It is abundantly clear that Richard Scruggs and the SKG used formidable public relations resources, including use of The Rendon Group, in an effort to control the public perception of the issue at the heart of this qui tam action, i.e. whether State Farm deliberately mischaracterized wind damage as flood damage in assessing claims under the insurance policies it was adjusting. As far as the wind damage claims are concerned, these attorneys were acting well within their rights as advocates for their clients who had homeowners policy claims. These attorneys were not free to disclose the existence of this qui tam action, and had their improper disclosures (Items 3,7, and 12 above) led to accounts in the public media indicating that such an action was underway, the government’s ability to investigate the Relators’ allegations might well have been compromised. But that is not the case disclosed in the record before me.
State Farm’s Motion to Dismiss the Rigsbys’ qui tam case (for violations of the seal order) was among those motions argued at the recent Status Conference. Today’s uncharacteristically long Memorandum Opinion on Judge Senter’s denial – the 14 page Scribd document at the end of this post – is the first Judge Senter has issued on those motions. One of the more surprising aspects of his decision is his consideration of the partial lifting of the seal that took place on Order of Judge Walker in January 2007:
The first question I must consider is the effect of the partial lifting of the seal on January 1, 2007. At the time Magistrate Judge Walker entered his order partially lifting the seal, this action had been filed and sealed for some seven months. In partially lifting the seal, the Court authorized the Realtors to make disclosures concerning this action to judicial officers presiding in the Alabama litigation. The order partially lifting the seal does not specify that the judicial disclosures themselves be made under seal, and this order could therefore be reasonably interpreted to authorize these judicial disclosures in pleadings and other documents distributed to the litigants and their attorneys in the Alabama litigation. This type of disclosure would effectively make the original seal of the qui tam case moot. In these circumstances, I consider the relevant period of the seal to be from April 26, 2006, (the filing of the original FCA complaint) through January1, 2007 (the partial lifting of the seal).
State Farm identified a total of 48 incidents the Company claimed as violations of the seal order on the Rigsby qui tam complaint. One item alone (#48) required the Court to review a “106-page compilation of e-mails concerning media contacts”. Judge Senter’s Memorandum Opinion lists all, starting on page 1 and continuing until page 8, concluding with, “State Farm contends that the disclosures reflected in these documents constitute such egregious violations of the FCA’s seal requirement, 31 U.S.C. §3730(b)(2), that dismissal of this action is justified. Judge Senter, obviously, thought not: Continue reading “Breaking News – Judge Senter denies State Farm Motion to Dismiss Rigsby qui tam!”
