US EX REL. BRANCH CONSULTANTS, LLC v. Allstate Ins. Co.
782 F. Supp. 2d 248
E.D. La.2011Background
- Relator Branch Consultants filed a 2006 FCA action alleging NFIP flood-claim adjustments post-Katrina fraud by WYO insurers and adjusters.
- Branch's Second Amended Complaint added an inflated-revenue theory and reinstated Allstate and Pilot as defendants.
- The court previously dismissed some claims under the first-to-file rule; the Fifth Circuit remanded to address jurisdictional issues.
- The Court analyzes jurisdiction under the FCA's first-to-file bar and public-disclosure bar, focusing on whether Branch was an original source for pre-filing disclosures.
- Branch's loss-shifting claims are found not to be supported as original-source information for several defendants, leading to dismissal; the inflated-revenue claim is dismissed for lack of jurisdiction over the original complaint.
- The overall effect is dismissal of Branch's claims against Allstate (without prejudice on first-to-file grounds), loss-shifting claims against several insurers with prejudice for lack of original-source status, and inflationary claims without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| First-to-file applicability to Allstate and Pilot | Branch; Allstate/Pilot | Allstate/Pilot; first-file controls | Yes; claims barred; Allstate dismissed (without prejudice) and Pilot dismissed on other grounds. |
| Loss-shifting claim original-source status | Branch as original source for loss-shifting | Core information not independently known; exemplar properties flawed | Branch not original source for loss-shifting; claims dismissed. |
| Inflated-revenue claim jurisdiction | Inflated-revenue claim separate from loss-shifting; maintain jurisdiction | No jurisdiction absent original-source status for base claim | Inflated-revenue claim dismissed without prejudice. |
Key Cases Cited
- Rockwell Int l Corp. v. United States, 549 U.S. 457 (2007) (jurisdiction depends on state of complaint at filing; original-source must exist for amended claims)
- Bowles v. Russell, 551 U.S. 205 (2007) (time-barred or jurisdictional limitations treated as jurisdictional constraints)
- Mollan v. Torrance, 22 U.S. 537 (1824) (time-of-filing rule; jurisdictional facts at filing)
- Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989) (limits of amendments to create jurisdiction; timing matters)
- Reagan v. East Texas Medical Center Regional Healthcare System, 384 F.3d 168 (5th Cir. 2004) (pre-filing disclosure and original-source standards; jurisdictional analysis)
- Laird v. Lockheed Martin Eng g & Sci. Servs. Co., 336 F.3d 346 (5th Cir. 2003) (public-disclosure bar and original-source principles in FCA context)