In my most recent post on the three Katrina qui tam cases, I compared Allstate to Larry, the character on the old Newhart show who spoke for his two mute brothers – “my brother Darryl and my other brother Darryl”. This update on the Branch Consultants’ qui tam case is the first of three follow-up posts, each focusing on a single case. While Louisiana federal district Judge Sarah Vance is not only more attractive than Larry’s “other brother Darryl”, pictured center in photo on the right, one might think she, too, mute given Allstate’s attempt to put words in her mouth.
Allstate certainly has good reason to be concerned. The Company has the distinction of being a named defendant in all the Katrina qui tam cases. Allstate argues it is a distinction without a difference and that, on that basis, Judge Vance lacks jurisdiction under the “first to file” requirement of the FCA (False Claims Act). A related SLABBED post, Allstate files Answer in Branch – and this I couldn’t make up!, introduced Allstate’s position; i.e., the Rigsby sisters were the first to file.
Despite having once invited Branch counsel Allen Kanner to “kiss my***ex rel“, I do not believe Judge Vance can determine jurisdiction until discovery has been completed in Branch, the recently unsealed ex rel Denenea v Allstate and Rigsby with the scope of expanded. Allstate represents the FCA restriction on similar claims too narrowly, IMO, but more importantly, there is currently no way to know for certain.
My position, however, is contrary to the strategy of the “wool-over-court’s-eye” scheme concocted, or so I believe, by Allstate and other insurers as an element in the overall scheme of fraudulent claims handling that followed Hurricane Katrina – and it is the context of that wet-dog smelling scheme unraveling before Judge Vance that we examined the current status of the Branch Consultants’ qui tam case.
If you knit, you know that a dropped stitch can’t be covered. Magistrate Shushan’s recent Orders make it clear that dropping a stitch in a “wool-over-court’s-eye” scheme also can’t be covered.
Although Shushan’s October 15, 2010 Order “granted in part” motions filed by Allstate and co-defendant Pilot Catastrophe Services, she refused to delay the production of initial disclosures before the Court rules on either company’s motion to dismiss each and the “part” she granted was a five-day extension of the deadline for Allstate:
The production of initial disclosures by Allstate and Pilot cannot be delayed until after the resolution of the motions to dismiss. If the participation of Allstate and Pilot in discovery is delayed, the trial schedule will be jeopardized.
A few days after her Order protecting the trial schedule was issued, Shushan issued another. Her October 18, 2010 Order sent an even stronger signal as it addressed discovery of ESI (Electronically Stored Information). Motions filed by defendant insurers Liberty Mutual and ANPAC had claimed neither had electronic flood insurance claim files as both contracted claims handling to the interestingly-named National Flood Services – a company with a history that has reeks of wet wool with added whiff of Gerald Neilsen. Shushan must have a good nose as she also picked up Fidelity, Allstate and Pilot:
Branch shall schedule the Rule 30(b)(6) deposition of the National Flood Services, Inc. (“NFS”) in cooperation with Liberty Mutual and ANPAC to obtain information responsive to the February 26, 2010 deposition notices which Liberty Mutual and ANPAC contend is not in their possession.
By Monday, November 1, 2010, Liberty Mutual and ANPAC shall file a memorandum in support of their argument that information in the possession of NFS pertaining to Liberty Mutual and ANPAC flood claims is not in their possession. The memorandum shall include the contracts between NFS and Liberty Mutual and ANPAC and any other documentation which they contend supports their position.
By Wednesday, November 10, 2010, Branch shall submit a memorandum regarding its position on whether NFS information is in the possession of Liberty Mutual and ANPAC .
After consideration of the memoranda, the court will determine whether further briefing and/or discovery is required.
Banch may re-depose the two insurer defendants (Fidelity and Liberty Mutual) who gave ESI depositions. Branch may not ask any questions which were asked and answered on the first depositions. Branch may only inquire as to matters which were foreclosed by the March 17, 2010 order. Branch shall not revise its Rule 30(b)(6) ESI notices for any defendant.
At the October 22, 2010 conference Branch shall report on when it can serve Rule 30(b)(6) ESI deposition notices on Allstate Insurance Company (“Allstate”) and Pilot CatastropheServices, Inc.
What Magistrate Shushan will decide after considering the memoranda is anyone’s guess. Here’s mine – I’m guessing her proclivity for nit-picking details, although proven to send her in the wrong direction on occasion, will lead her to the shell game insurers played with flood insurance claims following Hurricane Katrina. Honest-to-god, I believe if the woman could, she’d crawl in the wires and follow electronic information.
In that regard, Magistrate Shushan reminds me of the metro-Jackson-area mayor who gets so involved in details that even Walmart had to fall in line with what she considered a tasteful design – but I digressed and there’s more to cover. For example, three all but identical motions were filed by Standard Fire, Liberty Mutual and Fidelity National.
All three companies claimed “newly available evidence” filed motions to supplement their motions for summary judgment. Two, Standard Fire and Liberty Mutual , filed motions with an identical title: “Motion for Leave to File Three-Page Supplemental Brief in Support of Motion for Summary Judgment Based Upon Previously Unavailable and Newly Disclosed Evidence”.
Odd man out, figuratively and literally, was Fidelity National with four pages, Gerald Neilsen and a “Motion for Leave to File Short Supplemental Brief in Support of Its Pending Motion for Summary Judgment Based Upon Previously Withheld Evidence.
The companies are in a dither over the Disclosure Statement filed by the Branch Consultants. However, even someone who is not an attorney – me – can read well enough to know Congress provided the option of separately filing FCA Disclosure Statements for the specific purpose of keeping evidence out of the hands of defendants while the government is conducting its investigation; and, the investigation of defendant Allstate is on-going via the Denenea case. I do believe some related concerns of the defendants may be legitimate but not their claims about the filing of the Disclosure Statement on the same day as the Complaint. Nor do I feel there was any need for the Disclosure Statement to specifically identify every company involved in the alleged scheme.
At any rate, these Curly-Larry-Mo motions will be given a hearing on the 19th of November – the date set for the Court to hear arguments on other pending motions, including the thank-god-for-Rigsby motions to dismiss filed by Allstate and Pilot in addition to those of other defendants. At some point thereafter, Judge Vance will resolve the question of jurisdiction and, if she retains jurisdiction, determine if there are any defendants that should be dismissed prior to the jury trial on the Branch qui tam case scheduled to begin June 25, 2012 according to the recently issued Case Management Order.
Estimated to last twelve weeks, the trial will end on or near the seventh anniversary of Hurricane Katrina – and a few months short of my fifth anniversary as Sop’s blogging partner despite his assurance that it wouldn’t take us more than six months to follow Katrina-related litigation to the end!
Fools do rush in – and the next in this series of updates on the Katrina qui tam cases will follow “brother Darryl” to the recently unsealed ex rel Denenea v Allstate and examine, among other things, the success of the wool-over-Court’s-eye strategy that caused the otherwise trick-savy Judge Carl Barbier to issue an Order transferring the Denenea case to Judge Vance .