Rigsbys seek Order compelling State Farm to completely and promptly produce all 8000 “late-disclosed documents”

On January 14, 2011, more than a year after responses to Relators’ first document requests were due and more than six months after the close of discovery, State Farm disclosed the existence of another 8,000 pages of documents in three boxes labeled “McIntosh Zone Litigation File.” These Documents had been “discovered” in the office of Terry Blaylock, State Farm’s 30(b)(6) witness who was designated specifically to testify on matters related to State Farm’s document production and document retention practices.

State Farm acknowledges that the Documents were “brought . . . to the attention of the State Farm corporate legal department in December 2010” but the existence of the Documents was not disclosed to Relators at that time. Despite the fact that a hearing related to dispositive motions and trial scheduling was to occur on January 12, 2011 and despite the fact that State Farm was taking depositions in this case during the last week of December and the first week of January, State Farm chose not to disclose these Documents to the Relators or this Court. Instead, on January 14, 2011, two days after oral argument, State Farm gave Relators a three-line privilege log that identified these 8,000 pages of Documents simply as “Zone litigation file for
McIntosh claim.”

The January 14 “privilege log” in its entirety provides as follows:

As the Rigsbys point out, “…The “log” contained no description of any of the individual Documents, did not identify by whom the Documents were created or collected, did not identify to whom the Documents were addressed or distributed, and failed to identify any privilege or other protection applicable to any such document”. (Relators’ Memorandum in Support of Their Motion for an Order to Compel Complete and Prompt Production of Late-Disclosed Documents in Scribd’ format below) Continue reading “Rigsbys seek Order compelling State Farm to completely and promptly produce all 8000 “late-disclosed documents””

Double Vision – Rigsbys and State Farm each file Notices citing Branch as “Intervening Authority”

So much for my thinking the next item listed on the Rigsby qui tam docket would be one of the two remaining motions argued at the recent Status Hearing.  State Farm filed its first Notice of Intervening Authority before the ink was dry on Judge Vance’s order dismissing the Branch qui tam case; and, when Judge Vance filed an Amended Judgment, State Farm filed a second Notice. (Notices in scribd format follow)

The Rigsbys legal team obviously differed with State Farm’s take on case and Friday they, too, filed a Notice of Intervening Authority citing the Branch decision (Notice in scribd format follows):

[T]he Rigsbys believe that the latest Branch decision again supports their motion to reconsider the scope of the current litigation. The Branch court’s ruling recognized that “a relator need not be an original source of the actual false claims made by the defendants to the government,” as long as the relator is “an original source of a certain core of information, such as the basic modus operandi of the fraud.” Thus, this most recent opinion reinforces the Branch court’s prior ruling, which held that original-source knowledge would have “entitle[d] [the Branch relator] to discovery on all the alleged instances of fraud in the loss-shifting scheme, even those outside the examples in the First Amended Complaint.”

State Farm incorrectly contends that the Branch decision suggests that the “threshold issue in this litigation” is the McIntosh claim rather than State Farm’s scheme to defraud the government. Continue reading “Double Vision – Rigsbys and State Farm each file Notices citing Branch as “Intervening Authority””

Breaking News – Judge Senter denies State Farm Motion to Dismiss Rigsby qui tam!

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!”

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”

Big crowd at Status Hearing for ex rel Rigsby v State Farm

Would love to have been a fly on this wall!

Minute Entry for proceedings held before Senior Judge L. T. Senter, Jr: Motion Hearing held on 1/12/2011. Court Hearing adjourned. APPEARANCES: August J. Matteis, Jr., Benjamin R. Davidson, C. Maison Heidelberg, Derek Yoshio Sugimura, Lucien C. Martinez for Plaintiffs; Michael B. Beers, Robert C. Galloway, Amanda B. Barbour, E. Barney Robinson, III, Jeffrey A. Walker, Benjamin McRae Watson, Phillip B. Abernathy, James R. Robie for State Farm; Larry G. Canada for Haag. RE 738 MOTION for Reconsideration of Scope of Proceedings in Light of Evidence Adduced in Discovery filed by Kerri Rigsby, Cori Rigsby, 734 MOTION for Summary Judgment filed by State Farm Fire and Casualty Company, 736 MOTION for Summary Judgment on Claims of Cori Rigsby filed by State Farm Fire and Casualty Company, 739 MOTION to Dismiss Due to the Rigsbys’ Repeated and Calculated Violations of this Court’s Seal Order filed by State Farm Fire and Casualty Company. (Court Reporter Kati Vogt (228)563-1751)(kbo) (Entered: 01/12/2011)

BIG NEWS – Judge Senter denies two State Farm motions despite the Company’s threat of appeal! (a Rigsby qui tam update)

Last Friday, this was “breaking news” but with my Christmas tree still up, I had to set priorities and these latest Orders from Judge Senter merit more than just a “pop-up” post. If you need background, check the SLABBED post published November 24, 2010, for Judge Senter’s earlier Orders admitting the testimony and/or report of Rigsby expert witnesses Dave Favre and Brian Ford.

After three years of following Katrina insurance litigation, much of it involving State Farm, I thought I’d reached the point where nothing would surprise me. However, State Farm’s legal eagles (AKA “the buckin fuzzards“) clearly proved me wrong with the Company’s Memorandum in Support of Motion for Reconsideration of the Court’s Opinion and Order re: The Brian Ford Report and Memorandum in Support of Motion for Reconsideration of the Court’s Opinion and Order re: Dave J. Favre, Sr.

However, I wasn’t as surprised by content as I was shocked by the threatening tone – and how it intensified in State Farm’s replies in rebuttal to the Rigsbys’ Response in Opposition to each of the Company’s motions. As I was reading, I began to wonder if Judge Senter felt like Travis Brickle when he took a look at State Farm’s briefs:

“You talkin’ to me? You talkin’ to me? You talkin’ to me? Then who the hell else are you talkin’ to? You talkin’ to me? Well I’m the only one here. Who the fuck do you think you’re talking to?”

For example, inState Farm’s Rebuttal brief asking for [demanding, IMO] reconsideration of Judge Senter’s decision on the admissibility of the Brian Ford report, the Company wrote:

Until now, no federal court has ever held that a document Continue reading “BIG NEWS – Judge Senter denies two State Farm motions despite the Company’s threat of appeal! (a Rigsby qui tam update)”

Judge Senter issues three Orders in Rigsby qui tam case

Let’s jump right in and start with Judge Senter’s Memorandum Opinion and Order on State Farm’s Motion to Exclude from Evidence the Settlement Agreement Between the Relators and Forensic Analysis & Engineering Corporation:

Mr. Robert Kochan (Kochan), on behalf of Forensic, signed the settlement agreement that is the subject of this motion…

State Farm contends that the terms of the settlement agreement and the statements the settlement agreement contains are hearsay and are therefore inadmissible…Relators acknowledge that the settlement agreement and the statements it contains are hearsay, but contend that the statements are still admissible…for purposes of impeaching Kochan, should his testimony at trial be inconsistent with the statements in the settlement agreement.

In the memorandum State Farm submitted in support of its motion, Kochan’s deposition testimony is extensively quoted. I have read these portions of Kochan’s testimony, and it does not appear to me that Kochan has denied the truth of any of the statements contained in the settlement agreement. In response to State Farm’s questions, Kochan has explained his understanding of these statements and the reason each of the statements was made, and he has done so in very precise terms. In the testimony I have read, he has done so without contradicting the statements set out in the settlement agreement…

To a certain extent, this motion asks the Court to make an abstract ruling, a ruling on the admissibility of potential impeachment material, without having the benefit of hearing what the witness will have to say under oath. For this reason, I will not rule the document inadmissible for the purpose of impeaching Kochan’s testimony at this time. I do agree with State Farm’s contention that the Forensic settlement agreement is inadmissible for any purpose other than impeachment of Kochan.

So, what did Judge Senter decide in his Order? Continue reading “Judge Senter issues three Orders in Rigsby qui tam case”

Rigsby qui tam Status Hearing postponed – ?

Your guess is as good as mine – the notice on the docket simply said:

RESET STATUS HEARING: Status Hearing RESET for 1/12/2011, 1:00 P.M., in Courtroom 506, Gulfport, Ms, before District Judge L. T. Senter, Jr. ALL Attorneys, who will participate in Trial, to be present.

If I learn more, SLABBED won’t keep you guessing.

BREAKING NEWS – Judge Senter denies Haag Engineering’s Motion for Summary Judgment in Rigsby qui tam

With just one day remaining before the December 1st Status Conference, Judge Senter continues to clear motions on the docket of ex rel Rigsby v State Farm.  Today he made short work of one – granting the Government’s Motion to Dismiss Forensic (FAEC) Without Prejudice – and moved on to a bigger piece of work, denying Haag Engineering Company’s Motion for Summary Judgment:

For the reasons set out below, this motion will be denied.

Relators have alleged that Haag participated, along with State Farm Fire and Casualty Company (State Farm), in a conspiracy to submit false claims for reimbursement of flood insurance payments made after Hurricane Katrina. The Realtors contend that this conspiracy was intended to maximize flood insurance payments and thereby reduce payments made to settle wind insurance claims.

There is no direct evidence that such a conspiracy existed. Relators rely upon the statements in a report Haag prepared for State Farm and the use to which State Farm put that report.  Relators contend that this report contains factual errors concerning the timing and effect of the storm winds and storm surge flooding and that these errors gave State Farm a plausible basis for giving its adjustors instructions that resulted in overpaying a substantial number of flood claims. Continue reading “BREAKING NEWS – Judge Senter denies Haag Engineering’s Motion for Summary Judgment in Rigsby qui tam”

Judge Senter sharpens his carving knife on Orders in Rigsby qui tam

Actually, Judge Senter pulled his knife out at the end of last week and while I was trying to find time to get those two Orders  posted, he was sharpening his knife on two more – but what  he has in mind is no  turkey, it’s the December 1st  Status  Conference on his schedule:

I have decided to continue the trial of this case from its present setting on December 1, 2010, and to set a status conference on that date to hear from all parties on the merits of the motions that remain undecided at that time.

Two motions pending “at that time” and mentioned in his  Order were the Government’s motion to vacate Judge  Senter’s  Order dismissing defendant Forensic and the Rigsbys’ motion to reconsider the scope of the proceedings.

These motions are fully briefed, and I do not anticipate requiring any additional briefings at this time. After this conference, I will reschedule the trial to accommodate my rulings on the pending motions.

Judge Senter should have known State Farm would consider that an  invitation.  In that context, today Judge Senter sent “regrets” to Butler Snow – and denied State Farm’s motion to declassify portions  of 30(b)(6) deposition of TRG (The Rendon Groups)in support of “the good neighbor’s “motion to dismiss the Rigsby’s case for repeated violations of the seal.  In his Order, Senter stated:

After reading the materials submitted in support of this motion, including the Rule30(b)(6) Deposition of the Rendon Group [Document 756, Exhibit 1] and theSupplemental Responses submitted by TRG [Document 756, Exhibit 2], it appears to me that the material in question has only marginal relevance, if any, to the merits of the State Farm motion [739] to dismiss. Continue reading “Judge Senter sharpens his carving knife on Orders in Rigsby qui tam”