Supreme Court to hear State Farm appeal in Hurricane Katrina false claims case News
Supreme Court to hear State Farm appeal in Hurricane Katrina false claims case

The US Supreme Court [official website] granted certiorari [order list, PDF] Tuesday in State Farm Fire and Casualty Co. v. United States ex rel. Rigsby [docket; cert. petition, PDF], a case concerning allegations that the insurance company defrauded the government in assessing damage following Hurricane Katrina [JURIST news archive]. The court limited to grant to question 1: “What standard governs the decision whether to dismiss a relator’s claim for violation of the [False Claims Act]’s seal requirement?” Section 3730(b) [text] of the False Claims Act (FCA) permits a private person (relator) to bring a civil action in the name of the US government for violation of the act. The complaint “shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders.” There is a circuit split on the standard for determining whether to dismiss a relator’s claim for violation of the seal requirement.

Sisters Cori and Kerri Rigsby, former claims adjusters who worked with State Farm after the hurricane, sued State Farm under the FCA, alleging that the company defrauded the government. A jury found that State Farm falsely claimed that damages to a home in Biloxi, Mississippi, were caused by flooding instead of wind. The court ordered State Farm to pay $758,000 in damages and awarded the Rigsbys $227,000 under the FCA. State Farm argued that the lawsuit should have been dismissed because the Rigsbys’ lawyer distributed information about the lawsuit to members of the media, violating the seal requirement.