Toot, Toot Judge Senter – hear that whistle blowing? (A Nowdy/Sop Tag team Post)

State Farm just needed Judge Senter’s DQ to launch an all out attack on the Rigsby sister’s Qui Tam. Answer Authorities Motion to Dismiss Motion to Disqualify Counsel Motion for Summary Judgement Support

Those interested in knowing more about Qui Tam law will find a helpful overview here. Those interested in finding out what really happened in that trailer will have to wait to read what attorneys for the Rigsby sister’s file for the definitive answer – or visit here and read more about the latest fantasy.

I have tried to picture in my mind what was going on there: was everyone huddled around looking at claims files on a laptop, gazing with wide open eyes at the wonder of it all? Was everyone present at once? Were some people off in a corner watching reruns of the Beverly Hillbillies, drinking a Pepsi and paging through Oprah’s latest magazine?

Obviously, this is no ordinary FEMA trailer fantasy!

Eureka! Legal commenters have been wondering about the meaning of meeting on March 11, 2006 described in Kerri Rigsby’s deposition given November 20, 2007. In fact much has been made of that the Rigsby depositions including this entry from Insurance Industry Attorney David Rossmiller in his entry entitled Scruggs Nation, April 5: the fall of the Scruggs Katrina Empire. I quote:

One thing we should expect is a motion in the False Claims Act case, Ex rel. Rigsby, which is also in the Southern District. That motion, I would expect, would be to dismiss the case entirely, because it is founded on the stolen documents — in that the government has not intervened in the lawsuit, it is nothing more than an ordinary lawsuit, and the same arguments would apply to it as to the McIntosh case where Judge Senter issued the disqualification order. If the Rigsby documents can’t be used in any of the KLG cases in the Southern District, why should they be able to be used in the False Claims Act case?

The motion, I would guess, would have an alternative request that, if the case is not dismissed, the lawyers should be disqualified. The lawyers are not the KLG lawyers, but rather Chip Robertson, Mary Winter, Todd Graves and so forth, the same people who represented Zach Scruggs in the criminal charges against him. You may remember that Kerri and Cori Rigsby have testified to meeting in a trailer in Pascagoula with those lawyers and Dickie Scruggs on March 11, 2006. Here is a copy of Kerri Rigsby’s deposition from November 20, 2007, a deposition I have posted a number of times. Read a few pages starting on page 21 of the transcript. You will see that she acknowledges that she and Cori were both in the trailer around 2 p.m. that day, which is the time State Farm has determined, from a check of computer records, that Cori and/or Kerri began accessing from a laptop the claims files of policyholders, most of whom were clients of Scruggs, in virtually the same order they were listed on the McFarland complaint that incorporated the claims of a huge bunch of policyholders. By the way, here is a copy of Cori’s deposition from November 19, 2007, I’ve also posted this before.

Now, given the constituency in the trailer, you can see some potential issues with this, can’t you? In that deposition, Sid Backstrom asserted attorney-client objections to almost all questions dealing with what happened in the trailer — although actions themselves are seldom protected communications. Did the attorneys present look at some of the files online? Let’s remember who some of the people in trailer were. Chip Robertson, whose name appears as counsel of record on the False Claims Act complaint, was a former chief justice of the Missouri Supreme Court. If Todd Graves, who also appears as counsel of record on the complaint, was the Todd in the trailer, he was at the time U.S. Attorney for the Western District of Missouri, and was until he left office on March 24, 2006. (Emphasis Sop)

Indeed Mr Rossmiller, I did not initially see the “potential issues” with this meeting until late today when I was reading the State Farm Motion to Dismiss linked by my blog partner Nowdy above. I saw one of the grounds in that motion related to testimony given by Robert Hunter before Congress on October 18, 2005. It cites a provision in the False Claims Act to prevent parasitic lawsuit filings once information on a false claim enters the public domain. I quote from pages 4 and 5 of today’s filing:

To prevent parasitic suits by opportunistic late-comers who add nothing to the exposure of fraud, Congress has denied federal courts subject matter jurisdiction over FCA claims based in whole or in part upon publicly disclosed allegations raised in civil or Congressional hearings unless the person bringing the action is an “original source” of the allegations of each false claim alleged in the complaint. 31 U.S.C. § 3730(e)(4)(A).

An “original source” is defined, in turn, as an individual who has direct and independent knowledge of the fraudulent acts alleged in the complaint and who has made a timely prior disclosure of those facts to the federal government. 31 U.S.C. § 3730(e)(4)(B).

Review of the law and the facts compels the conclusion that the Rigsbys’ claims of NFIP fraud are based on publicly disclosed allegations, and they are not an original source with direct and independent knowledge of information that was provided to the government in a timely manner. As the following analysis reveals, courts routinely dismiss qui tam claims for lack of subject matter jurisdiction under such circumstances.

In my non legal opinion, State Farm is grasping at straws equating Mr Hunter’s non specific testimony on conflicts of interest in the National Flood Insurance Program a kindergarten kid could easily discern with the detailed specific insider knowledge of claims dumping brought by the Rigsby sisters. That said I was inspired by a post this evening from Mr Gar on the Yahoo Allstate board to research the matter further. My search lead me to the False Claims Act and code section 31 U.S.C. § 3730(e)(4)(A) cited by State Farm as their grounds for dismissal. Also following is is 31 U.S.C. § 3730(e)(4)(B). I quote both sections so our readers can draw clarity.

(4) (A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.

(B) For purposes of this paragraph, “original source” means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.

So this brings us back to the mythical question of why Todd Graves was in the trailer. I found a pdf of his resignation here and see he resigned effective March 24, 2006 and was tendered exactly one day before the meeting with the Rigsby sisters. Without a doubt Mr Graves is the Governmental recepient of the “voluntarily provided” information.

Certainly Cori and Kerri Rigsby had some idea of the ramifications of their actions. If they believed a crime was perpetrated they were duty bound to report it ( or risk the fate accorded Zach Scruggs) and well within their right to obtain legal council and advice. In fact Dr MacFarland said at Gene Taylor’s town hall meeting (timestamp 3:30ish on the Youtube video) on August 13, 2007 it was his claim that caused the Rigsby sisters to give consideration to the harm they were doing. Dr. Mac was a client of the Scruggs Katrina Group.

What better roadmap to potential claims dumping than a list of people forced to sue. Isn’t it logical the list from the firm representing Dr MacFarland would be used to hone in on the problem children. In my world as an auditor we call it auditing the risk. Perhaps that also explains why plaintiffs were later added to the RICO civil suit based upon information obtained from the Nellie Williams hard drive. It simply would not have been practical to look at every claim given the time constraints.

So now we can see that perhaps this was not a bunch of greedy bungling boobs lustily hunched over a notebook computer screen gathering information on Scruggs Katrina Group cases like the insurance industry portrays these days. I am seeing a well thought plan of bringing a governmental official in to obtain specifc evidence of wrong doing in advance of a Qui Tam suit filed persuant to the False Claims Act. I also see the Rigsby sisters obtaining legal advice from the people who literally wrote the book on modern day Qui Tam and have an excellent checklist to evaluate if there is a case.

Those who would so easily dismiss the Cori and Kerri Rigsby as document theives are misguided or extremely frightened by the ramifications of what they uncovered. Nowdy is sending me emails connecting even more dots. Stay tuned.