Category: E.A. Renfroe

Amendments to False Claims Act – implications for Katrina qui tam litigation

President Obama signed the Fraud Enforcement and Recovery Act containing significant amendments to False Claims Act the very day on May 20,2009 – the very day the pre-trial hearing on the Rigsby qui tam claim commenced in Southern District Mississippi Federal Count.

Among the most significant provisions of the new law are its amendments to the False Claims Act, 31 USC §§ 3729-33 (FCA). According to the Senate Judiciary Committee Report, these amendments—the first substantive revisions to the FCA in more than 22 years—were enacted to reverse judicial interpretations which “undermined” the statute by “limiting the scope of the law…”

The cumulative impact of these amendments is to alter significantly the landscape of FCA jurisprudence.

clarifications on fca via fera all files_Page_1One analysis posed the question when is an amendment not an amendment.  The answer – or rather the answer from the perspective of Congress – is when amendments are made as clarification to reflect the original intent of the  law.

code with additions deletions notedIf the Rigsbys’ qui tam claim were filed today, there would be enormous benefit in these amendments.  Even as a pending case, however, the Rigsbys’ claim is subject to certain provisions.

F. SECTION 4(F). EFFECTIVE DATE AND APPLICATION
(f) Effective Date and Application- The amendments made by this section shall take effect on the date of enactment of this Act and shall apply to conduct on or after the date of enactment, except that– Continue reading “Amendments to False Claims Act – implications for Katrina qui tam litigation”

Judge Senter’s decision on Relator’s claim of Retaliatory Discharge raises question – Where’s the evidence?

There is no evidence in this record to indicate State Farm had the authority to terminate the Relators’ employment status. Accordingly, I will grant State Farm’s motion for summary judgment on this portion of the Relators’ claim.

In awarding State Farm summary judgment on this point, Judge Senter put his yardstick for all decisions on the table – evidence and controlling law.

However, his decision on the Relators’ Claim for Retaliatory Discharge from Their Employment begs the question – Where’s the evidence?

In a zoo? Exactly. Isn’t that where seals usually do their tricks? In this case, the zoo is the Federal Court for the Northern District of Alabama and the trick seals do in that zoo is shield evidence – the contract between E.A. Renfroe and State Farm, for example.

Knowing what evidence is needed begs a second question that in turn begs a third – Could the Rigsby sisters overturn this decision? and, in their position, Would you focus on winning every battle or winning the war?

E.A. Renfroe  provides adjusters under contract with the Company to separately contracted insurance companies and other entities.  Not all employee leasing and temporary help agencies are as specialized as Renfroe but all professional employer organizations (PEO) contract with individuals and separately contract with employers.  However, these agencies are “third parties” and the contracting employer retains the authority to hire and fire, set compensation and other terms of employment. Continue reading “Judge Senter’s decision on Relator’s claim of Retaliatory Discharge raises question – Where’s the evidence?”

11th Circuit overturns Scruggs contempt citation!

Renfroe’s suggestion of mootness by virtue of Scruggs’ satisfaction of the June 5, 2008, contempt judgment is unavailing… The satisfaction of a joint and several liability does not moot the appeal of the debtor satisfying the judgment. See United States v. Balint, 201 F.3d 928 (7th Cir. 2000) (citing Corley v. Rosewood Care Center, Inc., 142 F.3d 1041, 1058 (7th Cir. 1998)) (“Payment of the sanction does not moot the appeal because the appellate court can fashion effective relief to the appellant by ordering that the sum paid in satisfaction of the sanction be returned”)…

That interesting piece of information comes from a footnote in the 11th Circuit ruling vacating Judge Acker’s Order.

The Sun Herald has the story and the 11th Circuit’s ruling.  Way to go, Anita Lee!

The 11th U.S. Circuit Court of Appeals has overturned a federal judge who cited then-attorney Dickie Scruggs for contempt of court…Acker held both Scruggs and the adjusters, sisters Cori and Kerri Rigsby, in contempt of court when the records were not returned to the Rigsbys employer, independent adjusting firm E.A. Renfroe. Acker levied a $65,000 fine to compensate Renfroe’s attorney’s fees in pursuing the records.

Scruggs paid the fine into a holding account and appealed Acker’s decision.

Renfroe, which supplied adjusters to State Farm after Katrina, had sued the Rigsbys in the company’s home state of Alabama for breach of contract. The appellate court held that Scruggs was not a party to the Renfroe vs. Rigsby lawsuit and, therefore, could not be held in contempt. The appellate judges also removed Acker from any further proceedings in the case.

The 11th Circuit ruling has Acker eating his own words:

…Based upon our review of the district court’s two contempt orders in this case, we conclude Continue reading “11th Circuit overturns Scruggs contempt citation!”

Evidence of criminal wrongdoing cannot be a trade secret – Rigsbys answer State Farm’s Counterclaim

Evidence of criminal wrongdoing – documents which are the utensils through which a crime is committed – cannot be a trade secret.

Sop’s excellent post on behavioral economics provides the contextual frame for the Rigsbys’ Answer to State Farm’s Amended Counterclaim seeking Summary Judgment for Retaliatory Discharge. From that perspective, we start with the Conclusion:

All Of State Farm’s Damage Flows From Its Own Criminal Conduct, Not Relators’ Actions.

  • Since at least September 3, 2005, State Farm Insurance, E. A. Renfroe & Company,and its other many co-conspirators have been engaged in a concerted effort to defraud the United States through its National Flood Insurance Program.
  • State Farm sent a “catastrophe team” to the Gulfcoast for the purpose of carrying out a complex scheme to reduce the amount of cash outlay that State Farm and its reinsurers would have to expend.
  • One mechanism selected for this purpose and process was a plan to push as much of  the coverage issues as possible off on the National Flood Insurance Program through the submission of false and fraudulent claims.  The chief facilitator of this plan was a State Farm employee by the name of Alexis King.
  • Any damages sustained by State Farm as a result of its own criminal and unlawful conduct flow from its own inequitable actions and are not the result of the Rigsbys’ reporting that criminal and unlawful conduct to federal and state authorities.
  • State Farm cannot pawn off on the Relators the costs relating to the defense of their own criminal conduct by claiming that the damages relate to the access of its computer systems.
  • Neither can State Farm make out a claim that a systematic plan to cheat the federal government, the roughly 173,000,000 United States taxpayers, and the Mississippi policy-holders out of billions of dollars is a “trade secret” as that term is commonly understood.

If the logical thinking of Counsel Continue reading “Evidence of criminal wrongdoing cannot be a trade secret – Rigsbys answer State Farm’s Counterclaim”

Borrowed servants? Great idea, could use one who irons and cooks. (a Rigsby qui tam post)

Alabama law recognizes the borrowed servant doctrine as a complete defense to liability…(11th Circuit)

In other words, under Alabama law, Renfroe had no liability to State Farm and the Rigsby sisters could dismiss their claims against against Renfroe without impacting their case against State Farm.

the Alabama Supreme Court recognized that “one [Rigsby] in the general employ of one master [Renfroe] may with respect to particular work be transferred to the service of a third person [State Farm] in such a way that he becomes for the time being the servant of that person, with all the legal consequences of that relationship.” (United States Fidelity & Guaranty Co. v. Russo Corp. with names inserted) Continue reading “Borrowed servants? Great idea, could use one who irons and cooks. (a Rigsby qui tam post)”

Did Chip Merlin find a slabberator? Are Computerized Estimates by Pilot Catastrophe Adjusters Low Because of a Special Database? (with a Rigsby qui tam tag on from SLABBED)

Did Chip Merlin discover the slabberator mentioned in the scheme? That I don’t know; but, he definitely happened upon some interesting information  — cross posted below — and the title of his related postposes a very interesting question: Are Computerized Estimates by Pilot Catastrophe Adjusters Low Because of a Special Database?.  SLABBED tags on to the end of Merlin’s post with comments linking the Rigsby qui tam.

Some Mondays are more interesting than others. When I go to conferences with adjusters, I make a point to ask about “in the street” information on insurers I am litigating against. The information and leads to witnesses or evidence are often extremely valuable to my clients. Adjusters know when the orders from claims management are wrong and aimed at paying less than what is fairly owed. Most want to disclose facts about insurers that wrongly demand underpayment.

A current problem regarding the disclosure of such activities is that catastrophe firms and insurers usually make the individual catastrophe adjusters sign confidentiality and non-disclosure agreements preventing whistle blowing from ever taking place. These agreements should be illegal. Can you imagine any reason society should tolerate contracts that prevent employees from disclosing improper claims conduct? What if the mafia could enforce such agreements? Yet, that is largely why Renfroe sued the Rigsby sisters–to shut them up about State Farm’s multiple engineering reports indicating excluded flood rather than covered wind caused damage to State Farm’s customers. (emphasis added @ SLABBED) Continue reading “Did Chip Merlin find a slabberator? Are Computerized Estimates by Pilot Catastrophe Adjusters Low Because of a Special Database? (with a Rigsby qui tam tag on from SLABBED)”

SLABBED Daily – April 30 (update:Rigsby qui tam, MRGO)

I could offer the reason this second evening edition of the SLABBED Daily is that I was waiting on Judge Senter’s bit of housekeeping news:

TEXT ONLY ORDER finding as moot Defendant Exponent, Inc.’s  Motion to Dismiss; finding as moot Defendant Jade Engineering’s  Motion to Dismiss for Lack of Jurisdiction; and finding as moot Defendant Jade Engineering’s Motion to Dismiss. These motions are rendered moot in light of the Court’s  order dismissing these two defendants, among others. NO FURTHER WRITTEN ORDER SHALL ISSUE.

The truth, I’m sorry to say, is that I just got so caught up in MRGO that I forgot!  I don’t expect the qui tam lawyers to forget about the two events noticed yesterday – their upcoming deposition of Lecky King on May 5 and Jack Ford’s the following day.

However, according to the Notice of Supplemental Production also on the Docket yesterday, State Farm had a little trouble remembering important things, too.

State Farm has so far been unable to confirm to its satisfaction whether exhibit 7 to the April 30 and May 1, 2007 Cori and Kerri Rigsby deposition transcripts in McIntosh is still subject to restrictions. For that reason, out of abundance of caution, Exhibit 7 to those depositions is not being produced at this time.

Otherwise, the included a list of 16 items produced and delivered to the attorneys for the Rigsby sisters and this snark:

Nothing in this submission constitutes consent by State Farm to the Rigsbys Continue reading “SLABBED Daily – April 30 (update:Rigsby qui tam, MRGO)”

SLABBED Daily – April 29 (Politz, O’Keefe, Rigsby, Minor)

Jumping right in to this sea of documents with the Reply to Nationwide’s Response filed by counsel for Mrs. Politz.

Clearly, even Nationwide cannot present any authority to dispute Plaintiffs’ arguments that no corroborating medical testimony is required for Mrs. Politz to testify as to how Nationwide’s conduct made her feel.

Nationwide instead seeks to enflame the Court’s sensibilities by continually mentioning what it refers to as Plaintiff’s “discovery abuses,” referring it its previous Motion to Strike, which the Court has already ruled upon. Primarily, Nationwide contends that Mrs. Politz was somehow being sneaky or acting in bad faith by not divulging to Nationwide that she had been prescribed anti-depressants until her first deposition on November 3, 2008.

Mrs. Politz is an honest and pleasant, sixty-seven year old woman who lost everything she owned, had her claim basically denied in full for two years, had to come out of retirement to go back to work to make ends meet,subsequently lost her husband, and underwent open heart surgery in early 2007. Needless to say, she has been through a lot, and can be absentminded at times. That does not tarnish the fact that she is an honest and intelligent woman…

The only thing that Mrs. Politz failed to divulge until her first deposition in November 2008 is the fact that she had been prescribed anti-depressants. Mrs. Politz did not divulge even to her attorneys that she was taking anti-depressants. Can Nationwide attempt to use that information to impeach her credibility at trial? Certainly it can. However, Mrs. Politz should not be subject to the severe sanctions sought by Nationwide simply because she forgot something in her interrogatory responses and remembered it during her deposition. Nationwide has fully explored the issues at this point, and it has now had this information in hand for almost six months.

As I recall, the question asked Mrs. Politz was had she ever sought treatment for her mental health.  If correct, that explains her response.  The anti-depressants were not prescribed by a mental health professional.

Next up, O’Keefe v State Farm and the Plaintiffs’ Motion to Quash Subpoena Duces Tecum.  The O’Keefes claim State Farm has once again “gone fishing” – this time for information on their insurance policy with USF&G.

The subject Subpoena should be quashed because it seeks information not reasonably calculated to lead to the discovery of Continue reading “SLABBED Daily – April 29 (Politz, O’Keefe, Rigsby, Minor)”

BREAKING NEWS! Rigsby sisters move to dismiss defendant Renfroe

It took two motions to dismiss all five counts against E.A. Renfroe in the Rigsby qui tam  case.  Apparently, dismissing Count V, allegations of retaliation against the whistle-blowers, does not require consent from the Department of Justice, unlike the Motion to Dismiss Counts I-IV:

Cori and Kerri Rigsby (the “Relators”), by and through their counsel, and, pursuant to Federal Rule of Civil Procedure 41(a)(2), move to voluntarily dismiss Counts I through IV of their Amended Complaint as to E.A. Renfroe & Company, Inc., Gene Renfroe, and Jana Renfroe (the “Renfroe Defendants”)…

The dismissal of these Counts against the Renfroe Defendants is in the best interests of justice and judicial economy. Specifically, Relators and the Renfroe Defendants have mutually agreed and request that (a) the Court, upon the United States’ consent, dismiss with prejudice as to Relators and without prejudice as to the Continue reading “BREAKING NEWS! Rigsby sisters move to dismiss defendant Renfroe”

How do you spell Renfroe v Rigsby? O-V-E-R

No need to spell relieved when Judge Acker’s lip prints are all over his Order kissing Renfroe v Rigsby good-bye – and, just guessing, but I suspect there’s lipstick on the Rigbys’ copy and Renfroe’s, too.

The court having been informed that the parties in the above entitled action have reached a settlement, the action is hereby DISMISSED WITH PREJUDICE. The parties shall have until 4:30 p.m., April 30, 2009, to request the substitution of a modified stipulated final judgment and to inform the court what should be done with the documents in the court’s custody. Unless there is a joint request to relinquish the documents to a named person, the documents will be shredded by the court.

The parties shall bear their own respective costs. DONE this 7th day of April, 2009.

Judge Acker’s realization that he’s stuck with a truckload of qui tam evidence in his office reminds me of State Farm’s Response to Relators’ Motion for Leave to Propound Expedited Document Requests in Order to Respond to Defendants’ Pending Dispositive Motions:

Turn the clock back to August 27, 2008: Continue reading “How do you spell Renfroe v Rigsby? O-V-E-R”