Justices Should Stand Up For FCA Rules

The underlying facts of a False Claims Act case argued before the U.S. Supreme Court last week are the stuff of a good Hollywood blockbuster.  At the center of State Farm Fire and Casualty Co. v. U.S. ex rel. Rigsby are two sisters, Cori and Kerri Rigsby, who worked as claims adjusters for a company hired by State Farm to inspect properties damaged by Hurricane Katrina.  In February 2006, the sisters met with a Mississippi lawyer, Richard "Dickie" Scruggs, providing him with documents stolen from State Farm's claims files that they believed showed State Farm had improperly characterized Katrina-related damage as a result of the flood waters (covered by federal flood policies) instead of wind (covered by State Farm policies). After handing the documents over, the sisters promptly quit their jobs and took positions as "consultants" with Scruggs, who paid them $150,000 a year apparently to do very little, including showing up for work.