The lawsuits of superstorm Sandy will be argued in large part by a handful of Gulf Coast attorneys who fought the legal battles in the wake of hurricanes Katrina, Ike and other epic disasters.
The lawyers, primarily from Florida and Louisiana, have already signed up more than 1,000 New York clients who say they were underpaid on insurance settlements to rebuild homes in Long Beach, Island Park, the Rockaways and elsewhere.
The ability of out-of-state attorneys to capture so much business in a region already packed with lawyers partly reflects the aggressive marketing Gulf Coast firms undertook in the months after the storm, experts said.
Yet the trend also underscores a reality of the legal profession: Storm litigation is complicated, and virtually the only ones who specialize in it are lawyers from Southern states who have the unfortunate advantage of tangling regularly with hurricanes.
"Most lawyers in New York and New Jersey have never spent time learning the intricacies of flood claims," said Samuel Bearman, a Pensacola, Fla., lawyer who co-wrote what many consider the definitive, and is perhaps the only, book on flood insurance. "It would be like taking an attorney who has never done a criminal case and giving him the O.J. Simpson trial."
Here to stay
The influx of Southern attorneys marks the latest wave of professionals from elsewhere to hit Long Island in the wake of Sandy, following earlier rounds of cleanup crews, utility workers and insurance adjusters. But while those previous workers left town once their Sandy work dried up, the law firms tackling storm claims have opened offices in New York and New Jersey and plan to become a permanent part of the region's legal landscape.
"We see a lot of opportunity," said William "Chip" Merlin, whose Tampa, Fla.-based firm opened offices in Manhattan and Red Bank, N.J., shortly after Sandy hit.
All told, lawyers have filed roughly 150 Sandy-related lawsuits in federal court in Central Islip and Brooklyn, primarily against companies that administer policies for the National Flood Insurance Program. The suits are on behalf of more than 800 homeowners in Nassau, Suffolk, Queens and Staten Island. More than 90 percent are represented by Gulf Coast firms.
Suits are apt to keep rolling in over the next year. So it is difficult to predict what percent will ultimately be handled by Southern attorneys. It appears likely, however, that their role will be significant.
A single firm, Gauthier, Houghtaling & Williams of Metairie, La., near New Orleans, has signed up about 800 clients, mostly from Nassau and Queens, and has filed more than half the existing suits. The Rain Law Firm of Hallandale Beach, Fla., has 450 local clients. And Merlin estimates he will file about 100 suits on behalf of New York Sandy victims.
If past litigation is prologue, many of the lawyers on the opposing side of the arguments will be from the South, too.
The universe of firms that specialize in defending insurance companies in flood cases is minuscule. And those lawyers are also predominantly from the Gulf Coast.
After past storms, the Metairie law firm of Nielsen, Carter & Treas defended insurers in more than 80 percent of flood suits, according to several attorneys who followed the cases.
John Carter, a partner at Nielsen, Carter & Treas, declined to estimate how many Sandy cases his firm would defend. He conceded, however, that it would likely play a key role. "We tend to handle a lot of these," Carter said.
The marketing for Sandy clients began shortly after the storm ended.
Gulf Coast law firms scrambled to open local offices and broadcast commercials via New York radio stations, billboards and newspapers. They held town hall meetings. And whenever possible, they partnered with local attorneys who already had deep roots in storm-battered communities.
Denis G. Kelly is a lawyer who has lived 20 years in Long Beach, raised four kids in town and is a former city councilman. Sandy ravaged his neighborhood, leaving residents without heat or hot water for months.
One night last December, Kelly was lying in bed with a wool cap pulled tight over his ears when he noticed a news story about a Louisiana attorney holding a meeting in Huntington to talk about flood insurance.
"This guy needs to come to Long Beach," Kelly said to his wife.
So Kelly called the lawyer, John W. Houghtaling, who agreed to visit. Kelly booked the Lindell Elementary School auditorium. And Houghtaling's firm sent north stacks of posters and palm cards, which Kelly and his wife spread all over town.
When the night came, hundreds crowded into the auditorium. Houghtaling, whose firm litigated some 800 cases after Katrina, took the stage and talked for more than an hour, pacing and punctuating the air with his hands as he told of how "the game has been rigged" by insurance companies.
Alan Kramer, whose Lido Beach condominium was gutted, sat rapt in the crowd.
"It was the first time that I had heard a knowledgeable person explain insurance in a way that made sense," said Kramer, who said his flood settlement covers only a fraction of what it will cost to rebuild his two-bedroom unit.
As the meeting ended, dozens of people approached Kelly, saying they wanted to hire Houghtaling. The two lawyers partnered up and now have more than 200 clients.
To be clear, New York lawyers are litigating some Sandy cases. And scores of local attorneys have volunteered to help storm victims through the Nassau County Bar Association and Touro College's Disaster Relief Clinic.
Yet most local attorneys -- even some who specialize in insurance cases -- have shied away from taking Sandy flood claims to court.
"We didn't market very heavily for that work," said Evan Schwartz, a Garden City attorney whose firm predominantly handles insurance cases. "Other than my desire to do some pro-bono work, my firm didn't see it as the right place to spend our resources."
That's largely because the obstacles to winning these cases are big and the payouts are small.
The vast majority of flood policies are offered through the National Flood Insurance Program, which is run by the federal government. When the program began in 1968, Congress included measures to protect against litigation.
Consequently, all flood insurance lawsuits must be filed in federal court. The cases are decided by judges rather than juries. Hence, there is no chance of pity from sympathetic peers who may have also suffered in the storm.
The payouts, meanwhile, are capped by the amount of unpaid damages. So if a homeowner was underpaid by $50,000 -- that's the most they can recoup. There are generally no extra damages awarded for bad faith, pain, suffering or anything else. Plaintiffs cannot even sue for attorneys' fees.
"There is a whole lot of work that goes into litigating flood claims," said Johnathan Lerner, a Manhattan attorney who specializes in insurance cases. "And the payout is not necessarily worth the time and effort you put into it."
The Gulf Coast lawyers, however, say they have figured out ways to make litigating flood claims profitable.
Many staff their firms with insurance adjusters to investigate damaged homes. Some group dozens of homeowners together in single suits to lower costs. And when it comes to arguing, the lawyers say the Gulf Coast has armed them with experience.
"For better or for worse," Bearman said, "we have had our share of hurricanes down here."