Hurricane Katrina victims won two court battles this week but both victories could be short-lived.
On Wednesday, a US federal judge said the Bush administration must immediately resume housing payments for thousands of people displaced by the hurricane, heaping more criticism on the government for its handling of last year's disaster.
US District Judge Richard Leon's ruling sharply criticized the Federal Emergency Management Agency (FEMA) for illegally cutting housing funding and subjecting storm victims to a convoluted application process he called "Kafkaesque."
A federal judge in Louisiana said on Monday that many homeowners might be entitled to more insurance money for flood damage. Insurers pledged to appeal.
In the Washington case, Leon said FEMA mishandled the transition from a short-term housing program to a longer-term program this spring and summer.
FEMA, criticized for responding too slowly to the storm, said in a statement on Wednesday that it sent letters outlining the program changes, explaining why some people were ineligible and describing the appeals process.
Leon, however, said those letters contained only program codes and agency jargon and did not explain anything. Some evacuees got multiple letters with conflicting information, he said, leaving families unable to understand why their aid was being cut.
Until FEMA explains itself and allows victims to appeal, Leon said the government must keep making housing payments.
"It is unfortunate, if not incredible, that FEMA and its counsel could not devise a sufficient notice system to spare these beleaguered evacuees the added burden of federal litigation to vindicate their constitutional rights," Leon wrote.
Leon's ruling came in a case brought in August by the Association of Community Organizations for Reform Now, which said more than 11,000 families would be affected. FEMA did not immediately have data on how much the ruling would cost and said it was considering its legal options.
In Louisiana, US District Judge Stanwood Duval sided with New Orleans homeowners who argued that the language in some insurance policies that excluded water damage was ambiguous. He said a suit against The Allstate Corp, The St. Paul Travelers Companies and other insurers could go forward.
Duval said the policies did not distinguish between floods caused by an act of God -- such as excessive rainfall -- and floods caused by an act of man, which would include the levee breaches following Katrina's landfall on Aug. 29 last year.
If successful, this suit could cost insurers US$1 billion in Louisiana alone, industry officials said, and could lead to similar suits elsewhere.
The ruling was hailed by Xavier University, which was inundated by 2m of water when the levees gave way. Xavier sued Travelers after the company only paid for a fraction of more than US$50 million in damage to the school.
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