SLABBED – All encompassing Rigsby qui tam update

Qui tam attorneys need stamp – response puts State Farm in a box ready to mail!

If there was any doubt that State Farm’s attempt the exclude all testimony of all four expert witnesses for the Rigsbys was the only choice the Company had short of surrender, the qui tam attorneys took care of that when they responded in opposition.

The four similarly titled documents appearing on the docket yesterday share a set of common elements: the requirements of Rule 702 Federal Rules of Evidence; the standards for an expert witness set by the Supreme Court; the Fifth Circuit’s recognition that cross-examination is the appropriate place to challenge the bases of an expert’s opinion; and, facts to refute State Farm’s argument that statements made by Kerri Rigsby in a deposition demonstrate that it lacked the scienter necessary to commit fraud.

State Farm’s little bit pregnant fraud

The birds and bees of the qui tam case were fluttering over two new State Farm entries on the docket when I checked early evening. State Farm called the first a Bench Memorandum Re: “Knowingly False” Claims; but, regardless of what they called it, there is no mistaking what it is – an admission the Company committed fraud against the government when they submitted the McIntosh claim for payment.

Retitled, it’s the story of their little-bit-pregnant fraud – which they claim is not a crime because the fraudulent claim they submitted in McIntosh was “unknowingly false”.

This is what they expect Judge Senter to believe:

State Farm did not “knowingly” present to the government a “false or fraudulent claim for payment or approval” with respect to the McIntosh property, as expressly required to establish liability under the False Claims Act.

GFL, what is it they think people have been talking about for almost four years? As their defense they show how their adjusters are trained to commit fraud and provide evidence suggesting they’ve been commiting fraud against the government and have been doing it for years to NFIP policyholders and their own.

SLABBED Daily – May 23-24 (weekend qui tam edition)

After spending a day off-line, I’m back with a weekend SLABBED Daily update on the Rigsby qui tam.

The hearing before Judge Senter ended during the day yesterday and continues on paper, according to the Minute Entry on the Docket.

Minute Entry for proceedings held before District Judge L. T. Senter, Jr: Motion Hearing Minute Entry for proceedings held before District Judge L. T. Senter, Jr: Motion Hearing held on 5/22/2009. Court Hearing adjourned with agreed upon stipulation of BRIEFING SCHEDULE for all parties as follows: Defendants have 10 working days to submit Brief to Court; Plaintiffs have 10 working days after receipt, to submit their Brief to Court; Defendants then allowed 5 days for Rebuttal. Court has reserved ruling as to admissibility of designated Exhibits, after which time, all exhibits will be filed in the Clerk of Court’s Office.

Also on the docket was a Judicial Notice – filed by the Rigsby sisters:

Federal Rule of Evidence 201 permits the Court to take judicial notice of facts only where the facts are “not subject to reasonable dispute in that [they are] either (1) generally known . . . or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b).

Judicial notice must be used cautiously; it can be taken to establish the existence of other litigation, but “not for the truth of the matters asserted in the other litigation.” … Indeed, the Fifth Circuit expressly held that even judicial findings of fact from other proceedings cannot be presented for the truth asserted therein “because these are disputable and usually are disputed.”

Accordingly, although pleadings in another case may be used against the party that pled them as an admission, statements in regards to a non-party in the other case are “hearsay and without probative force.”

…a little more on the Rigsby qui tam hearing and next steps

Somewhere between the qui and the tam, I missed the Sun Herald story ran that explained the earlier than expected end to the hearing on Friday and provided more detail on the follow-up briefs each party is to file.

Only one witness, Dr. Ralph Sinno testified on Friday after the two parties agreed for Lecky King’s deposition to stand as evidence.

Responding to one question in her deposition, King said, “There was obvious wind blowing long before the first big waves hit, but that wind was not strong enough to knock those houses down, in my opinion.”

…Ralph Sinno disputed King’s opinion in testimony Friday. Sinno, a professor of civil engineering at Mississippi State University, said he has studied the effects of wind on structures for 15 years. He also has studied damages to the McIntosh home, which he described as “sucked out” by wind.

“The uplift (of wind) is the number one force of structural analysis,” Sinno said. “This is wind damage before the storm surge, before the water.”

After hearing one witness testify Friday, the judge said he will allow attorneys to present their closing arguments in the form of briefs. The defendants have 10 working days to submit their written arguments.The plaintiffs will have the same amount of time to reply.

SLABBED Daily – May 26

Writing from the beach at Destin looking ahead to the water in amazement that neither this house nor any other is elevated – and remembering the elevation required on the Mississippi coast is the highest in the nation.

I can’t help but wonder what impact the various acts of fraud described in last week’s hearing on the Rigsby qui tam case had on rebuilding requirements – but I suspect a lot, perhaps as much as they had on Gene Taylor’s legislation.

Before I started writing this morning, I read Brian Martin’s comment identifying specific examples of fraud in State Farm’s handling of NFIP claims following Katrina and his conclusion:

The instructions are the fraud.

Brian made the point of fraudulent instruction much better than I did in my written-in-haste comment about the fraudulent instruction of adjusters on the significance of a waterline. The deposition of Lecky King documents other examples of fraudulent instruction. It would be interesting to see how much of her inaccurate understanding of hurricane damage is reflected in the curriculum she wrote that State Farm offers as on-line training; and, I noted in her deposition that the attorneys for the Rigsby sisters requested a copy.

It is easier to believe a lie that one has heard a thousand times than to believe a fact that no one has heard before.

he science behind Ms. King’s misinformed opinions is very simple. However, when considered with her testimony that State Farm has provided all of her post-secondary education and training, the source of her misinformation is clear – and a point to remember in the event the Company attempts to shift blame for the fraudulent adjusting to her lack of knowledge rather than institutionalized position it represents.

Most troubling of all is her testimony suggests the related fraudulent instruction of adjusters and claims managers predates Katrina when it was compounded by other fraudulent instructions in the adjustment of claims for damage from Katrina and subsequent hurricanes.

There appears to be only one solution; and, the opposition of the insurance industry to that solution is telling in light of the King deposition.