Court Rules Against New Orleans Flood Victims

Reversing an earlier U.S. District Court judgment from last November, the U.S. Fifth Circuit Court of Appeals has ruled that Louisiana homeowners affected solely by flood waters that resulted from multiple levee breaches following Hurricane Katrina won’t be able to recover damages from their insurance companies.

The decision is a major victory for insurance companies, who could have been forced to pay billions of dollars in claims. The ruling puts to rest many cases bolstered by Judge Stanwood Duvall, Jr.’s ruling last year that concluded the term “flood” used in ISO’s water damage exclusion, which is found in most homeowners’ policies, was ambiguous and therefore inapplicable. This ruling opened the door for plaintiffs to recover, but that door now seems firmly shut.