• Here’s what happened: The FBI is investigating Houston-based law firm MMA (formerly McClenny Moseley and Associates) following disciplinary actions related to the firm’s storm-chasing litigation practices, including improper client solicitation, filing lawsuits for non-clients and mishandling settlement checks.
• Dig deeper: MMA allegedly violated state laws by paying millions to marketing firms to generate thousands of client sign-ups after hurricanes in Louisiana, and by representing homeowners without their knowledge.
• Catch up quick: The Louisiana State Police opened a criminal investigation into the firm last year, focusing on potential fraud, forgery, and improper solicitation of clients.
  • In April, MMA filed for bankruptcy in Texas, declaring around $155 million in assets and $106 million in debts.
  • A Louisiana district judge barred MMA and its attorneys from collecting fees in hundreds of pending cases.
  • The  U.S. 5th Circuit Court of Appeals vacated that decision and allowed a hedge fund—which had loaned MMA $30 million in litigation funding—to intervene in the case.
• What about Texas? This lawsuit mill is reminiscent of the lucrative scheme storm-chasing lawyers used to exploit natural disasters in Texas before the Texas Legislature HB 1774.
• TLR Thoughts: Because the Texas Legislature stepped in to shut down abusive storm-chasing lawsuit mills, today, firms like MMA have shifted their business model to other states without similar homeowner safeguards.

Read the full article here.