STORY FROM: Superstorm Sandy Insurance Litigation

False Claims Act Does Not Require Dismissal Where Seal Provision Violated, U.S. High Court Rules

WASHINGTON, D.C. — The False Claims Act does not require mandatory dismissal of a qui tam action where the Act’s seal provision has been violated, the U.S. Supreme Court has ruled in a Hurricane Katrina case, explaining that the Act “does not enact so harsh a rule.”

In a Dec. 6 opinion, the high court rejected State Farm Fire & Casualty Co.’s contention that a Mississippi federal court did not abuse its discretion in refusing to dismiss the action, which was filed by two former adjusters who accused the insurer of misclassifying wind damage as flood damage.

In the years ...

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