U.S. Magistrate Judge Gary R. Brown of the Eastern District of New York, citing “startling findings” of “reprehensible gamesmanship by a professional engineering company that unjustly frustrated efforts by two homeowners to get fair consideration of their claim” following Superstorm Sandy – and evidence that “these unprincipled practices may be widespread,” and may have similarly affected “hundreds” and “possibly more” Sandy flood insurance claims – has sanctioned an insurer and its counsel, and has significantly broadened discovery in all Sandy cases in the district.

Specifically, Magistrate Brown stated in his memorandum and order that the “evidence adduced in this matter” demonstrated that U.S. Forensic, an engineering firm retained by Wright National Flood Insurance Company to examine a storm-battered house in Long Beach, New York:

unfairly thwarted reasoned consideration of plaintiffs' claim through the issuance of a baseless report. The engineer sent by U.S. Forensic opined in a written report that the home at issue had been damaged beyond repair by Hurricane Sandy. A second engineer, who did little more than review the photographs taken by the inspecting engineer, secretly rewrote the report, reversing its conclusion to indicate that the house had not been damaged by the storm, and attributing – without sufficient evidence – defects in the home to long-term deterioration. This process, euphemistically dubbed a “peer review” by U.S. Forensic, was concealed by design from the homeowners, remained uncovered during the Court-assisted discovery process and came to light through near happenstance. In a misguided attempt to defend these flawed practices, [Wright] has elicited evidence that this “peer review” process may have affected hundreds of Hurricane Sandy flood insurance claims – and possibly more.