A U.S. District Judge has ruled that Mississippi State Farm policyholders whose insurance claims were rejected after Hurricane Katrina cannot establish a class action lawsuit against the insurer to bring quick resolution to what they argue are similar claims. The 2005 storm reduced the policyholders’ homes to mere slabs. The insurers contend that the policies covered wind damage, but not damage from rising water, including storm surge.

The U.S. District Court for the Southern District of Mississippi, Southern Division, held that the cases were factually different each requiring individual treatment. To form a class action for the “slab cases,” according to the court, would be “inconsistent with the requirements of due process.” The judge instead supports a court-ordered and supervised mediation program as a solution to the many federal lawsuits for Katrina damage. The Mississippi Insurance Commissioner and State Farm have separately reached an agreement for the insurer to re-evaulate and make possible payments on thousands of claims.

See http://www.mssd.uscourts.gov/Insurance%20Opinions/ch06cv1orderA0322.pdf, Decided March 22, 2007.