begin to recover from this event:

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When No Higher Court Remains

On April 20, 2010, BP’s Deepwater Horizon rig exploded at a cost of eleven lives. What followed was the largest accidental marine oil spill in history.  In the aftermath, BP looked for a solution, ostensibly to cap its exposure and address a swirling PR disaster. BP began to actively negotiate a settlement.

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