As Hurricane Ida deadline looms, judges loosen rules for former cases of troubled Texas law firm

The deadline to file suit against insurance companies over damages caused by Hurricane Ida is quickly approaching, a prospect that is particularly concerning for clients of Texas law firm McClenny Moseley and Associates, who saw their lawyers suspended from practice across the state earlier this year.

Property owners have until August 29 to file suit, but according to estimates by the Nannette Jolivette Brown, chief judge of the Eastern District of Louisiana, there may be as many as 8,000 former clients of MMA who are yet to do so.

"The prospect that such a staggering number of unfiled claims may still exist with just over 60 days (about 2 months) until prescription runs out on those claims is a cause of great concern to the court," Brown wrote in a June 21 order.

That is in addition to a deluge of cases already filed by the firm. According to legal analytics firm Lex Machina, MMA filed a total of 2,766 lawsuits in 2022 nationwide, more than any other law firm in the country.

To make things easier on attorneys picking up cases left behind in the aftermath of the Texas law firm's fall from grace, the court issued an order allowing lawsuits to be filed with only minimal initial research. This was the very practice that got MMA in trouble in Louisiana in the first place, but there's an important difference: the new attorneys have the permission of the court.

Cases filed by attorneys on behalf of former MMA clients will be placed under an automatic 120-day stay in the Eastern District, to allow the new lawyers time to thoroughly investigate the claim post-filing, as long as their clients are aware that a lawsuit has been filed. Usually, professional rules require attorneys to substantially research a claim before filing to ensure that it is valid, something MMA has been accused of not doing.

"The court seeks to encourage attorneys to take on cases where MMA previously represented insureds, or alleged they represented insureds, by mitigating concerns attorneys may have about getting involved with such a short time left to file cases," Brown said in an emailed statement. "It is our hope that the community can gain confidence in the judicial system knowing that we are acting where we have the ability to do so to ensure justice is served."

Last week, U.S. Magistrate Judge Michael B. North, also of the Eastern District, called a meeting of insurance lawyers in his courtroom. In that meeting, North told attorneys not to wait for confirmation from MMA that a client was no longer represented by the firm — commonly referred to as a "drop letter" — before resuming communication with the insured on their claim, according to an insurance attorney present at the meeting.

In the Western District, Special Master Cade Cole was tasked with sending out letters to the firm's former clients, informing them that they would require new counsel, although several former MMA clients said they did not receive the letter, which was scheduled to be sent out in March.

The deadline to file suit for damages caused by hurricanes Laura and Delta, which hit in southwest Louisiana, ended last year. But many former clients of MMA still find their cases in limbo after the firm's lawyers were temporarily suspended from practice in the state, with most of the firm's Louisiana-based legal staff quitting shortly after.

There are currently 1,411 cases in the Western District that still list William Huye, the firm's former lead attorney for Louisiana, as the attorney. Special Master Cole did not respond to several requests for comment.