Judge Poised to Sanction Law Firm that Filed Hundreds of La. Hurricane Lawsuits

A federal judge in Louisiana is threatening to fine a Houston-based law firm $200 for each duplicate or baseless lawsuit he finds among the 1,642 that the firm has filed against insurers for alleged hurricane damages.

US District Court Judge James D. Cain Jr. on Oct. 21 ordered McClenny, Moseley and Associates to submit hard copies of retention or engagement contracts with each of the named plaintiffs in lawsuits that the law firm filed seeking to recover damages allegedly caused by Hurricanes Laura and Delta, which both struck Louisiana in 2020.

The order states that the court had already determined that the McClenny Moseley firm has filed duplicate lawsuits, lawsuits for claims that were already settled and lawsuits for damage to properties that were outside of the geographical area where the hurricanes were known to cause damage.

The order prohibits any the lawsuits from being “mass mediated, litigated or settled.”

Insurance defense attorney Steve Badger, a partner with the Zelle law firm in Dallas, said the prohibition against mass settlements is the most important part of the order.

“These lawyers were clearly banking on insurance companies agreeing to bulk mediations and settlements,” Badger said in an email. “They didn’t plan to litigate thousands of lawsuits. With this order, they have no choice but to litigate each individual matter.”

The McClenny law firm did not respond to calls and emails requesting comment.

The law firm, founded by James M. McClenny and Zach Moseley, employs 14 attorneys and works with five “of counsel” lawyers, according to its website. Most of the team is based in Houston, but three attorneys work in a New Orleans office.

McClenny Moseley employs four people just for marketing, according to its website. The law firm makes no secret about its ambition to file lawsuits in bulk.

One of the New Orleans attorneys, partner William Huye, appears in a documentary-style marketing video posted on Facebook by Disaster Solutions, a restoration contractor. Huye tells the camera operator that his team is racing to file claims before the end of the day.

“Over the past four days we’ve filed 1,700 lawsuits,” Huye says in the video. “We have about 100 left to round it out at a flat 1,800. People are recognizing that we have a time bar coming.”

Huye says that the Western District of Louisiana has a filing system that a limits filing fees to $24,999 in a day per account.

“That had never been hit before so the court wasn’t aware of that,” he said. “We blew that one morning by 7 a.m.”

The volume of litigation caught the attention of Judge Cain, who is with the District Court for Western Louisiana in Alexandria. He ordered the McClenny Moseley law firm to appear for an Oct. 20 hearing to explain why they had filed hundreds of lawsuits within the span of several weeks. His order, issued the next day, includes a spreadsheet that lists 1,642 lawsuits filed by the law firm from Aug. 8 to Oct. 13. Some are specious, the order says.

“Consequently, the court has concerns about this law firm’s representation and due diligence in preparing their pleadings in the vast number of Hurricanes Laura/Delta lawsuits filed in the Western District of Louisiana,” the order says.

Cain ordered McClenny Moseley to submit its client retention agreements by Oct. 31. The order says the law firm must pay a $200 fine for each duplicate filing, each lawsuit that had been previously settled or dismissed and each lawsuit that claims damage in an area that was not affected by the hurricanes.

Badger, the defense attorney, said the order shows that “mass tort” litigation after disasters won’t work.

Badger said earlier this year that Zach Moseley bragged that he had signed up 7,000 Louisiana clients.

“If his braggadocio is accurate and he can’t bulk settle these cases, Zach and his young lawyers are going to be spending a lot of time in Louisiana courts over the next decade working for attorneys fees that they may have mostly already given up to others,” Badger said.

Hurricane Ian has given McClenny Moseley another opportunity to sign up new clients. A note on its Facebook page urges “fellow Floridians” to contact the firm “to hold your insurance company accountable.”

Biographies on the law firm’s website say both McClenny and Moseley were born in Texas.

About the photo: The screen shot of a video posted on Facebook shows McClenney and Moseley employees as they file hundreds of hurricane lawsuits on a single day.