WMC represents more than 1,200 Sandy claimants who purchased flood insurance through the National Flood Insurance Program.
FEMA administers the NFIP with the aid of private insurance companies participating in the Write Your Own program.
According to the lawsuit, Sandy litigants uncovered significant evidence of misconduct by WYO insurers and others working on the agency’s behalf that led to the improper denial or underpayment of many Sandy flood insurance claims.
In 2015, FEMA allowed 140,000 policyholders who had submitted NFIP insurance claims after Sandy to reopen their claims in the Hurricane Sandy Claims Review process.
“FEMA has lied to its policyholders and to all taxpayers,” the suit states. “The SCR has become a boondoggle designed to overpay FEMA’s contractors while continuing deliberately to underpay homeowners.”
FEMA’s combination of “delay and deliberate underpayment” has resulted in aggregated payments of more than $500 million to federal contractors, while homeowners received less than $200 million during the same period, according to the suit.
WMC submitted Freedom of Information Act requests on Jan. 6, 2016 and Feb. 9, 2016 to unearth documents “concerning these troubling aspects of the SCR” but FEMA has apparently “failed to respond or even to acknowledge these requests for more than a year,” the suit states
“Former SCR staff members have reported that FEMA is not conducting the thorough, line-by-line adjustments of each insurance claim that it promised, but rather has designed the SCR deliberately to continue underpaying NFIP policyholders,” the suit states.
“At the same time FEMA has continued to underpay its policyholders, whistleblowers indicated that the SCR has been a boondoggle for FEMA reserve staff and contractors, who are paid on a daily rate and have financial incentive to draw out the process as long as possible, to the detriment of FEMA’s NFIP policyholders.”
In addition to release of the doucments, WMC is seeking an award of attorney’s fees.
WMC attorneys August Matteis Jr., Matthew Krauss and Joshua Katz are handing the case.
The complaint was filed Feb. 28 in the U.S. District Court for the District of Columbia, cause No. 1:17-cv-00365-RBW.