Eastern District Awash in Sandy Insurance Cases

, New York Law Journal


Dr. Harold Parnes in the room of his Sheepshead Bay office where his X-ray machine once stood. The office was damaged by Hurricane Sandy.
Dr. Harold Parnes in the room of his Sheepshead Bay office where his X-ray machine once stood. The office was damaged by Hurricane Sandy.

More than a year after Hurricane Sandy's waters receded, an "onslaught" of litigation is now slamming into the federal court with jurisdiction over the storm's most heavily affected areas.

As of early February, more than 800 Sandy-related cases—most disputing insurance claim denials or alleged underpayments—have been filed in the Eastern District, which includes the outer boroughs of New York City and Long Island, areas that endured the brunt of the nation's second-costliest weather disaster after Hurricane Katrina.

Policyholders and insurers have tried to resolve claims one-on-one. But the influx of cases shows that a large number of those negotiations have proven fruitless.

The cases started pouring in around October and November. Rather than let what Eastern District Chief Judge Carol Bagley Amon (See Profile) described as an "onslaught" overwhelm the court, she tapped three magistrate judges to examine whether the cases could be grouped or organized for more efficient resolution.

The trio—Magistrate Judges Cheryl Pollak (See Profile), Gary Brown (See Profile) and Ramon Reyes Jr. (See Profile)—has submitted a case management plan to address matters such as discovery schedules and settlement discussions. The Eastern District's Board of Judges, comprised of all the jurisdiction's judges, is now reviewing the proposal and will approve the final order.

In preparation, Amon opened a case last month called In re Hurricane Sandy Cases "for the purposes of Pretrial Case Administration in all actions seeking insurance coverage for damage caused by Hurricane Sandy."

"There are a lot of cases, but we're being sensible about it," she said in an interview about the court's approach. "We couldn't let this just happen to us. We had to take charge. As judges, that's what we're required to do."

She added that individual judges could opt out of the case management plan.

Some attorneys have said the cases are too fact-specific for a uniform judicial approach, but Amon said there could be a meaningful method of grouping cases, even in a limited way.

Benjamin Rajotte, director of the disaster relief clinic at Touro College Jacob D. Fuchsberg Law Center, said most of the Sandy litigation will go to federal court because the National Flood Insurance Act dictates that suits challenging flood coverage trigger federal jurisdiction.

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