[Vision2020] 09-15-05 LA Times: Lawyers Planning a Deluge of Hurricane Damage Lawsuits

[Art Deco]

http://www.latimes.com/business/la-fi-katrinasuits15sep15,0,6603241.story?track=tothtml

KATRINA'S AFTERMATH
Lawyers Planning a Deluge of Hurricane Damage Lawsuits
By Joseph Menn
Times Staff Writer

September 15, 2005

After the flood comes the flood of litigation.

Two weeks after Hurricane Katrina battered the Gulf Coast, lawyers from the region are deciding whom to sue over the catastrophe - or rather, whom to sue first.

At least one suit was filed in the last week, and plans were being sketched out for many more. The targets include real estate agents, insurance companies and federal agencies. The potential damages being sought range from a few thousand dollars to billions of dollars.

"You're going to have substantial litigation," said Daniel Becnel Jr., a Louisiana attorney who spent last weekend interviewing hydrologists and geologists and is working on multiple suits.

Many suits will be fought by attorneys who have been displaced from their offices by hurricane damage. They and other Louisiana lawyers will be in big demand because theirs is the only U.S. state in which the legal system is based on the Napoleonic Code rather than British common law. Some of the U.S.' most successful plaintiffs' lawyers are based in the Gulf Coast region.

Becnel, well known for suing tobacco and pharmaceutical companies, is counting on million-dollar damage awards or settlements. Citing statements by the Army Corps of Engineers, he claimed that a barge tore loose from its moorings and caused the devastating levee breach on the Industrial Canal in New Orleans. He plans to sue the barge's owner and its insurance carriers. The potential beneficiaries of any award, he said, include "everyone that got flooded in that area."

Suits are also expected against the owners of facilities where the sick or elderly were allegedly abandoned. Dozens of bodies were found inside Memorial Medical Center and at St. Rita's Nursing Home in St. Bernard Parish.

The government generally enjoys immunity against suits over actions taken as part of its regular functioning. That bars damages when officials exercised normal discretion in their decision-making, even if they blundered, said Georgetown University law professor Joseph Page.

But New Orleans residents can take legal action if the Army Corps of Engineers or other agencies failed to follow their own guidelines, he said.

Becnel and others say they plan to claim that some government agencies didn't meet their own standards.

Property owners are expected to file a spate of suits against insurance firms that deny claims by arguing, for example, that damage was caused not by high winds but by flooding, which is not covered by many policies.

Richard Scruggs, a Mississippi lawyer who helped many states reap multibillion-dollar awards from tobacco firms in the 1990s, has the insurance industry in his cross hairs. Scruggs lost his weekend home in Pascagoula, Miss., to Katrina.

Scruggs said he planned to file thousands of suits in state courts. He said the effort would be aided by a Mississippi statute known as the "valued policy law." In a controversial decision last year, a Florida appeals court held that a similar state law required full restitution when a house was partly destroyed by hurricane winds, even though flooding did most of the damage.

"The statute provides in these states that if there's any damage at all by wind, they must pay the full amount," Scruggs said.

A spokesman for the Property Casualty Insurers Assn. of America said insurers wouldn't pay for uncovered flood damage and that adjusters were trained to determine when flooding was the main culprit.

"Typically in floods, the water rises from the bottom, and it leaves a mark on your wall just like a ring on your bathtub," said spokesman Joseph Annotti. But he said he couldn't talk about the valued policy law.

In an earlier comment to A.M. Best Co., which rates the stability of insurance companies, insurer association Vice President Don Griffin acknowledged that the Florida decision might be an issue in Louisiana.

Scruggs predicted that if the insurance companies lost in the courts, the industry would ask Congress for a comprehensive settlement plan similar to the one enacted after the Sept. 11 attacks, which distributed $7 billion to survivors of the 2,880 people killed and others who were wounded. People who promised not to sue shared in the award.

Not all of the litigation will be for such high stakes.

In Baton Rouge, La., C.J. Brown Realtors handled a recent offer to sell a house to a plaintiffs' law firm looking to shelter its New Orleans staff.

As demand for such housing surged, the homeowner decided he wanted more money, according to the law firm, E. Eric Guirard & Associates.

Guirard promptly sued the would-be seller and C.J. Brown, accusing them of violating an anti-gouging statute.

E. Eric Guirard, a personal injury lawyer known locally for television commercials seeking new clients, this week began advertising for other potential gouging victims.

C.J. Brown President Arthur Sterbcow, displaced from New Orleans himself, said he couldn't control what price his client asked for his property.

"They haven't suspended personal property rights, as far as I know," Sterbcow grumbled. "This is where lawyers pay for their law school." 
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