A federal judge in New Orleans has dismissed a lawsuit filedafter plaintiff's lawyers in Louisiana complained in 2007 thatinsurers facing lawsuits filed in the wake of Hurricanes Katrinaand Rita were behaving like a "cartel," working together tounderpay legitimate claims.

The suit was filed by the former Louisiana attorney general,Charles Foti, against property insurance companies and theirvendors for lack of evidence.

The case was dismissed Wednesday by U.S. District Court JudgeJay Zainey in response to a motion by insurers to dismiss thecase.

"I just don't feel that there were any facts sufficient tosupport this," Judge Zainey said.

The case cited Allstate Insurance Co., Lafayette Insurance Co.,State Farm Fire and Casualty Co., USAA Casualty Insurance Co.,Farmers Insurance Exchange and Standard Fire Insurance Co., a unitof Travelers.

Non-insurers involved in the case included software companiesXactware Solutions Inc. and Marshall & Swift/Boeckh, LLC; dataaggregator and Xactware owner Insurance Services Office, Inc.; andconsultant McKinsey & Company, Inc.

The case was argued on behalf of the defendants by Wayne Lee, anantitrust lawyer with Stone Pigman Walther Wittmann L.L.C. Herepresented State Farm.

Arguing that the case should continue, Alex Watkins, a NewOrleans attorney who is working with the attorney general's office,told the court that the suit should be allowed to continue becauseit addresses "the formulation of a hard-core cartel" and "the waythe insurance industry is run."

Mr. Lee, argued, however, that adjusting software is necessaryto make sure that claims-handling isn't arbitrary.

The estimates that the programs produced are starting points, hesaid, noting that homeowners are free to request supplementalpayments if they find that the amount of money they receive fromtheir insurers is insufficient to repair their houses.

"The complaint that you've alleged is 'you underpaid us onclaims.' That's a plain and simple breach of contract," Lee said."There is no price-fixing. There is no antitrust conspiracy."

Jeff McCollum, a spokesman for State Farm, cautioned that thecurrent Louisiana attorney general, Buddy Caldwell, could stilldecide to appeal the case, although spokespeople for Mr. Caldwellindicated otherwise.

As for the decision, Mr. McCollum said, "In terms of formerattorney general Foti's allegations, we felt the accusations andallegations were completely unfounded from the outset, and we arevery pleased that the court agreed with our position."