No. 09-1333, 2009 U.S. Dist. LEXIS 51410
(E.D. La., June 2, 2009)


Isidore’s home in Slidell, Louisiana was damaged in Hurricane Katrina. Isidore was originally included as one of several hundred improperly joined plaintiffs consolidated in the Federal District case, In re: Katrina Canal Breaches Litigation. When that case was administratively closed, all plaintiffs were ordered by the court to file separate amended complaints. After settlement negotiations with USAA, Isidore’s insurer, failed, Isidore refiled suit in the United States District Court for the Eastern District of Louisiana. USAA moved to dismiss for lack of subject matter jurisdiction. 

Isidore argued that the federal court had subject matter jurisdiction under 28 U.S.C. s. 1332, based on diversity of citizenship; Isidore was a resident of Louisiana and USAA was a Texas entity. USAA argued it is a reciprocal interinsurance exchange, organized under the laws of Texas with members who reside in all 50 states, including Louisiana. A reciprocal interinsurance exchange is treated as an unincorporated association for the purposes of determining diversity jurisdiction. To determine the citizenship of an unincorporated association, the court must consider the citizenship of each of the entity’s members.

The Court granted USAA’s motion to dismiss. Pursuant to Federal Rule of Civil Procedure 12(b)(1), it was Isidore’s burden to prove that USAA was not a reciprocal interinsurance exchange, but Isidore presented no evidence or argument to rebut USAA’s representation. Additionally, the Court found that as USAA had members who were residents of Louisiana and Isidore was also a resident of Louisiana, complete diversity was lacking and the court lacked subject matter jurisdiction.

You can read the full opinion by clicking here.