Opinion ID: 1226703
Heading Depth: 3
Heading Rank: 3

Heading: Unnamed Defendants

Text: The district court also dismissed Branch's allegations against a host of Defendants not named in Rigsby, presumably on the theory that Rigsby 's broad allegations preempted the entire field of Katrina-related WYO fraud. No circuit has directly addressed the issue of whether allegations in a first-filed action can bar related allegations against wholly unrelated defendants brought in a subsequent action. The closest cases are those holding that allegations of fraud against a corporation may bar subsequent allegations of fraud against the corporation's subsidiaries. In Hampton, for example, the District of Columbia Court of Appeals held that § 3730(b)(5) barred an action against certain subsidiaries and employees of a corporation in light of a first-filed action naming only the corporation. 318 F.3d at 218-19. In reaching this conclusion, however, the court relied heavily on the fact that the first-filed action alleged a corporate-wide fraud perpetrated by the corporation directly through its subsidiaries. Id.; see also Grynberg, 390 F.3d at 1280 n. 4 (relying on Hampton to conclude that an FCA action against a corporation barred a subsequent action alleging the same essential claim of fraud against its subsidiaries). Several circuits have also addressed the issue of unnamed wrongdoers in the context of the FCA's public disclosure bar, § 3730(e)(4)(A), which, as we stated above, is not the same thing as the first-to-file bar. See, e.g., United States ex rel. Gear v. Emergency Med. Assocs. of Ill., Inc., 436 F.3d 726, 729 (7th Cir.2006) (industry-wide public disclosures of Medicare fraud bar qui tam actions against any defendant who is directly identifiable from the public disclosures); United States v. Alcan Elec. & Eng'g, Inc., 197 F.3d 1014, 1019 (9th Cir.1999) (public disclosures of fraud that failed to identify specific defendants but pertained to a narrow class of suspected wrongdoerslocal electrical contractors who worked on federally funded projects over a four-year periodtriggered the public disclosure bar as to those contractors); United States ex rel. Fine v. Sandia Corp., 70 F.3d 568, 572 (10th Cir.1995) (where disclosures revealed that at least two of [the laboratory's] eight sister laboratories were engaged in a fraud, the government would have little trouble examining the operating procedures of nine, easily identifiable, [Department of Energy]-controlled, and government-owned laboratories.); United States ex rel. Cooper v. Blue Cross and Blue Shield of Fla., Inc., 19 F.3d 562, 566 (11th Cir.1994) (allegations of widespread Medicaid fraud made in sources in which a particular insurance company was not specifically named or otherwise directly identified were insufficient to trigger the public disclosure bar). If we were to apply these decisions by analogy to the first-to-file situation, they suggest that there might be situations in which the allegations in a first-filed complaint pertain to such a narrow or readily-identifiable group of potential wrongdoers that § 3730(b)(5) acts to bar subsequent allegations against previously unnamed defendants. But that is not the case here. Rigsby does not allege a true industry-wide fraud or concerted action among a narrow group of participants. Rather, looking only at the facts pleaded (not any public information, which is not part of the first-to-file analysis), Rigsby implicates, at most, four specific WYO insurers among the approximately ninety-five WYO insurers conducting business in the Louisiana and Mississippi areas during Hurricane Katrina. Thus, Rigsby tells the government nothing about which of the ninety-one other WYO insurers (and adjusting firms working for or with those insurers), if any, actually engaged in any fraud. The potential for fraud exists in any government program and, certainly, in the situation presented by Hurricane Katrina where mass amounts of federal funds were expended in emergency and less-controlled conditions. By itself, then, Rigsby tells us nothing about any parties not named therein. [11] Thus, in combing through a host of WYO insurers and identifying those specific insurers and adjusting firms that may have committed wind/water fraud, Branch likely revealed instances of fraud that would have otherwise eluded the government. Further, unlike the additional defendants named in Hampton and Grynberg, the additional defendants named in this case are not corporate affiliates or subsidiaries of the Rigsby defendants. Neither Rigsby nor Branch alleges that Katrina-involved WYO insurers conspired or acted in concert to defraud the government. They are not part of a small group of carefully-monitored federal contractors, or working together on a particular site. Rather, the class of wrongdoers that may have committed Katrina-related wind/water fraud are independent entities operating wholly separately, related only by their mutual participation in the government's WYO program. Under these circumstances, forcing the government to expend its limited time and resources wading through the records of ninety-one WYO insurers in an attempt to identify specific instances of fraud would completely undermine the enforcement component of the FCA's qui tam provisions. That is not to say that the first-filed bar can never bar a suit against an unnamed alleged fraud-feasor who is not a corporate relative of the named fraud-feasor. As stated above, once the government knows the essential facts of the fraudulent scheme, it has enough information to discover related fraud. LaCorte, 149 F.3d at 234. Here, nothing in the Rigsby complaint provided the government with facts from which it could discern a widespread fraud involving all WYO insurers or the identities of other specific fraud-feasors. Thus, the claims in the present case against previously unnamed alleged fraudfeasors are not barred by the first-to-file rule. Accordingly, we conclude that the district court erred in dismissing under the first-to-file rule the Branch Defendants that Rigsby failed to name.