Allstate Wins Dismissal of False Claims Act Suit Involving Katrina Claims

Munger Tolles obtained the dismissal of the last in a long-running series of False Claims Acts (FCA) actions alleging our client, Allstate Insurance Co., and other insurers overstated damages for government-backed insurance claims following Hurricane Katrina. The ruling issued by Judge Lee H. Rosenthal of the United States District Court for the Southern District of Texas on Jan. 29, 2015 not only puts an end to FCA litigation against Allstate arising out of Hurricane Katrina, but confirms that the ability of relators to pursue FCA claims based on highly publicized events is very limited.

In dismissing the case brought by an independent insurance adjuster, Judge Rosenthal found the plaintiff lacked standing under the FCA because his claims were not independent of what was publicly known about the issue. Judge Rosenthal noted the alleged fraud was already widely known through media reports, Congressional hearings and government investigations and wrote, “The record does not show that Sonnier, by his own efforts, contributed new or 'qualitatively different' information from what had already been publicly disclosed.”

The Munger Tolles team representing Allstate includes Gregory J. Weingart, Blanca F. Young and Kenneth M. Trujillo-Jamison.