Lawyers for major insurance companies are asking a federal judge to dismiss a lawsuit that accuses insurers of trying to profit from a grant program for homeowners devastated by Hurricane Katrina.
U.S. District Judge Stanwood Duval Jr. heard arguments Jan. 30, but didn’t rule on the companies’ request to dismiss the suit filed in 2007 by former Louisiana Attorney General Charles Foti.
Lawyers for Allstate Insurance Co., State Farm Fire and Casualty Co. and other insurers claim the attorney general’s office is trying to take over rights to more than 155,000 insurance claims to recover money paid out through the Road Home homeowner grant program.
But the companies say the state deducted insurance payments while calculating grant awards.
A federal judge in New Orleans in December 2008 dismissed an antitrust lawsuit Foti had filed in 2007 against Allstate Insurance Co., State Farm Fire and Casualty Co. and other insurers. some of the nation’s largest insurance companies after hurricanes Katrina and Rita. Foti accused the insurers of conspiring to shortchange policyholders after the hurricanes struck the Gulf Coast in 2005.
The companies asked U.S. District Judge Jay Zainey in New Orleans to throw out the case, which Attorney General James “Buddy” Caldwell inherited from Foti. Zainey said he agreed with insurers that the suit failed to present evidence of a conspiracy among competing companies.
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