Lawsuit against insurers will proceed
by Rebecca Mowbray - Times-Picayune (excerpt)

A federal judge on Monday withdrew his call for the U.S. Department of Justice to take over prosecution of a whistleblower case alleging that insurance companies defrauded the National Flood Insurance Program after the agency argued that it had not had sufficient time to investigate the case.

On June 5, U.S. District Court Judge Peter Beer ordered Attorney General Alberto Gonzales and the U.S. attorneys in Baton Rouge and New Orleans to intervene in the suit brought by a group of ex-insurance adjusters known as Branch Consultants LLC against seven homeowners insurance companies and their subcontractors. Beer asked that they intervene by July 9 or appear in court July 11 to explain their lack of involvement.

Last week Assistant Attorney General Peter Keisler in Washington, D.C., and U.S. Attorney David Dugas in Baton Rouge said they think Beer's June 5 motion was the first time a court had ever ordered the U.S. government to intervene in a qui tam suit, or whistleblower action brought by private individuals on behalf of the U.S. government.

Named in the complaint are Allstate Insurance Co., State Farm Fire and Casualty Co., Liberty Mutual Fire Insurance Co., Fidelity National Insurance Co., American National Property & Casualty Co., Travelers, American Reliable Insurance Co., Pilot Catastrophe Services Inc., Crawford & Company, Allied Claims, NCA Group Inc., Simsol Insurance Services Inc., and other unidentified parties. Scottsdale Insurance Co. had been erroneously named in the original complaint and has been terminated as a defendant.