In an amazing act of hubris, State Farm asks Judge Senter to certify seal to the Fifth Circus (a Rigsby qui tam update)

Judge Senter’s Order denying State Farm’s Motion to Dismiss the Rigsby qui tam case was Breaking News on the 24th of January. In a different sense, it was also breaking news at State Farm – news that broke the Company’s front line defense.

Shortly thereafter State Farm filed a Motion asking the Court to allow the Company to throw the allegations at a different wall – a motion to certify the seal to the Fifth Circus claiming the Court’s “denial of State Farm’s motion to dismiss due to the Rigsbys’ violations of the seal order presents a controlling question of law, that an immediate appeal would materially advance the ultimate termination of the litigation, and that there are substantial grounds for a difference of opinion as to this question”.

The Rigsbys recently filed a Response. However, before taking a look at the State Farm Memorandum and Rigsby Response in Opposition, a little stroll down memory lane is in order. In his Opinion Memorandum, Judge Senter recognized the significance of the partial lifting of the seal that took place on “January 1, 2007, to allow the Relators to make certain disclosures in judicial proceedings in related but independent litigation in Alabama”:

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)…and the stay was fully lifted on August 1, 2007.

Judge Senter obviously didn’t think it necessary to provide supporting evidence or he would have mentioned a particularly significant event that took place between the date the seal was partially lifted and the date it was fully lifted some eight months later – the May 30, 2007, Motion to Compel that State Farm filed in McIntosh v State Farm:

“The Rigsbys’ assertion of a putative ‘law enforcement privilege’ and a privilege ostensibly derived from an unidentified federal statute are similarly baseless…the Rigsbys do not provide State Farm – or this Court – with even the most basic information necessary to evaluate whether a ‘law enforcement’ privilege even potentially applies. And a litigant claiming a ‘statutory’ privilege must, at an absolute minimum, identify the statute that is the putative source of the privilege…”

In other words, following the partial lifting of the seal, State Farm used the McIntosh case to circumvented the Stay on Discovery in ex rel Rigsby v State Farm until February 7, 2008 when the Court ordered the Complaint served and the Stay lifted.

Hence, it was an amazing act of hubris for State Farm to seek an interlocutory order on alleged seal violations by the Rigsbys:

Finally, State Farm notes that the Fifth Circuit has shown a keen interest in considering the important and cutting-edge legal issues arising from Hurricane Katrina cases.  In addition to Tuepker, the Fifth Circuit very recently agreed to review important FCA issues that had been decided by the district court in the Branch litigation…Although that review is likely now moot in light of the even more recent entry of judgment against the Branch relators, the point remains that the Fifth Circuit has been willing to preemptively engage these important issues and thereby allow the district courts saddled with the responsibility of handling Hurricane Katrina litigation to proceed to conclusions with even greater confidence.

However, no lack of confidence was reflected in Judge Senter’s Opinion Memorandum or the Rigsbys’ Response:

Despite State Farm’s best efforts to delay the inevitable, material disputes of fact abound and trial is the only way to resolve them. the Relators have extensive evidence that will show how State Farm committed widespread,systemic fraud against the government. State Farm argues that the Relators are lying and that the evidence is false. It is now time for a jury to decide. Regardless of whether the Court orders the parties to proceed with one trial or two, the Relators respectfully submit that this entire matter can and should be completed very promptly, in months not years. Accordingly, State Farm soon will have the opportunity to appeal any and all of the Court’s orders and the jury verdict after final judgment if the Relators prevail at trial.

This is one “seal” that doesn’t belong in a circus!