"Hurricane Kartrina and similar natural disasters raise significant legal issues. Potentially liable parties quickly invoke the common law Act of God doctrine as a limitation on liability.
"However, the defense is severely restricted in its application. For example, the common law held it was inapplicable when an Act of God coalesced with an Act of Man, in other words human negligence, to cause injury.
"This article analyzes the traditional Act of God defense while positing that most large scale natural disasters entail human errors, such as in design, construction, operations, maintenance, inspection, regulation, or preparation or response to an emergency. The legal result is the same whether the Act of God is viewed as a defense, duty issue, or intervening causation issue.
"Two follow up articles, in a trilogy dealing with the legal issues involved with natural risks and societal responses to emergencies, are The Duty to Disclose Gelologic Hazards in Real Estate Transactions, 1 Chapman Law Review 13 (1998) and Emergency Action Plans: A Legal and Practical Blueprint Failing to Plan is Planning to Fail, 63 U. Pitt. Law Review 791 (2002)." —Abstract.
+Fleischer, Miranda Perry, University of Illinois College of Law, Why Limit Charity?(provided by: SSRN) (U Illinois Law & Economics Research Paper No. LE07-020) (June 2007)
"In the wake of Hurricane Katrina, Congress temporarily lifted one of the most puzzling limits in the tax Code: the cap that prevents an individual from claiming a charitable deduction greater than 50% of her income, even if she gives more than half her income to charity. Although scholars often criticize the cap in passing for creating unnecessary complexity, few have explored its theoretical underpinnings, and those who have appear hard-pressed to find a satisfactory justification.
"This Article fills that void by proposing two complementary explanations for the AGI limits, one grounded in economic theory and one in political philosophy. The economic explanation proceeds directly from the literature conceptualizing the charitable deduction as a way of overcoming market and government failure for various public goods by spurring non-profits to produce them. It suggests that the AGI limits reflect a bargain between individuals whose preferred public goods are fully funded by the government and those whose projects are only partially subsidized. The philosophical explanation is anchored by the idea of reciprocity inherent in liberal democratic theory. It argues that allowing some individuals to pay no taxes, even if supporting a 'good' cause, is tantamount to allowing them to opt out of a previously agreed-to scheme of cooperation and undermines the stability of our democratic society."—Abstract.
"Climate change will increase risks significantly in many areas of society, and also will render far less measurable many risks that were previously calculable. If our society is to survive climate change without significant human costs, we must develop robust institutions and practices to manage these risks. The insurance industry is our society's primary financial risk manager, and needs to play a leading role in developing these institutions and practices. But climate change poses an unprecedented challenge to the insurance industry, because factors such as increasing uncertainty and the potential for highly correlated losses will make it difficult to insure against climate change-related risks and will strain capital markets' ability to compensate those who are affected. If the industry rises to the challenge, it stands to profit while facilitating our most successful responses to climate change-related threats around the world. If not, insurers will suffer along with everyone else. A report issued recently by a major financial firm identified climate change as the number one 'strategic threat' facing the insurance industry, noting that it is a 'long-term issue with broad-reaching implications that will significantly affect the industry.' To date, however, there has been relatively little effort to examine what supply- and demand-side barriers may be impeding development of insurance products that address climate change risk effectively. In this context, this Article examines the incentives that insurance products provide to influence the climate change-mitigating and adaptive capacity-building behavior of policyholders and other actors. It also looks at the reasons that insurers might or might not choose to provide those products and the reasons individuals and businesses may or may not choose to purchase those products. Finally, it examines the extent to which the insurance industry's products are likely to play a significant and effective role in affecting private actors' responses to climate change. The Article concludes that although it is not yet clear whether and how the insurance industry will be able to address climate change in a way that systematically creates solutions, the industry's future - and perhaps the rest of ours as well - may rest on the success or failure of its adaptation to a world with a changing climate." —Abstract.
This article begins with a critical account of what occurred in the aftermath of Hurricane Katrina. This critique serves as the backdrop for a discussion of whether there are international laws or norms that give poor, black Katrina victims the right to return to and resettle in New Orleans. In framing this discussion, this article first briefly explores some of the housing deprivations suffered by Katrina survivors that have led to widespread displacement and dispossession. The article then discusses two of the chief barriers to the return of poor blacks to New Orleans: the broad perception of a race-crime nexus and the general effect of the imposition of outsider status on poor, black people by dominant groups. Finally, the article explores the international law concept of the right of return and its expression as a domestic, internal norm via standards addressing internally displaced persons, and considers how such a domestic right of return might be applicable to the Katrina victims."
"Hurricane Katrina, the largest disaster in the history of the United States, caused widespread property destruction throughout the Gulf Coast, but particularly in the city of New Orleans. Although the storm created an environment which facilitated increased mortgage defaults in the area, the Article analyzes data from the Orleans Parish Recorder of Mortgages Office and from the Orleans Parish Civil District Court and concludes that foreclosure filing rates in the year after Katrina in fact decreased significantly from the rates for the corresponding period in the year prior to the storm. This result is contrary to what would normally be expected in a usual mortgage lending market, where an increase in the rate of mortgage default would lead to an increase in the rate of foreclosure.
"The Article evaluates in detail the legal and market responses to mortgage default after the storm that contributed to the reduction in foreclosure actions in Orleans Parish in the year after Katrina. Secondary mortgage market initiatives provided the principal means for mortgage relief, because Louisiana debtors received little in the way of formal legal relief. Even though secondary market responses were successful in protecting mortgage debtors after Katrina, their limitations in scope make them inadequate to address the years of financial distress that might likely follow any disaster of the magnitude of Katrina. Thus, while the Katrina experience demonstrates that secondary market interventions can effectively reduce debtor distress after a major disaster, such interventions should not been seen as a substitute for more traditional legal responses to address mortgage debtor distress after disasters or other economic crises." —Abstract.
"In 2005, two events garnered great national attention: the controversy over the death of Terri Schiavo and the destruction of New Orleans by Hurricane Katrina. Although each event was compelling and even tragic, only the former, which focused on whether a single individual would be removed from life support, was widely understood as implicating constitutional questions. Using a population-based perspective that is influenced by the discipline of epidemiology and focuses attention on both the interests of and the impact of law on populations, this Article analyzes why a controversy concerning the life and death of one woman was understood as raising questions of constitutional law while the failure to protect thousands was not viewed as such. The Article begins reviewing the courts' embrace of an individualistic right-to-reject treatment in cases such as Cruzan v. Director, Missouri Department of Health and contrasting that embrace with the Supreme Court's rejection, in cases such as DeShaney v. Winnebago County Department of Social Services, of any broad right to care and protection. Taken together, these cases demonstrate that contemporary constitutional law fails to appreciate the interdependency of risk and the social and population context in which health threats, and treatment decisions, arise. As a result, the rights vindicated in cases such as Cruzan and Schiavo are particularly shallow as they cannot provide either individuals or populations (such as that in New Orleans) with the opportunity to make meaningful risk-reducing choices. In addition, because of the influence of constitutional discourse in our society, the shallowness of constitutional rights spills over to influence political and legislative priorities. Hence, the fact that the population of New Orleans had no legally recognizable constitutional right to protection against hurricanes may have abetted the government's failure to protect the city's residents. Likewise, a constitutional discourse that focuses on the plight of a single woman while overlooking the multitude of problems faced by large populations may reinforce the political system's failure to protect populations from other potential natural disasters, such as a potential influenza pandemic."—Abstract.
"This paper addresses the complex institutional structure in the United States for dealing with victim compensation in cases of catastrophic loss. It will appear as a chapter in a multinational study that compares the institutional frameworks adopted by Western European nations and the United States.
"Part I of the paper focuses on catastrophic loss triggered by potentially responsible human agencies, and as a consequence, discussion of tort law is central. But what of situations where no human agency can be charged with responsibility for catastrophic harm? In these cases there is no recourse to tort in most instances, and victims of catastrophic loss ordinarily must rely exclusively on private insurance coverage, or, when available, on public insurance systems. The latter can be parsed into two separate categories: social welfare schemes (discussed in section II of this paper), such as government disability and unemployment insurance legislation, which are available to all claimants meeting general eligibility requirements - without reference to the source of the harm that has occurred. And, legislative no-fault or insurance schemes that have been established with designated types of catastrophic loss in mind. This second category of social welfare legislation is discussed, along with a description of private insurance coverage, in section IV - after examining the government agency whose work is devoted exclusively to disaster relief (in section III, on the Federal Emergency Management Agency).
"Section V of the paper serves as a reprise on the somewhat patchwork design of the U.S. system by isolating for special consideration three case studies of particularly salient disaster events that illustrate the range of approaches discussed earlier: First, the terrorist acts of September 11, and, in particular, the legislative no-fault compensation scheme that was enacted to compensate the personal injury victims; second, Hurricane Andrew, which initiated a mixed private/public insurance scheme in Florida and recast FEMA's approach to disaster relief; and third, commercial airline crashes, as a category, which invoke tort as the principal source of disaster relief compensation.
"A concluding section VI of the paper returns to a more general overview of the system, offering a brief final commentary on fairness and efficacy considerations."—Abstract.
"Traditional law and economics has no place for price controls. Yet public support for anti-gouging legislation has led to the enactment of a variety of legal regimes to control price hikes following natural and man-made disasters such as hurricanes and terrorist attacks. This Essay provides an economic justification for such laws. First, the Essay surveys the existing models of anti-gouging legislation. Then, the Essay describes the traditional economic critique of price caps, a critique applied to laws that attempt to control post-disaster prices. Finally, the Essay argues that anti-gouging laws enhance economic efficiency by ensuring a functioning consumer market after the collapse of electronic payment systems on which the American economy now depends. The externalities of consumption in post-disaster environments mean that the costs of consumers forgoing needed products are not adequately captured by a reliance on market mechanisms. This analysis suggests that current anti-gouging laws should be restructured to include a more discrete focus on areas actually affected by physical damage from natural or man-made disasters." —Abstract.
"This is a book chapter in a forthcoming book, Law, Property, and Society (Ashgate Press). The chapter argues that financing extreme catastrophic loss will become more problematic as catastrophes become more frequent and severe. An effective strategy must increase the level of participation in the spreading of risk and loss. Currently, risk spreading is done largely through insurers and government as they are the default aggregators of private and public capital. An enlargement of participation may mean the disintermediation of the traditional insurance and public compensation functions, thus allowing more direct and efficient participation between those are exposed to risk and those who are willing to bear it. This chapter also argues that tax policy should consider catastrophe risk and compensation as a way to positively influence risk-taking behavior. Currently, tax policy focuses on the equity and fairness of taxation of individual income, but these considerations are also at the heart of public financing of catastrophes."—Abstract.
"Emitters of greenhouse gases externalize the true costs of their contribution to climate change. Efforts to recover these costs, which manifest both through the costs of impacts and the costs of efforts to prevent impacts, can take the form of insurance claims as well as legal remedies. The most widely discussed insurance-related consequences of climate change are the impacts of property damage from extreme weather events. However, there is increasing awareness of the relatively subtle but equally important dimension of liability. Liability insurance risks - risks to insurers from claims of third-parties who allege injury or property damage that may be the fault of the insured - are rising as scientific uncertainty surrounding climate change declines. This Article explores three major dimensions of the issue: (1) sources of climate-change-related legal liability to third parties and their nexus with insurance and law, (2) new liabilities associated with potential technological responses to climate-change, and (3) potential roles for insurers, reinsurers, and other industry actors in proactively managing climate change-related liability insurance risks for themselves and their customers. Because the insurance sector is the world's largest industry, the response of insurers to the broader climate-change challenge will no doubt be key to the ultimate success of society's overall response."—Abstract.
"Unfortunately, Attorney General Hood's colorful observation has proven untrue. Hurricane Katrina's direct physical toll has been estimated to exceed $200 billion, only a fraction of which is recoverable under existing insurance law. As many policyholders and citizens have realized, insurance is something we tend to think about only after a disaster. Indeed, this oversight is a central explanation for why the system for allocating flood losses in the United States has failed.
"Now that Katrina's waters have receded, it is time to reconcile insurance law and policy to reality: Catastrophic losses create interdependencies among public and private actors that must be managed rather than avoided. Our current systems for preventing, mitigating, and allocating these losses are fractured, diffuse, and maddeningly counterproductive. No single actor is vested with both the incentive and the power to manage this risk effectively.
"As with healthcare, the system for allocating catastrophic loss is characterized primarily by the evasion of responsibility at all levels: private, commercial, and governmental. The result (as in healthcare) has been dysfunction. Before Katrina's seemingly indelible memories recede - as they are destined to - it is time to recalibrate the relationship between government and the private market.
"This Article focuses on the two insurance systems that inadequately govern the distribution of flood risk: The National Flood Insurance Program (NFIP) and the private market for property insurance. There have been a number of studies detailing the structure and limits of these systems. However, scant attention has been directed toward the role that insurance law plays in driving the systems toward failure. What follows is a synthesis of insurance law, economics, and regulatory criticism, leading to the ineluctable conclusion that these two systems rest on a foundation of sand.
"I propose a market-based alternative that draws on the comparative advantages each system offers. To the information-generating of the marketplace, we may add a more precisely targeted governmental role in subsidizing some policyholders and reinsuring others. There are inevitable tradeoffs, and my proposal has a number of drawbacks - only some of which can be guessed at here. But the alternative is a system that has proven itself unable to cope adequately with the predictable losses of a bad year, let alone the greatest natural disaster in American history." —Abstract.