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Judge: Resume Katrina housing aid

A federal judge on Wednesday ordered the Bush administration to immediately resume housing payments for thousands of people displaced by Hurricane Katrina.

District Judge Richard J. Leon's ruling was the second court victory for Katrina victims this week. A federal judge in Louisiana said Monday that many homeowners might be entitled to more insurance money for flood damage.

In the Washington case, Leon said the Federal Emergency Management Agency did not adequately explain why it ended a housing assistance program for people who lost their homes in the 2005 storm.

This spring and summer, FEMA told thousands of evacuees that they no longer were eligible for housing reimbursement or that they had to reapply. Leon said the computer-generated letters from the agency were too vague and he described the application process as Kafkaesque.

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 by the Association of Community Organizations for Reform Now. The group's suit in August contended FEMA violated the rights of Katrina victims by abruptly stopping housing payments.

In his ruling, Leon cited letters from caseworkers who described a convoluted process in which evacuees get contradicting advice and vague reasons for their termination. Leon also cited statements submitted by evacuees describing the ordeal.

"The reasons I have been given for the termination are not what is in the documents and/or the reasons change each time I call," said Carmen Handy, an evacuee whose statement was cited. "Every time I call back, the person answering the call knows nothing about what the previous person told me."

FEMA did not immediately comment on Leon's ruling.

In Louisiana, U.S. District Judge Stanwood Duval Jr. 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 Cos. Inc. 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, 2005.

If successful, this suit could cost insurers $1-billion in Louisiana alone, industry officials said, and could lead to similar suits elsewhere. Insurers said they plan to appeal.

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