End days for False Claims Act case alleging massive insurer fraud?

Now, it has always seemed pretty clear to me that this strategy of claiming fraud on the nation’s taxpayers was simply a way to try to nationalize Katrina issues and put added pressure on insurers to pay more. One of the legal offensives that supposedly would vindicate these accusations was a False Claims Act case filed by Dickie Scruggs and his “insiders,” the Rigsby sisters. You can ponder the words “False Claims Act” and decide for yourself what the false claims are in connection with this lawsuit: the insurers’ conduct or the allegations themselves.

This case is the one that people who deal with these Katrina cases all the time refer to as “the Qui Tam,” which in Latin of course means “Who’s Your Daddy?” I prefer to call it the False Claims Act case, because I hate to be ruled by the dead hand of Latin, or if I must use Latin, I call it by its name, Ex rel. Rigsby, which sounds like a great name for a race horse. This case, you may remember, featured secret meetings in beach trailers to access State Farm files from laptops, it featured the Trailer Lawyers — Trailer Chip and Trailer Tony, Trailer Todd and Trailer Mary — and it featured the flood payment in the McIntosh case, and for the quiz, all you really need to remember about that payment is this: Kerri Rigsby herself approved the flood payment. You heard that right. The only specific example cited in the lawsuit of fraudulent conduct is one where the supposedly fraudulent payment happened because of one of the plaintiffs, or as they call them in this type of lawsuit, “relators.” Try to “relate” that fact to the overall allegations: Kerri Rigsby approved the federal flood payment to the McIntoshes.

David Rossmiller
Insurance Coverage Blog
3/4/9