Louisiana judge lashes out at Texas firm over hurricane lawsuits

In the weeks before the deadline to file insurance lawsuits related to Hurricane Laura, a Houston-based law firm filed over 1,400 cases at the Lake Charles federal courthouse. Now, those cases are under review and the law firm may face hefty fines if it is found to be preying on hurricane victims, as one judge says he suspects.

In a recent hearing, federal Judge James D. Cain issued a scathing takedown of what he suspected to be predatory practices by the firm, McClenny, Moseley and Associates.

"Tell your partners in Houston stay the frick out of my court with this kind of trash," federal Judge James D. Cain of the Western District of Louisiana told lawyers from the firm during the hearing, according to a transcript obtained by The Times-Picayune | The Advocate.

Cain knows a thing or two about hurricane insurance cases. Presiding over those cases at the courthouse that accounts for one in five federal insurance lawsuits in the nation, he has, by his own estimates, handled about 7,000 of them.

So when his court was hit with 1,629 filings from a single law firm over the span of two and a half months, Cain became suspicious. For comparison, other law firms have filed a maximum of 200 to 300 cases in the same timeframe, Cain said at the hearing.

"How'd you get these cases?" Cain asked attorneys with McClenny, Moseley and Associates at the hearing, according to the transcript. "How did you communicate with this many people over that short period of time?"

The firm argues that its unique technology, which uses large amounts of data to manage cases, made it possible to parse through this large volume. "We're a technology company, essentially," Zach Moseley, a partner at the firm, said in a later interview. "We spent millions of dollars on automation and AI [artificial intelligence]. Our firm can handle an extraordinary amount of cases with just the power of technology."

The deadline to sue insurance companies over damage related to Laura was two years after the August 2020 Category 4 storm devastated southwest Louisiana, leading to a rush of lawsuits at the time.

With the use of its technology, Moseley argued, his firm was able to help hundreds of people file lawsuits before the deadline who otherwise would have lost their chance to demand more of their insurers.

"We're actually the biggest, strongest machine helping these clients. Without us, these clients would have nothing," Moseley said.

Cain, however, was difficult to convince. "You have wasted judicial resources having to deal with your mess," Cain told attorneys representing the firm at the beginning of the hearing. "You're not going to clog up my system."

Cain said that a review of cases by the court found that some had already been settled by other law firms, constituted duplicate filings on the same case, or concerned properties located outside of the hurricane's path. In one case, six lawsuits were filed concerning the same client, according to the judge. In another, the property in question was located in New Orleans.

Cain said failing to properly research cases before filing or failing to meet with all clients in person or talk to them over the phone equates to preying on hurricane victims and further burdens an already overloaded court system.

He also questioned whether the firm even represented some clients on whose behalf cases were filed and accused McClenny, Moseley and Associates of trying to mass settle cases, denying each client a chance to have their individual case reviewed properly.

"I have a duty to protect the public," Cain told the firm's attorneys at the October 20 hearing. "I grew up in southwest Louisiana. I went to McNeese. I saw this community torn apart. And if I leave this bench with one legacy, it's that I protected the public the best I could."

According to Moseley, his firm has since provided copies of client retainers to the court. He also noted that an internal review of the cases had found none that they considered sanctionable under the judge's order and that some of the cases on Cain's list were handled by other law firms.

While there were some duplicate filings, Moseley said administrative and technical issues between the firm and the court are to blame, and the firm was only doing its due diligence in ensuring clients' cases were filed. In cases where the geographical location was the main point of concern, his firm went back to confirm the circumstances with the respective clients, he noted.

During the hearing, clients of the firm who had been called to testify said that the firm's attorneys had kept up sufficient communication.

And the firm continues to recruit new clients, now focusing on the southeastern part of the state, where survivors of Hurricane Ida are looking for representation, and Florida, where lawsuits related to Hurricane Ian are starting to ramp up, something Cain was critical of.

"You may go try to pull this stunt in Florida because I've already seen y'all's advertisements," Cain told attorneys William Huye and Grant Gardiner. "Shame on you. Shame on you for trying to prey on people."

Whether the firm preyed on hurricane survivors in southwest Louisiana and what price it could pay is under review. In the meantime, all of the firm's cases are on hold.

Even without duplicate or incorrect filings, the Lake Charles federal court is dealing with a deluge of hurricane-related cases and a special order is in place to manage the overwhelming caseload.

"We've got stuff that we're dealing with everyday," said Patrick Juneau, the court's special master appointed to handle Laura cases. "We don't want to waste our time with matters that aren't fully adjudicable."

A day after calling in attorneys with the firm for a hearing, Cain ordered each case filed by the firm to be reviewed and a $200 fine to be issued per lawsuit that's found ineligible to proceed.

By the end of the hearing, Cain issued a warning to the firm. "God forbid we ever have another hurricane, but I do not ever want to see this again," the judge told the attorneys present.

According to Moseley, attorneys with his firm have met with the judge since. He is optimistic about his firm's future in Cain's courtroom. "We're hoping that this stay is lifted shortly and that we can go back to helping the people of Louisiana," Moseley said.