The Sun Herald picks up the coverage of Judge Senter’s decision in Ex Rel Rigsby

Michael Newsome has the Sun Herald story:

A federal judge ruled Monday that whistleblowers Cori and Kerri Rigsby can testify in the lawsuit the sisters brought against State Farm alleging the insurer defrauded the government through claims filed after Hurricane Katrina.

U.S. District Judge L.T. Senter Jr. also asked State Farm Monday to turn over details of certain claims that the company filed through the National Flood Insurance Program. The Rigsbys’ suit alleged the company defrauded the federal government by wrongfully denying homeowner’s insurance claims and shifting the burden for the storm’s damage to the taxpayer-funded NFIP.

A previous order in a different case had prohibited the two from testifying in civil suits against State Farm, but the Risgbys had asked Senter whether that would apply to the current proceedings. Senter said the matter at hand was substantially different than previous actions. He said the two, who worked as insurance adjusters for E.A. Renfroe, a company State Farm used after Katrina, “have relevant knowledge” and should be permitted to testify in all further proceedings. 

In the orders handed down Monday, Senter also said State Farm must submit the names of those insured, as well as the details about the property, including the amount of flood insurance paid, for all claims the company made under government flood policies for cases meeting three criteria the judge determined.

First, the company must submit a list of properties that did not fall within any of the three categories of storm damage for which FEMA approved payment of the program’s limits, meaning insured properties that weren’t reduced to slabs, pilings and empty shells.

Secondly, State Farm also must give details about properties on which government insurance limits were paid because the property was a “constructive total loss.”

Third, the company must disclose details about properties for which no “stick built” or “exactimate estimation” of the flood damage was made before the policy limits were paid.

The judge also ruled proceedings in the case would be limited to the allegations about the payment of the government flood insurance on the Biloxi property of Thomas and Pamela McIntosh. The Rigsbys say when State Farm presented the McIntosh claim to the federal government for reimbursement it was a violation of the False Claims Act.

Since E.A. Renfroe was the Rigbsys’ employer, not State Farm, Senter also ruled the sisters couldn’t bring normal whistleblower claims, which include relief in cases of retaliatory firings and other measures, against State Farm. Senter said he could find no case where anyone other than the whistleblower’s direct employer has been found liable for such damages.

“There is no evidence in this record to indicate State Farm had the authority to terminate (the Rigsbys) employment status,” Senter wrote. “Therefore I will grant State Farm’s motion for summary judgement on this portion of the (Rigsbys) claim.”

Senter also denied motions from State Farm and Haag Engineering to dismiss the action for “lack of subject matter jurisdiction” with the reasoning that Kerri Rigsby was an original source of the information supporting the complaint.

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