U.S. District Court for the Southern District of Florida in Fort Lauderdale. The Southern District of Florida had the highest number of insurance case filings with over 4,080 from 2017 to 2021. (Credit: Raychel Lean/ALM)
An attorney is advising insurers and law firms to take immediate action after Lex Machina Inc. released new federal district and appellate court data that pinpointed multiple litigation trends.
Ron Porter, a legal data expert in product liability at Lex Machina, said the insurance litigation report focused on the five years from 2017 to 2021. During that period, 2021 accounted for the most federal case filings, nearly 14,800, of any year since 2009 when Lex Machina began tracking the data.
"Overall, Insurance litigation is up 47% from 2017 to 2021, which is a substantial increase," Porter said while noting a caveat about the data: The coronavirus pandemic also impacted the data, particularly in business interruption. For example, business interruption cases peaked in 2020, and were 3.7% higher than the previous high in 2014.
Credit: Lex Machina But Porter said there are still long-term trends in hurricane and automotive insurance, for instance, that would affect the bottom line of litigation attorneys. In 2021, 26% of all insurance litigation in federal district courts was hurricane-related, arising from over 3,800 lawsuits. Porter asserted in the report that the filings of these lawsuits were the highest of any year since 2009.
"Insurers need to be prepared by increasing resources both in-house and outside counsel to be ready for hurricane season," Porter said in an interview. "The weather is increasingly unpredictable."
Regarding automotive insurance, there has been a steady increase in cases filed from 2012 to 2021, totaling close to 65%. The report showed that the amount in controversy increasingly met the $75,000 threshold for diversity jurisdiction, explaining, in part, the rise in federal court filings.
State Farm kept busy despite breaking apart its automotive coverage and fire and casualty coverage into two different companies. Both companies were the most active defendants, with over 1,000 cases more than the next most active defendant.
Beyond hurricane and automotive litigation, the report showed that the Southern District of Florida had the highest number of insurance case filings with over 4,080. And juries awarded plaintiff attorneys nationally across all U.S. district courts over $157 million in damages in 123 cases in 2021.
But during the five-year period, approved class action settlements carried most of the damage awards with $657 million, followed by contract damages of $509 million and, later on, attorney fees and costs of $58 million, according to the Lex Machina data.
Credit: Lex Machina Meanwhile, federal appellate judges in California had their work cut out for them. The U.S. Court of Appeals for the Ninth Circuit heard the highest number of cases on appeal, with 647 docketed. Nationally, insurance cases that were appealed and received a decision on the merits of the appeal were reversed by federal judges 25% of the time.
Credit: Lex Machina The report also included a shoutout that the most active plaintiffs' law firm was Pandit Law in New Orleans, Louisiana. In contrast, the most active defendants' law firm was Butler Weihmuller Katz Craig located in Tampa, Florida.
Scott Katz, the managing partner at Butler Weihmuller Katz Craig, said his law firm was fortunate to hold the accolate.
Katz said, "We appreciate our clients."
Michael A. Mora
Michael is the national cryptocurrency litigation reporter for Law.com, as well as an editor for ALM Global. He earned his master's degree from the Columbia University Graduate School of Journalism and is based in St. Petersburg, Florida. Reach him at [email protected].