Louisiana High Court Refuses to Overturn Citizens Ruling

The Louisiana Supreme Court says it won’t reconsider a $92.7 million judgment against Louisiana’s state-backed insurer of last resort for handling claims too slowly after Hurricanes Katrina and Rita in 2005.

Louisiana Citizens Property Insurance Corp. will ask the U.S. Supreme Court to hear the case, Insurance Commissioner Jim Donelon told The Advocate, acknowledging that will be an uphill struggle.

A state appeals court had reversed a Jefferson Parish judge’s decision in 2009 to award $5,000 apiece to more than 18,000 Citizens policyholders. But the Supreme Court overturned the appeals court’s ruling by a 4-3 vote – the same vote by which the court refused Friday, without comment, to reconsider the case.

Fred Herman, a plaintiffs attorney for Jefferson Parish policyholders, said the plaintiffs are not aware of any “genuine federal issue.”

“That does not mean they will not attempt to make one,” Herman said.

The judgment, with legal interest, would cost Citizens, and taxpayers, around $100 million, with 25 percent to 40 percent likely going to plaintiffs’ lawyers.

However, Donelon said there are potentially thousands of other Citizens policyholders who could be added to the judgment. If that happens, and if Citizens loses other class-action lawsuits, the total cost could be as much as $200 million, he said.