Tag: Branch Consultants Qui Tam

Anita Lee reports on the Rigsby qui tam Status Hearing

Although I wished to have been a “fly on the wall”, I don’t think I could have held on for four hours – and Anita Lee reports that’s just how long the attorneys argued:

Judge L.T. Senter Jr. is weighing whether to dismiss a whistle-blower lawsuit against State Farm Fire & Casualty Co. or expand its scope beyond one policyholder’s Katrina claim.

Attorneys spent four hours in federal court Wednesday presenting their arguments to Senter, who is presiding over his last major Hurricane Katrina case, Rigsby vs. State Farm.

State Farm attorneys argue the case should be dismissed because sisters and former insurance adjusters Cori and Kerri Rigsby have turned up no evidence of fraud during extensive pre-trial investigation, called discovery. Senter limited the scope of discovery to one policyholder claim, McIntosh, because the Rigsbys have firsthand knowledge of how it was adjusted.

Attorneys for the Rigsbys argue they have discovered a pattern of fraud by State Farm and should be allowed to expand discovery beyond the McIntosh claim. The Rigsbys maintain State Farm minimized its costs for wind-damage claims by overcharging the National Flood Insurance Program for losses caused by storm surge.

It takes two to tango but you can’t dance around the fact that an “exemplar case” alone is not the widespread scheme alleged in the Rigsbys’ complaint. In that regard, Judge Vance’s related decision in the Branch Consultants qui tam case is insightful: Continue reading “Anita Lee reports on the Rigsby qui tam Status Hearing”

Allstate files Answer in Branch – and this I couldn’t make up!

My calendar was marked with the due date for Allstate’s Answer to the Branch SAC (Second Amended Complaint); and, given the Allstate Motion for Extension of Time…and…Page Limits, I expected the “good hands” to mix things up:

In its notice of nonintervention filed in Denenea, the Government stated that ‘with the addition of Allstate as a defendant in Branch Consultants, the question of whether the jurisdictional bar under 31 U.S.C. § 3730(b)(5) is triggered as to either the relator in Denenea or the relator in Branch Consultants arises’…Allstate seeks a ten day extension of the deadline for it to respond to the SAC so that Allstate may address the impact of the Denenea action on the viability of the SAC’s claims against Allstate…

Allstate also respectfully moves for an extension of the page limit…In addition to the issues raised by the Denenea action, Allstate’s motion will address the first-to-file, res judicata, and law of the case issues raised by the Rigsby complaint and this Court’s and the Fifth Circuit’s prior rulings dismissing Allstate under the first-to-file rule.”

Allstate, however, did more than just mix things up.  The Company’s Answer to the Branch complaint reads as if Abbott and Constello were heading Allstate’s legal team and offering who-filed-first as a defense! Continue reading “Allstate files Answer in Branch – and this I couldn’t make up!”

Branch files Appeal of Magistrate’s Order

“No wonder you’re late. Why, this watch is exactly two days slow.”

SLABBED reported the Magistrate’s Order in Shall we dance?…, a post that focused on what the Branch plaintiffs argue was the Magistrate’s “flawed construction” of a “Loss Shifting” and “Inflated Revenue” dichotomy.   In Branch’s Motion for Appeal of Magistrate’s Order, however, the Plaintiffs lead with the suggestion the Magistrate’s watch, like that of the March Hare, was running “exactly two days slow” as “There Was No Undue Delay” and, therefore, “There Is No Undue Prejudice”:

The sole basis for the Magistrate Judge’s denial of leave to add the allegations concerning adjusting fees is that Defendants would be “unduly prejudiced” by Branch’s “undue delay.” Order at 18-19. The record does not support such a finding, and the Magistrate Judge’s ruling is clear error for at least three reasons. First, there was no undue delay… Accordingly, “it cannot be said that plaintiff’s motion as a product of bad faith, dilatory motive or undue delay when plaintiff satisfied the deadline set forth in the Court’s new Scheduling Order.” Mendoza v. City of New Orleans, 2007…

Second, the Magistrate Judge’s conclusion that there would be undue prejudice is clear error because Branch filed its Motion for Leave at the very beginning of discovery… Branch is aware of no case finding undue prejudice under such circumstances…Third, the Order should be reversed because it narrowly construes the First Amended Complaint (“FAC”) in a manner that disposes of Branch’s claims based on properties for which the homeowners carrier and the WYO carrier are not identical.

As this Court recognized, Branch “pleaded the existence of a broad scheme to defraud the government” following Hurricane Katrina. Departing from this ruling, the Magistrate Judge concluded that there are two “entirely different schemes,” the “loss shifting” scheme and the “inflated revenue” scheme, and held that Branch’s allegations encompass only the “loss shifting” scheme. (citations omitted, emphasis added)

In a related post, “It’s the same old song But with a different meaning”… , SLABBED pointed out the Defendants’ strategy is to word their briefs in a way that attempts to put the Magistrate “in a box” when she issues Orders in the case.  The Appeal demonstrates it was this strategic boxing that resulted in the Magistrate seeing the “broad scheme” as “two ‘entirely different'” schemes: Continue reading “Branch files Appeal of Magistrate’s Order”

Aggregate Reserves – the meme for the scheme and the schemata of the Defendants in Branch qui tam

Memes, of course, are contagious and those about Katrina litigation tend to spread like wildfire.  In that regard, Judge Vance, who appears to be up-to-date on her shots and fully immunized, might want to suggest others get booster shots before decisions are made on Branch’s Motion to Compel.  Defendants’ response to the Branch motion is an aggregate of aggregation of epidemic proportion.

The schemata employed by the defendants are designed to weaken Branch to the point the case is dismissed as quickly as possible by limiting Branch discovery.  The associated attack of the  aggregated aggravators, a variation of hide and go-seek, targets Interrogatory No. 4 from the Branch Motion to Compel.  Interrogatory No.4  requests aggregate data on each insurer’s Katrina reserves, “the amount of money…[an]… insurance company sets aside on its books to ensure the ability to pay…[claims]”:

As noted in Nicholas v. Bituminous Casualty Corp.:

Setting reserves is a method of managing litigation in which attorneys, claims adjusters and/or line personnel compile their mental impressions and opinions concerning the substance of the litigation as well as the cost of litigation. Specifically, when setting a reserve, attorneys and claims personnel not only assess the value of the claim based on the available evidence and the strengths and weaknesses of the claim, but also take into consideration the probability of an adverse judgment, the jurisdiction, and the fees and expenses that may be incurred in defense of the claim.

Consistent with the schemata, the meme of the aggregated aggravators is one that frames any Branch discovery not specific to a claim as a “fishing expedition”.  While that meme falls short, I did go fishing hoping to catch something that would be relevant to the Branch request for each company’s aggregated reserves for Katrina claims – and while fishing I caught Central Georgia Anesthesia Servs.,P.C. v. Equitable Life Assurance Society of the U.S.,: Continue reading “Aggregate Reserves – the meme for the scheme and the schemata of the Defendants in Branch qui tam”

Please release me, let me go Protection in Branch qui tam in the context of Judge Vance’s post-trial Order in Weiss v Allstate

Branch is rockin’ and rollin’ over Protective Orders!  Chain of fools was the opening act for please release me, let me go Elvis-impersonating Allstate’s attempt to place trial exhibits under seal in Weiss v Allstate.  Judge Vance’s post-trial Order in Weiss provides context for an examination of the protective motions and orders in Branch:

To counter the presumption in favor of the public’s common law right of access to court records, Allstate argues that the Court should seal the documents designated Exhibits 7, 31, and 31A because other courts have found similar insurance materials to be confidential in nature, and thus subject to a protective order. Allstate also asserts that it would be prejudiced in litigating other claims arising from Hurricane Katrina if plaintiffs in those other cases had access to the exhibits outside of the normal course and scope of discovery. The Court finds that neither interest is sufficient to overcome the right of public access in this instance.

Allstate does not point to a single document or excerpt of a document within the approximately 185 pages that comprise Exhibits 7, 31, and 31A that might be harmful to its competitive position. Its failure to do so is particularly telling given the facially benign nature of these exhibits. Exhibit 7 includes a press release, a list of publicly available phone numbers, tips to policyholders affected by Hurricane Katrina, and suggested answers for its personnel to use when responding to questions from policyholders with hurricane claims. Exhibit 31 and 31A contain customer service guidelines to be followed by Allstate personnel, including information that was intended to be passed along to customers. It is not apparent that these documents contain sensitive material of any kind.

Judge Vance’s use of the word benign provides an interesting contrast to “our documents are malignant” espoused by insurer defendants in Katrina policyholder litigation.  As a result, there has been an epidemic of protection orders in federal courts in both Mississippi and Louisiana. However, as the Order indicates, insurers cry “malignant” but submit the “benign”.

Why our courts have been quick to issue protective orders will be one of the legacy questions of Katrina litigation.  Some have suggested the Magistrate Judges were convinced protective orders were the only way to assure plaintiff’s access to needed documents – a suggestion that begs another why.  Rather than speculate at the answers, let’s look at evidence of alternatives. Continue reading “Please release me, let me go Protection in Branch qui tam in the context of Judge Vance’s post-trial Order in Weiss v Allstate”

chain, chain, chain of fools – Liberty Mutual’s and Standard Fire’s motions to break chain and sever from Branch defendants

Aretha I’m not but a chain of fools I can spot –  and, despite their claims to the contrary, there’s no weak link between either Liberty Mutual or Standard Fire and the other Branch defendants.  I will concede, however, both companies rattle the chain more than most.  In fact, they make so much noise that I would have missed the motions to sever each filed in January had the two defendants not recently filed motions for leave to Reply to the Branch Response in Opposition to their motions..

Apparently, I’m not the only one who ignored the rattling and moved on.  While both argue against being joined with other defendants, the two companies are obviously joined in a defense strategy to sever.  Each requested a hearing on its motion on the same day, the 3nd of February, a date that passed without a response from the Court.  Perhaps, I’m not the only one these two links in the “chain” didn’t fool.

The WYO Accounting Procedures Manual, Exhibit 1 to the Branch Opposition brief, documents the link. Liberty Mutual makes a foolish attempt to fool the Count by claiming Branch “espouses a new theory of liability” by arguing “the defendants’ unauthorized/fraudulent use of the DHHS PMS” as sufficient to “satisfy Federal Rule of Civil Procedure 20(a)(2)’s requirement that the right to relief against joined defendants must arise out of the same series of transactions or occurrences”.

Surely, neither defendant expects the Court to believe its company does not have to use the established NFIP procedures and system to file flood claims!  The word games these two companies are playing is based on the same flawed analysis of policyholder claims data used to justify streamlined or steamrolled procedures.

Granted, each claim represents a different property and all that claim handling entails. However, the Feldman procedures erred because the number one insurer’s claims are to the total number of claims is a reliable indicator of nothing other than the calculated percentage.  Likewise, the number of exemplary claims Branch cited for a single defendant insurer is not a statistically reliable indicator of the extent of the alleged fraud.  The Branch opposition brief picks up from there: Continue reading “chain, chain, chain of fools – Liberty Mutual’s and Standard Fire’s motions to break chain and sever from Branch defendants”

hide-and-go-seek in Branch qui tam – and Liberty Mutual, you’re &#IT

96 – 97 – 98 – 99 -100!  Time to open your eyes Magistrate Shushan!

Liberty Mutual is “It” and the game is hide-and-go-seek and see if Branch can find you.  Two new entries of the docket show how the game is played.  The first is an Order issued by Magistrate Shushan:

Considering the foregoing Ex Parte Motion to Seal Pleading (“Motion”) filed by Defendant Liberty Mutual Fire Insurance Company (“Liberty Mutual”), IT IS HEREBY ORDERED that Liberty Mutual’s Motion be and is hereby GRANTED. The Clerk of Court shall designate Record Document Nos. 387-2 and 395 as “Confidential”, and seal said pleadings.

Sop linked the motion granted by this Order in his post Evidence of bad faith is not a trade secret. Hidden in a footnote for those who seek to find was Liberty Mutual’s admission the documents it wanted to seal had been given to Branch in fall 2009 – but, never fear, “Liberty Mutual is in the process of re-bates labeling its production, and will provide all parties with a new set of documents labeled “HIGHTLY CONFIDENTIAL.”

Personally, I’d never trust anyone who thought it was possible to “re-bates” a label.

Now, you’ll see why.  Liberty Mutual didn’t have the decency to even wait for the ink to dry on Shushan’s Order before the Company filed a Motion for Leave to File Sur-Reply Memorandum in Support of Opposition to Branch Consultants Motion to Compel.

However, the Memorandum does not address points in Branch’s Motion to Compel (can you believe it?).  Instead, “Liberty Mutual’s Sur-Reply….”merely seeks to address two misstatements related to Liberty Mutual contained within Branch’s reply brief (R. Doc. No. 395)”.  The second concerns the arrest of Liberty Mutual’s insured: Continue reading “hide-and-go-seek in Branch qui tam – and Liberty Mutual, you’re &#IT”

Judge Vance denies Defendants Motion for Interlocutory Appeal and Branch qui tam rings in the new with Motion to amend complaint adding Allstate and Pilot Catastrophe Service

Defendants contend that a specific question of law controls this matter: “whether a ‘sleuth’ like Branch, without first-hand involvement in an alleged fraud, can qualify as an ‘original source’ by providing additional examples of a publicly disclosed, alleged fraudulent scheme.”

…The Court need not resolve this question because district courts do not certify “questions” for the court of appeals upon the grant of a § 1292(b) motion.

The eleven-page Order and Reasons s is classic Vance – another pick ’em up, put ’em down tutorial on qui tam law!

Defendants’ primary argument is this: the Supreme Court, in Rockwell International Corp. v. United States, 549 U.S. 457, 470- 71 (2007), abrogated the Fifth Circuit’s “original source”decision in United States ex rel. Laird v. Lockheed Martin Eng’g & Sci. Servs. Co., 336 F.3d 346, 356 (5th Cir. 2003)…Defendants contend that the Court’s Order “diverges from Fried based on pre-Rockwell, out-of-circuit decisions,” R. Doc. 237 at 1, and that there is substantial ground for difference of opinion as to whether a relator who initiates an investigation after an alleged fraud can be considered an original source…

Initially, although defendants make repeated use of the term “pre-Rockwell,” they point to nothing in Rockwell itself that makes it a watershed decision as to the specific issue they identify. Continue reading “Judge Vance denies Defendants Motion for Interlocutory Appeal and Branch qui tam rings in the new with Motion to amend complaint adding Allstate and Pilot Catastrophe Service”

Judge Vance’s decision consistent with ABA analysis of Supreme Court’s Rockwell decision – a Branch qui tam update

A post on Insurance Law Hawaii (h/t CLS) sent me racing to the Branch qui tam docket thinking I’d missed an Order more recent than those I linked in taproot – digging out the fact on Branch qui tam.

As it turned out, I had not.  Sop posted Judge Vance’s 69-page Order of October 19 in Judge Sarah Vance Educates Insurers about Federal Court Jurisdiction in False Claims Act Cases that I linked in taproot.

However, while SLABBED focused on the big picture of Judge Vance’s ruling; i.e., Branch was moving forward,  Tred Eyerly, the attorney who writes Insurance Law Hawaii, pointed to the ruling of Branch Consultants qualified as an “original source” – a ruling the Defendant are challenging in their Motion for Certification of an Interlocutory Appeal.

State Farm tried to run the “original source” rabbit in the Rigsby qui tam; but, the dog didn’t hunt.  Let’s take a look at why and see if we pick up the scent of the “good neighbor”. Continue reading “Judge Vance’s decision consistent with ABA analysis of Supreme Court’s Rockwell decision – a Branch qui tam update”