A Louisiana homeowner’s insurance company illegally charged approximately 67,000 customers service fees in violation of state law. Melancon, Rimes & Daquanno filed a class action lawsuit in the 19th Judicial District Court that resulted in a settlement exceeding $16 million, securing full reimbursement for affected consumers.
The litigation centered on violations of the Louisiana Unfair Trade Practices Act (LUTPA) and the Louisiana Insurance Code. After the class action was certified by the court, the Louisiana Commissioner of Insurance intervened and ordered the insurance company to reimburse the illegal service fees. The insurer ultimately conceded and agreed to the multi-million dollar settlement.
Case Details:
Practice Area: Commercial Litigation, Consumer Protection
Result: $16 Million Settlement
Timeline: 2 Years
Lead Attorney: Jason Melancon
Clients Represented: 67,000 Louisiana consumers
A Louisiana insurance company charged its customers a service fee that violated Louisiana statutory law. Specifically, the practice violated the Louisiana Unfair Trade Practices Act (La. R.S. 51:1401) and provisions of the Louisiana Insurance Code (Title 22).
The illegal fee affected approximately 67,000 Louisiana citizens who purchased homeowner’s insurance policies from the company. Each policyholder was charged the fee without proper authorization under state law.
After a client discovered the illegal service fee, Melancon, Rimes & Daquanno attorneys recognized that thousands of Louisiana consumers had been similarly affected. The firm filed a class action lawsuit in the 19th Judicial District Court for the Parish of East Baton Rouge seeking reimbursement of all illegal fees.
Our attorneys drafted and filed a comprehensive class action petition seeking reimbursement of illegal service fees on behalf of approximately 67,000 Louisiana citizens. The lawsuit alleged violations of Louisiana’s consumer protection statutes and the Insurance Code.
Because the insurance company charged all of its customers the same illegal amount using standardized corporate procedures, the court approved our motion for class certification under Louisiana Code of Civil Procedure Article 591. This ruling was critical, as it allowed all affected consumers to pursue their claims collectively rather than individually.
The Louisiana Commissioner of Insurance, Jim Donelon, intervened in the litigation. Following the Commissioner’s review of the case, he ordered the insurance company to reimburse the illegal service fees to all affected policyholders.
The Commissioner’s intervention reinforced the legal merits of our case and added regulatory pressure alongside the court proceedings.
Given the court’s certification of the class, the Commissioner’s intervention, and the mounting legal pressure, the insurance company agreed to settle. Rather than face the uncertainty of a jury trial in Baton Rouge, the insurer negotiated a comprehensive settlement agreement.
Our actions led to the reimbursement of illegal service fees for 67,000 consumers through a settlement and judgment against the insurance company exceeding $16 million.
The settlement fund provided direct financial relief to tens of thousands of Louisiana policyholders who had been charged illegal fees. The resolution was reached within approximately 2 years of filing the initial lawsuit.
This case demonstrates how commercial litigation can serve as an effective tool for consumer protection when regulatory oversight alone proves insufficient. The settlement not only compensated affected consumers but also sent a clear message to insurance companies that systematic violations of Louisiana consumer protection laws carry significant financial consequences.
This $16 million settlement showcases several key strengths of our approach to complex commercial litigation:
Willingness to Take on Major Corporations: We filed suit against a major insurance company despite its substantial legal resources, demonstrating our commitment to holding large corporations accountable when they violate Louisiana law.
Class Action Expertise: Successfully obtaining class certification in a case involving 67,000 consumers requires specialized knowledge of Louisiana’s class action procedures and the ability to prove that common legal questions predominate over individual issues.
Regulatory Coordination: Our ability to work effectively alongside the Louisiana Commissioner of Insurance resulted in a comprehensive resolution that served both the class members and the broader public interest.
Results-Driven Approach: Rather than accepting a quick settlement that might have left many consumers uncompensated, we pursued full litigation, including class certification, ultimately securing a settlement that provided meaningful relief to all affected policyholders.
If you believe you’ve been charged illegal fees by an insurance company or have been the victim of other unfair business practices, contact Melancon, Rimes & Daquanno for a free consultation. Our commercial litigation team has recovered millions for Louisiana consumers and businesses.
Call (225) 303-0455 or visit our office at 6700 Jefferson Hwy (Building 6), Baton Rouge, LA 70806 to discuss your case with an experienced attorney.