JUDGMENT: ORDERED that Branch’s claims against Allstate are DISMISSED W/OUT PREJ on first-to-file grounds. FURTHER ORDERED that Branch’s claims against American Reliable, Standard Fire, Colonial, Liberty Mutual, SIMSOL, ANPAC, Fidelity, and Pilot are DISMISSED WITH PREJ because Branch is not an original source of those claims, a determination that is intertwined with the merits and that was decided on summary judgment. FURTHER ORDERED that the inflated-revenue claims, added by amendment, are DISMISSED W/OUT PREJ because the Court lacks jurisdiction over Branch’s original ccmp. Signed by Chief Judge Sarah S. Vance on 1/25/11.(bbc, ) (Entered: 01/25/2011)
Long story Order and Reasons short, Judge Vance took 68-pages to explain how Branch failed to comply with the requirements of the False Claims Act.
As the Judgment indicates, the dismissal of Branch centered on two key points of qui tam law – the “first to file” and the “original source” requirements.
In his “stock basher style” post announcing the dismissal, Sop opined Vance had “busted Allen Kanner’s balls”. Maybe so, but, her very exact detailing of what appear to be preventable deficiencies in the filing and content of the Complaint would have definitely crushed his ego.
You won’t see such deficiencies in Rigsby. Think what you will about Dick Scruggs but, in this situation, he knew his limits and, early on, put the case in the expert hands of a team of attorneys with experience specific to cases filed under the False Claims Act. Kanner, on the other hand, filed Branch – but that alone did not lead to the dismissal.
And, then there were four – ex rel Rigsby, ex rel Branch Consultants, ex rel Denenea and, now, ex rel Sonnier v Allstate:
ALLSTATE’s price allowed on wind policy estimates of loss in the State of Louisiana for painting damaged areas was between $0.15 and $0.38 per square foot. However, on NFIP flood policy estimates, ALLSTATE allowed $0.56 per square foot, a difference of between $0.18 and $0.41 per square foot. Thus, if the true and correct cost to repaint flood damaged property was between $0.15 and $0.38 per square foot (i.e., the same cost listed by defendant, ALLSTATE, to paint the same unit of drywall covered under the wind policy issued for the same property by defendant, ALLSTATE, and applicable to the same loss event), ALLSTATE caused the federal government to overpay ALLSTATE between $0.15 and $0.41 for every square foot required to be painted in every NFIP flood policy loss estimate adjusted and initially paid by ALLSTATE but subsequently submitted to the federal government for full reimbursement to ALLSTATE.
Kermith Sonnier, “the Relator is a licensed insurance adjuster with 30 years experience…principal shareholder of Sonnier & Fisher Public Adjusters, LLC, a public adjusting firm based in Lake Charles, Louisiana”.
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.”
The best place to hide a needle is in a haystack of needles– and, at the moment, there’s no bigger haystack of needles than the docket of the Branch Consultants qui tam case The Branch defendant insurers file a single motion as a group and, then, some or all file essentially the same motion separately. The result is the eye-crossing, mind-boggling docket that confused Magistrate Shushan to the point she thought she’d developed an enlightened perspective on the USSC Rockwell decision.
Rather than similarly embarrass myself, it seemed better to hold motions until all parties had filed – but that was before a thoughtful reader sent me the link to Liberty Mutual’s “Responsibility Project” website and I clicked on the Company’s list entitled “How Liberty Mutual is Responsible” and found the most incredible statement – “Liberty Mutual is all about doing the right thing. First and foremost for our policyholders, but also for our employees and our communities as well”.
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.