The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOSEPH STUBBLEFIELD et al. CIVIL ACTION
VERSUS CASE NO. 22-2509
UNITED PROPERTY AND CASUALTY SECTION: “G”(4)
INSURANCE CO.
ORDER
This litigation arises from an insurance coverage dispute related to Hurricane Ida. The
Court has received notice that Defendant United Property and Casualty Insurance Co. has been
placed into liquidation.1 The Fifth Circuit has recognized that “insolvent insurers are subject to
the comprehensive oversight of state administrative agencies and courts” and “[f]ederal law
consigns to the states the primary responsibility for regulating the insurance industry.” 2
Accordingly, the Fifth Circuit has held that “allowing a creditor or claimant to proceed against an
insolvent insurer in federal court while a state insolvency proceeding is pending would usurp [the
state’s] control over the liquidation proceeding by allowing [the claimant] to preempt others in the
distribution of [the insurance company’s] assets.”3 Such a statutory scheme exists in Louisiana.
Under Louisiana law, “[a]ll proceedings in which the insolvent insurer is a party or is obligated to
defend a party in any court in this state shall be stayed for six months.”4 Thus, this Court has
1 See, e.g., No. 22-4243, Rec. Doc. 13.
2 Clark v. Fitzgibbons, 105 F.3d 1049, 1051 (5th Cir. 1997) (citing the McCarran–Ferguson Act).
3 Id. (internal citation and quotation omitted).
4 La. Rev. Stat. § 22:2068(A).
1
authority under Louisiana law to stay this matter for six months sua sponte due to Defendant’s
insolvency.
In light of Louisiana’s comprehensive statutory scheme for regulating insolvent insurers
and Fifth Circuit precedent admonishing courts to avoid interfering with state administrative
processes involving insolvent insurers, the Court exercises its discretion to stay the claims pending
against Defendant for a period of six months.°
IT IS HEREBY ORDERED that the above-captioned action is STAYED AND
ADMINISTRATIVELY CLOSED for a period of six months. The case shall be reopened upon
a motion of a party at the conclusion of the six-month period.
NEW ORLEANS, LOUISIANA, this 6th day of March, 2023.
NANNETTE JOQWETTE BROWN Mev
CHIEF JUDGE
UNITED STATES DISTRICT COURT
5 See Landis v. North American Co., 299 U.S. 248, 254 (1936).