sandbar 6.1

Woullard v. State Farm Fire & Casualty Co., No.1:06cv1057 LTS-RHW (S.D. Miss. Jan. 26, 2007)

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When Hurricane Katrina made landfall onAugust 29, 2005, it brought along a twenty-seven foot wall of water that crashed down oneverything in its path, causing catastrophicdamage along the Mississippi Gulf coast.Insurance companies, such as State Farm Fireand Casualty, maintained that their policiesonly covered wind damage, not damage result-ing from the storm surge. The exclusionresulted in a controversy among home ownersand their insurers and left thousands ofMississippians with insurance policies that donot compensate for the losses they suffered.

BBaacckkggrroouunnddState Farm insures more than one in five homesin the United States and in 2005 recorded a netprofit of $3.24 billion.1 Because it controls sucha substantial piece of the market, the media hasfocused its attention on the “Good Neighbor”brand during the wind-driven water controver-

sy. From articles in national newspapers todebate on the floor of Congress, the water versuswind fight has resonated throughout the coun-try and centered itself on the policies written byState Farm.

The claim denials have not only resulted inmedia attention, but also in hundreds of law-suits filed against the company. In Woullard v.State Farm, State Farm policyholders withinsured property in Jackson, Harrison, andHancock counties filed a motion in federal dis-trict court for class certification and for prelim-inary approval of a class action settlement.

On January 26, 2007, United States DistrictJudge L.T. Senter, Jr. denied the settlementagreement, which would have settled hundredsof lawsuits and reopened thousands of disputedclaims resulting from the catastrophic impactof Hurricane Katrina. In the order, JudgeSenter held that without additional informa-tion the proposed settlement did not clearlyestablish a “procedure that is fair, just, bal-anced or reasonable.”2

SSeettttlleemmeenntt AAggrreeeemmeennttThe “Woullard Settlement Agreement” (settle-ment) contained two main components. In the

Good Neighbor, page 4

State Farm Not Acting as a “Good Neighbor”?

Legal Reporter for the National Sea Grant College Program

TheVolume 6:1, April, 2007

Volume 6, No. 1 The SandBar

Have you noticed something different aboutThe Sandbar? The April issue marks severalchanges to the National Sea Grant LawCenter’s legal reporter.

First, we have designated the issue as aspecial “Katrina edition” to cover some of themost significant cases stemming from thedevastation of Hurricane Katrina. From theclass action lawsuit against State Farm inMississippi to the litigation surrounding thelevee breaches in Louisiana, our research asso-ciates have provided a look at the wide range oflegal issues surrounding Katrina and its after-math. Additionally, Waurene Roberson, ourpublication designer, has compiled picturesthat help tell the story of Hurricane Katrina.

On a lighter note, the issue recognizes the40th anniversary of the law that created the SeaGrant program. Michael J. Thomas, an attor-ney in New Mexico, provides a brief history ofthe creation of the program and forecasts whatmight be on the horizon for Sea Grant.

Finally, I have enjoyed writing and actingas assistant editor for several previous issues,and I am excited and honored to now serve aseditor of The SandBar. I will continue to workdiligently to keep the Sea Grant communityinformed of important legal developmentsthrough the publication of The SandBar. Inupcoming issues, we plan to include more spe-cial features and guest authors to highlightemerging legal issues.

And, as always, we welcome any thoughtsand comments that you might have. We arehere to serve you, so please let us know how weare doing. Enjoy the issue!

State Farm Not Acting as a “Good Neighbor”?Allyson L. Vaughn . . . . . . . . . . . . . . . . . . . . 1

Letter from the EditorTerra Bowling . . . . . . . . . . . . . . . . . . . . . . . 2

In the Wake of Katrina, Mississippi ApprovesOnshore Casinos

Jessica Ruthven . . . . . . . . . . . . . . . . . . . . . . 3

Federal Judge Rules Against State Farm in Katrina Case

Rick Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Several Insurance Policies Provide Coverage from Levee-Breach Flooding

Sarah E. Spigener . . . . . . . . . . . . . . . . . . . . 9

Report Blames Corps for Levee BreachesSarah E. Spigener . . . . . . . . . . . . . . . . . . . 11

FEMA Evicts Evacuees without Adequate Explanation

Adam DeVrient . . . . . . . . . . . . . . . . . . . . . 12

LA Supreme Court Finds Insurance Claims Extenstions Constitutional

Jason M. Payne . . . . . . . . . . . . . . . . . . . . . 15

Hospital Negligence Class Action Remanded to Louisiana State Court

Kathryn L. Burgess . . . . . . . . . . . . . . . . . . 17

From Sea to Shining Sea (Grant) -- Forty Years of Research thru the National Sea Grant College Act

Michael J. Thomas . . . . . . . . . . . . . . . . . . . 19

Coast to Coast . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Table of Contents Letter from theEditor


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Prior to Hurricane Katrina, casinos on theMississippi Gulf Coast were relegated to operat-ing on offshore floating barges. When HurricaneKatrina devastated the Gulf Coast on August 29,2005, most of the coastal casinos were damaged,and casino executives were left with the decisionof whether or not to rebuild the gambling estab-lishments. A heated debate ensued over whetherto build shore-based casinos.

The casinos provide an important source ofstate tax revenue for Mississippi. It is estimatedthat the casinos generated $500,000 a day instate and local taxes before Katrina.1 Due inpart to the tax revenue generated on both thestate and local levels, Governor Haley Barbourwas unwilling to give casino executives a reasonto leave the state.

In a bid to retain the sizeable tax revenue thestate receives from the coastal casino industry,Barbour swiftly presented a proposal toMississippi lawmakers suggesting that GulfCoast casinos be allowed to rebuild inland. Thenew onshore gaming law was met with accoladesfrom casino executives, builders, and membersof the local population who had been leftwithout jobs.

While many people in the state,including the governor, wanted to see thecoastal region continue its reign as aprominent casino and resort destination,there were others who vehementlyopposed the new gaming law. Many law-makers saw the issue as a question ofmorality. The Mississippi Baptist Con-vention and its pastors protested the lawand continued to assert that allowing thecasinos inland would contribute to themoral decay of the state and should notbe allowed.

Despite the controversy, on October17, 2005, in a special legislative session,

Mississippi lawmakers passed a new onshoregaming law that allowed casinos to move inlandand build within 800 feet of the waterfront.2

With the ability to move on land, comes the abil-ity to expand the structural size of the casinos.Prior to Hurricane Katrina, the Gulf Coast casi-nos provided an estimated 17,000 jobs, andauthorities expect the number will increase to25,000 within several years of the passage of thenew onshore gambling law.3 The Imperial Palacewas the first casino to reopen on December 22,2005, and most have now followed suit.

EEnnddnnootteess1. Rogelio Solis, Mississippi Casino Boats Are

Moving onto Dry Land, available at:http://www.usatoday.com/news/nation/ - 2005-10-18-casinos-miss_x.htm .

2. A copy of HB 45 is available at:http://index.ls.state.ms.us/isysnative/ (Clickon “2005 Fifth Extraordinary Session” andsearch “gaming.”)

3. Donna Blevins, Rebuilding Mississippi GulfCoast, available at: http://www.pokerplayernewspaper.com/ -viewarticle.php?id=1010&sort=author .

In the Wake of Katrina, MississippiApproves Onshore Casinos

Photograph of casino grounded across the highway from the beach in Biloxi,MS, courtesy of the Missouri State Highway Patrol (taken while assisting localpolice in Katrina’s aftermath).

first component, State Farm agreed to pay 639claimants an average of $125,000 each, totaling$80 million. This aspect of the settlement onlyapplied to those suits filed by the Scruggs LawFirm involving homes that were completely lostto the storm, referred to as “slab cases.” Thiscategory includes United States Senator TrentLott, who lost his home in Jackson County tothe storm. It is unclear how this component ofthe agreement is affected by the order, as JudgeSenter dealt exclusively with the other compo-nent; however, both State Farm representativesand Richard F. Scruggs agreed that the two ele-ments are separate and the settlement proce-dures in the 639 cases would proceed.3

The second part of the settlement createdan administrative process to reevaluate thedenial of coverage for approximately 35,000State Farm policyholders who live inMississippi’s three coastal counties but did notfile lawsuits against State Farm. In order toadequately address these disputes, the agree-ment creates a damage matrix to assist in dis-tributing policy benefits.

The matrix, the Mississippi KatrinaResolution Guideline Tool (MKRGT), dividesthe type of loss sustained by the proposed classmembers into five categories. The first categoryinvolves “slab cases” or “foundation only” casesand is defined as those cases involving theabsence of a structure on the site of the insuredproperty. Slab cases are guaranteed a minimumrecovery. The other four categories are as fol-lows: Total/Constructive Total (the damage tothe insured structure is equal to or greater than60 percent of the insured value), Severe (thedamage to the insured structure is between 30percent to 60 percent of the insured value),Moderate (the damage to the insured structureis between 10 percent and 30 percent of itsinsured value) and Minor (the damage to theinsured structure is equal to or less than 10 per-cent of its insured value). Any property fallingin these four categories is subject to maximumrecovery but no minimum recovery require-ments are set forth. The agreement called for aminimum of $50 million to be dispersed among

these individuals with total costs estimated toreach around $500 - $600 million. JudgeSenter’s order deals exclusively with this aspectof the settlement agreement.

The court refused to accept this matrix asan adequate procedure because State Farmfailed to present any information that new cri-teria had been established to reevaluate theclaims of class members. It was the lack ofdetail in dispersing the funds that Judge Senterultimately found the most problematic.“[T]here is no way I can ascertain how this sumcompares to the total claims of the members ofthe proposed class. Nor can I fairly estimate,with even a minimum degree of accuracy, howthinly this large sum may be spread among theclass members.”4 Judge Senter feared the pay-ments from the matrix would be arbitrary andnot fair and reasonable. He also found that theadministrative process was too complex for thelay person and would require the assistance oflegal counsel.

The agreement set forth mandatory andbinding arbitration for any disputes arisingfrom the revaluation of claims. Judge Senterfound this arbitration procedure needing revi-sion because it provides no right of appeal, atwo hour time limit, and the State Farm-trained arbitrator had the power to award lessthan the initial offer by State Farm yet StateFarm presented no information to the court as

Good Neighbor, from page 1


“[T]here is no way I canascertain how this sum

compares to the total claimsof the members of the proposed class. . . .”


to what training the arbitrator would receiveand how State Farm would minimize their con-trol over the claims resolution process.

The settlement also contained provisionsproviding attorneys’ fees totaling $46 million.The fees were divided between the $26 millionfor settling the 639 lawsuits and $20 million forreopening the 35,000 claims. Judge Senterfound no evidence to justify the payment forreopening the claims as the plaintiffs failed toprovide information concerning the basis forcalculation of the fee arrangement.

A final element of the settlement involvedMississippi Attorney General Jim Hood agree-ing to drop a criminal investigation into StateFarm’s response to hurricane claims and thecharge that the insurer fraudulently deniedKatrina-related claims. A grand jury had beenassembled and was hearing evidence only daysbefore the settlement was announced.5

CCeerrttiiffiiccaattiioonn ooff tthhee CCllaassssIn addition to rejecting the settlement agree-ment, the order also denies the plaintiffs’motion to certify a class. In order for the dis-trict court to certify a group of plaintiffs as aclass in federal court, the court must conduct a

rigorous analysis to determine if all require-ments of Federal Rule of Civil Procedure 23 aresatisfied. The district court has great discre-tion in determining whether to certify a class.Rule 23(a) establishes four requirements: (1)numerosity, which requires a class so large thatjoinder of all members is impracticable; (2)commonality, which requires questions of lawor fact to be common to the class; (3) typicality,which requires that the named parties’ claimsor defenses are typical of the class; and (4) ade-quate representation, which ensures that therepresentatives will fairly and adequately pro-tect the interests of the class.

Judge Senter found that the plaintiffs failedto satisfy all of the Rule 23(a) requirements.“Neither the plaintiffs nor State Farm has giventhe Court any information from which theCourt can determine with any reasonabledegree of certainty how many policy holders arewithin the proposed class or how many policy-holders have each of the eleven types of policiesidentified.”6 Thus, the plaintiffs failed to satis-fy the numerosity requirement because thecourt requires a reasonable estimate of the num-ber of purported class members. The court alsofound that the requirements of commonality,

See Good Neighbor, page 6

Photograph post-Katrinacourtesy of Richard K.(Rick) Wallace,AUMERC/Sea Grant.

typicality and adequate representation were notsatisfied because “[t]here is insufficient infor-mation to support a finding that the plaintiffs,who are presumably owners of a State Farmhomeowners policy, have a claim that is sub-stantially similar to claims under the other tencategories of policies covered by the proposedagreement.”7 However, in denying certifica-tion, Judge Senter invited the plaintiffs torequest certification again and present suffi-cient evidence that satisfies the require-ments of F.R.Civ.P. Rule 23.

NNoo NNeeww PPoolliicciieessWhat does this mean for State Farm and itspresence in Mississippi? On February 14, 2007,State Farm announced that it would no longersell new homeowner policies in Mississippi andwould be assessing how many current policiesto renew this year.8 Mike Fernandez, vice-pres-ident of public affairs for State Farm, said thatState Farm cannot “write new policies under acontract that they are calling into question,”referring to the challenge by homeowners totheir policy that storm surge is wind-drivenwater and should be covered by policies thatcover wind damage.9 For now, Mississippiansseeking to insure their homes from futurestorms will face increased obstacles.

AA NNeeww DDeeaallDuring the weeks following the rejection ofScruggs’ settlement agreement, MississippiInsurance Commissioner George Dale reachedan out-of-court agreement with State Farm, andthe Scruggs law firm removed its settlementagreement from court consideration. The newagreement appears very similar to the settle-ment agreement that was rejected in federalcourt but lacks some of the more controversialcomponents.10 The agreement calls for media-tion for homeowners, renters, and commercialentities in the three coastal counties ofMississippi. State Farm has agreed to pay noless than $50 million to settle claims, and thereis no limit in the agreement on how much StateFarm could spend.

The new agreement takes the dispute be-tween State Farm and a policy owner out of thecourt system. While the parties will likely avoidyears of expensive and time-consuming litiga-tion, they may lose the benefits of a judge’sreview. Ideally, this new agreement will speedthe rebuilding process as homeowners begin toreceive financial assistance to move forwardwith life.

EEnnddnnootteess1. Randy J. Maniloff, Looking Under the Hood

of State Farm’s (Rejected, for Now) MississippiKatrina Claims Settlement, THE NATIONAL

UNDERWRITER COMPANY, January 29, 2007.2. Woullard v. State Farm Fire & Casualty Co.,

No. 1:06cv1057 LTS-RHW (S.D. Miss. Jan.26, 2007).

3. Joseph B. Treaster, Judge Puts Settlement onKatrina in Question, THE N.Y. TIMES, January27, 2007, available at http://nytimes.com/ -2007/01/27/business/27insure.html?ei= -5070&en=d6af6e205a7ffab7&ei=5070 .

4. Woullard, at *6. 5. Michael Kunzelman, Ex-State Farm

Adjusters Tell Miss. Grand Jury of KatrinaClaims, THE ASSOCIATED PRESS, January 23,2007, published at http://www.insurance -journal.com/news/southeast/2007/01/23/ -76104.htm .

6. Woullard, at *1. 7. Id. at *2.8. MSNBC, State Farm: No new home policies in

Miss., Insurer to also stop writing commercialcoverage amid Katrina litigation, MSNBC.com,available athttp:/www.msnbc.com/id/17150886/(February 14, 2007).

9. Id.10. Emily Wagster Pettus, In Mississippi, Dale

Moves In with State Farm Settlement asScruggs Withdraws, INSURANCE JOURNAL,March 21, 2007, available athttp://www.insurancejournal.com/news/ -southeast/2007/03/21/77911.htm .


Good Neighbor, from page 5

Broussard v. State Farm Fire and Casualty Co.,2007 WL 113942 (S.D. Miss. Jan. 11, 2007)

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Originally published in Water Log: The LegalReporter of the Mississippi-Alabama Sea GrantConsortium, Volume 26.4 (Feb. 2007).

On January 17, 2007, U.S. District Court JudgeL.T. Senter granted a directed verdict in favor ofa couple who sued State Farm for refusing topay for any damage to their home caused byHurricane Katrina. The ruling captured much

attention not only around the region, but alsonationally because of the potential impact onthe insurance industry.

BBaacckkggrroouunnddLike so many other families along the GulfCoast, Biloxians Norman and GenevieveBroussard suffered the complete destruction oftheir home during Hurricane Katrina. After thestorm, all that remained of their house was aconcrete slab. Since then, the Broussards andothers like them have been insisting that thedamage caused by Katrina should be covered bytheir homeowner’s insurance policy.


Federal Judge Rules AgainstState Farm in Katrina Case

Photograph of Beach Blvd. Biloxi, MS, September 24, 2005, courtesy of Brendan Holder, http://www.photosfromkatri-na.com/page01.htm .

See Broussard, page 8


Broussard, from page 7

However, under the terms of State Farm’sand other insurers’ homeowner policies, dam-age from wind is covered, but damage caused bywater is not. The insurers argue that the policiesexclude damages that could have been causedby a combination of both, even if the winds pre-ceded the water.1

After having their claim refused by StateFarm, the Broussards sued the insurer in federalcourt. In addition to the full insured value oftheir home ($211,222), the Broussards alsosought $5 million in punitive damages againstState Farm for unreasonably denying their claim.

TThhee DDiissttrriicctt CCoouurrtt’’ss DDeecciissiioonnU.S. District Court Judge L.T. Senter found thatunder the terms of the homeowner’s insurancepolicy, State Farm is liable for the full insuredvalued of the Broussard’s home, unless it canprove that some or all of the loss was caused bywater damage.

Both parties stipulated that the Broussard’shome was completely destroyed by Hurricane

Katrina. Judge Senter held that since it wasclear that the Broussard’s home sustained winddamage during the hurricane, the burden ofproof shifted to State Farm to establish, by apreponderance of the evidence, what portion ofthe loss was attributable to flood damage andtherefore not covered by the policy.2

State Farm argued that 100% of the damageto the Broussard’s home was caused by risingwater. However, State Farm’s own expert wit-ness testified that it was more probable than notthat the property incurred at least some winddamage to its roof prior to the arrival of thestorm surge. The key issue the court had todetermine was how much damage was caused bythe wind before the storm surge arrived. It didnot matter that the storm surge was powerfulenough to destroy the property regardless of thepreceding wind damage.

Under its homeowners policy, State Farmmust establish, by a preponderance of the evi-dence, that portion of the loss that was attributed

See Broussard, page 18

Photograph taken at Bayou La Batre courtesy of Richard K. (Rick) Wallace, AUMERC/Sea Grant.


In re Katrina Canal Breaches ConsolidatedLitigation v. Encompass Insurance Co., 2006 U.S.Dist. LEXIS 85777 (D. La. November 27, 2006)

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In November, the United States District Courtfor the Eastern District of Louisiana held thatthe “flooding” exclusion in several insurancepolicies is limited to flooding caused by a nat-ural event. Because much of the flooding inNew Orleans was caused by canal breaches andnot solely by a natural event, some New Orleansresidents’ insurance policies were interpreted togrant coverage.

BBaacckkggrroouunnddThe In re Katrina Canal Breaches ConsolidatedLitigation encompasses all of the cases concern-ing damages caused by flooding as a result ofbreaches or overtopping in the areas of the 17th

Street Canal, the London Avenue Canal, theIndustrial Canal, and the Mississippi RiverGulf Outlet (“MRGO”) in New Orleans.1 Fourindividual cases that focus on the issue of insur-ance coverage are incorporated in this decision.2

The plaintiffs, residents of New Orleans,claimed that sometime between 10:00 and 11:00a.m. on August 29, 2005, before the full force ofHurricane Katrina reached the city, a small sec-tion of the concrete canal wall, known as the 17th

Street Canal, suddenly broke, causing water toenter the streets and their homes. The residentssued various insurance companies seeking cov-erage for damage caused by the collapse of the17th Street floodwall and the resulting waterdamage, arguing that the insurance companiesimproperly failed to compensate them for thedamage to their homes. The residents alsoclaimed that the Board of Commissioners forthe Orleans Levee District (“OLD”) was negli-

gent; however, the court severed the negligenceallegations against the Board from this case.

IInnssuurraannccee PPoolliicciieessThe policies at issue were homeowner’s policies.A homeowner’s policy is considered a type of“all-risks” insurance. These policies generallyallow recovery for all losses, unless the policycontains a specific exclusion expressly exclud-ing the loss from coverage. Under Louisianalaw, unless there is a specific exclusion stated,the presumption is that the policy covers alldamage. In this case, the plaintiffs had the bur-den of proving that the water intrusion fallswithin their policies’ terms; however, the defen-dants had to prove that the water intrusion fallswithin an exclusionary clause.

The policies issued by Standard Fire,Hartford, Hanover, and Unitrin all includedprovisions stating that they did not insure forloss caused directly or indirectly by water dam-age, which includes flooding. However, theword “flood” was not defined in the policies.State Farm’s policies noted that they did notinsure loss as a result of flooding that arisesfrom nature or external forces. The Hartfordpolicies also stated that they did not insure forloss as a result of flooding, which the policydefined to include “the release of water held bya levee or a flood control device.”

DDeeffiinniinngg tthhee WWoorrdd ““FFlloooodd””The defendant insurance companies contendedthat all water damage caused by the canal breachwas excluded from coverage because their poli-cies exclude coverage for water damage resultingfrom a “flood.” They maintain that all theclaimed damage was a result of a “flood.” Theyfurther argued that the definition of “flood” isnot limited to natural events. The plaintiffsargued that with regard to the exclusions

See Levee-Breach, page 10

Several Insurance Policies ProvideCoverage from Levee-Breach Flooding


Levee-Breach, from page 9

included in their policies, “flooding” is limitedto natural events. In addition, they argued thatthe “flooding” that occurred was not caused bythe overtopping of the levees or by rainwaterfilling the city with surface water. They con-tended that Louisiana courts have construed thewater damage exclusion to require a “risingover” of water; whereas, here, a “rising over” ofwater did not occur; rather, it was the negligenceof OLD that caused the canal walls to collapse.

The issue for this court was whether in anall-risk policy, where coverage is provided fordirect loss to property, these insurance provi-sions which exclude coverage for water damagecaused by “flood” clearly exclude from coveragedamages caused by the alleged negligence ofOLD. In other words, the issue is whether it isreasonable to conclude that there are two defin-itions of “flood.”

The majority of the definitions of the word“flood” found independently by the courtrequired an “overflowing” or an “overtopping.”The court further concluded that the definitionof “overflowing” contemplates the occurrence ofa natural event caused by rain or tide.Therefore, the court concluded that a reason-able interpretation of the word “flood” would beflooding caused by a natural event.

CCoonncclluussiioonnBecause the word “flood” is not defined in thepolicies in question, the court found the exclu-sionary clauses of the policies ambiguous. Anyexclusion listed in these “all-risk” policies must

be clear and unambiguous; otherwise, the policywill be construed to give coverage. Consequently,the court held that the insurers must providedamages for the plaintiffs’ losses, with theexception of State Farm and Hartford. TheState Farm policies clearly exclude regardless ofthe cause of the flooding; therefore, they do nothave to provide damages for the losses. Also, thecourt held that the Hartford policies expresslyexcluded the damages caused by negligentlymaintained levees and that Hartford is notliable for damages.

EEnnddnnootteess1. Another case entitled Robinson v. United

States is also grouped under In re KatrinaCanal Breaches Consolidated Litigation and isstill pending; however this case can be dis-tinguished from the cases here because thecentral issue is different. In Robinson, NewOrleans residents are suing the Army Corpsof Engineers, not their insurance compa-nies, for the negligent construction andmaintenance of the MRGO. Robinson v.United States, C.A. No. 06-2268, Document2994 (E. D. La. Feb. 2, 2007).

2. These cases are: Vanderbrook, et al. v. StateFarm Fire & Casualty Co., et al.; XavierUniversity of Louisiana v. Travelers PropertyCasualty Co. of America; Chehardy, et al. v.State Farm, et al. ; and Humphreys v.Encompass Insurance Co.

Photograph of flooded Plaquemines Parish courtesy of NOAA.


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After Hurricane Katrina struck, theSecretary of the Louisiana Departmentof Transportation and Development(DOTD), Johnny B. Bradberry, com-missioned “Team Louisiana,” a team ofLouisiana academic experts and engineers, tocollect and document evidence related to thefailure of levee systems in the Greater NewOrleans (GNO) area. Team Louisiana submitteda final report, “The Failure of the New OrleansLevee System during Hurricane Katrina,”1 inFebruary 2006, which was released by theDOTD on March 21, 2007. The report focuseson the hurricane protection system (HPS)designed and constructed over a 40-year periodby the U.S. Army Corps of Engineers (theCorps) for the East Bank of the GNO.

The report claims that decades of incompe-tence and neglect by the Corps allowedHurricane Katrina’s storm surge to devastateNew Orleans. The report further alleges that theagency supervisors ignored increases in thethreat level for their project, knowingly builtlevees and floodwalls lower than congressional-ly mandated, failed to detect or ignored obviouserrors during the review process, underestimat-ed the impact of the Mississippi River-GulfOutlet (MRGO) on the city’s defenses, andfailed to properly maintain the system. Thereport also calls for the state and Congress tohold “8-29 Commissions” for a full investiga-tion of the disaster to explain why decisionswere made the way they were, passage of a“Katrina Recovery Bill” to ensure coastal

restoration and flood protection are fullyfinanced by the federal government, and moretransparency on the part of federal and stateauthorities when discussing flood protectionplans. Team Louisiana also recommends aninvestigation of the integrity and safety of allexisting federal and state levee systems and ofall existing federal navigation projects incoastal areas in Louisiana.

This report, as well as previous nationalones with similar conclusions, may benefit someNew Orleans residents. In a pending case,Robinson v. United States, New Orleans residentsare suing the Corps for the negligent construc-tion and maintenance of the MRGO. They claimthat the flooding that resulted in their area wasa combination of failed levees and of a decreasein the natural wetland protection caused by theMRGO. The Louisiana District Court hasrecently upheld the plaintiffs’ right to bring thesuit by overruling a motion to dismiss initiatedby the Corps.2

EEnnddnnootteess1. Team Louisiana, La. Dep't of Transp. and

Dev., The Failure of the New Orleans LeveeSystem during Hurricane Katrina (Mar. 23,2007), available at http://www.publichealth. -hurricane.lsu.edu/TeamLA.htm .

2. Robinson v. United States, C.A. No. 06-2268,Document 2994 (E.D. La. Feb. 2, 2007).

Photograph of flooded New Orleans subdivision courtesy of NOAA.

ReportBlames

Corps forLevee Breaches


Association of Community Organizations forReform Now v. FEMA, 463 F.Supp.2d 26(D.D.C. Nov. 29, 2006)

AAddaamm DDeeVVrriieenntt,, 22LL,, UUnniivveerrssiittyy ooff MMiissssiissssiippppiiSScchhooooll ooff LLaaww

In August 2005, the Gulf Coast experiencedthe most ferocious natural disaster in U.S. his-tory. Hurricane Katrina made landfall nearPass Christian, Mississippi, causing more than1,000 deaths and over $100 billion dollars inproperty damage. Katrina also led to the even-tual displacement of over 700,000 Gulf Coastresidents, many of whom were left withoutadequate shelter.1 Less than a month later,Hurricane Rita made landfall near LakeCharles, Louisiana, displacing approximately70,000 more people.

After the hurricanes, the Federal Emer-gency Management Agency (FEMA) declaredthat evacuees from the Gulf Coast qualifiedfor “short-term housing rental assistance”under Section 403 of the Stafford Act, 42U.S.C. § 5170b. In February 2006, FEMAbegan transferring eligible evacuees to its“longer-term” Section 408 housing program,which provides up to eighteen months of hous-ing assistance to disaster evacuees. However,in order to receive this longer-term assistance,the evacuees had to submit an application toFEMA and “meet certain statutory and regu-latory criteria.”

Thousands of evacuees who applied forSection 408 assistance were denied benefits andinformed that their short-term 403 benefitswould be terminated following a thirty-daynotice period. FEMA used a computer programto automatically determine eligibility for bene-fits and sent out standardized form lettersinforming applicants of the denial of long-termhousing assistance.

Each letter contained a numerical code orphrase that stated the reason for the denial ofthat person’s application. Unfortunately for theapplicants, the codes were cryptic and vague.Other than the code or phrase, there was eitherlittle or no individual explanation as to why

FEMA denied that particular application. Anotice was attached that provided “non-individ-ualized” details for the appeal process. WhileFEMA did provide means for the applicants toresolve any misunderstandings which resultedfrom the letter, the plaintiffs claimed that themeans were oftentimes no more helpful than theletter itself.

Due to the ensuing confusion, FEMAextended its deadline to terminate Section 403benefits several times. The final date for thetermination of Section 403 benefits was August31, 2006. As a result of the elimination of thebenefits, the Association of CommunityOrganizations for Reform Now (ACORN) andseveral individuals filed suit against FEMA.ACORN asked the court for a restraining orderto prevent FEMA from terminating the bene-fits. The court denied the request and sched-uled a hearing to determine the appropriate-

FEMA Evicts Evacuees withoutAdequate Explanation

Other than the code or phrase, there was

either little or no individual explanation

as to why FEMA denied that particular application.


ness of an injunction to prevent termination.The court warned FEMA not to terminate theevacuees’ short-term housing benefits prior toits determination. FEMA ignored that order,canceling the benefits of thousands of evacueesthat very day.

PPrroocceedduurraall AAnnaallyyssiissOn appeal, FEMA claimed that the courtlacked subject matter jurisdiction to hear thecase and that ACORN lacked standing to bringsuit on behalf of the evacuees. First, FEMAargued that both the Stafford Act itself and theAdministrative Procedures Act (APA) providethat “acts that are takenwithin the discretionof the federal agencyare not reviewablein court.”2 In re-sponse, the plain-tiffs stated thatthey were challeng-ing the process bywhich FEMA madeits decisions, not thedecision itself. Neitherthe Stafford Act, nor its prede-cessor the Disaster Relief Act of 1974, barredjudicial review of unconstitutional acts.

FEMA also argued that ACORN lackedstanding to bring the claims on behalf of theevacuees. The court explained that in orderfor ACORN to have standing, it must passa three-part test: first, its members musthave standing to sue in their own right; sec-ond, the interest that ACORN seeks to pro-tect must be germane to the organization’spurpose; and, finally, neither the claim assertednor the relief requested must require the par-ticipation of individual members. The courtheld that ACORN met all three prongs of thetest and did in fact have standing to sue onbehalf of its evacuated members.

IIss tthhee CCoouurrtt GGooiinngg ttoo SSttoopp FFEEMMAA??To obtain an injunction, plaintiffs must showseveral elements: a substantial likelihood of suc-

cess on the merits of their case; that they wouldsuffer irreparable injury should the injunctionnot be granted; that an injunction would notsubstantially harm either party; and, finally,that the injunction would advance the publicinterest. In balancing these factors, the courtfocused on whether the plaintiffs were substan-tially likely to succeed based upon the merits oftheir case.

The court explained that for the plaintiffs toshow a likelihood of success, they would have toestablish “that they possess a property interestin the housing assistance benefits that is pro-tected by the Due Process Clause…” and “thatFEMA’s termination and denial letters wereconstitutionally insufficient notice of the rea-sons for FEMA’s decisions and failed to provide

the requisite opportunity for appeal.”3

The court held that the evacuees did have aproperty interest protected by the DueProcess clause, since the Fifth Amendmentof the U.S. Constitution provides that the

government will not deprive a person of his orher property without due process of law. The

court recognized that government benefits cre-ate constitutionally protected property interests

if an applicant can legiti-mately claim or show

entitlement to it.The court used a

three-part test todetermine whetherthe evacuees hadbeen given ade-quate notice. First,

the court consideredwhether there was a

private interest that would be affected by

FEMA’s action. Since the discontinuation ofbenefits would deprive individuals of a place tolive, they had a very strong interest in the offi-cial action. Next, the court considered whetheran erroneous deprivation of property wouldoccur through the use of FEMA’s procedures.The court stated that, “the risk of erroneousdeprivation . . . significantly increases as the

See Acorn, page 14


notice being given becomes … more vague.”4

The court found FEMA’s method of notifyingevacuees of the denial of long-term benefits wasinadequate and should have been more spe-cific. Finally, the court weighed the increasedburden and cost for FEMA to send out moredetailed explanations. FEMA failed to demon-strate that sending out more detailed expla-nations to evacuees would result in too great aburden for the agency. After examining allthree parts of this test, the court determinedthat the plaintiffs were likely to succeed on themerits of their case.

The court also briefly looked at the otherthree factors to determine if they would issuean injunction prohibiting FEMA from discon-tinuing evacuees’ housing benefits. The courtheld that the plaintiffs would suffer irrepara-ble harm. The court stated that FEMA failedto demonstrate that they would suffer sub-stantial harm by having to provide moredetailed explanations. Finally, the court heldthat the injunction would advance the pub-lic’s interest, since the public has an interest

in ensuring that the government’s proceduresare constitutional.

CCoonncclluussiioonnThe court granted the plaintiffs’ motion for aninjunction and required FEMA to send moredetailed explanations to evacuees. Further-more, the court ordered FEMA to reinstateshort-term housing benefits, and pay evacueesbenefits that they would have received but forthe discontinuation.

EEnnddnnootteess1. Kamilah Holder, Congressional Research

Service, Disaster Housing Assistance: A LegalAnalysis of Acorn v. FEMA (Jan. 5, 2007),available at http://www.opencrs.com/rpts/ -RS22560_20070105.pdf .

2. Association of Community Organizations forReform Now v. FEMA, 463 F.Supp.2d 26, 31(D.D.C. 2006).

3. Id. at 33.4. Id. at 34.

Acorn, from page 13

Collage of Katrina photographs courtesy of NOAA except the grounded casi-no, right bottom, which is courtesy of the Missouri Highway Patrol.


State of Louisiana v. All Property and CasualtyInsurance Carriers Authorized and Licensed to doBusiness in the State of Louisiana, 937 So. 2d 313(La. Aug. 25, 2006)

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In response to the extensive devastation ofHurricanes Katrina and Rita in August andSeptember of 2005, the State of Louisiana enact-ed amendments extending the period that vic-tims of the storm could file insurance claims.The amendments, Acts 739and 802, also called for theLouisiana Attorney Gen-eral to file a suit within tendays of the enactment ofthe amendments seekinga declaratory judgment todetermine if the amend-ments were constitutional.

BBaacckkggrroouunnddPrior to Acts 739 and 802,Louisiana law held thatno contract for insur-ance could set a period ofless than twelve monthswithin which to file a claim for damages. Dueto the devastation of Hurricane Katrina onAugust 29, 2005, and Hurricane Rita a mere 27days later, Governor Blanco of Louisianaissued several executive orders extending vari-ous legal deadlines, including filing periods forinsurance claims. Most of these executiveorders were taken up by the Louisiana legisla-ture and made into state law. Among thesewere Acts 739 and 802, dealing with the insur-ance claims filing periods. These acts extendedthe old deadline for filing claims from one yearfrom the date of the damage to September 1,

2007, for Katrina’s victims, and October 1,2007, for Rita’s victims.

As required by the acts, the attorney generalfiled a claim for declaratory judgment on behalfof the State of Louisiana on July 10, 2006, list-ing all property and casualty insurance carriersauthorized and licensed to do business in thestate as defendants. All of the insurance carriersagreed to the extensions, except for AllstateInsurance Company, State Farm InsuranceCompany, and USAA Insurance Company(defendants).

On August 17, 2006, the attorneygeneral filed papers with the

Louisiana Supreme Court urg-ing them to exercise their abil-ity to immediately hear thecase due to the time sensitiv-ity of the material and itsimportance to the citizens of

the state. The supremecourt agreed with theattorney general and

agreed to hear thecase, but sent itfirst to a state dis-trict court for anexpedited hear-ing. The districtcourt judge heard

the case, concludingthat the insurance companies’ arguments werewithout merit and the acts were constitutional.On August 24, 2006, the Louisiana AttorneyGeneral sought a review of the case with theLouisiana Supreme Court to receive a finaljudgment on the matter.

LLoouuiissiiaannaa SSuupprreemmee CCoouurrttThe supreme court first dealt with classifyingthe Acts as either substantive or interpretive law.

LA Supreme Court Finds InsuranceClaims Extensions Constitutional

See Claims Extensions, page 16


Louisiana law provides that unless there is leg-islative intent to the contrary, substantive lawscan only be applied prospectively, while proce-dural and interpretive laws can be applied bothprospectively and retrospectively. The courtfound legislative intent to have the act applyretroactively in order to cover the damage ofHurricanes Katrina and Rita. However, they didfind the law to be substantive, since it eitherestablished new rules or changed existing ones.Upon this determination, the court had to decideif the new laws impaired contractual obligationsor disturbed any vested rights to the point thatthey could not be applied retroactively.

CCoonnttrraacctt CCllaauusseessThe insurance companies first argued that Acts739 and 803 violate the Contract Clauses of boththe Louisiana and United States Constitutions,which prohibit states from interfering with pri-vate contracts. Although the Contract Clauselanguage seems absolute, the U.S. SupremeCourt has found that “… the Contract Clausedoes not operate to obliterate the police powers

of the States.”1 The police powers allow thestates to make the necessary laws to protecttheir residents.

The Louisiana Supreme Court looked at thestate’s right “… to safeguard the vital interest ofits people…”2 in deciding that these acts did notviolate the Contracts Clause. The supremecourt also weighed the impairment to the insur-ance companies and determined that, althoughthe insurance companies would be impaired bythe extension, the filing extensions were justi-fied since citizens of the state were displaced allover the country and a great quantity of legaldocuments, insurance policy papers included,were destroyed due to the wind and water. Thecourt further justified the acts by pointing outthey were limited in both time and scope to dealonly with the two natural disasters that hadoccurred.

The defendants next claimed that theLouisiana Attorney General did not have theright to make a legal claim about the constitu-tionality of the acts. The insurance companies

Claims Extensions, from page 15

See Claims Extensions, page 21

Aerial photograph of Hurricane Katrina over the Gulf of Mexico courtesy of NOAA.


Preston v. Tenet Healthsystem Memorial MedicalCenter, Inc., 463 F. Supp. 2d 583 (E.D. La. Nov.21, 2006)

KKaatthhrryynn LL.. BBuurrggeessss,, 22LL,, UUnniivveerrssiittyy ooff MMiissssiissssiippppiiSScchhooooll ooff LLaaww

BBaacckkggrroouunnddAfter Hurricane Katrina hit, the conditions atMemorial Medical Center in New Orleansrapidly deteriorated. The hospital lostelectrical power and the temperaturesinside rose to over one hundreddegrees. Sanitation systems backed up.When the levees broke, more than onethousand people were trapped insidethe hospital as a result of the eight-foot-high flood waters. Teams usedhelicopters and boats to perform res-cues, but some of the most vulnerablepatients remained trapped inside, andan estimated thirty-five patients diedduring the crisis.

In October, relatives of the de-ceased and injured patients filed a law-suit in federal district court againstMemorial Medical Center and LifeCareManagement Services, which operated an acutecare unit inside the hospital. The plaintiffs alsofiled a class action suit asserting “various alle-gations of negligence and intentional miscon-duct” and reverse patient dumping under theEmergency Medical Treatment and ActiveLabor Act.1

RReemmoovvaall CCllaaiimmssThe plaintiffs filed a notice to remand the suitto state court, but later withdrew that request.Subsequently, Memorial resurrected the motionto remand. LifeCare filed a notice of removal tokeep the case in federal court citing severalbases for federal jurisdiction: (1) the Federal

Officer Removal Statute; (2) the Multiparty,Multiforum Trial Jurisdiction Act; (3) the ClassAction Fairness Act; and (4) the EmergencyMedical Treatment and Active Labor Act.2

The purpose of the Federal Officer RemovalStatute is to “provide a federal forum in caseswhere federal officials are entitled to raise adefense arising out of their duties.”3 Removal isonly proper in the current case if LifeCare is aperson that acted under color of federal

authority when committing a tortious act andcan assert a colorable defense. The court heldthat LifeCare failed to show that it acted undercolor of federal authority in failing to maintainhospital conditions and putting an evacuationplan in motion sufficient to keep its patientsalive. No federal officer exercised “directand detailed” control of the hospital at any timeduring the crisis.

The Multiparty, Multiforum Trial Juris-diction Act creates original federal jurisdictionover “any civil action involving minimal diver-sity between adverse parties, where at least sev-enty-five natural persons have died in the acci-dent at a discrete location and allows consolida-tion of cases relating to a common disaster.”4

Hospital Negligence Class ActionRemanded to Louisiana State Court

See Hospital, page 22

Photograph of rescue from New Orleans hospital courtesy of FEMA.


to water damage. State Farm is liable for alllosses that it does not prove to have been causedby water.

At the conclusion of all the evidence pre-sented by both sides, Judge L.T. Senter wasasked by both parties for a judgment as a mat-ter of law. Under Rule 50 of the Federal Rulesof Civil Procedure, the court must grant adirected verdict “if the facts and inferencespoint so strongly and overwhelmingly in favorof one party that the Court believes that rea-sonable jurors could not arrive at a contraryverdict.”3 Granting a Rule 50 motion takes thedecision out of the jury’s hands and assigns it tothe judge.

Judge Senter granted the Broussard’smotion for a directed verdict. The court feltthat State Farm failed to meet its burden ofproof as to the extent of the damage caused bywater and therefore was liable to the Broussardsfor the full insured value of their home. JudgeSenter also found that under Mississippi lawand the terms of the policy, State Farm shouldhave made an unconditional offer to theBroussards for the wind damage that their ownexpert estimated. Mississippi law requires aninsurer to act reasonably and in good faithwhen investigating and paying legitimateclaims under its policies.4

Judge Senter found that State Farm wasunreasonable in trying to shift its burden ofproof to the Broussards, when even its ownexpert believed that their property sustained atleast some wind damage. The court found thatState Farm did not act in good faith and left theBroussards no choice but to file a lawsuit inorder to recover their losses. For that reason thecourt held that punitive damages against StateFarm were appropriate and submitted the issueto the jury.

TThhee AAfftteerrwwaarrdd The jury punished State Farm for refusing topay the claim by awarding the Broussards $2.5million in punitive damages. Judge Senter laterreduced the punitive damages to $1 millionbecause he felt that an award of four to five

times the value of the Broussards’ home wasmore appropriate.

The punitive damages award was instru-mental in encouraging State Farm to enter intosettlement negotiations involving a class actionsuit brought by 640 policyholders in Mississippiwhose claims have also been denied. The initialagreement called for State Farm to pay the 640claimants $80 million. The agreement alsocalled for State Farm to allocate at least $50 mil-lion to the settlement in order to reopen theclaims of thousands of policyholders whoseclaims were denied but did not sue.

On January 26, 2007, Judge Senter reject-ed the initial settlement offer because hewanted more information from the partiesbefore he would agree to a deal that couldaffect up to 35,000 policyholders. This settle-ment negotiation is still pending. However,by agreeing to settle, Jim Hood, Mississippi’sAttorney General, has agreed to drop a civilsuit and a criminal probe related to allega-tions that State Farm fraudulently deniedclaims related to Hurricane Katrina. BecauseState Farm is the largest insurer in Miss-issippi, its decision to settle could encourageother insurers to do the same.

CCoonncclluussiioonnHaving determined that State Farm did notmeet its burden of proof with respect to theamount of damage caused by water, it is liable tothe Broussards to the full value of their insuredhome. Also, because State Farm acted unreason-ably in denying the plaintiffs’ claim and leftthem no choice but to file a lawsuit, punitivedamage were appropriate.

EEnnddnnootteess1. Gary Mitchell, State Farm Losses Katrina

Claim Case, ABC News, January 12, 2007. 2. Broussard v. State Farm Fire and Casualty

Co., 2007 WL 113942 (S.D. Miss. 2007).3. Id. 4. Gregory v. Continental Insurance Co., 575

So.2d 534 (Miss. 1990).

Broussard, from page 8


MMiicchhaaeell JJ.. TThhoommaass,, JJ..DD..,, iiss aa 11999966 ggrraadduuaattee ooff tthheeUUnniivveerrssiittyy ooff MMiicchhiiggaann llaaww sscchhooooll.. HHee ccuurrrreennttllyy lliivveessiinn AAllbbuuqquueerrqquuee aanndd wwoorrkkss aass aassssiissttaanntt iinn--hhoouussee ccoouunn--sseell ffoorr aa NNeeww MMeexxiiccoo ssttaattee aaggeennccyy..

One thing we cannot escape — forever after-ward, throughout all our life, the memory ofthe magic of water and its life, of the homewhich was once our own — this will neverleave us.

William Beebe, American naturalist andauthor

Last year marked the fortieth anniversary of thelaw which created the Sea Grant program, theNational Sea Grant College and Program Act of1966 (“Act”).1 The Act’s main purpose was to

establish and help fund a network of “sea grant”colleges among universities in marine andcoastal areas to promote development of theirprograms in ocean and coastal research. The SeaGrant program forms a network between stateresearch institutions conducting ocean andcoastal research and the federal government, inrecognition of the importance of those resourcesto the nation.2 This article highlights the histo-ry of Sea Grant and its continuing importanceforty years after it began.

BBaacckkggrroouunnddThe Morrill Acts of 1862 and 1890 establishedthe “land grant” university system in which fed-eral lands provided to the states were to be usedto fund colleges of agriculture and mechanicalarts in the states receiving such land. Examplesof land grant colleges include Texas A & M Uni-

Graphic created from map on opening page of the National Sea Grant College Program website:http://www.seagrant.noaa.gov/colleges/colleges.html

From Sea to Shining Sea (Grant) -Forty Years of Research through

the National Sea Grant College Act

See Sea Grant, page 20

Sea Grant, from page 19

versity and Michigan State University. The orig-inal land grant concept has led to not only theSea Grant program, but also the Space Grantand Sun Grant programs.

The roots of the Sea Grant program arefound in the early 1960s during a period ofincreased interest in science.3 America was inthe heart of the post-World War II economicboom and there was an increased realizationthat scientific research could lead to responsibleeconomic development. Specifically, Dr.Athelstan Spilhaus suggested that a Sea Grantprogram could bring benefits, economic andotherwise, from research in coastal and marinematters, just as the “land grant” college pro-gram had done for agricultural and engineeringresearch in the early 1900s. In 1965, the legisla-tion creating the Sea Grant program was intro-duced by Senator Pell of Rhode Island.

DDeevveellooppmmeenntt ooff tthhee pprrooggrraammOriginally, the responsibility for implementationof the Act was charged to the National ScienceFoundation, with the intent that it would beadministered by the proposed National Oceanicand Atmospheric Administration (NOAA).4

NOAA, formally established in 1970 by placingmany related research agencies under one umbrel-la, includes many important components such asthe National Weather Service, National GeodeticSurvey, and the National Marine FisheriesService. The agency is housed within the U.S.Department of Commerce due to the importanceof the ocean to the commerce and trade of theUnited States. In 1970, Sea Grant moved to NOAAdue to NOAA’s large focus on oceanic research.

In 1971, four universities were the first toachieve Sea Grant College status. They wereOregon State University, University of RhodeIsland, Texas A & M University, and Universityof Washington. Many other institutions werelater granted such status throughout the 1970sand onwards. Today, there are thirty universityprograms that have been designated Sea Grantinstitution status.

The Act originally focused on fundingnational strategic investments, through re-

search and programs by sea grant colleges, infields relating to “ocean and coastal resources.”Amendments in 1976 clarified what require-ments applied to determine eligibility for SeaGrant institution status and also established theSea Grant review panel, which reviewed appli-cations for Sea Grant status designation and forgrants and contracts.5

Amendments in the 1980s expanded the Actto apply not only to ocean and coastalresources, but to Great Lakes resources as well.6

This encouraged universities in the GreatLakes area to expand their programs or seekSea Grant status.7 The Ohio State University,for example, achieved Sea Grant College statusin 1988. Although the primary motivationbehind Sea Grant was and continues to be clas-sical marine and ocean or coastal relatedresearch, the inclusion of the Great Lakes aspart of the research mission is logical. TheGreat Lakes contain one-fifth of the world’sfreshwater supplies and are a tremendouslyimportant economic engine in the Midwest, forshipping of goods, resource extraction (fishing,e.g.), and tourism. The Great Lakes have right-ly been referred to as “inland seas”8 due to theirsize, influence on the weather and climate ofthe region, and other factors that render themmore like oceans than traditional lakes. As theGreat Lakes drain to the Atlantic Oceanthrough the St. Lawrence Seaway, there likelyremains much opportunity for cross-beneficialresearch in the oceans and Great Lakes.9

CCoonncclluussiioonnThe objective of Sea Grant continues to be to:

increase the understanding, assessment,development, utilization, and conserva-tion of the Nation’s ocean, coastal, andGreat Lakes resources by providing assis-tance to promote a strong educationalbase, responsive research and trainingactivities, broad and prompt dissemina-tion of knowledge and techniques, andmultidisciplinary approaches to environ-mental problems.10



The continuation of the Sea Grant program isvital, not only for its own importance, but alsoin conjunction with other federally fosteredprotection of, and research on, marine andcoastal resources and ecosystems. For example,NOAA also administers the National MarineSanctuaries Program, which currently containsthirteen marine sanctuaries designed to protectselective marine ecosystems in the UnitedStates. The most recently established sanctuaryprotects an area in Lake Huron in the GreatLakes. Such programs form a comprehensiveresearch base, with Sea Grant at its core, pro-moting the nation’s long term interests.

EEnnddnnootteess1. 33 U.S.C. §§1121 et seq. 2. 33 U.S.C. §1121(a) (Congressional findings

concerning the importance of the ocean,coastal and Great Lakes resources).

3. See http://www.seagrant.noaa.gov/history-ofsg.html .

4. See http://www.history.noaa.gov/legacy/ -noaahistory_3html .

5. See 33 U.S.C. §§1126, 1128. 6. See, e.g., history notes under 33 U.S.C.

§§1122, 1123. 7. See http://history.noaa.gov/legacy/noaahis -

tory_9.html .8. See Jerry Dennis, The Living Great Lakes:

Searching for the Heart of the Inland Seas, at1-3 (2003).

9. See http://ciler.snre.umich.edu/about. Seehttp://www.glsc.usgs.gov .

10. 33 U.S.C. §1121(b).

claimed that the suits should be filed on an indi-vidual basis. The court stated that the legisla-ture authorized the attorney general to bring thesuit, thus giving him standing. The court alsofelt that innumerable individual suits wouldcause too great a strain on the courts and thatthe attorney general’s suit worked toward judi-cial efficiency as well.

The insurance companies also claimed Act803 violated the Supremacy Clause of theUnited States Constitution, which states theU.S. laws “… shall be the supreme Law of theLand.”3 The defendants claim that Act 803, bychanging the claim deadlines of flood insurancepolicies, interferes with the claims deadlines ofthe federally-run National Flood InsuranceProgram (NFIP). The court said it must inter-pret legislation in ways that make it effective,rather than meaningless. In doing this, they rec-ognized Act 803 as referring to all flood insur-ance programs except the federally run NFIP.

The defendants’ final argument was thatthe hurried nature of the court proceedinginterfered with their procedural due processby not giving them adequate time to preparetheir defense. The court found that they hadbeen given ample time, since they were served

papers notifying them of the declaratory judg-ment action more than a month before thetrial began.

CCoonncclluussiioonnOn August 25, 2006, the Louisiana SupremeCourt confirmed the district court’s decisionthat Acts 739 and 803 are constitutional. Thecourt decided even though the new laws weresubstantive in nature, they should still beapplied retroactively since the damage to theinsurance companies was minor in contrast tothe benefits provided to the Louisianans inneed. The decision gave the displaced, storm-ravaged people of Louisiana an extra year to fileclaims with their private insurance carriers,while also confirming that the extensions do notpertain to the federally run NFIP.

EEnnddnnootteess1. State of Louisiana v. All Property and Casualty

Insurance Carriers Authorized and Licensed todo Business in the State of Louisiana, 937 So.2d 313, 323 (La. Aug. 25, 2006).

2. Id. at 324.3. Id. at 328.

Claims Extensions, from page 16


Hospital, from page 17

Many courts have refused to consider HurricaneKatrina as an accident, although some havereserved judgment on whether the leveebreaches are accidents. Regardless, seven-ty-five people were not killed at the hospitalitself, which precludes federal jurisdiction.

The Class Action Fairness Act allows adefendant to move an action to federal court ifthe threshold amount in controversy and mini-mal diversity exist. Diversity of citizenship wasat issue in this claim. The court held that thelack of diversity precluded the removal of thecase, citing the nexus between the plaintiffs, thedefendants, and the state of Louisiana. Forinstance, all of the injuries took place in NewOrleans at a defined moment in time.Additionally, ninety-seven percent of thepatients and the hospital are Louisiana citizens.Although there was a mass displacement ofmost of the residents after Katrina, many ofthem express a desire to remain citizens of thestate of Louisiana.

Finally, the plaintiffs claimed that reversepatient dumping brought the EmergencyMedical Treatment and Active Labor Act into

play. Reverse patient dumping refers to theclaim that LifeCare evacuated some patientsout of the hospital after the levees broke andabandoned others due to the lack of an effectiveevacuation plan. Under federal law, this is not aviable cause of action. The main purpose of thestatute was to prevent doctors and hospitalsfrom refusing to treat people who lacked themoney to pay for medical treatment.

CCoonncclluussiioonnThe court held that state law claims predominateover the issues in the case. The district court con-cluded that in its entirety, it lacked jurisdictionto hear the matter and remanded it to the CivilDistrict Court for the Parish of Orleans.

EEnnddnnootteess1. Preston v. Tenet Healthsystem Mem. Med. Ctr.,

Inc., U.S. Dist. LEXIS 85381 at *6 (E.D. La.Nov. 21, 2006).

2. Id. at *9.3. Id. at *11.4. Id. at *19.

Photograph of rescue helicopter courtesy of NOAA.


Fearing the worst, organizers of a migratory project were elated recently to receive a transmittersignal from a young male whooping crane believed to be dead. The crane was part of an eighteen-member whooping crane migratory project housed in Citrus County, Florida, at theChassahowitzka National Wildlife Refuge. When violent storms hit the area in February, theentire flock was thought to have perished. The young male whooping crane escaped the fataleffects of the storm and was sighted in the company of two sandhill cranes several days after thestorm. Although the loss of the experimental migratory flock was devastating, organizers will con-tinue to monitor the male survivor as well as the 64 non-migratory whooping cranes also locatedin Florida.

Three Northern Pacific killer whale pods, totaling 85 whales, located in western Washington state’sinland waters near Puget Sound, were recently the subject of a lawsuit when local building andfarm groups challenged the decision to list Puget Sound’s orca population as an endangeredspecies. The farmers claimed that recognizing the orca population as endangered would harm theirlivelihoods by resulting in unnecessary water and land use restrictions. The judge dismissed thesuit stating that the plaintiffs did not present evidence to prove that they would be harmed.

The Michigan Department of Natural Resources recently confirmed that viral hemorrhagic sep-ticema (VHS) has been found in Lake Huron. VHS is a highly contagious virus that affects someof the region’s most popular commercial fish species, and its presence in Lake Huron is expectedto widely impact Michigan’s aquaculture industry. VHS had previously been found only in LakesOntario and Erie, but officials now predict the virus will spread through the entire Great Lakes sys-tem. VHS was originally a saltwater virus, but it was first discovered in the Great Lakes in 2005.Fishery managers suspect that ballast water from ocean freighters was the culprit in introducingthe virus to the Great Lakes region.

In Navy ranges off the coast of Hawaii, Southern California, and the East Coast, the DefenseDepartment granted the Navy permission to continue using sonar for the next two years, despitethe outcry of activists who fear that the sound waves may harm marine animals. The Navy has stat-ed that it will produce environmental impact statements to provide better information on howsonar use in underwater training ranges affects the environment.

The source of the ocean’s distinct smell was recently discovered by scientists. Dimethyl sulfide(DMS), a gas produced by genetic activity recently identified by researchers in ocean-dwelling bac-teria, produces the tangy sea air smell. A research team headed by Andrew Johnston of theUniversity of East Anglia was able to use marine plant decay samples to isolate in one form of bac-teria the genetic sequence responsible for converting plant decay products, dimethylsulfoniopro-pionate (DMSP), into the gas DMS. Although the gene sequence found is not the only mechanismfor conversion of DMSP into DMS, the discovery is an important step in understanding environ-mental interactions in the ocean.

Sea Grant Law CenterKinard Hall, Wing E, Room 262P.O. Box 1848University, MS 38677-1848

THE SANDBAR

THE SANDBAR is a result of research sponsoredi n p a r t b y t h e N a t i o n a l O c e a n i c a n dAtmospheric Administration, U.S. Depar-tment of Commerce, under Grant NumberNA16RG2258, the Sea Grant Law Center,Mississippi Law Research Institute, andUniversity of Mississippi Law Center. TheU.S. Government and the Sea Grant CollegeProgram are authorized to produce and dis-tribute reprints notwithstanding any copyrightnotation that may appear hereon. The viewsexpressed herein are those of the authors anddo not necessarily reflect the views of NOAA orany of its sub-agencies. Graphics from NOAA,Missour i Highway Pat ro l , R ichard K .Wallace, Brendan Holder, FEMA and TheNational Sea Grant College Program.

The University of Mississippicomplies with all applicablelaws regarding affirmativeaction and equal opportunityin all its activities and pro-grams and does not discrimi-nate against anyone protect-

ed by law because of age, creed, color, nationalorigin, race, religion, sex, handicap, veteran orother status.

MASGP 07-004-01 April, 2007

Editor: Terra Bowling, J.D.

Publication Design: Waurene Roberson

Research Associates:Kathryn L. Burgess, 2LAdam DeVrient, 2LJason M. Payne, 2LSarah E. Spigener, 2LRick Silver, 3LAllyson L. Vaughn, 3L

Contributors:Jessica RuthvenMichael J. Thomas

THE SANDBAR is a quarterlypublication reporting onlegal issues affecting the U.S.oceans and coasts. Its goal isto increase awareness andunderstanding of c o a s t a lp r o b l e m s a n d issues. Tosubscribe to THE SANDBAR,

contact: the Sea Grant Law Center, Kinard Hall, WingE, Room 262, P.O. Box 1848, University, MS, 38677-1848, phone: (662) 915-7775, or contact us via e-mail at:[email protected] . We welcome suggestions for top-ics you would like to see covered in THE SANDBAR.

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