Transcript Shows Judge Blasted ‘Bottom Feeder’ Law Firm for Sloppy Mass Filings
The federal judge who threatened to sanction a Houston law firm that filed hundreds of hurricane-damage lawsuits over the course of several weeks warned one of the firm’s lawyers that he had put his professional reputation at risk, according to a transcript of an Oct. 20 hearing that was made available to the public on Monday.
“Shame on you for trying to prey on people,” U.S. District Judge James D. Cain Jr. said. “I think personally that’s what you do, but maybe after today y’all will take a different approach. I know your firm’s some Texas firm, and y’all look like good young lawyers. And I’m trying to — I want you to know now if you get a bar complaint against you, you get sanctions against you, it follows you as lawyers.”
Cain demanded that a representative for the McClenney Moseley & Associates law firm appear in his courtroom on Oct. 20 after he discovered that duplicate and apparently baseless claims were among 1,642 lawsuits filed in the US District Court for Western Louisiana from Aug. 8 to Oct. 13. The firm is headquartered in Houston but has an office in New Orleans.
The lawsuits allege insurers had failed to adequately compensate victims of Hurricanes Laura and Delta in 2020.
Cain said that the bulk of those lawsuits were filed over the course of several days. He said during the hearing he had found one lawsuit filed for a claim that had already been dismissed, three cases filed against an insurer that had not issued a policy on the properties and six lawsuits that were filed for the same claim by the same person.
The judge said the the law firm was “sloppy” in its rush to file hundreds of cases before the statute of limitations barred claims for damages caused by the hurricanes. He said he has reviewed some 7,000 lawsuits filed for damage from the storms, but no other law firm filed hundreds of cases at once.
“This is why at the last minute you get yourself in trouble and you create a lot of problems for you, for the court,” Cain said. “And the way it appears on the surface, y’all are coming in at the bottom and just trying to scoop up the bottom of the barrel like a bunch of bottom feeders.”
Cain told R. William Huye, an attorney with McClenny Moseley’s New Orleans office, that he is concerned that the law firm did not take the time to properly vet claims before filing lawsuits. He said it appears that firm’s business model is to pressure insurers with mass filings in an effort to push them “back on their heels” with hopes they will settle cases in bulk.
“You’re not going to mass settle these cases,” Cain said. “These people are individuals. They have individual claims. Each of them is different. Each of them’s problems are different. And you have a duty as lawyers to them to represent their interest, work their claim up individually, and get them the best result possible.”
Huye told the judge that his firm did try to investigate each claim, but in the “vast minority” of cases it was unable to reach the claimants by telephone. He said in those cases the law firm will use a “knocking campaign” with the claimants — sending a representative to visit their homes in person.
Cain said personal visits make sense, but asked how the law firm can conduct “mass mediations” with insurers to determine the value of individual claims.
Huye told him that he has been doing mass mediations “for years and years,” starting with Superstorm Sandy in 2012. He said he has been able to settle as many as 50 claims in a single day.
Cain said he won’t allow mediators assigned to his courtroom to approve 50 settlements in a single day. He said insurance claims are too “individualized” to be settled in mass.
The judge ordered the McClenny Moseley firm to bring all of its client retainer agreements into his courtroom by Monday. He said he will sanction the firm $200 for each baseless or duplicate filing he finds.
The law firm filed a motion to be present when the judge reviews those retainer agreements, but Cain denied it on Oct. 26. On Monday, the judge ordered the transcript of the Oct. 20 hearing to be made available to the public.
About the photo: A mobile home is destroyed by a fallen tree, Friday, Aug. 28, 2020, in Westlake, La., as clean up efforts continue following Hurricane Laura. (Kirk Meche/American Press via AP)
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