NEW ORLEANS (AP) — A sweeping lawsuit that accuses some of the nation's largest insurance companies of conspiring to shortchange Louisiana policyholders after hurricanes Katrina and Rita is staying in federal court.

US District Court Judge Jay Zainey denied a bid on Wednesday by plaintiffs attorneys to transfer the case to state court, where former Attorney General Charles Foti originally filed it last year.

The suit accuses Allstate Insurance Co., State Farm Fire and Casualty Co. and other insurers of working together to manipulate damage estimates and low-ball claims payments after the 2005 hurricanes.

Zainey agreed with lawyers for the insurance companies that the case belongs in federal court because it's a class action.

Plaintiffs attorneys argued the suit doesn't qualify as a class action because policyholders aren't a party and may not be entitled to recover any money if the case is successful.

Foti teamed up with private lawyers to file the case in November 2007, only days after he was voted out of office. A spokeswoman for new Attorney General James "Buddy" Caldwell says Foti's successor hasn't decided whether to continue with the case.