The federal district court for the district of New Jersey cracked down on a Texas law firm that filed 250 Hurricane Sandy related cases against insurers without adequate investigation. Lighthouse Point Marina & Yacht Club, LLC v. Int'l Marine Underwriters, 2015 U.S. Dist. LEXIS 6430 (D. N.J. Jan. 20, 2015). 

   The Texas firm filed more that 250 actions in New Jersey courts against insurers to recover for alleged property damage caused by Hurricane Sandy. The original complaints were nearly identical with the same typos. The complaint in this case alleged that the insurer did not pay benefits under the policy for "extreme external and internal damages, as well as other wind-related loss," but did not specify the value or nature of the damage. The insurer answered that it sent an adjuster to the property soon after the storm and found wind damages to two fences, but no damage to any building on the property. The adjuster valued the claim at $1,612.00 and recommended a payment of $612.00, after applying the $1000 deductible. 

   Plaintiff's counsel then wrote to the insurer demanding $540,000 to pay for the wind damage, and an additional $135,000 in attorney's fees. The insurer made multiple attempts to re-inspect the property, but was constantly rebuffed by Plaintiff's counsel. 

   The insurer moved to dismiss. Attached to the motion were five separate letters from the adjuster to Plaintiff's counsel, over the course of six months, requesting an opportunity to inspect the property. The motion to dismiss was granted. The court also ordered Plaintiff to show cause why sanctions under Rule 11 should not be issued for filing a claim that lacked merit, and for failing to properly investigate before filing. Plaintiff did not respond to the court's order. 

   The court noted it was unaware of any authority that relaxed Rule 11 when a natural disaster generated a large volume of litigation. The court issued sanctions. The Plaintiff's attorney was barred from applying for pro hac vice admission before the court for a period of one year. The court also awarded the insurer its litigation expenses against both the Plaintiff and Plaintiff's counsel.