Shaving with Hanlon’s Razor – the unsealing and disclosure of Rigsby qui tam (Part 1- 2006)

“Never attribute to malice that which can be adequately explained by stupidity.”

It hardly seems possible there is anything about ex rel Rigsby v State Farm that has not been subjected to scrutiny and speculation; but, starting around a month before the May 2009 pre-trial hearing and continuing during the many that have followed, something on the docket would catch my eye and I’d make a note to take a closer look later.

“Later” came when I saw mention of a familiar name on the blog Main Justice:

A Southern District of Mississippi prosecutor is in the mix for the Northern District of Mississippi U.S. Attorney nomination, Rep. Bennie Thompson (D-Miss.) told Main Justice…Assistant U.S. Attorney Felicia Adams is being considered by the Obama administration for the Northern Mississippi slot…

Ms. Adams has been the “face” of the government in the Rigsbys’ qui tam case.  Her signature, not that of Dunn Lampton, “the U.S. Attorney who wasn’t fired,” is affixed to the documents filed by the government.

However, this series of posts is not about Ms. Adams, reportedly now a leading candidate for appointment to one of the two USA positions in the State.  Instead these posts are a year-by- year timeline reporting the events reflected in the docket of ex rel Rigsby v State Farm, supplemented with events recorded on the docket of other cases when required to document events related to the unsealing and disclosure of the Rigsbys’ qui tam Complaint.

Nonetheless, the government’s position on the unsealing and disclosure of ex rel Rigsby v State Farm often left the Rigsby sisters as vulnerable as a “sitting duck”.

Did “the government” shave the case with Hanlon’s Razor or malice? SLABBED reports, you decide.

Law governing the filing, unsealing and disclosure of a “Civil actions for false claims” under the False Claims Act [FCA] is found in 31 USC § 3730 (b), “Actions by Private Persons”:

Did the government act within the statutory timeline for requesting an extension to maintain the seal?

(1) A person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The action shall be brought in the name of the Government. The action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting.

(2) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government pursuant to Rule 4(d)(4) of the Federal Rules of Civil Procedure. The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders. The Government may elect to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information.

(3) The Government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2). Any such motions may be supported by affidavits or other submissions in camera. The defendant shall not be required to respond to any complaint filed under this section until 20 days after the complaint is unsealed and served upon the defendant pursuant to Rule 4 of the Federal Rules of Civil Procedure.

(4) Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the Government shall

(A) proceed with the action, in which case the action shall be conducted by the Government; or

(B) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action.

ACLU v Holder (2009) explains the practical application of law related to the 60-day period:

If the relator initiates the action, the complaint must be filed in camera and under seal…[and]… shall remain under seal for at least 60 days…During those 60 days the government investigates the case and determines whether to intervene in the action. Before the conclusion of this 60-day period, the government must either inform the court whether it is intervening, or for good cause shown, move the court for extensions of the time during which the complaint remains under seal. 31 U.S.C.S. § 3730(b)(3).

What happens when the government’s Application for an extension is untimely?

In ex rel Eisenstein v. City of New York (2008) the Court said the “United States is not a party to a qui tam action when the government fails to intervene or to raise or resist any legal claim”:

Where a private person brings suit under the False Claims Act, the Act allows the government to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information. 31 U.S.C.S. § 3730(b)(2).

Before that 60 day period expires, the Act mandates that the government carry out one of two choices: (A) proceed with the action, in which case the action shall be conducted by the government; or (B) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action. 31 U.S.C.S. § 3730(b)(4).

While the Act allows the government to intervene at a later date, it may do so only upon a showing of good cause. 31 U.S.C.S. § 3730(c)(3). When the government declines to intervene, the Act specifies that the person who brought the suit has the right to conduct the action. 31 U.S.C.S. § 3730(c)(3). (emphasis added)

The government filed an Unopposed Ex Parte Application for a Six-Month Extension of Time to Consider Election to Intervene with a Memorandum in Support asking “for an extension until January 3, 2007 of its period in which to notify the Court of its decision…” under the False Claims Act, as amended, 31 U.S.C. § 3730(b)(3).

However, there is nothing on the docket indicating the government’s Application was “supported by affidavits or other submissions in camera” documenting:

  • the alleged communication from the Relators’ counsel verifying the government’s Application was “unopposed”;
  • the May 3, 2006 date of “service of process” that allegedly extended the intervention deadline beyond the 60-day period established by the FCA to July 3, 2006; or
  • the allegedly “diligent investigation of this case” the government had begun since…”Relators filed this action in April 2006″.

“Diligent” is defined as, “showing persistent and hardworking effort in doing something”.  Yet, the government’s Application states, “Interviews
with the Relators are in the process of being scheduled” over two months after the “Relators filed this action in April 2006”.

Given the little time required for such a “diligent investigation” [sic], surely there was ample time to comply with the government’s statutory obligation to file the Application “before the end of the 60-day period…” as required under 31 U.S.C. § 3730(b)(3).

Did “the government” shave the case with Hanlon’s Razor or malice? SLABBED reports, you decide.

3 thoughts on “Shaving with Hanlon’s Razor – the unsealing and disclosure of Rigsby qui tam (Part 1- 2006)”

  1. I think the fact the motion was unopposed speaks for itself. Scruggs had plenty of opportunity to speak up if Craft was doing something sneaky. He didn’t and the motion was granted. That said you wonder how important this case must have been to Lampton’s office when important deadlines were missed.

    Like so many decisions made in the early days of Qui Tam, one wonders how many were made with the longer term interests of the claim in mind versus a shorter term public relations strategy that failed when Scruggs copped a plea for bribing Judge Lackey. Keeping the option of an intervention open makes sense. Having the girls featured on 20/20 on the other hand made none.

    sop

  2. Remember the evidentiary disclosure was never filed with the Court so it was never “under seal”. The law only requires the Complaint to be sealed. An evidentiary disclosure is communication between Relators and their government attorneys.

    Also, there was nothing to document the government’s Application was unopposed except the government’s statement. Even assuming the Rigsbys’ counsel did not oppose the government filing an Application for extension, there is no indication the government told the Rigsbys’ counsel anything related to the date it would claim the 60-day period ended.

    Having the girls appear on 20/20 makes a lot of sense to me. “Scruggsing” aside, the media exposure was of considerable benefit to policyholders – and there was no seal that prevented anyone from calling attention to the McIntosh claim, or any other for that matter, or making the public aware of State Farm’s practice of securing a second engineering report if the first was unfavorable to the Company.

    The government’s obvious lack of interest is a bitter pill to swallow even now – or, rather, another bitter pill in addition to one Scruggs’ conduct/plea provided.

    However, the remaining timelines will show there were more than just two bitter pills in this bottle! Here in 2010, it appears someone ordered a refill (yuck).

    The competence and confidence the Rigsbys demonstrated in the hearing last May is simply remarkable – all those bitter pills, it seems, only made these two courageous young women, and their case, even stronger!

  3. You act as if the girls were in this case pro se at times. Look up the definition of unopposed and then put it with the slang expression “big boy pants” and you’ll land closer to the fact that the girls supposedly had competent counsel.

    If your contention is that Dick Scruggs was not competent to handle a case of this type I would tend to agree. I think it is clear Zach was a neophyte that was in over his head. The Missouri people knew what they were doing though. 20/20 was a mistake period.

    I like the timeline but I do not think I agree with your conclusions.

    sop

Leave a Reply

Your email address will not be published. Required fields are marked *