“Allstate is pleased that the Eastern District Court recognized that these claims were without merit and dismissed Allstate from these cases,” Allstate said in an e-mail statement. The company added that it believes it properly settled homeowners claims after Hurricane Katrina.

Allstate said the NFIP has reviewed the insurer’s files regarding flood claims and “confirmed they were processed according to NFIP standards.”

Branch alleged that the insurers shifted costs of claims to the government by fraudulently asserting that the damage to homes was caused by flooding, which is not covered by a standard homeowners policy.

The court history is a long one and Allstate’s involvement is complicated. Early in 2009 Allstate and State Farm were dropped from the Branch case, but before that, the entire case was dropped because a similar False Claims Act suit was filed first in Mississippi by former adjusters Cori and Kerri Rigsby against State Farm. Allstate was originally named in the Rigsby case. Two False Claims Act suits of a similar nature cannot be filed at the same time.

Branch appealed and the companies were reinstated except for Allstate and State Farm. It wasn’t until December 2009 that Allstate was added back into the mix when Branch filed an amended complaint.

The court acknowledged the litigation logjam, saying that it “has become encumbered with increasing numbers of claims, complaints and parties, further complicating each successive jurisdictional determination,” but the court “has no choice but to wade into this jurisdictional thicket.”

In dismissing the case on the grounds that it lacks jurisdiction, Judge Vance said, “If the court determines at any time that it lacked subject matter jurisdiction, then it must dismiss the case…. The court reaches precisely that conclusion here.”

However, a dismissal of this nature “is not a decision on the merits, and the dismissal does not ordinarily prevent the plaintiff from pursuing the claims in another forum.”

Judge Vance continued on the issue of jurisdiction by saying that if the court once ruled that the first-to-file grounds applied in dismissing Allstate from the case—a decision upheld on appeal—then it reaches the same conclusion.

“Branch cannot argue that the voluntary dismissal of Allstate cured the jurisdictional flaw in its original complaint,” Judge Vance ruled. “Branch cannot argue that the dismissal frees it to rename Allstate by amendment because the court cannot have jurisdiction over an amended complaint if it did not have jurisdiction when the original complaint was filed.”

In late September, Allstate was informed it is the subject of a similar whistleblower lawsuit filed more than three years ago.

Attorney John H. Denenea Jr. filed the lawsuit in U.S. District Court in New Orleans on behalf of the federal government and claims Allstate “knowingly fabricated” insurance documents to decrease its own claims payments and inflate flood losses at the expense of the federal government, in violation of the False Claims Act.