HUD
Subscribe to HUD's Posts

Failure to Specify Statutes and Regulations Fatal to FCA Complaint

The US Court of Appeals for the Seventh Circuit recently reviewed a district court’s dismissal of an FCA claim against the City of Chicago, in which the relator alleged that the City’s certifications of compliance with civil rights laws were false because the City engaged in practices which increased racial segregation. The case is United States ex rel. Hanna v. City of Chicago, and can be found here. On August 22, the Seventh Circuit affirmed dismissal of the relator’s complaint for failure to comply with Fed. R. Civ. 9(b). The most notable takeaway from this case is the court’s holding that where the complaint itself did not specify which statutes and regulations the City violated (and with which it thus falsely certified compliance), the relator could not rely on more specific statutory and regulatory references later identified in his briefs. The court observed: “If the particularity requirement is meant to ensure more thorough investigation before...

Continue Reading

Ninth Circuit Rejects Qui Tam Relator’s Original Source Claim

On July 27, 2016, a three-judge panel of the Ninth Circuit Court of Appeals in California issued a ruling in United States ex rel. Hastings v. Wells Fargo Bank, NA, Inc., affirming the district court dismissal of a qui tam suit on the grounds that the relator was not an original source. The relator had sued Wells Fargo and a number of other lending institutions under the Federal Claims Act (FCA), claiming they had falsely certified to the federal Department of Housing and Urban Development (HUD) that they were in compliance with a regulation requiring borrowers to make a down payment of at least 3%. Federal regulations allow this down payment to be paid via gift, so long as repayment for the gift is not “expected or implied.” See U.S. ex rel. Hastings v. Wells Fargo Bank, Nat. Ass’n (Inc.), 2014 WL 3519129, at *1 (C.D. Cal. July 15, 2014) (summarizing HUD regulations). The defendants moved to dismiss, arguing that the gravamen of the allegations (that certain...

Continue Reading

BLOG EDITORS

STAY CONNECTED

TOPICS

ARCHIVES