Alternative New Media for the Gulf South
From the stupid burglar files someone (composite sketch on left) robbed Judge Vance’s place uptown last week stealing $100K worth of bling. It is rumored that stealing from a federal judge brings 10 years bad luck.
We have lots of uptowners in the Slabbed Nation. You folks be careful out there.
sop
As the core subject topic of this blog involves financial issues and the related legalities our audience here on Slabbed tends to be very well heeled and geographically diverse. I am gratified a fair number of you guys are reading the posts we’re doing on local issues such as the sack of sh!t politicians that run Jefferson Parish among others. One subject that we have not blogged much on but that we are following is the Danziger Bridge Shootings of unarmed Hurricane victims by NOPD in the early days after Katrina. Those interested in learning a bit more can click here for a great account of the events to this point as Judge Sarah Vance accepted the guilty plea of a 3rd officer involved in the cover-up to the crime. Here is a snippet:
Hunter, 33, said a New Orleans police sergeant fired an assault rifle at wounded civilians at close range after other officers stopped shooting and after it was clear that the police were not taking fire. He also says he saw another officer in a car fire a shotgun at a fleeing man’s back, although the man did nothing suggesting he was a threat to police. That man, 40-year-old Ronald Madison, who was severely mentally disabled, died of his wounds. Continue reading ““I don’t think you can listen to that account without being sickened by the raw brutality of the shooting and the craven lawlessness of the cover-up”: US District Court Judge Sarah Vance”
Oops! With an apology to Judge Vance and another to SLABBED readers, I have corrected my error and appropriately attributed the Order discussed in this post to Magistrate Shushan.
Magistrate Shushan’s autopsy-Order on the 2nd Amended Complaint filed by the Branch Consultants poses a new and entirely different challenge for reporting on an order issued in Branch – turning a technical manual into a non-fiction novel. In that context, Allstate is somewhat of a MacGuffin, “a plot element that catches the viewers’ attention…Commonly, though not always, the MacGuffin is the central focus of the film in the first act, and later declines in importance as the struggles and motivations of characters play out”.
Although Allstate is certain to be the “central focus” of public interest in the Order, it is important to note the Magistrate doesn’t know how this character will play out and her Order” is stayed until the District Judge resolves any appeal of the order”. In that regard, a footnote in the Order is telling of the story at this point:
In support of it motion for leave to amend, Branch states:
To be clear, whether Allstate is entitled to immunity under the first-to-file provision of the False Claims Act is not at issue in this motion (for leave to amend), and Branch has not attempted to fully brief the issue here. Rather, what is at issue is merely whether Branch may amend its complaint to attempt to state a claim against Allstate.
The story of claims handling following Hurricane Katrina is more of a thriller than a typical mystery. However, the Magistrate’s dénouement of the plot missed important clues and I momentarily digress from the discussion of Allstate’s role to examine her conclusion and related denial of the proposed incorporation of an inflated-revenue scheme. Branch alleged a loss-shifting scheme in both the original and first amended complaint.
In her Order, Magistrate Shushan declared, “The loss-shifting and inflated-revenue motives create two entirely different schemes”. I contend otherwise and suggest her decision indicates knowledge of the law can not overcome lack of experience with what “po’ folks” call “getting by” else she, too, would recognize the two are one in the same. 
On a much larger scale, the situation insurance companies faced after Katrina was similar. Like those who can’t meet their obligations when faced with an unexpected cost, insurers employed strategies that delay payment of thousands of policyholder claims and made partial payment on thousands more in the guise of mediated settlements. However, they also engaged in a “broad scheme” to “get by” for reasons that have been well documented since Katrina such as investments that were worth less or worthless. Continue reading “Shall we dance? Magistrate Shushan invites Allstate and Pilot adjusting to the party – Order grants in-part Motion to Amend Complaint REVISED AND CORRECTED”
Qui tam plaintiffs move to strike Fidelity’s Third-Party Complaint against its policyholders… Because Fidelity’s claims do not meet the appropriate standard under the Federal Rules of Civil Procedure and because third-party practice is considerably restricted in False Claims Act actions, the motion is GRANTED.
With 24-pages of Reasons supporting her Order, no one can call Judge Sarah Vance a party pooper for turning down Nielsen’s “morally correct” [sic] Third Party Demand.
Fidelity has filed an answer to Branch’s complaint, and this answer includes a complaint asserting claims against third parties.1 R. Doc. 247. Specifically, Fidelity, acting in its “fiduciary capacity” as a “fiscal agent of the United States,” brings claims against certain of its own policyholders for breach of contract and unjust enrichment, as well as the common-law doctrine of payment by mistake. Fidelity proposes to sue those Fidelity policyholders whose property adjustments Branch put in issue in its complaint against Fidelity. Fidelity alleges that, if Branch proves that Fidelity overpaid its policyholders, these policyholders improperly received payments that are rightfully the property of the United States government.
In a footnote, Judge Vance point out, “These claims are brought by Fidelity only. None of the other defendants has brought a similar complaint against its own policyholders or has filed support for Fidelity’s.” Surprisingly, however, Judge Vance goes no further. Since she once again demonstrates mastery of a broad range of controlling decisions in discussing the Reasons for denial of Fidelity’s motion, the obvious assumption is she elected to spare the Company’s counsel, Gerald Nielsen, the embarrassment of revealing his apparent failure to read the Maurstad memo:
FEMA will not seek reimbursement from the company when a subsequent review identifies overpayments resulting from the company’s proper use of the FEMA depth data and a reasonable method of developing square foot value in concluding claims.
According to Nielsen, “Currently, virtually every major participant “Write-Your-Own Program” (“WYO”) insurance company in the NFIP utilizes Nielsen Law Firm, L.L.C. to handle its NFIP-related litigation on a national basis” In that case, the embarrassment he was spared could just as easily been that his motion was an admission by omission. In other words, Fidelity Fidelity did not properly use “the FEMA depth data and a reasonable method of developing square foot value”.
Whatever grace Nielsen was extended, however, was short-lives when Vance began the discussion of his motion on its merits: Continue reading “Judge Vance has her Reasons – orders Nielsen to dance with Branch; band is playing fraud”
With this week’s GAO release of Financial Management: Improvements Needed in National Flood Insurance Program’s Financial Controls and Oversight, there is no longer a need for a juggling act to find the truth of claims made in earlier reports and the evidence policyholders present the courts – and, in the interest of judicial economy, the qui tam defendants should just kiss their arguments goodbye:
FEMA’s Bureau and Statistical Agent (BSA) serves as a liaison between the government and WYO insurance companies. GAO identified weaknesses at three levels of the NFIP transaction accountability and financial reporting process.
- First, at the WYO level, our internal control testing of a statistical sample determined that almost 71 percent of WYO company claims loss files did not have the necessary documents to support the claims, or reports were filed late.
- Second, incomplete BSA-level premium data files (lacking key information such as insureds’ names and addresses) prevented an assessment of the reliability of reported NFIP premium amounts. Further, BSA-level internal control activities were ineffective in verifying the accuracy of WYO-submitted data.
- Lastly, FEMA’s financial reporting process uses summary data that is overly reliant on error-prone manual data entry.
Apparently, the Branch Defendants decided no one would notice the OIG only examined .0062% of total claims and decided they would try and pass off Hurricane Katrina: Wind versus Flood Issues (Exhibit A, Response to the Branch Proposed Discovery Plan) as a statistically reliable report and sell it to Judge Vance: Continue reading “New GAO report pulls juggling act from qui tam Olympics – puts Rigsby and Branch in the lead!”
Yes, Sop, you heard someone say there was a qui tam hearing today before Judge Vance! It must have been a hoot, too! I wrote about defendant Fidelity’s bright idea to collect any NFIP overpayments from the policyholders paid by the defendants in taproot- digging up the fact. However, my bad for not realizing until today’s Minute Entry that Fidelity was represented by none-other than the self-proclaimed King of Flood, Gerald Nielsen:
Currently, virtually every major participant “Write-Your-Own Program” (“WYO”) insurance company in the NFIP utilizes Nielsen Law Firm, L.L.C. to handle its NFIP-related litigation on a national basis. If one were to run a Westlaw search of the undersigned’s name and the word “flood,” one would find that the majority of all Program caselaw being announced in the country over the last few years lists the undersigned as the attorney of record for the WYO carrier.
Believe me, readers, this is not encouraging! Nielsen likely conceived the convoluted reasoning in the Company’s Answer and Third Party Demand and argued it before Judge Vance today – telling her, “It would be morally correct to sue the homeowners to collect the overpayments.” I bet she thought she he’d lost his scienter – actually, I bet she thought she was hallucinating!
The Minute Entry of the hearing does show she issued an Order ensuring there will be no service of the Third Party Demand until she decides the matter. In a related decision, Magistrate Judge Sally Shushan re-issued the Scheduling Order with notes about matters still to be decided. The biggest issues among the big issues on the table – the Branch Motion to File an Amended Complaint and the limits on Discovery- should be somewhat familiar to readers of the Qui Tam Olympics. The set of slides that follows below introduces the Discovery issues in the context of the Supreme Court’s Rockwell decision:
[slideshare id=2960402&doc=theprotectiongamebranch3-100120202317-phpapp01]
Digging through the latest filings in the Rigsby and Branch qui tam cases, I began to notice the Branch Defendants’ were using rulings from the Rigsby case in their defense – a strategy that could prove helpful to State Farm’s current defense effort to limit discovery in Rigsby. Coincidence? Probably not given the way Renfroe v Rigsby, the Alabama case, was used for Rigsby qui tam discovery in McIntosh v State Farm.
Games with Judge Acker were child’s play. However, there is only one way to describe games that pit Louisiana Federal District Judge Sarah Vance against Mississippi’s L.T. Senter – a qui tam Olympics with a torch too hot to handle!
[slideshare id=2932151&doc=quitamolympicsfinal-100117013235-phpapp02]
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”
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”
Taproots develop from the radicle of the seed, which forms the primary root. It produces branches called the secondary roots, and they in turn produce branches to form tertiary roots…very difficult to uproot – the plant itself gives way, but the root stays in the ground and may sprout again.
Who better than Judge Sarah Vance to do the digging and get to the fact of the Branch Consultants qui tam claim? None that I can think of considering the depth of research evident in the Order that Sop reported in Judge Sarah Vance Educates Insurers about Federal Court Jurisdiction in False Claims Act Cases – A Branch Qui Tam Update.
However, shortly after Judge Vance’s well-reasoned 69-page Order was issued, the Defendants filed for certification of an Interlocutory Appeal to the Fifth Circuit:
Relying on pre-Rockwell out-of-circuit decisions, this Court has reached a different conclusion, finding that Branch’s investigation of a publicly disclosed fraud provides direct and independent knowledge such that Branch is an “original source” whose allegations provide this Court subject matter jurisdiction. It is this question Defendants seek to have certified for interlocutory appeal: 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.
Naturally, the Branch Consultants responded in Opposition:
…whether a particular case was decided pre-Rockwell or post-Rockwell misses the point. Instead, the relevant question is whether Rockwell overruled any of the legal points on which the Court based its decision. It did not, and Defendants do not argue otherwise. Continue reading “taproot – digging out the fact of Branch qui tam UPDATED”
