State Farm Fire and Casualty Co. v. United States ex rel. Rigsby

Summarized by:

  • Court: United States Supreme Court
  • Area(s) of Law: Civil Procedure
  • Date Filed: May 31, 2016
  • Case #: 15-513
  • Judge(s)/Court Below: Court Below: 794 F.3d 457 (5th Cir. 2015)
  • Full Text Opinion

What standard governs the decision of whether to dismiss a relator's seal requirement under the False Claims Act?

Respondent filed a False Claims Act (“FCA”) complaint, alleging that Petitioner insurance company fraudulently misadjusted claims arising from Hurricane Katrina by attributing them to flood damage, which the United States government (“US”) covers, rather than wind damage which would be covered by Petitioner. The FCA imposes liability on “any person who . . . presents . . . a false . . . claim of repayment (to the US). ” The FCA authorizes a private citizen, (“relator”), to bring a civil action to recover losses incurred by the US. The FCA requires the complaint to “remain under seal for at least 60 days.” One purpose of the seal requirement is to allow the US the opportunity to investigate the complaint. Five circuit courts have addressed the question of whether a relator’s violation of the seal requirement warrants a dismissal of the FCA claims. The Fifth and Ninth Circuits assess three factors: the nature of the violations, the harm to the government, and whether defendant’s conduct was willful. The Sixth Circuit holds that any violation of the seal requires dismissal. The Second and Fourth Circuits require dismissal only if the court finds that the violation of the seal irreversibly frustrates the congressional goals of the FCA. Petitioner asks the Court to announce a uniform rule regarding the seal violations.

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