Cori and Kerri Rigsby keep beating State Farm in their Katrina Qui Tam litigation. This case is one of the final Hurricane Katrina cases still making news.
The federal district court refused to lower the $750,000 treble damage award against State Farm.1 The Court noted the genesis for the ruling:
On April 8, 2013, the jury returned a unanimous verdict finding that (1) State Farm knowingly presented, or caused to be presented, to an officer or employee of the United States Government, a false or fraudulent claim for payment or approval in connection with the McIntosh flood claim, and (2) that State Farm knowingly made, used, or caused to be made or used, a false record or statement material to a false or fraudulent claim in connection with the McIntosh flood claim. The jury concluded the Government suffered damages of $250,000.00 under the False Claims Act as a result of State Farm submitting a false flood claim for payment of flood policy limits on the McIntosh property.
State Farm argued a settlement HAAG reached with the United States should operate as a set-off from what State Farm owed under the Judgment. I was not previously aware of HAAG’s settlement, but this is what the Court noted:
Under the Haag Settlement Agreement, Haag agreed “to pay the total sum of $100,000.00” to the United States in return for Relators releasing and discharging Haag “from any civil monetary claim, demand, action, cause of action, and/or suit that Relators have or may have on behalf of the United States under the False Claims Act, 31 U.S.C. §§ 3729–3733, for the Covered Conduct.” .. The Agreement defines Covered Conduct “to include all conduct arising out of, concerning, or related to Hurricane Katrina flood claims submitted to the NFIP . . . .”… The Haag Settlement Agreement thus encompasses conduct much broader than the single McIntosh claim, the only claim presented to the jury in this case.
Finding against State Farm and for the Rigsby sisters, the Court held in part:
… State Farm asserted in the Second Amended Pretrial Order  that “[t]he Haag Survey had nothing to do with the McIntosh flood claim and, in fact, was not even sent by Haag to State Farm until more than two weeks after the McIntosh flood claim was paid.”… Haag similarly maintained in the Second Amended Pretrial Order that it “was not involved in the investigation or adjustment of the McIntosh flood claim” or “the McIntosh wind claim."
Even if the Haag Settlement Agreement were explicitly limited to Hurricane Katrina NFIP claims on State Farm written and adjusted flood policies, the number of State Farm NFIP claims resulting from Hurricane Katrina is information which would be in State Farm’s possession. State Farm has resisted divulging such information throughout this litigation. Another problem with State Farm’s common damages argument then is that neither Relators nor the United States possess the information to ascertain what percentage of the $100,000.00 settlement could potentially be attributed to the single McIntosh claim.
What happens next in this litigation is anybody’s guess. Mine is that State Farm will appeal to the Fifth Circuit Court of Appeals where its Katrina litigation luck has been much better than rulings from the District Court for the Southern District of Mississippi.
1 United States of America ex rel. Rigsby v. State Farm Fire and Cas. Co., 1:06-cv-00433 (S. D. Miss. Apr. 10, 2014).