Archive for November, 2016

SEC Whistleblower Program reports that 2016 was a record-breaking year

SEC Whistleblower Award

SEC Whistleblower AwardOn the eve of Thanksgiving, one thing we can be thankful for is the great year that the SEC Whistleblower Program had protecting the United States markets from fraud. In its annual report to Congress, the SEC detailed several encouraging trends that it experienced in the fiscal year ending on September 30, 2016. Read More…

 

James Hoyer Partner Interviewed about Miami Whistleblower Ruling

Sean P. Keefe - James Hoyer Partner

Sean P. Keefe – James Hoyer Partner

James Hoyer Partner Sean Keefe, an expert on SEC whistleblower cases, lauded a recent Miami appeals court ruling that helps to protect whistleblowers. Florida’s Third District Court of Appeals rejected a lower court ruling that whistlebower protections do not apply to employees who are supposed to report fraud as part of their job description.

Keefe told the legal publication LAW360 that this is good news for whistleblowers.  Here is an excerpt from the article:

The case made waves in the whistleblower community when the trial court’s decision was first handed down, according to James & Hoyer PA attorney Sean Keefe, who said any decision that cuts into the teeth of the False Claims Act, whether at the state or federal level, gets notice among attorneys.

Keefe said the trial court’s ruling, had it stood, “could have created a blueprint” for employers to protect themselves against the reach of the whistleblower statute.

Instead, the Third District handed whistleblowers another tool to fight retaliation that Keefe said could be referenced even in cases dealing with private-sector employees, which are not explicitly covered in the statute.

“It’s good for private citizens too,” Keefe said. “They might have been harmed by this decision had the Third District not ruled this way.”

The case under appeal involved a city of Miami independent general auditor who reported securities violations by the city to the U.S. Securities and Exchange Commission and then aided in the investigation.  Victor Igwe’s contract was not renewed after he reported $38 million in improper transfers intended to improve the city’s bond rating.

Click here to read more in the LAW360 article.

 

 

 

Another “Managed Repair” Homeowners Insurance Nightmare

ABC News in Tampa interviews Morales family about managed repair problems.

ABC News in Tampa interviews Katie and Chris Morales about managed repair problems.

ABC Action News in Tampa told the story of another “managed repair” nightmare for homeowners in Florida. Katie and Chris Morales of Tampa have been battling their home insurance company, Florida Peninsula, ever since problems developed following repairs made to their home due to a water leak. Click here to see the ABC News story.

Florida Peninsula invoked a little known clause in its contract called “managed repair,” which gives the company the ability to take over repair of a homeowner’s property. Many homeowners throughout the state of Florida have found themselves subjected to this, with the repair of their greatest asset essentially hijacked by the insurance company. Insurers use their “preferred providers” to save money and homeowners have little to no say over who repairs their home.

How to Get Help

The James Hoyer Firm, along with attorneys from the Stockham Law Group in Tampa, are teaming up to alert and help homeowners being subjected to this burdensome practice.  It’s important for you to know we believe you should not have to pay any out-of-pocket costs when an insurance company invokes its “right to repair.” That includes your deductible.  Click here to learn more.

Chris and Katie Morales

Chris and Katie Morales

The Morales’ Fight Back

In the Morales’ case, just two months after repair work was completed newly laid wooden floors buckled and a potentially dangerous mold problem developed in the home. Florida Peninsula is denying its contractor’s work caused the problems, but the Moraleses never had problems with mold or moisture before.

Now, the Morales’ have been forced to sue Florida Peninsula to try and get an acceptable resolution to fix the problem. Luckily, Florida law gives homeowners the ability to sue their home insurance company over a claim with no out of pocket costs. These cases are done on a contingency basis, so if you lose, you pay nothing. If you win, the insurance company must pay the homeowner’s attorney’s fees, on top of any damages paid.

If you’ve had a problem with “managed repair,” click here for a confidential case evaluation.

 

Supreme Court Arguments on Seal Seem to Favor Relators

Oral arguments were held before the Supreme Court this week in the case of State Farm Fire & Casualty Co. v. U.S. ex rel. Rigsby.  The decade-old case originates from claims made by Cori and Kerrie Rigsby, sisters from Alabama, who filed a False Claims Act case alleging that State Farm defrauded the government in the wake of Hurricane Katrina.

As background, State Farm was responsible for covering damages caused by windstorms while the United States had a program to pay for damages caused by flooding. The Rigsby sisters allege that State Farm intentionally misclassified windstorm damages as flooding to hoist the burden of payment on the United States.  In 2013, a jury in Mississippi found in favor of the Rigsbys, and determined that the United States had been damaged to the tune of $250,000.  Pursuant to the trebling and penalties provisions of the False Claims Act, the jury awarded the United States $758,000 in damages.

During the course of litigation, State Farm learned that the Rigsbys’ original attorney, Dickie Scruggs, had violated the seal provisions of the False Claims Act by providing information about the lawsuit to three media outlets.  Scruggs provided the information as background to explain the fraud allegations, and the news outlets never disclosed the existence of a False Claims Act case while the seal was in place.  Regardless, State Farm moved to dismiss the case based on the alleged seal violation, but the district court denied the motion.  After the jury verdict in the relator’s favor, State Farm unsuccessfully appealed to the Fifth Circuit, and then to the Supreme Court.

State Farm put before the Court the narrow issue of the appropriate standard for the decision to dismiss a relator’s claims for violations of the False Claims Acts seal requirement.  During the one-hour of oral arguments from counsel for State Farm, the Rigsbys, and the United States of America (in support of the relators), the eight Supreme Court justices appeared unlikely to reverse the Fifth Circuit’s holding and grant State Farm’s request for mandatory dismissal of a case following a seal breach.

All of the justices appeared to be skeptical of State Farm’s drastic approach, particularly given that the seal requirement was put into place to protect the government and the United States has sided with the Rigsbys in this dispute.  Chief Justice Roberts noted to State Farm’s counsel that, “[Y]ou’re arguing the government’s interests, but it rings a little hollow when we see that the government is on the other side.”

John Bash, Assistant to the Solicitor General arguing for the United States, reaffirmed that focus, stating, “[W]e think that the overall focus should be courts should remedy protective orders and seal orders with a healthy dose of discretion, but in light of the purpose of this provision, to protect the government.”  Some justices, including Justice Ginsburg, appeared to suggest that the government’s preference should be the guiding, if not only, consideration as to whether a case should be dismissed following a seal breach.

Several justices asked for suggestions as to how to properly frame a workable standard which would discourage future violations while also allowing for the flexibility for district courts to conduct case-specific evaluations.  The justices also seemed to focus on whether the evaluation should consider the potential for harm versus the actual harm resulting from the breach.  (In the Rigsbys’ case, the newspapers did not print anything about the lawsuit itself, thus mitigating any actual harm from the seal breach.)

This is a very important case for relators because a State Farm victory could put another fatal arrow in the quiver of defendants and their counsel.  If defendants could guarantee a dismissal for even a minor, unintentional seal breach, they would be incentivized to engage in intense, scorched-earth discovery of relators and their counsel to try to find any mention of the lawsuit to a third party.  Fortunately, the Supreme Court seems reluctant to accept such a fatalist position and instead appears poised to set standards for a discretionary test which evaluates the circumstances of each case with an ultimate focus on protecting the government’s interest.

An opinion is due by the end of June 2017, so we’ll post an update as soon as the order is handed down.