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”

Haag in the Church of What’s Happening Now in Rigsby qui tam

Tim Marshall, storm chaser…drove from his home in the Dallas area to a Slidell parking garage in an extended cab Chevy pickup, loaded down with supplies and technology, to track Hurricane Katrina…

The Sun Herald’s Anita Lee described Marshall, a shareholder in Haag Engineering, as appearing every inch the mild-mannered engineer in his business suit and oversized wire-rimmed glasses on the witness stand. But get him out of a courtroom and it’s like Superman stepping from the phone booth.

Oklahoma attorney Jeff Marr, on the other hand, told Lee, The jury hated him…They viewed him as a professional witness… gave him the consideration his expert opinion deserved and wrote him off.

Following Hurricane Katrina, Haag’s Superman, the professional witness, became a survey-thumping Reverend Leroy holding forth in the Church of What’s Happening Now -Mississippi’s Southern District Federal Court.

Abundant evidence exists to document the role Haag played in State Farm’s claims handling.  The date of the Survey’s publication, on the other hand, only documents the date a published report was available; but, Haag’s post-hearing brief attempts to play word games with the Court:

The evidence [sic] has shown that the Haag Survey did not exist at the time the McIntosh flood claim was adjusted and submitted to the government.

The 30(b)(6) deposition of Marsha Slaughter in Williams v State Farm, taken October 19, 2006, provides a start point for discussing the Haag Survey in the context of State Farm’s claims handling after the storm – contrary to what Haag’s recent [sic] Answer and Amended Answer to the Rigsby qui tam complaint suggests. Continue reading “Haag in the Church of What’s Happening Now in Rigsby qui tam”

Evideniary disclosure is Michael Oher of Rigsby qui tam

Evidentiary disclosure is Michael Oher protecting the Rigsby qui tam.

Nonetheless,  State Farm, Forensics, and Haag each recently took a shot – a strategic play intended to force Judge Senter to reveal his game plan.

On its face, Judge Senter’s focus on the McIntosh claim seems too narrow.  In the context of evidentiary disclosure in qui tam litigation, however, it takes on a different look  – one that makes evidence such as the McIntosh claim secondary to the scheme of the fraud.  A Fifth Circuit decision explains:

We hold that to plead with particularity the circumstances constituting fraud for a False Claims Act § 3729(a)(1) claim, a relator’s complaint, if it cannot allege the details of an actually submitted false claim, may nevertheless survive by alleging particular details of a scheme to submit false claims paired with reliable indicia that lead to a strong inference that claims were actually submitted.

The “reliable indicia” include those contained in the Complaint as well as the those in the Disclosure Statement. Continue reading “Evideniary disclosure is Michael Oher of Rigsby qui tam”

Read ’em while they’re hot – briefs filed by State Farm, Haag, Forensic, and Rigsbys post-hearing in the Rigsby qui tam

keep in mind the purpose of this hearing. We’re dealing here with summary motions, we’re dealing here with is there a genuine issue of material fact that will justify this case going forward to a full-blown trial. Would y’all like to brief that for me in writing rather than come back this afternoon and argue?  What about it, Plaintiff?

Who wouldn’t rather write a brief than “come back this afternoon” on a Friday? No wonder Judge Senter is so well-liked.  The post-hearing briefs were filed directly with Judge Senter, as ordered, and did not appear on PACER until today – the result of a State Farm motion SLABBED reported in up their sleeve or in their briefs – State Farm comes up with another Eddie Haskell motion in Rigsby qui tam

Regardless of the ultimate outcome of this Action at the trial court level, there likely will be an appeal by one or more Parties and “[u]nder this Circuit’s general rule, arguments not raised before the district court are waived and will not be considered on appeal unless the party can demonstrate ‘extraordinary circumstances.’”

Had State Farm said no more in Defendants’ Joint Motion to Require All Parties to File their Previously Submitted Respective Post-Hearing Briefs in the Record, there might have been a different title; but, this paragraph followed:

Further, as a general proposition, the Fifth Circuit “is barred from considering filings outside the record on appeal….” Accordingly, it is especially important to all Parties’ respective ability to prosecute a potential appeal to have all post-hearing summary judgment briefs in the record.

And, then, there was this gotcha: Continue reading “Read ’em while they’re hot – briefs filed by State Farm, Haag, Forensic, and Rigsbys post-hearing in the Rigsby qui tam”

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)”

Missed the Easter Bunny? Join the qui tam hunt, find what State Farm wants to keep hidden, and win chocolate egg – State Farm files Notice and Objections to Rigsby Exhibits

Rule 403. Exclusion of Relevant Evidence on Grounds of Prejudice, Confusion, or Waste of Time

Although relevant, evidence may be excluded if its probative value is substantially out­weighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.

You could 403 this post title and get no argument from me.  However,  many of the 31 items listed by State Farm are clearly relevant to me. Of course, the Easter Bunny was relevant,  too – as in, what is it we’re trying to hide here.

Continue reading “Missed the Easter Bunny? Join the qui tam hunt, find what State Farm wants to keep hidden, and win chocolate egg – State Farm files Notice and Objections to Rigsby Exhibits”

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”

There are as many opinions as there are expert in Rigsby qui tam

Pulling the documents filed today along with Judge Senter’s Order took a lot more time than I expected because of the number and size of Exhibits.

Both parties identified four experts.  State Farm’s are interesting in that two are from Florida and the other two are from Tupelo – right, Tupelo.  Hold that thought for a moment and take a look at the two from Florida:  Curtis Gurley (Exhibit A) and Robert Dean (Exhibit B), both from the University of Florida’s Department of Civil and Coastal Engineering.

Now, back to Tupelo, birthplace of Elvis and a rather unusual place to find not one, but two, expert witnesses on hurricane damage.  Tupelo is located in the red clay hills of the northeast corner of Mississippi in what is call the foothills of the Appalachian Mountain region – just about as far from the Coast as one can travel and still be in Mississippi.

However, Tupelo is also home to Webb Sanders Williams, PLLC; and, the Webb is State Farm attorney Dan Webb who at one time practiced law with none other than Tim Balducci.  Small world.  Continue reading “There are as many opinions as there are expert in Rigsby qui tam”

Breaking News -Judge Senter’s Order allows deposition of Lecky King in Rigsby qui tam UPDATED with link and comment

There are two types of discovery sought by the Relators, namely documents related to the insurance claim giving rise to this cause of action (referred to herein as “the McIntosh claim” or “loss”), and the depositions of seven individuals (three of whom are associated with the Defendants, with the remainder being witnesses to the McIntosh loss).

Defendants, speaking primarily [268] [269] through State Farm Fire and Casualty Company (State Farm), do not object to producing the McIntosh flood claim file; the McIntosh homeowner’s claim file; any photographs or video images of the McIntosh property in State Farm’s possession; and repair invoices and related materials concerning the McIntosh property.

Obviously, that leaves the issue of the seven depositions requested by the attorneys representing the Rigsby sisters – and that’s where I found Judge Senter’s thinking in the Order for discovery prior to the upcoming pretrial hearing most interesting.

He clearly gave the subject a great deal of thought; but, the question is what was he thinking. My non-lawyer reading about the False Claims Act leads me to believe that had he ruled against the Rigsbys without allowing discovery, his decision would have been ripe for appeal.

I want to believe he allowed discovery, and particularly the deposition of Lecky King, because it is unquestionably the right thing to do.  There will never be the needed healing if the people on the Coast feel the Court has not been fair. Continue reading “Breaking News -Judge Senter’s Order allows deposition of Lecky King in Rigsby qui tam UPDATED with link and comment”