ATLANTA, GA -- (MARKET WIRE) -- March 1, 2007 -- King & Spalding obtained a significant victory
today on behalf of low-income Hurricane Katrina victims in Louisiana whose
Federal Emergency Management Agency benefits were improperly counted as a
basis for denying federal food stamp assistance.
In November 2006, King & Spalding agreed to represent Paul Lala, a disabled
resident of Chalmette, Louisiana, whose home and personal property were
destroyed by Hurricane Katrina. In 2005, Lala received disaster assistance
payments from FEMA to rebuild his home and replace personal property. Like
many other Louisiana residents, Lala has not yet spent his disaster
assistance funds to repair his home due to contractor shortages and
uncertainty surrounding the rebuilding effort in the Gulf Coast region.
Therefore, he deposited the funds into his personal checking account.
Because of his desperate situation, in June 2006 Lala applied to the
Louisiana Department of Social Services for federal food stamps assistance.
Even though Lala's only income consists of monthly SSI/SSDI payments and he
otherwise met all the other eligibility requirements for food stamps, LDSS
denied his food stamps application on the grounds that the FEMA funds were
still sitting in his checking account. Federal law prohibited Lala from
spending those very same funds -- which were intended solely for home
repairs -- on food.
LDSS based its denial on an obscure federal regulation under the Food
Stamps Act that prohibits "commingling" disaster payments with other funds
in a personal checking account for more than six months. In a ruling that
LDSS itself characterized as "harsh," LDSS told Lala that he would have to
"spend down" his disaster funds before he could reapply for food stamps.
"The state's interpretation of the commingling regulation placed Lala in a
Catch-22," said Shelby S. Guilbert, Jr., a King & Spalding lawyer who
represented Lala. "He could use the money he received from FEMA to rebuild
his home, buy new kitchen appliances, or purchase new pots and pans, but
under the Stafford Act, he couldn't use that same money to buy food. And
because of the slow pace of the rebuilding effort and the state's
interpretation of the commingling regulation, the FEMA money that was
supposed to be helping him get back on his feet was preventing him from
receiving food stamps. This result is not what Congress intended when it
passed the Stafford Act."
King & Spalding had reason to believe that the commingling regulation was
affecting other Louisiana residents. In November 2006, Lala filed a
complaint on behalf of himself and other similarly situated individuals in
Louisiana against the U.S. Department of Agriculture, LDSS and named
government officials in the U.S. District Court for the Eastern District of
Louisiana (Lala v. Williamson, et al. Case No. 06-10513). The complaint
alleged that the commingling regulation was contrary to the clear intent of
Congress as expressed in both the Stafford Act and the Food Stamp Act, and
was therefore invalid. The complaint sought a declaratory judgment that
the commingling regulation was invalid, and an injunction restoring
benefits that were wrongfully withheld.
Several weeks after the complaint was filed, USDA, the federal agency that
oversees the food stamps program, agreed to waive application of the
commingling regulation as it applies to FEMA aid recipients through March
2008 for the entire state of Louisiana. Shortly thereafter the parties
reached a settlement agreement that provides, among other things, that
Louisiana will:
-- apply the USDA waiver of the commingling regulation to Lala and all
other similarly situated Louisiana residents;
-- provide Lala with retroactive food stamp benefits that were wrongfully
withheld;
-- notify food stamp applicants who were denied based on disaster
assistance funds of the waiver and restore retroactive benefits to those
eligible to receive them; and
-- pay a portion of Lala's attorney's fees.
Lala's counsel has announced that it will donate the attorney's fee award
to New Orleans Legal Assistance, who had assisted Lala with his food stamps
appeal in LDSS.
The Atlanta-based King & Spalding legal team that successfully represented
Lala and the class in this case included partners William E. Hoffmann, Jr.,
and Stephen B. Devereaux, and associates Guilbert, Tomesha L. Faxio and
Regina Lennox. Lala was also represented by K. Eric Gisleson and Peter J.
Rotolo, III, of Chaffe McCall.
About King & Spalding
King & Spalding is an international law firm with more than 800 lawyers in
Atlanta, Dubai, Houston, London, New York and Washington, D.C. The firm
represents half of the Fortune 100, and in a Corporate Counsel survey in
August 2006 was ranked one of the top ten firms representing Fortune 250
companies overall. For additional information, visit
www.kslaw.com.
Contact Information: Contact:
Les Zuke
King & Spalding
212-827-4392
Email Contact
Tim Doody
Chaffe McCall
504-585-7200
Email Contact