IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-60160

United States of America, ex rel, CORI RIGSBY; KERRI RIGSBY, 

 Plaintiffs-Appellants - Cross-Appellees

v.

STATE FARM FIRE & CASUALTY COMPANY, 

 Defendant-Appellee - Cross-Appellant

Appeals from the United States District Court

for the Southern District of Mississippi

Before STEWART, Chief Judge, and SOUTHWICK and COSTA, Circuit 

Judges.

CARL E. STEWART, Chief Judge:

In April 2006, Plaintiffs Cori and Kerri Rigsby (hereinafter, “the 

Rigsbys” or “relators”) brought this qui tam action under the False Claims Act, 

31 U.S.C. § 3729 et seq. (“FCA”), claiming that State Farm Fire and Casualty

Company (“State Farm”) submitted false claims to the United States 

government for payment on flood policies arising out of damage caused by 

Hurricane Katrina.1 At trial, the Rigsbys prevailed on a single bellwether false 

 

1 The FCA allows private parties, referred to as “relators,” to bring a suit (called a “qui 

tam” suit) on behalf of the United States against anyone who has submitted false or 

United States Court of Appeals

Fifth Circuit

FILED

July 13, 2015

Lyle W. Cayce

Clerk

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2

claim under the FCA. The district court subsequently denied their request to 

conduct further discovery, and denied State Farm’s motions for a new trial and 

judgment notwithstanding the verdict. Both parties appealed. The Rigsbys 

primarily challenge the district court’s discovery ruling and State Farm 

principally challenges the jury verdict. We REVERSE in part and AFFIRM in 

part. 

I. BACKGROUND

After Katrina, Gulf Coast residents whose homes were damaged or 

destroyed looked to their insurance companies for compensation. Many of these 

homeowners were covered by at least two policies, often provided by the same 

insurance company: a flood policy excluding wind damage, and a wind policy 

excluding flood damage. A private insurance company would frequently

administer both policies, but wind policy claims were paid out of the company’s 

own pocket while flood policy claims were paid with government funds. This 

arrangement generates the conflict of interest that drives this case: the private 

insurer has an incentive to classify hurricane damage as flood-related to limit 

its economic exposure.

We relate the pertinent facts in the light most favorable to the Rigsbys, 

as the jury rendered a verdict in their favor. See Wharf (Holdings) Ltd. v. 

United Int’l Holdings, Inc., 532 U.S. 588, 590 (2001). The Rigsbys2 were 

certified, experienced claims adjusters employed by a State Farm contractor 

that provided disaster claims management services and claims 

representatives. They claimed that State Farm (other defendants have since 

been dismissed or settled) sought to unlawfully shift its responsibility to pay 

 

fraudulent claims to the government. See 31 U.S.C. § 3730(b). A prevailing relator is entitled 

to a percentage of the recovery. See id. § 3730(d).

2 Whenever used in the singular, “Rigsby” signifies Kerri Rigsby. The Rigsbys are 

sisters.

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wind damage claims on homeowner’s insurance policies to the government, 

through the National Flood Insurance Program (“NFIP”), by classifying 

damage to properties covered by both a homeowner’s policy and a flood policy 

as flood damage instead of wind damage.

The NFIP, administered by the Federal Emergency Management Agency 

(“FEMA”), provides flood insurance coverage “at or below actuarial rates” in 

areas where it “is uneconomical for private insurance companies to provide 

flood insurance.” Gowland v. Aetna, 143 F.3d 951, 953 (5th Cir. 1998). In 1983, 

FEMA established the “Write Your Own” Program (“WYO”), which allows 

participating private property and casualty insurance companies to issue, 

under their own names, government-backed flood insurance policies with 

limits of up to $250,000 for flood-based building damage and $100,000 for flood 

damages to personal property. See Flick v. Liberty Mut. Fire Ins. Co., 205 F.3d 

386, 389 (9th Cir. 2000); Nat’l Flood Ins. Program, Summary of Coverage 1

(2012). The policies conformed to FEMA’s Standard Flood Insurance Policy 

(“SFIP”), which generally provided coverage for flood damage but excluded 

coverage for wind damage. See 44 C.F.R. pt. 61, app. A(1), arts. I, V(D)(8). WYO 

insurers take a fee for administering the policy, but when claims are made, 

they are paid out of the federal treasury. See Mun. Ass’n of S.C. v. USAA Gen. 

Indem. Co., 709 F.3d 276, 280–81 (4th Cir. 2013).

At all relevant times, State Farm was a participating WYO insurer. 

State Farm and other WYO insurers often issued, to the same customers, 

homeowner’s policies that provided coverage for wind damage, but excluded 

coverage for flood damage. To address the inherent incentive to classify 

ambiguous damage as flood damage, regulations characterize the WYO 

insurer’s relationship to the government as “one of a fiduciary nature.” 44 

C.F.R. pt. 62, app. A, art. XV.

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On August 29, 2005, Hurricane Katrina struck the Gulf Coast. Shortly 

thereafter, State Farm set up an office in Gulfport, Mississippi, to address

claims involving its policies. Alexis “Lecky” King (“King”) was one of two 

primary Gulfport supervisors and a catastrophe coordinator with substantial 

experience adjusting claims. According to Rigsby’s trial testimony, a meeting 

was convened soon after Katrina during which State Farm trainers, including 

King, told its adjusters that “[w]hat you will see is, you will see water damage. 

The wind wasn’t that strong. You are not going to see a lot of wind damage. If 

you see substantial damage, it will be from water.”

Prior to Katrina, State Farm’s general policy was to conduct line-by-line

and item-by-item estimates of home damages using a program called 

Xactimate. In the wake of Katrina, and because of the immense number of 

claims, FEMA authorized WYO insurers—through FEMA directive W5054—

to use an expedited procedure to pay two particular types of claims: 1) claims 

in which a home “had standing water in [it] for an extended period of time” and 

2) claims in which the home was “washed off its foundation by flood water.” All 

other claims fell into a third category that required WYO insurers to follow 

their “normal claim procedures.” The Rigsbys presented evidence at trial that 

State Farm failed to comply with that directive.

After Katrina, State Farm—rather than using Xactimate to generate a 

line-by-line printout of flood damages to a home—often used a program called 

Xactotal, which estimates the value of a home based on square footage and 

construction quality. State Farm told its adjusters that any time damage to a 

home appeared to exceed the flood policy’s limits, the adjuster should use 

Xactotal. There was also evidence that State Farm officials told adjusters to 

“manipulate the totals” in Xactotal to ensure that policy limits were reached.

On September 20, 2005, a few weeks after Katrina, Rigsby and Cody 

Perry, another State Farm adjuster, inspected the home of Thomas and 

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Pamela McIntosh (“the McIntoshes”) in Biloxi, Mississippi. The McIntoshes 

had two insurance policies with State Farm: a SFIP excluding wind damage, 

and a homeowner’s policy excluding flood damage. Using Xactotal, and thereby 

foregoing a line-by-line estimate, Rigsby and Perry presumed that flooding was 

the primary cause of damage to their home. On September 29, 2005, State 

Farm supervisor John Conser (“Conser”) approved a maximum payout of 

$350,000 ($250,000 for the home, $100,000 for personal property)3 under the 

SFIP. Three days later, State Farm sent checks to the McIntoshes.

State Farm later retained an engineering company, Forensic Analysis 

Engineering Corporation (“Forensic”), to analyze the damage. Forensic 

engineer Brian Ford (“Ford”) concluded that the damage was primarily caused 

by wind. His report (the “Ford Report”) was prepared on October 12, 2005. But 

the Rigsbys presented evidence that after State Farm received it, the company 

refused to pay Forensic and withheld the Ford Report from the McIntosh NFIP 

file. A note on the Ford Report from King read: “Put in Wind [homeowner’s 

policy] file – DO NOT Pay Bill DO NOT discuss.” State Farm commissioned a 

second report, written by another Forensic employee, John Kelly (the “Kelly 

Report”). The Kelly Report determined that while there had been wind 

damage, water was the primary cause of damage to the McIntosh home. There 

was evidence that King pressured Forensic to issue reports finding flood 

damage at the risk of losing contracts with State Farm. Ford was subsequently 

fired. These events led the Rigsbys to believe State Farm was wrongfully 

seeking to maximize its policyholders’ flood claims to minimize wind claims. 

The Rigsbys brought suit under the FCA on April 26, 2006. They alleged 

violations of 31 U.S.C. § 3729(a)(1), (a)(2), (a)(3), and (a)(7), but only the claims 

 

3 The $100,000 that State Farm paid the McIntoshes for flood-related personal 

property damage is not at issue in this litigation.

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under § 3729(a)(1) and § 3729(a)(2)—now codified at § 3729(a)(1)(B)—are at 

issue in this appeal.4 The government declined to intervene on January 31, 

2008. The district court focused discovery and the subsequent trial on the 

McIntosh claim, rather than permitting the Rigsbys to seek out and attempt 

to prove other claims, in order to “protect the interests of both parties.” The 

district court stated that it sought to “strike a balance between the Relators’ 

interest in identifying . . . other allegedly false claims and the defendants’ 

interest in preventing a far ranging and expensive discovery process.” The 

court then explained that, “[i]n the event the Relators prevail on the merits of 

their allegations concerning the McIntosh claim, I will then consider whether 

additional discovery and further proceedings are warranted.” After a new 

district judge was assigned to this case, the Rigsbys did prevail at trial. They 

were aided by expert testimony from Dr. Ralph Sinno that the McIntosh home

had been “wracked” by winds that completely destroyed it before the flood 

waters came.

The jury concluded that the McIntosh residence sustained no 

compensable flood damage and that the government therefore suffered 

damages of $250,000 under the FCA as a result of State Farm’s submission of 

false flood claims for payment on the McIntosh property. The jury also found 

that State Farm submitted a false record. The district court denied State 

Farm’s motions for judgment notwithstanding the verdict and for a new trial. 

The Rigsbys moved after trial for additional discovery to seek out other 

instances of false claims that were part of the alleged general scheme, but the 

 

4 In 2009, while the Rigsbys’ claims were pending, Congress amended the FCA. See 

Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111-21, § 4(a), May 20, 2009, 123 

Stat. 1621. Most of these changes were not retroactive as applicable here. Thus, the 1994 

version of § 3729(a)(1)—now § 3729(a)(1)(A)—governs the Rigsbys’ false claim count. 

However, the 2009 version of § 3729(a)(1)(B), which was formerly § 3729(a)(2), is retroactively 

applicable to the Rigsbys’ false record count.

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court denied that motion, concluding that they had failed to plead sufficient 

facts about any claims unrelated to the McIntosh claim. The court, however, 

awarded the Rigsbys the maximum possible share under the FCA for relators

pursuing claims without the government as a party—30 percent of $758,250 

(the court trebled damages on the $250,000 false claim and added a civil 

penalty of $8,250), or $227,475. See § 3730(d). The court also awarded the 

Rigsbys $2,913,228.69 in attorney’s fees and expenses. Both parties appealed. 

These cross-appeals present four issues: 1) whether the Rigsbys are 

entitled to further discovery; 2) whether the Rigsbys’ alleged violations of the 

FCA’s seal requirement independently warrant dismissal; 3) whether the 

district court retained subject matter jurisdiction throughout the litigation; 

and 4) whether the jury’s verdict was supported by sufficient evidence. We will 

address the applicable standards of review in each section and provide 

additional relevant background where necessary.

II. DISCUSSION

A. Rule 9(b) and Further Discovery

The Rigsbys seek further discovery into the same alleged scheme they 

argue produced the McIntosh claim. The district court denied this request, 

explaining that “[b]eyond the McIntosh claim, Relators’ conclusory allegations 

in the Amended Complaint as to the existence of other specific FCA violations 

do not satisfy the particularity requirements of [Federal Rule of Civil 

Procedure] 9(b), and expanded discovery would lead to an inappropriate fishing 

expedition for new claims.”

We review the district court’s decision barring discovery for abuse of 

discretion. See Moore v. CITGO Ref. & Chems. Co., 735 F.3d 309, 315 (5th Cir. 

2013). “A district court has broad discretion in all discovery matters, and such 

discretion will not be disturbed ordinarily unless there are unusual 

circumstances showing a clear abuse.” Id. (internal quotation marks and 

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citation omitted). Even if we determine that the district court has abused its 

discretion, “we will only vacate a court’s judgment if it affected the substantial 

rights of the appellant.” Green v. Life Ins. Co. of N. Am., 754 F.3d 324, 329 (5th 

Cir. 2014) (citation omitted). Notwithstanding “this stated discretion over 

discovery, the lower court is directed to exercise carefully its authority in light 

of the intent of the federal litigation process and the federal rules. It must in 

discovery ‘adhere to the liberal spirit of the Rules.’” Steven A. Childress & 

Martha S. Davis, Federal Standards of Review § 4.11[4] (4th ed. 2010) (quoting 

Burns v. Thiokol Chem. Corp., 483 F.2d 300, 305 (5th Cir. 1973)); see also Fed. 

R. Civ. P. 26(b)(1) (“Parties may obtain discovery regarding any nonprivileged 

matter that is relevant to any party’s claim or defense . . . . For good cause, the 

court may order discovery of any matter relevant to the subject matter involved 

in the action.”).

What makes this case unique is the manner in which the district court 

treated the Rigsbys’ allegations. A limited procedural background is therefore 

necessary. In addressing State Farm’s 9(b) motion filed early in this litigation, 

the district court recognized that the allegations in the Rigsbys’ amended 

complaint went “well beyond the two specific instances of misconduct 

specifically identified.” But the district court, “[i]n order to protect the interests 

of both parties,” struck a “balance between the Relators’ interest in identifying 

these other allegedly false claims and the defendants’ interest in preventing a 

far ranging and expensive discovery process that relates only to claims that 

are not, for now, specifically identified.” The district court then effectively sent 

the McIntosh claim to trial, but not before explaining that, should the Rigsbys 

“prevail on the merits of their allegations concerning the McIntosh claim,” it 

would “then consider whether additional discovery and further proceedings 

[were] warranted.”

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The parties and the district court have framed this dispute as one almost 

entirely dependent on the application of Rule 9(b). True, complaints under the 

FCA must comply with Rule 9(b), which provides that “[i]n alleging fraud or 

mistake, a party must state with particularity the circumstances constituting 

fraud or mistake.”5 But Rule 9(b) is a pleading rule that would almost always 

come into play in pre-trial proceedings (as it did in this case). The renewed

application of that rule in the post-trial posture here is highly unusual, if not 

sui generis. Indeed, the parties have not directed us to any decision applying 

Rule 9(b) to limit discovery after a successful trial on the merits of a “test case” 

fraud claim.

We do not believe that Rule 9(b) is the appropriate analytical prism 

through which to view the issues presented by this case. First, a court would 

generally, in this context, have before it a pending Rule 12(b)(6) motion to 

dismiss for failure to state a claim or a motion to dismiss for failure to meet 

the requirements of Rule 9(b). See 5A Charles Alan Wright & Arthur R. Miller, 

Federal Practice and Procedure § 1300 (3d ed. 2015) [hereinafter Wright & 

Miller]. Neither were before the district court when the decision to terminate 

proceedings in this case was made.

Second, even if such a motion had been pending, the posture of this case 

has generated substantial confusion about precisely what evidence would be

relevant to a Rule 9(b) determination. The parties dispute the degree to which 

the trial proceedings could be taken into account. The district court’s decision 

at its core simply appears to rewind the case to the amended complaint, as 

though years of proceedings and a two-week trial had not taken place in the 

 

5 “Rule 9(b) supplements but does not supplant Rule 8(a)’s notice pleading,” U.S. ex 

rel. Grubbs v. Kanneganti, 565 F.3d 180, 186 (5th Cir. 2009), which requires “enough facts 

[taken as true] to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 570 (2007).

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interim. But that same amended complaint was already the subject of State 

Farm’s futile Rule 9(b) motion discussed above. Both of these decisions look to 

the adequacy of the same complaint to determine if the case should move 

forward. See Frederico v. Home Depot, 507 F.3d 188, 201 (3d Cir. 2007) (“[W]e 

do not consider after-the-fact allegations in determining the sufficiency of her 

complaint under Rule[] 9(b) . . . .”); Estate of Axelrod v. Flannery, 476 F. Supp. 

2d 188, 198 n.1 (D. Conn. 2007) (“Indeed, the impetus for filing a Rule 9(b) 

motion to dismiss is to challenge a complaint on its face.”). But the decision 

about whether this case should move forward after the trial cannot be based 

solely on the way matters stood before trial. Applying Rule 9(b) here presents 

a square peg/round hole problem.

Third, the central purposes of Rule 9(b)—“to provide defendant with fair 

notice of claim, to safeguard defendant’s reputation, and to protect defendant 

against the institution of strike suits,” Shushany v. Allwaste, Inc., 992 F.2d 

517, 521 (5th Cir. 1993)—appear inapplicable in this context. State Farm in 

this case is all too aware of the nature of the Rigsbys’ allegations. It has 

litigated this case for nearly a decade. To the extent that the rule is designed 

to safeguard the defendant’s reputation, that purpose is not served here: a jury 

already determined that State Farm committed fraud at least with respect to 

the McIntosh claim. Finally, there is no indication that this is a strike suit—

one “based on no valid claim.” ABC Arbitrage Plaintiffs Grp. v. Tchuruk, 291 

F.3d 336, 354 n.84 (5th Cir. 2002) (quoting Black’s Law Dictionary 1448 (7th 

ed. 1999)). “In cases of fraud, Rule 9(b) has long played that screening function, 

standing as a gatekeeper to discovery, a tool to weed out meritless fraud claims 

sooner than later.” U.S. ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 185 (5th 

Cir. 2009); see also Richard L. Marcus et al., Civil Procedure: A Modern 

Approach 187 (6th ed. 2013) (“[O]ne cannot forget that Rule 9(b) is not meant 

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to supplant discovery.” (citation omitted)). Here, the Rigsbys’ claims were quite 

obviously not entirely “meritless.”6

Finally, we note that we “have power not only to correct error in the 

judgment under review but to make such disposition on the case as justice 

requires.” Patterson v. Alabama, 294 U.S. 600, 607 (1935); see also Wiwa v. 

Royal Dutch Petroleum Co., 392 F.3d 812, 819 (5th Cir. 2004). Consequently,

we review the decision below not as a dismissal under Rule 9(b), but instead 

as a decision limiting discovery after a trial on the merits resulted in a jury 

verdict in favor of the plaintiffs on two counts of fraud. 

Turning, then, to the rules applicable to requests for discovery, we start 

from the background principle that “the scope of discovery is broad and permits 

the discovery of ‘any nonprivileged matter that is relevant to any party’s claim 

or defense.’” Crosby v. La. Health Serv. & Indem. Co., 647 F.3d 258, 262 (5th 

Cir. 2011) (quoting Fed. R. Civ. P. 26(b)(1)). This principle is also to be 

understood in light of Rule 1, which directs that the rules “should be construed 

and administered to secure the just, speedy, and inexpensive determination of 

every action.” Fed. R. Civ. P. 1. We have explained that there “probably is no 

provision in the federal rules that is more important than this mandate.” 

Trevino v. Celanese Corp., 701 F.2d 397, 405 (5th Cir. 1983) (internal quotation 

marks and citation omitted). We also are cognizant that the “FCA is remedial 

in nature and thus we construe its provisions broadly to effectuate its purpose.” 

 

6 We hasten to add here that we have recently suggested, in the post-Grubbs FCA

context, that additional discovery might be employed to permit plaintiffs to cure certain 

defects in a complaint. See U.S. v. Bollinger Shipyards Inc., 775 F.3d 255, 264 n.29 (5th Cir. 

2014). Additionally, at least one other circuit permits discovery on “the entire fraudulent 

scheme” where a relator “pleads a complex and far-reaching fraudulent scheme with 

particularity, and provides examples of specific false claims submitted to the government 

pursuant to that scheme.” U.S. ex rel. Bledsoe v. Cmty. Health Sys. Inc., 501 F.3d 493, 510 

(6th Cir. 2007); see also In re Lupron Mktg. & Sales Practices Litig., 295 F. Supp. 2d 148, 171 

(D. Mass. 2003) (permitting plaintiffs in fraud action to remedy deficiencies in amended 

complaint after completion of discovery).

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Townsend v. Bayer Corp., 774 F.3d 446, 459 (8th Cir. 2014) (citing Tcherepnin 

v. Knight, 389 U.S. 332, 336 (1967)).

While it is indeed rare for an appellate court to reverse a denial of a 

request for further discovery, it is far from unprecedented. See 8 Wright & 

Miller § 2006 (“Reversal is more likely, although still unusual, when the trial 

court has erroneously denied or limited discovery.”). And, indeed, we have 

reversed in circumstances where a district court inappropriately denied a party 

adequate discovery. See, e.g., Brown v. Miss. Valley State Univ., 311 F.3d 328, 

333–34 (5th Cir. 2002) (“The district court did not rule on Brown’s request for 

discovery but granted summary judgment on the grounds that there was 

insufficient evidence of Abraham’s involvement in a conspiracy, precisely the 

type of evidence sought by Brown.”); Murphy v. Kellar, 950 F.2d 290, 293 (5th 

Cir. 1992) (requiring that district court permit additional discovery where it 

may result in identification of unidentified defendants).

The Rigsbys’ allegations and trial evidence—which extend far beyond the 

realm of the McIntosh claim—entitle them to at least some additional 

discovery. In their final pretrial order,7 the Rigsbys first describe a State Farmplanned adjuster meeting they attended shortly after Katrina during which 

“State Farm trainers told the adjusters that Hurricane Katrina was a ‘water 

storm’ and that all major damage to homes was caused by flooding.” They 

explain that State Farm directed its adjusters to pay policy limits under NFIP 

policies, and allege that “State Farm, through Alexis King and [State Farm 

principal FEMA contact] Juan Guevara, pushed the NFIP to relax its rules and 

requirements for adjusting flood claims.” Using the Xactotal shortcut software

 

7 In evaluating the Rigsbys’ allegations, we look to the final pretrial order, rather than 

their amended complaint, because the pleadings were amended to conform to that order. See 

Rockwell Int’l Corp. v. United States, 549 U.S. 457, 474 (2007); Fed. R. Civ. P. 16(d) & advisory 

committee note to 1983 amendment. 

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(rather than the Xactimate software, which would have provided a line-by-line, 

item-by-item adjustment), the Rigsbys allege that “State Farm adjusted 

multitudes of flood claims under NFIP policies in knowing and direct violation 

of one of the core NFIP adjusting requirements.” The Rigsbys assert that “[f]or 

the first time in adjusting a major hurricane, State Farm ordered engineers [to 

examine properties] for virtually all claims that involved flooding.” Finally, 

they allege, “King appropriated the McIntosh engineering reports and all of 

the other engineering reports coming into the Gulfport office and made sure 

that they all conformed with State Farm’s scheme to categorize all losses as 

caused by flooding rather than wind.” These allegations touch on matters well 

beyond the McIntosh claim.

But our analysis does not cease with those allegations. We cannot blind 

ourselves to the verdict in this case and the associated record developed at 

trial, at least in this distinctive setting. This case presents something 

exceptional that most (if not all) plaintiffs in FCA cases are unable to show 

when seeking discovery: a jury’s finding of a false claim and a false record.

Coupled with the allegations in the final pretrial order, this “amounts to more 

than probable, nigh likely, circumstantial evidence” that additional false 

claims might have been submitted. Grubbs, 565 F.3d at 192. At a minimum, 

the trial record supports a high probability that State Farm submitted more 

than one false claim.

And the jury’s verdict—though it referenced only the McIntosh claim—

cannot be so easily limited. The jury determined that State Farm “knowingly 

present[ed], or cause[d] to be presented,” a false claim and that the insurer 

“knowingly ma[de], use[d], or cause[d] to be made or used” a false record 

material to a false claim. 31 U.S.C. § 3729(a)(1), (a)(1)(B). State Farm contends 

the jury could have made this determination without finding wrongdoing 

beyond the McIntosh claim. But that takes too narrow a view of the Rigsbys’ 

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evidence. Even in closing argument, as he walked the jury through the verdict 

form, the Rigsbys’ counsel explained that they should render a verdict for 

Relators on the § 3729(a)(1) claim because of “all the scheme type evidence that 

we’ve been putting on” and on the § 3729(a)(1)(B) claim because of the Xactotal 

form.

With respect to the § 3729(a)(1) claim, the Rigbys presented evidence at 

trial that State Farm told its adjusters that the post-Katrina damage they 

would see would be flood damage, that they should “hit the limits” on flood 

policies, and that they should use Xactotal in these circumstances rather than 

FEMA directive W5054’s required line-by-line estimate. These general 

allegations, extending beyond the McIntosh claim, were fervently litigated 

during the trial. 

The verdict on the § 3729(a)(1)(B) claim is perhaps even more suggestive 

of additional claims. State Farm did not quarrel with whether the Xactotal 

printout had in fact been placed in the McIntosh NFIP file; witnesses testified 

to widespread use of Xactotal in adjusting Katrina claims. Its argument was 

that the document was not a false record within the meaning of § 3729(a)(1)(B)

because State Farm had generalized permission to deviate from FEMA 

directive W5054 if the loss appeared to exceed the coverage limit. The jury’s 

verdict necessarily entailed a finding that this was not so. 

“In pursuing traditional or test case trials, the judge may conduct a 

unitary trial, bifurcate liability and damages, or create other helpful trial 

structures.” Manual for Complex Litigation § 22.93 (4th ed. 2015). But a “court 

must identify and minimize any risk of unfairness in requiring litigants to 

present claims or defenses in a piecemeal fashion.” Id. The district court 

appropriately employed its discretion to isolate the McIntosh claim for trial. 

But in denying the Rigsbys any additional discovery after a verdict in their 

favor, the district court abused its discretion in a manner that affected their 

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substantial rights. See Green, 754 F.3d at 329; see also Burns, 483 F.2d at 305

(requiring that administration of discovery remain consistent with “the liberal 

spirit of the Rules”). The Rigsbys’ allegations in the final pretrial order and the 

verdict on the McIntosh claim provide sufficient justification to permit 

additional limited discovery. While the typical case might warrant shutting the 

door to more discovery, the Rigsbys have at least edged the door ajar for some 

additional, if superintended, discovery. 

We emphasize that our decision hinges in large part on the idiosyncratic

nature of this case—seldom will a relator in an FCA case present an alreadyrendered jury verdict in her favor while seeking further discovery. We 

therefore remand to the district court for further proceedings not inconsistent 

with this opinion, but stress that we make no judgments about the actual 

existence of other potential false claims or records.8

B. Seal Violations

Turning to the cross-appeal, State Farm argues that the Rigsbys’ 

violations of the FCA’s seal requirement independently warrant dismissal. The 

FCA requires that a “copy of the complaint and written disclosure of 

substantially all material evidence and information the person possesses shall 

be served on the government.” 31 U.S.C. § 3730(b)(2). The complaint must be 

filed in camera and remain under seal until the court orders it served on the 

defendant. Id. Whether a violation of this requirement compels dismissal 

presents a statutory interpretation question reviewed de novo. See U.S. ex rel. 

Summers v. LHC Grp. Inc., 623 F.3d 287, 291 (6th Cir. 2010). The 

requirements of § 3730(b)(2) are procedural, not jurisdictional. See Claire M. 

 

8 We are sympathetic to the district court’s fear of unconstrained discovery. To that 

end, a reasonable place to begin would be to allow the Rigsbys access to a list that State Farm 

already prepared in response to the district court’s request to review in camera certain 

materials in its August 10, 2009, order.

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Sylvia, The False Claims Act: Fraud Against the Government § 11:14 (2d. ed. 

2010) [hereinafter Sylvia, Fraud Against the Government] (collecting cases).

Although this is an issue of first impression in this court, three circuits 

have addressed the consequences of an FCA seal violation and come to 

divergent conclusions. In U.S. ex rel. Lujan v. Hughes Aircraft Co., the plaintiff 

filed her FCA suit under seal but subsequently disclosed, to a national 

newspaper, the existence of the suit and the nature of her allegations about a 

government contractor mischarging for its work on a plane’s radar system. 67 

F.3d 242, 243–44 (9th Cir. 1995). Two articles were subsequently published 

revealing that the suit had been filed and relaying the substance of the claims. 

Id. at 244. The district court dismissed the suit because of the seal violations. 

Id. at 243. 

The Ninth Circuit reversed. Id. at 243, 247. The court determined that 

no provision in the FCA explicitly authorizes dismissal as a sanction for a seal 

violation. Id. at 245. The court then looked to the legislative history 

surrounding the passage of the 1986 amendments to the FCA that added the 

seal provision, and determined that Congress sought to strike a balance 

between encouraging private FCA actions and allowing the government an 

adequate opportunity to evaluate whether to join the suit. Id. (citing S. Rep. 

No. 99-345, at 23–25 (1986)). The Lujan court concluded that the plaintiff had 

violated the seal requirement, but remanded with instructions for the district 

court to evaluate three factors in determining whether dismissal was 

warranted: 1) the harm to the government from the violations; 2) the nature of 

the violations; and 3) whether the violations were made willfully or in bad 

faith. Id. at 245–47. The Second Circuit adopted a similar analysis in U.S. ex 

rel. Pilon v. Martin Marietta Corp., 60 F.3d 995, 997, 999–1000 (2d Cir. 1995).

By contrast, the Sixth Circuit held that any violation of the seal 

requirement, no matter how trivial, requires dismissal. See Summers, 623 F.3d 

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at 299. The Summers court determined that Congress’s choice of a 60-day seal 

period already reflected legislative balancing of the interests identified by the 

Lujan court. See id. at 296. The Summers court also feared that a balancing 

test would encourage “plaintiffs to comply with the FCA’s under-seal 

requirement only to the point the costs of compliance are outweighed by the 

risk” of dismissal. Id. at 298. 

While cognizant of the justification for and the merits of a per se rule, we 

conclude that a seal violation does not automatically mandate dismissal. As

the Lujan court recognized and the government stated as amicus in this case, 

nothing in the text of § 3730(b)(2) “explicitly authorizes dismissal as a sanction 

for disclosures in violation of the seal requirement.” 67 F.3d at 245. Perhaps 

more essentially, though, the 1986 amendments to the FCA were intended to 

encourage more, not fewer, private FCA actions. See S. Rep. No. 99-345, at 1–

8, 23–25. Holding that any violation of the seal requirement mandates 

dismissal would frustrate that purpose, particularly when the government 

suffers minimal or no harm from the violation. We therefore embrace the Lujan 

test for addressing violations of § 3730(b)(2) and turn to the relevant facts here. 

We review the district court’s application of the Lujan factors, and its election 

of a remedy for a seal violation, for abuse of discretion. See Lujan, 67 F.3d at 

247 (“Imposition of dismissal as a sanction is reviewed for abuse of 

discretion.”); Pilon, 60 F.3d at 1000.

The Rigsbys filed their initial complaint under seal on April 26, 2006, 

and served a copy to the government. State Farm alleges that the Rigsbys’ prior 

counsel then disclosed the existence of the lawsuit to several news outlets by 

emailing copies of the evidentiary disclosures and engineering reports, 

sometimes including the case caption. State Farm also alleges that the Rigsbys 

themselves sat for interviews that culminated in the publication of multiple 

news stories—including one interview that was the subject of a national 

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broadcast on ABC’s 20/20 program—and notified a Mississippi congressman of 

their FCA action. Most of these events occurred before the seal was partially 

lifted on January 10, 2007, to allow the Rigsbys to address related litigation in 

Alabama. The seal was fully lifted on August 1, 2007.

First, we limit the scope of our inquiry to the period between the filing of 

the complaint and the partial seal lift. Indeed, while neither party appears to 

have scrutinized the docket in the related litigation, the existence of this qui 

tam litigation was revealed there in another party’s public filings within days 

of the partial seal lift. See E.A. Renfroe & Co. v. Cori Rigsby Moran et al., No. 

2:06-cv-01752 (N.D. Ala. Jan. 18, 2007), ECF No. 85. This effectively mooted 

the original seal. We also confine our analysis to disclosures of the existence of 

the suit itself, and do not consider disclosures of the underlying allegations. 

See Am. Civil Liberties Union v. Holder, 673 F.3d 245, 254 (4th Cir. 2011) 

(“[T]he seal provisions limit the relator only from publicly discussing the filing 

of the qui tam complaint. Nothing in the FCA prevents the qui tam relator 

from disclosing the existence of the fraud.”).

Having closely reviewed each of the disclosures offered by State Farm

that fall into the aforementioned time period and relate to the existence of the 

FCA suit,9 we first conclude that the Rigsbys violated § 3730(b)(2). They 

conceded as much at oral argument. But we agree with the district court’s 

determination that none of the disclosures appear to have resulted in the 

publication of the existence of this suit before the seal was partially lifted. 

Applying the Lujan factors, then, we conclude first that the government was 

not likely harmed. If State Farm was not tipped off about the existence of the 

suit from the Rigsbys’ disclosures, a fundamental purpose of the seal 

 

9 We assume, without deciding, that: 1) disclosures by the Rigsbys’ prior counsel, who 

were later disqualified, can be imputed to them; 2) disclosures to a sitting congressman can 

violate § 3730(b)(2); and 3) State Farm has standing to seek dismissal under § 3730(b)(2). 

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requirement—allowing the government to determine whether to join the suit 

without tipping off a defendant—was not imperiled. See Lujan, 67 F.3d at 245–

46; U.S. ex rel. Le Blanc v. ITT Indus., Inc., 492 F. Supp. 2d 303, 307–08

(S.D.N.Y. 2007); S. Rep. No. 99-345, at 24.

Second, the violations here—unlike those in many other cases that 

resulted in dismissal, see e.g., Taitz v. Obama, 707 F. Supp. 2d 1, 4 (D.D.C. 

2010); Erickson ex rel. U.S. v. Am. Inst. of Biological Scis., 716 F. Supp. 908, 

911–12 (E.D. Va. 1989)—did not involve a complete failure to file under seal or 

serve the government, and were therefore considerably less severe. See Lujan, 

67 F.3d at 246. We acknowledge that some of the above-mentioned publications 

revealed that the Rigsbys turned over material to federal and state 

prosecutors. But each reference to those disclosures is in the context of 

allegations about State Farm misleading policyholders, not the federal 

government. The distinction is significant because the revelation of possible 

private or public enforcement to protect policyholders would not alert State 

Farm to a pending FCA suit.

With respect to bad faith, the district court determined that “there is 

nothing in the record to suggest that the disclosures in question . . . were 

authorized by or made at the suggestion of the Relators,” and held that a 

finding of bad faith or willfulness was unwarranted. There is no indication that 

the Rigsbys themselves communicated the existence of the suit in the relevant

interviews. Were we to impute their former attorneys’ disclosures to them, 

however, we would conclude that they acted in bad faith. Even presuming bad 

faith, the Lujan factors favor the Rigsbys. Although they violated the seal 

requirement, the Rigsbys’ breaches do not merit dismissal. 

C. Subject Matter Jurisdiction 

State Farm next challenges the district court’s determination that it had 

subject matter jurisdiction over this action. Where the underlying allegations 

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of a suit have been the subject of a “public disclosure,” a court lacks subject 

matter jurisdiction to hear the suit unless the relator is an “original source” of 

the information. See 31 U.S.C. § 3730(e)(4).10 Whether § 3730(e)(4) bars a 

complaint is a question of subject matter jurisdiction. See Rockwell Int’l Corp. 

v. United States, 549 U.S. 457, 467 (2007). Assuming arguendo that a public 

disclosure occurred, as the district court did, we conclude that the district court 

properly retained jurisdiction because the Rigsbys are original sources.

A “challenge under the FCA jurisdictional bar is necessarily intertwined 

with the merits and is, therefore, properly treated as a motion for summary 

judgment.” U.S. ex rel. Reagan v. E. Tex. Med. Ctr. Reg’l Healthcare Sys., 384 

F.3d 168, 173 (5th Cir. 2004) (internal quotation marks and citation omitted). 

“Summary judgment will be granted if, viewing the evidence in the light most 

favorable to the non-moving party, there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a matter of law.” U.S. 

ex rel. Jamison v. McKesson Corp., 649 F.3d 322, 326 (5th Cir. 2011) (citations 

omitted).

In relevant part, § 3730(e)(4)(A) reads: “No court shall have jurisdiction 

over an action under this section based upon the public disclosure of allegations 

or transactions” in a civil hearing or in the news media “unless . . . the person 

bringing the action is an original source of the information.” An “original 

source” is “an individual who has direct and independent knowledge of the 

information on which the allegations are based and has voluntarily provided 

the information to the Government before filing an action under this section 

which is based on the information.” § 3730(e)(4)(B). “Direct” knowledge is 

“derived from the source without interruption or gained by the relator’s own 

 

10 This section was substantively amended in 2010, but the new version does not apply 

to cases, like this one, that were already pending at the time of its enactment. See Graham 

Cnty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 283 n.1 (2010).

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efforts rather than learned second-hand through the efforts of others.” U.S. ex 

rel. Laird v. Lockheed Martin Eng’g & Sci. Servs. Co., 336 F.3d 346, 355 (5th 

Cir. 2003) (citation omitted) abrogated on other grounds by Rockwell, 549 U.S. 

at 472. Knowledge is “independent” when “it is not derived from the public 

disclosure.” Reagan, 384 F.3d at 177 (citations omitted).

In evaluating whether a relator has “direct and independent knowledge,” 

we “must look to the factual subtleties of the case before [us] and attempt to 

strike a balance between those individuals who, with no details regarding its 

whereabouts, simply stumble upon a seemingly lucrative nugget and those 

actually involved in the process of unearthing important information about a 

false or fraudulent claim.” Laird, 336 F.3d at 356. The relator’s contribution 

must “translate into some additional compelling fact, or must demonstrate a 

new and undisclosed relationship between disclosed facts, that puts a 

government agency ‘on the trail’ of fraud, where that fraud might otherwise go 

unnoticed.” Reagan, 384 F.3d at 179 (citations omitted). Significantly here, the 

court must retain subject matter jurisdiction at all times throughout the 

litigation. “The court can lose jurisdiction over an otherwise sound action if the 

relator amends his complaint to remove the basis of the jurisdiction.” See 

Jamison, 649 F.3d at 327–28 (citing Rockwell, 549 U.S. at 473–74). Conversely, 

the “amendment process cannot be used to create jurisdiction retroactively 

where it did not previously exist.” See id. at 328 (internal quotation marks and 

citation omitted). 

Turning to the facts, two relevant clusters of disclosures occurred before 

the Rigsbys filed their initial complaint in April 2006. First, in September

2005, a different set of plaintiffs filed a class action complaint (the “Cox/Comer

Complaint”) against 100 unnamed insurance companies and seven named 

ones, including State Farm. That suit alleged that insurers were engaged “in 

an effort to save money and pass on the costs of the loss to the federal flood 

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insurance program” by misclassifying “storm related activity other than 

flooding”—including wind damage—as flood-related. The suit focused on the 

Mississippi Coast. In January 2006, the Cox/Comer plaintiffs filed a second 

amended complaint, alleging that damages were “caused by the hurricane 

winds . . . that preceded the arrival of water by a sufficient amount of time that 

the destruction had already occurred prior to the arrival of floodwaters.”

Second, on October 18, 2005, and February 2, 2006, former NFIP 

administrator J. Robert Hunter testified before a U.S. Senate committee about, 

among other topics, the conflict of interest WYO insurers adjusting Katrina 

claims faced in determining whether property damage was caused by wind or 

water. Hunter explained that “even though a property may have been washed 

away by the storm surge, it was likely first hit by heavy winds, so that by the 

time the water wiped out the property, some percentage of the property was 

already destroyed by wind and rain.” Hunter called for the Government 

Accountability Office to audit the allocations “so that any tendency of the 

insurers to diminish their wind losses for their own benefit is stopped quickly.” 

He did not name State Farm.

Assuming arguendo that these were public disclosures within the 

meaning of § 3730(e)(4)(A), we look first to whether the Rigsbys were original 

sources with direct and independent knowledge of the information in their 

original complaint. See Jamison, 649 F.3d at 327, 332. Although the 

Cox/Comer Complaint and the Hunter testimony did reveal some of the 

information coloring the background of this litigation, the Rigsbys’ personal, 

first-hand experiences filled in much of the detail, particularly as it related to 

the McIntosh claim, and certainly amounted to more than a “seemingly 

lucrative nugget” that they “simply stumble[d] upon.” Laird, 336 F.3d at 356. 

The Rigsbys allege in their original complaint that: 1) they were told to use the 

“shortcut” Xactotal software even on claims that “sustained moderate flood 

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damage”; 2) they were told to manipulate the information entered into Xactotal

if the initial analysis did not result in a full payout under the flood policy; and 

3) Rigsby discovered the wind-focused Ford Report as well as King’s “DO NOT 

Pay Bill DO NOT discuss” note attached to that document and the subsequent 

flood-focused Kelly Report. These allegations were sufficient to confer original 

source status upon the Rigsbys at the outset of the case. 

We next look to whether the Rigsbys’ status as original sources was 

divested by the pursuit of a different theory at trial, as State Farm argues. 

This is precisely what happened in Rockwell. In that case, a relator brought an 

FCA suit against his former employer, a government contractor operating a 

nuclear weapons plant, after a toxic waste leak. 549 U.S. at 460–64. His 

original complaint alleged the leak was rooted in a process for mixing the waste 

that he had predicted during his employment would fail because of a piping 

defect. Id. at 461. However, the theory the government developed after it 

intervened in the case (and upon which it was successful at trial) was that—

after the relator himself had already left the company—a foreman caused the 

leak by using an improper waste mixture. Id. at 461–65. The Court determined 

that because the only false claims found by the jury related to the period after

the relator had left the company, and were rooted not in the relator’s predicted 

piping failure but instead in a foreman’s improper mixture, he had no direct 

and independent knowledge of the defect. Id. at 475–76. The district court 

therefore lacked jurisdiction to enter judgment in the relator’s favor. Id. at 479.

But the facts here differ substantially from those in Rockwell. The 

Rockwell Court looked to the final pretrial order to evaluate jurisdiction and 

observed that it had become unmoored from the original allegations underlying 

the complaint. See id. at 474–76. But the final pretrial order in this case is 

replete with allegations about which the Rigsbys had direct and independent 

knowledge. The Rigsbys allege in the final pretrial order, for example, that: 1) 

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State Farm told adjusters to use Xactotal to “hit the limits” of flood policies; 2) 

adjuster Cody Perry handed Kerri Rigsby the Ford Report, which contained 

King’s note; and 3) the Rigsbys attended an adjuster meeting convened by 

State Farm during which the company’s trainers told the adjusters that 

Katrina was a “‘water storm’ and that all major damage to homes was caused 

by flooding.” These allegations formed the basis of much of the trial and they 

do not significantly diverge from the Rigsbys’ original allegations. 

State Farm is correct that the Rigsbys relied on Dr. Ralph Sinno’s 

“wracking” theory at trial, but wracking is not a “theory of fraud” about which 

the Rigsbys could have been whistleblowers. As detailed above, the Rigsbys 

alleged that State Farm fraudulently misclassified wind damage as flood 

damage through a variety of means. State Farm sought to refute the Rigsbys’ 

allegations of fraud by arguing that water was in fact the cause of the damage 

to the McIntosh home. Dr. Sinno’s wracking theory countered that defense by 

explaining how wind actually would have caused the damage first. The 

wracking theory was part of the proof by which the Rigsbys convinced the jury 

of the predicate fact that wind caused the damage to the McIntosh home. See 

Rockwell, 549 U.S. at 475 (“[A] qui tam relator’s misunderstanding of why a 

concealed defect occurred would normally be immaterial . . . .”); Sylvia, Fraud 

Against the Government § 11:63. In any event, the wracking theory was 

consistent with the allegations of fraud the Rigsbys presented in their 

complaint and final pretrial order. Indeed, when asked to summarize his 

theory of how the McIntosh home was destroyed, Dr. Sinno stated: “I agree 

fully with the first conclusion of the first inspector from State Farm,” that is, 

Ford.

The Rigsbys are the “paradigmatic . . . whistleblowing insider[s].” U.S. 

ex rel. Lam v. Tenet Healthcare Corp., 287 F. App’x 396, 401 (5th Cir. 2008) 

(internal quotation marks and citation omitted); see also Sylvia, Fraud Against 

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the Government § 11:62; John T. Boese, Civil False Claims and Qui Tam 

Actions § 4.02[D][3][a] (4th ed. 2014) (“[K]knowledge acquired and witnessed 

during the course of employment or professional work is direct knowledge.”).11

Their direct knowledge surpasses that presented by other would-be relators in 

our original source case law. Compare Jamison, 649 F.3d at 331–32 (holding 

that relator who “describe[d] a general scheme of fraud and then list[ed] 

arbitrarily a large group of possible perpetrators” was not an original source); 

U.S. ex rel. Fried v. West Indep. Sch. Dist., 527 F.3d 439, 440, 443 (5th Cir. 

2008) (holding that relator was not an original source where he was a 

government-waste opponent who sought to infiltrate a school district to root 

out retiring teachers’ alleged social security fraud); Fed. Recovery Servs., Inc. 

v. United States, 72 F.3d 447, 448–49, 451–52 (5th Cir. 1995) (holding that 

relators who brought suit against a competitor and other defendants were not 

original sources). The Rigsbys’ knowledge was also independent because their 

contributions put the government “on the trail of fraud” that “might otherwise 

[have gone] unnoticed.” Reagan, 384 F.3d at 179. Even the most zealous 

government investigator would not likely have been able to pinpoint the 

McIntosh claim—which was the basis of the trial—from the Cox/Comer

Complaint and the Hunter testimony. Thus, the Rigsbys are original sources.

It is plausible that § 3730(e)(4) might come into play again as the district 

court proceeds with this litigation. See Rockwell, 549 U.S. at 473, 476 

(recognizing that subject matter jurisdiction can be questioned at any time and 

 

11 Cori Rigsby’s status as an original source in this case is more tenuous because she 

lacked direct and independent knowledge of the specifics of the McIntosh claim. However, we 

are satisfied that her contributions to the action permit the court to retain subject matter 

jurisdiction over her claims. Like her sister, Cori Rigsby was an experienced adjuster working 

for a State Farm contractor. She was instructed by State Farm that Katrina was a “water 

storm”; she was told to use Xactotal rather than Xactimate; and she knew about engineers 

altering their reports. Cori Rigsby, too, was a “paradigmatic . . . whistleblowing insider.” 

Tenet Healthcare Corp., 287 F. App’x at 401 (internal quotation marks and citation omitted).

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with respect to any claim). We emphasize that there has been no finding of a 

public disclosure in this case under § 3730(e)(4)(A). However, even if the 

district court on remand should find a public disclosure touching on any 

possible claims, the Rigsbys would not necessarily be barred from pursuing 

those claims if they remain qualified as original sources under § 3730(e)(4)(B).

D. Jury Verdict

State Farm’s cross-appeal in this case lastly aims to unravel the jury’s 

verdict in favor of the Rigsbys on the McIntosh claim. The jury found that State 

Farm was liable under § 3729(a)(1) (false claim liability) and § 3729(a)(1)(B) 

(false record liability), and the district court denied State Farm’s motions for 

judgment as a matter of law. We conclude that a reasonable jury could have 

rendered these verdicts. 

“Although we review denial of a motion for judgment as a matter of law 

de novo . . . our standard of review with respect to a jury verdict is especially 

deferential.” Wellogix, Inc. v. Accenture, L.L.P., 716 F.3d 867, 874 (5th Cir. 

2013) (internal quotation marks and citation omitted). The district court only 

errs where “the evidence at trial points so strongly and overwhelmingly in the 

movant’s favor that reasonable jurors could not reach a contrary conclusion.” 

Omnitech Int’l, Inc. v. Clorox Co., 11 F.3d 1316, 1323 (5th Cir. 1994). While 

“the court should review all of the evidence in the record,” it “must draw all 

reasonable inferences in favor of the nonmoving party, and it may not make 

credibility determinations or weigh the evidence.” Reeves v. Sanderson 

Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).

The Rigsbys’ first count is for a violation of § 3729(a)(1), the applicable 

version of which premises liability on “knowingly present[ing], or caus[ing] to 

be presented, to an officer or employee of the United States Government . . . a 

false or fraudulent claim for payment or approval.” § 3729(a)(1). To succeed on 

their false record claim, the Rigsbys had to prove that State Farm “knowingly 

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ma[de], use[d], or cause[d] to be made or used, a false record or statement 

material to a false or fraudulent claim.” § 3729(a)(1)(B).

State Farm argues that no reasonable jury could find: 1) that the 

McIntosh claim was false; 2) that State Farm had the requisite guilty 

knowledge; or 3) that there was evidence of a false record or statement. State 

Farm’s first two challenges affect both counts, while its third affects only the 

false record count. We take each challenge in turn.

i. Falsity of the McIntosh Claims

To prove a violation of both § 3729(a)(1) and § 3729(a)(1)(B), the Rigsbys 

had to show that the claim presented for payment on the McIntosh’s flood 

policy was false. A claim includes “any request or demand, whether under a 

contract or otherwise, for money or property.” § 3729(c).12 And this court has 

explained that a claim “for money or property to which a defendant is not 

entitled [is] ‘false’ for purposes of the False Claims Act,” and “whether a claim 

is valid depends on the contract, regulation, or statute that supposedly 

warrants it.” United States v. Southland Mgmt. Corp., 326 F.3d 669, 674–75 

(5th Cir. 2003) (en banc). Here, the issue is whether State Farm appropriately 

determined that the flood insurance contract—derived word-for-word from a 

federal regulation, and containing an exclusion for wind damage—permitted 

the full $250,000 payout for flood damage to the McIntosh home. 

State Farm primarily contends that evidence of flood damage permeated 

the case, and that the Rigsbys failed to adequately support their trial theory 

that the home was rendered a total loss by wind before the flood waters arrived. 

We conclude a reasonable jury could find that the McIntosh claim was false, 

and, more specifically, could have believed that the home was destroyed by 

Katrina’s winds before the water arrived.

 

12 The definition has since been amended, but this language is unchanged. 

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At the outset, we disagree with State Farm that the Rigsbys were 

required to present expert valuation evidence. We have already held that 

evidence of valuation can include—besides expert evidence—adjusters’ reports 

and a plaintiff-insured’s deposition testimony. See Bayle v. Allstate Ins. Co., 

615 F.3d 350, 360, 363 (5th Cir. 2010); see also 17A Couch on Insurance 

§ 255:52 (3d ed. 2014) (“The question of value, for purposes of estimating the 

loss under [a] policy, is more or less one of expert opinion, but witnesses 

testifying as to the value of property are not required to be expert or skilled in 

the strict sense of the term in order to express an opinion on value.”).

The Rigsbys’ most significant valuation evidence came from Dr. Ralph 

Sinno, a professor of structural civil engineering.13 Dr. Sinno, after personally 

inspecting the property, testified that:

[T]he McIntosh house was damaged by the hurricane wind way 

before even the water got into the threshold of the house. The 

water did not get into the threshold of the house until two hours 

after the peak wind. After two hours, after all of the damage has 

been done, the water got to the house. 

Dr. Sinno testified in detail about how winds “demolished, twisted, and 

wracked” the McIntosh home, and he defined wracking as “deform[ing] and 

mov[ing] [the structure] horizontally due to horizontal forces.” Dr. Sinno’s 

testimony aligned with that of Brian Ford (the Forensic employee who 

concluded in a report shortly after the storm that the primary cause of damage 

to the McIntosh home was wind), and it was corroborated by additional expert 

 

13 State Farm alleges that the district court abused its discretion by permitting Dr. 

Sinno to testify under Daubert v. Merrell Dow Pharm. Inc., 509 U.S. 579 (1993). “District 

courts enjoy wide latitude in determining the admissibility of expert testimony, and the 

discretion of the trial judge and his or her decision will not be disturbed on appeal unless 

manifestly erroneous.” Hodges v. Mack Trucks Inc., 474 F.3d 188, 194 (5th Cir. 2006) 

(internal quotation marks and citation omitted). The district court cogently and thoroughly 

evaluated Dr. Sinno’s qualifications, expertise, and opinions in ruling on State Farm’s motion 

in limine. There was no abuse of discretion in permitting the jury to hear his testimony.

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and witness testimony. While Dr. Sinno is not a valuation expert, as State 

Farm forcefully argues and Dr. Sinno himself conceded, his expertise in 

structural engineering qualified him to opine on whether the home was 

structurally destroyed. See 17A Couch on Insurance § 255:52. 

State Farm argues that many witnesses—including some of the Rigsbys’ 

own—testified that there had been flood damage to the home. That is certainly 

true (though much of that damage could have occurred after the wind rendered 

the home a total loss, or it could relate to the contents of the home, for which 

the McIntoshes were reimbursed an unchallenged $100,000). But, as the 

district court correctly recognized, “it is the function of the jury as the 

traditional finder of the facts, and not for the Court, to weigh conflicting 

evidence and inferences, and determine the credibility of witnesses.” Roman v. 

W. Mfg., Inc., 691 F.3d 686, 692 (5th Cir. 2012) (internal quotation marks and 

citation omitted). A reasonable jury could have concluded that the house was 

a total loss before the flood waters arrived. Certainly the evidence does not 

point “so strongly and overwhelmingly in [State Farm’s] favor that reasonable 

jurors could not reach a contrary conclusion.” Omnitech, 11 F.3d at 1323.14

 

14 The parties dispute whether State Farm’s alleged violation of FEMA directive 

W5054 can independently support the jury’s verdict. State Farm contends that compliance 

with W5054 was not an express condition or prerequisite for payment of the claim. See U.S. 

ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262, 268 (5th Cir. 2010) (“Not every breach 

of a federal contract is an FCA problem. We have thus repeatedly upheld the dismissal of 

false-certification claims (implied or express) when a contractor’s compliance with federal 

statutes, regulations, or contract provisions was not a ‘condition’ or ‘prerequisite’ for payment 

under a contract.”). The Rigsbys contend that this is not a false certification case that would 

require concluding that compliance with W5054 was a prerequisite for payment of a claim. 

Even were we to agree with State Farm that compliance with W5054 must be a prerequisite 

for payment in this context, FEMA regulations emphasize that WYO insurers “shall comply 

with written standards, procedures, and guidance issued by FEMA.” 44 C.F.R. pt. 62, app. A, 

art. II(G)(1); see also 44 C.F.R. pt. 62, app. A, art. II(A)(2) (“Companies will also be required 

to comply with . . . guidance authorized by . . . [FEMA].”). Additionally, directive W5054 itself 

states that the “NFIP’s general adjusters will be involved in closely monitoring the 

performance and procedures of the WYO carriers utilizing this process,” signifying that 

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ii. Scienter

State Farm next argues that the Rigsbys failed to prove the requisite 

degree of scienter. Violations of both § 3729(a)(1) and § 3729(a)(1)(B) require

intent, or scienter. A person must have actual knowledge of the truth or falsity 

of information, act in deliberate ignorance of the truth or falsity of information, 

or act in reckless disregard of the truth or falsity of information. See § 3729(b). 

Proof of specific intent is not required, though negligence or gross negligence 

is insufficient. See id.; U.S. ex rel. Longhi v. Lithium Power Techs., Inc., 575 

F.3d 458, 468 (5th Cir. 2009).

State Farm first argues that that the evidence of knowledge was 

insufficient because the three adjusters assigned to the claim—Rigsby, Cody 

Perry, and John Conser (the State Farm supervisor and team leader who 

ultimately made the decision to pay the McIntosh flood claim on October 2, 

2005)—all shared a good faith belief at the time the claim was submitted that 

the McIntosh home suffered $250,000 in flood damage. Further, State Farm 

argues, there is no indication that anyone besides these individuals knew the 

details of the McIntosh claim before it was paid. 

But State Farm’s constricted theory of FCA liability would enable 

managers at an organization to concoct a fraudulent scheme—leaving it to 

their unsuspecting subordinates to carry it out on the ground—without fear of 

reprisal. The FCA is not so limited. First, the statute provides for liability 

where a defendant knowingly “causes to be presented” a false claim or 

knowingly “cause[s]” a false record to be made or used. § 3729(a)(1), (a)(1)(B). 

That is, the statute by its plain text permits liability without a direct falsity. 

Second, courts have rejected “ignorant certifier” defenses like this one. A 

 

FEMA took compliance seriously. Finally, FEMA officials testified that line-by-line estimates 

were in fact a prerequisite to payment under the NFIP.

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textbook example comes from Grand Union Co. v. United States, 696 F.2d 888 

(11th Cir. 1983). In that case, cashiers at a grocery store allegedly assisted 

customers in defrauding the federal food stamp program, but the head cashier 

who actually submitted the false claims knew nothing of the scheme. Id. at 

889–90. The court reversed a grant of summary judgment for the defendant 

grocery store on an FCA claim, holding that liability could attach to a 

corporation under the FCA despite the certifier’s good faith belief in the 

validity of the certification. Id. at 891; see also U.S. ex rel. Harrison v. 

Westinghouse Savannah River Co., 352 F.3d 908, 920 n.12 (4th Cir. 2003) (“[A] 

corporation can be held liable under the FCA even if the certifying employee 

was unaware of the wrongful conduct of other employees.”).

State Farm contends, however, that Grand Union and Harrison still 

require that at least one State Farm employee have knowledge that a claim is 

false. Because there is no indication that the alleged perpetrators of the scheme

knew the details of the McIntosh claim before its submission,15 State Farm 

argues, it cannot be held liable. The Rigsbys counter that they identified 

perpetrators of the scheme: Lecky King (the “architect and enforcer”); Juan 

Guevara (who confirmed in an email that State Farm knew FEMA directive 

W5054 required line-by-line estimates in circumstances like this one); and 

 

15 Lecky King’s alleged manipulation of the McIntosh engineering reports occurred 

after the McIntosh claim was paid. The Rigsbys have abandoned their reverse false claim 

allegation under § 3729(a)(7), which would sanction recovery for certain actions taken to 

“conceal, avoid, or decrease an obligation” to the government. § 3729(a)(7). Consequently, 

State Farm cannot be liable in this suit for any failure to reimburse the government for 

improperly transmitted funds. However, simply because an action took place after the fraud 

does not render it wholly irrelevant in determining whether there was sufficient knowledge, 

before the claim or record was submitted, to impose liability under § 3729(a)(1) or

§ 3729(a)(1)(B). Circumstantial evidence is appropriate in determining scienter in an FCA 

case, see United States v. Aerodex, Inc., 469 F.2d 1003, 1007–08 (5th Cir. 1972), and the jury 

was entitled to use post-payment evidence to evaluate State Farm’s pre-payment knowledge.

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Jody Prince (a State Farm trainer who wrote in an email that State Farm 

adjusters should “manipulate the totals” and “write Policy limits”). 

In this case, there was evidence that adjusters were effectively told to 

presume flood damage instead of wind damage. There was also evidence that 

State Farm knowingly violated W5054, concealed evidence of wind damage, 

and strong-armed an engineering firm to change its reports. Even if we were 

to agree with State Farm that one individual must have knowledge that a 

claim is false, the jury could have reasonably believed that King alone, “act[ing] 

in reckless disregard of the truth or falsity” of the information, 1) caused a false 

claim to be presented for payment, and 2) caused a false record material to a 

false claim to be made or used. § 3729(a)(1), (a)(1)(B), (b). State Farm’s 

liability—premised on this knowledge—does not make the company

“answerable for anything beyond the natural, ordinary and reasonable 

consequences of [its] conduct.” Allison Engine Co. v. U.S. ex rel. Sanders, 553 

U.S. 662, 672 (2008) (internal quotation marks and citation omitted). 

State Farm’s final allegation with respect to scienter is that the 

government’s knowledge and approval of its actions—through FEMA and 

NFIP witnesses who testified to a desire to streamline the flood claim process—

precludes a finding of guilty knowledge. Where the government “knows and 

approves of the particulars of a claim for payment before that claim is 

presented, the presenter cannot be said to have knowingly presented a 

fraudulent or false claim.” U.S. ex rel. Laird v. Lockheed Martin Eng’g & Sci. 

Servs. Co., 491 F.3d 254, 263 (5th Cir. 2007) (emphasis added) (internal 

quotation marks and citation omitted). State Farm nowhere alleges that any 

FEMA official had particularized knowledge of the McIntosh claim. There are 

only general allegations that FEMA was behind State Farm’s effort to pay flood

claims quickly. But FEMA’s desire to have valid claims paid out quickly does 

not translate into a license to pay invalid claims. We conclude that a reasonable 

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jury could believe that State Farm had the requisite scienter to support 

violations of § 3729(a)(1) and § 3729(a)(1)(B). 

iii. False Record or Statement

The second relevant count in this case is for a violation of § 3729(a)(1)(B), 

which requires the knowing submission of a “false record or statement material 

to a false or fraudulent claim.” The term “material” is defined broadly to mean 

“having a natural tendency to influence, or be capable of influencing, the 

payment or receipt of money or property.” § 3729(b)(4). The Rigsbys argue that 

the Xactotal printout in the McIntosh flood claim file met this standard 

because it appeared deceptively to be a line-by-line estimate, when in fact it 

only estimated the value of the McIntosh home based on its square footage and 

construction quality. State Farm responds that the Xactotal printout cannot 

be a false record because it was a true and correct document that was properly 

a part of the McIntosh file and was not intended to deceive the government.16

We agree with the district court that evidence adduced at trial could lead 

a reasonable jury to believe that State Farm deliberately or recklessly did not 

comply with FEMA directive W5054. To cite just one example, State Farm’s 

principal FEMA contact, Juan Guevara, wrote in an email shortly after W5054 

was circulated that the directive required a line-by-line estimate for a building 

like the McIntosh home. And the Xactotal printout for the McIntosh claim so 

closely resembled a line-by-line estimate that former FEMA adjuster Gerald 

Waytowich—who testified on behalf of State Farm—confused it for one. The 

jury could reasonably have believed that the printout was material, and was 

placed in the file to mislead FEMA in violation of § 3729(a)(1)(B).

 

16 The Rigsbys also argue that the omission of the Ford Report from the NFIP file 

triggered liability under § 3729(a)(1)(B). Because we conclude that the submission of the 

Xactotal printout supports a violation of § 3729(a)(1)(B), we do not reach this issue.

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III. CONCLUSION

We therefore REVERSE the district court’s decision to deny the Rigsbys 

additional discovery, but AFFIRM that court’s decisions with respect to the 

seal violations, subject matter jurisdiction, and State Farm’s motion for 

judgment as a matter of law. The case is REMANDED for further proceedings 

not inconsistent with this opinion. 

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