Oyster Bay Sues Insurer That Refused To Pay $1.5M In Legal Fees

OYSTER BAY, NY — Following a dispute over a law that prevented day laborers from gathering on the streets of Oyster Bay to look for work, the town sued an insurance company over $1.5 million in legal fees the municipality was ordered to pay, according to a report Tuesday.

In 2010, Centro de la Comunidad Hispana de Locust Valley and The Workplace Project accused the town of targeting Latino workers and unlawfully banning employment-related speech, hindering their ability to find work from homeowners and businesses.

The town passed a law seeking to "prevent a group of predominantly Latino, immigrant day laborers from soliciting work in Oyster Bay so as to drive them out of their communities and out of the sight of residents who wish they were not there," the lawsuit said.

Five years later, a federal judge struck down the law, and in 2017, a federal appeals judge upheld that decision.

Then on July 8, a federal judge ordered the town to pay $1.5 million in attorney fees in the lawsuit, which the Town Board approved in September. Within weeks, the town sued Illinois National Insurance Company in federal court, accusing the insurer of improperly refusing to cover the entirety of the fees.

The insurer notified the town in January 2018 it would only cover up to $100,000, citing policy exclusions, according to federal court documents filed in July and obtained by Patch.

The town later refiled in state court, which has jurisdiction, Newsday reported.