NJ Judicial Committee Issues Plan To Manage Sandy Suits

Law360, New York (April 03, 2014, 8:47 PM ET) -- A committee of New Jersey federal judges last week issued case management guidelines for the state’s glut of suits against flood insurance carriers in the wake of Superstorm Sandy, after soliciting public comment on how to streamline the adjudication of as many as 2,000 such suits.

New Jersey’s Superstorm Sandy Flood Litigation Committee issued a case management order on March 25, the culmination of a collaboration among eight New Jersey federal judges headed by U.S. District Court Judge Jerome B. Simandle and a cadre of attorneys representing insurers. The group met in a public meeting early last month to discuss how to manage 600 Sandy-related cases, a number Judge Simandle estimates could grow as large as 2,000, according to a release.

“Basically, this reflects a collaborative effort between bench and bar to put sensible and clear requirements into place, tailored to the needs of the National Flood Insurance Program cases,” Judge Simandle said. “The uniform approach has been agreed to by all district and magistrate judges and shortly will be filed in each of the affected cases.”

Judge Simandle said the committee drew its inspiration from a similar effort in the Eastern District of New York, which in February laid out its own plan for streamlining more than 800 Sandy coverage suits, including plans to tap liaison counsel for insurers and plaintiffs and direct policyholders to withdraw some claims.

Per Judge Simandle’s case management order, the management of each dispute will begin after initial disclosure and discovery process, at which point, the judge assigned to the case will call a conference to determine whether the case, presuming it has not been settled, will proceed to further discovery, settlement, arbitration or a bench trial. The goal is to bring the Sandy actions in line with the court’s typical six-month window for resolving claims.

The order is a compromise between the polar perspectives expressed during the public meeting, with some attorneys saying the process should be standardized for all cases, and others arguing the one-size-fits-all approach could backfire and actually prolong the process.

Gerald J. Nielsen of Nielsen Carter & Treas LLC, an attorney for the National Flood Insurance Program, recommended a uniform scheduling order, automatic deadlines to be set without an initial scheduling conference and automatic discovery.

Nielsen said his suggestions would hasten the process without prolonging the discovery process, allowing claims to be resolved faster.

“You’re going to have a discovery battle in a lot of these cases,” Nielsen said. “But my firm has never had a judge order us to confine our discovery. We’ve never had a judge say we do too much discovery — we do just what is needed to get that file verified and get it to a resolution.”

But Christopher W. Gerold, a Wolff and Samson PC associate and member of its disaster recovery claims group, said his firm, which represents about 125 plaintiffs, opposed the suggestions.

Gerold said foregoing initial conferences will ultimately prolong the process if the attorneys can’t hammer out an agreement on discovery issues at the outset, especially on the issue of policyholder depositions.

“Our fear is that discovery will go on ad nauseum if we don’t have a conference with the magistrate early on in the case to determine what additional discovery is needed,” Gerold said. 

“We don’t think a deposition is needed in every case — we don’t even think half of them will — and we want to get these cases resolved," he added. "We’re mostly dealing with homeowners, some of which have been displaced, and some have mortgages they’re paying and no place to live, and we don’t want discovery to go on forever.”

Judge Simandle’s order didn’t satisfy everyone though, as it includes an option for alternative dispute resolution, which he stumped for during the meeting, calling it a viable option for quickly resolving some of the cases and reducing the overall caseload. This suggestion, however, was not well-received by attorneys for the plaintiffs or the defendants.

--Editing by Christine Chun.