The 5th Circuit has released its long awaited Opinion on the Appeal of the Katrina Qui Tam claim filed by a group of public adjusters as the Branch Consultants – an Opinion that references this year’s award-winning snark –
and the Big Sleazy in the Big Easy Award goes to…
We AFFIRM the district court’s dismissal of Branch’s claims against State Farm and Allstate. We REVERSE the dismissal of Branch’s claims against all other Defendants based upon the ground of the first-to-file bar. Rather than address Defendants’ alternative grounds for affirmance, we REMAND the cause so the district court can consider those arguments in the first instance…
The Court’s error is dismissing Allstate in light of the stated intent to dismiss the only Branch Defendants that Rigsby names.
Although Allstate was one of the four insurers named when the Rigsby sisters filed suit in April 2006, they later (March 05, 2008) filed a Consent Motion to dismiss three insurers – Allstate, Nationwide, and USAA. Judge Senter issued the Order on the 10th and received the needed approval of the Department of Justice a week later. Consequently, State Farm has been the sole insurer named as a defendant in the Rigsby qui tam for almost a year.
The obvious question is how did the Court make such an error and I have no answer. However, there are other misrepresentations of fact in the Opinion; and, on several of those I have more than a guess.
The envelope, please, Sop, and
the winner of the Big Sleazy in the Big Easy Award for his snark is…
none other than Allan Kanner, attorney for the Branch Consultants.
A dubious distinction but a deserving honor, if you will, for this statement alone in the 5th’s opinion:
Branch also asserts that Rigsby cannot constitute a first-filed action under § 3730(b)(5) because it fails to satisfy Rule 9(b)’s pleading requirements.
Now, I realize that Mr. Kanner is Harvard Law and I’m still in “google”; but, he’s just flat out wrong. The Rigsby qui tam does indeed satisfy Rule 9(b).
Rule 9. Pleading Special Matters
(b)Fraud or Mistake; Condition of Mind.
In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.
Courtesy [sic] of State Farm, we havea recent 5th Circuit opinion that explains the 9(b) rule itself with a particularity that offers further evidence of the Rigsby qui tam satisfies the requirements. h/t Barney of the “buckin’ fuzzards”
Because the linchpin of an FCA claim is a false claim, “the ‘time, place and contents of the false representations, as well as the identity of the person making the misrepresentation and what that person obtained thereby’ must be stated in a complaint alleging violation of the FCA in order to satisfy Rule 9(b).”
Note the “linchpin” is “a ” false claim” – singular- indicating that it matters not if there is just one, as long as it meets the standards.
Bragging about how many times you’ve “done it” (if indeed you have done it to standard); is a little high school for such a serious matter –
…[Branch]…documented the trend in hundreds of cases and filed a lawsuit backed by a sample of 57 claims in which insurers had paid policyholders more in flood money than the flood damage to their homes warranted, but stiffed them on payments for wind damage to save themselves money.Kanner says the…[Rigsby]…suit never should have been viewed as stand-in for the Branch allegations about the overbilling of the federal flood program.
…the Branch suit had a systematic analysis of claims payments and damages by multiple companies, the Rigsby suit was mostly about claims practices at State Farm. It alleged overbilling for flood claims in only two instances, both of them State Farm cases, without even noting whether the properties in question had flood insurance, meaning that the case would be unable to identify any specific overcharge to the federal government and satisfy basic requirements of a False Claims Act case.
“The transactions in Branch and Rigsby are completely unrelated,” the Branch appeal brief says.
– and absolutely no basis for judical comment or decision.
Rigsby specifically alleged that State Farm, in its capacity as a WYO insurer, reallocated claims on two Mississippi properties from wind damage to flood damage in a pernicious attempt to shift its costs to the federal fisc. Branch brought identical allegations against State Farm, except it also alleged facts concerning ten properties in neighboring Louisiana.
While the award-winning Mr. Kanner is directly accountable for what “Branch asserted”, he is deserves credit for creating the inaccurate perception the Court holds about the Rigsby claim.
By itself, then, Rigsby tells us nothing about any parties not named therein. [duh! added]
The qui tam attorneys for the Rigsby sisters, no doubt, have read the 5th’s opinion by now and are finding great comfort in knowing the Rigsby claim was prepared by a man who wrote the book! The 5th Circuit library appears to be in dire need of a copy!