Hurricane Laws Ruled Constitutional

(AP)  Two new Louisiana laws giving insurance policyholders more time to sue their insurers or file claims over damage from hurricanes Katrina and Rita are constitutional, the Louisiana Supreme Court ruled Friday.

The unanimous ruling came less than 12 hours after oral arguments.

The Louisiana Attorney General's office had asked the high court to review the laws after a state judge had upheld them. Although it is unusual for the party that wins a ruling to seek a review from a higher court, Attorney General Charles Foti said he wanted the matter solidly settled.

The court also ordered defendants to file for a rehearing no later than noon Saturday.

Its ruling means that homeowners, renters, condo owners, drivers with auto insurance and other nonfederal flood insurance policyholders have until Sept. 1, 2007, to file lawsuits resulting from Katrina damages and up to Oct. 1, 2007, for Rita damages.

"These acts simply give victims of Katrina and Rita additional time to access the courts if they need to," Attorney General's Office lawyer Megan Terrell told the Louisiana Supreme Court Friday.

But an attorney for Allstate Insurance Co., the second-largest homeowner insurer in Louisiana, argued that the laws could hinder the recovery by sending a message to the business community that the Legislature can change existing contracts.

"The problem is the Legislature is saying, `We are going to change the agreement in a hurricane-prone state,"' said Philip Franco, suggesting that could cause companies to think twice about doing business in the state. "That doesn't encourage rebuilding."
At issue are laws that would extend the claims deadlines for Katrina and Rita victims by one year — until two years after the 2005 storms struck on Aug. 29 and Sept. 24. Lawmakers approved the new laws in the latest legislative session and required the state attorney general's office to immediately seek a judgment on whether the new laws were constitutional.

Ten of the state's major insurers were listed as defendants in the suit.

The laws apply to homeowners, personal property, tenant, condominium owners and commercial property insurance — and certain automobile, crop and livestock insurance policies. Terrell said the laws don't apply to the National Flood Insurance Program, which is governed by federal law.

Five justices took part in the hearing in person at the court's French Quarter courthouse and two by video hookups from their north Louisiana offices.

Earlier this week District Court Judge Kay Bates in Baton Rouge upheld the laws.

She said the extension of the time periods doesn't expand citizens' rights under existing contracts but gives those who were displaced by the storms more time to enforce their rights.

Terrell echoed that opinion in arguments Friday, while Franco insisted that the laws violate existing contracts and send the wrong message to the business community.

In Friday's hearing questions from the justices centered on what flood damage might be covered and the length of time allowed by Louisiana to sue over settlements.

Justice Bernette Johnson said Texas has a four-year period, Mississippi and Florida — both states where hurricane damage is frequent — had three-year periods.

It was unclear when the court would rule. However, the justices had made it clear that they want to move quickly when they ordered Bates to listen to arguments and decide the case on Wednesday.