Aretha I’m not but a chain of fools I can spot – and, despite their claims to the contrary, there’s no weak link between either Liberty Mutual or Standard Fire and the other Branch defendants. I will concede, however, both companies rattle the chain more than most. In fact, they make so much noise that I would have missed the motions to sever each filed in January had the two defendants not recently filed motions for leave to Reply to the Branch Response in Opposition to their motions..
Apparently, I’m not the only one who ignored the rattling and moved on. While both argue against being joined with other defendants, the two companies are obviously joined in a defense strategy to sever. Each requested a hearing on its motion on the same day, the 3nd of February, a date that passed without a response from the Court. Perhaps, I’m not the only one these two links in the “chain” didn’t fool.
The WYO Accounting Procedures Manual, Exhibit 1 to the Branch Opposition brief, documents the link. Liberty Mutual makes a foolish attempt to fool the Count by claiming Branch “espouses a new theory of liability” by arguing “the defendants’ unauthorized/fraudulent use of the DHHS PMS” as sufficient to “satisfy Federal Rule of Civil Procedure 20(a)(2)’s requirement that the right to relief against joined defendants must arise out of the same series of transactions or occurrences”.
Surely, neither defendant expects the Court to believe its company does not have to use the established NFIP procedures and system to file flood claims! The word games these two companies are playing is based on the same flawed analysis of policyholder claims data used to justify streamlined or steamrolled procedures.
Granted, each claim represents a different property and all that claim handling entails. However, the Feldman procedures erred because the number one insurer’s claims are to the total number of claims is a reliable indicator of nothing other than the calculated percentage. Likewise, the number of exemplary claims Branch cited for a single defendant insurer is not a statistically reliable indicator of the extent of the alleged fraud. The Branch opposition brief picks up from there:
Standard Fire and Liberty Mutual would have the Court believe that, because the fraud concerned different properties, it did not involve a series of transactions or occurrences. This is incorrect. As WYO insurers, Standard Fire and Liberty Mutual are fiduciaries of the federal government who have access to National Flood Insurance Program (“NFIP”) monies. See … Exhibit 1 (“The Department of Health and Human Services Payment Management System (DHHS PMS) is the system currently utilized by FEMA to enable WYO Companies to draw funds as needed from the U.S. Treasury.”)…This action arises out of the series of fraudulent withdrawals from the U.S. Treasury’s National Flood Insurance Fund.
Rule 20 of the Federal Rules of Civil Procedure, Permissive Joinder of Parties, is at issue:
Persons — as well as a vessel, cargo, or other property subject to admiralty process in rem — may be joined in one action as defendants if:
(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and
(B) any question of law or fact common to all defendants will arise in the action.
Branch claims Liberty Mutual and Standard Fire,” … concede that the second prong of this test is readily met here”.
They merely contest the first prong. But in doing so, they have utterly failed to show that the Government’s right to relief against them arises out of a different or unrelated series of transactions or occurrences. They have only shown that the claims involve different physical properties. This showing is not sufficient to support the motions…
This case involves an illegal scheme concocted by multiple defendants but no allegation of conspiracy or concerted action. The transactions or occurrences here are linked by both the immediateness of their connection and by their logical relationship. Similar and even identical evidence will likely be introduced against each defendant.
Once again indicating they are joined in a common defense but acting independently to suggest otherwise, the two companies filed motions for leave to reply to Branch’s opposition on the same date, the 26th of February – three weeks after their proposed date for a hearing passed.
Both Standard Fire’s and Liberty Mutual’s proposed replies are full of word games. Liberty Mutual, as it is want to do on every occasion, whines about how hard it will be to pull the larger number of files Branch has requested for discovery and how long discovery will take on so many claims.
The Court should consider this a clear indication Liberty Mutual does not understand the electronic discovery proposed by Branch and deny the Company’s opposition to the Branch Plan as well as to the Company’s Motion to Sever. No defendant should be severed until the completion of Discovery. When arguing the defendants’ claim of prejudice when joined, Branch cites as precedent a court decision that “declined to find prejudice at the then-current stage of the case, reserving that decision for closer to trial”. However, Branch goes further and argues Rule 42 FRCP “would be more appropriately raised…following the conclusion of discovery” noting:
The pending motions avoid mentioning Rule 42, perhaps because that rule employs an even less demanding standard for consolidating cases than Rule 20 does for joining parties. Under Rule 42(a), the claims against Standard Fire and Liberty Mutual can be tried with the rest of the action if the claims merely “involve a common question of law or fact”—a test indisputably met here.
Could all the chain rattling be the defendants signaling they were all in this together? Thus far, the statistically reliable data that will be telling have yet to be examined. The defendants are pulling out all stops to defeat and/or weaken Branch discovery- a chain of motions and a “chain, chain, chain, chain of fools” who thought if technology did the crime, they wouldn’t have to do the time.