A federal appeals court has upheld the dismissal of Allstate Corp. and State Farm Fire and Casualty Co. from a lawsuit accusing them of overbilling the U.S. government for flood damage in Louisiana related to the 2005 storm Hurricane Katrina. But the ruling last month by the U.S. Fifth Circuit Court of Appeals in New Orleans revives the lawsuit against several other insurance companies and adjusting firms. The defendants left in the case include Fidelity National Insurance Co, Fidelity National Property and Casualty Insurance Co and Liberty Mutual Fire Insurance Co, among others.
Branch Consultants LLC, a claims adjuster, had accused eight insurers and six adjusters in an August 2006 “whistleblower” lawsuit in Louisiana of violating the federal False Claims Act by treating Katrina wind damage as flood damage. It was alleged that this resulted in overcharging the federal government’s National Flood Insurance Program. But the three-judge appellate panel agreed with a 2007 ruling by U.S. District Judge Peter Beer that Allstate and State Farm were properly dismissed because they were defendants in a similar case filed in April 2006 in Mississippi. This, the panel said, barred the Louisiana lawsuit under the False Claims Act’s “first-to-file” rule even though Allstate faced only “skeletal allegations” in the Mississippi case.
Source: Reuters UK
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