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United States ex. rel. Schneider v. J.P. Morgan Chase Bank, N.A.

United States District Court for the District of Columbia

March 6, 2019, Decided; March 6, 2019, Filed

Civil Action No. 14-1047 (RMC)

Opinion

MEMORANDUM OPINION

Pursuant to the Federal False Claims Act and similar State and District of Columbia laws, Relator Laurence Schneider sued J.P. Morgan Chase Bank, N.A., J.P. Morgan Chase & Co., and Chase Home Finance LLC (collectively "Chase") and argued Chase submitted false claims relating to the National Mortgage Settlement and false claims relating to the Home Affordable Modification Program (HAMP) to decrease its liability to the Federal Government. After over five years in litigation both in front of this Court and the D.C. Circuit, the United States has moved to dismiss the case pursuant to 31 U.S.C. § 3730(c)(2)(A), which permits the United States to dismiss a qui tam action "notwithstanding the objections of the person initiating the action." The Court held a hearing on the motion, as required by the statute, and based on the representations made in the briefs and at the hearing will grant the motion.

I. FACTS

The general [*3]  background and facts of this case are set forth in detail in this Court's opinion on Chase's Motion to Dismiss the Second Amended Complaint and will not be repeated here except as necessary to understand the posture of the current motion. See United States ex rel. Schneider v. J.P. Morgan Chase Bank, N.A., 224 F. Supp. 3d 48, 50-53 (D.D.C. 2016) (Schneider I).

On May 6, 2013, Mr. Schneider filed his initial Complaint as Relator under the False Claims Act, see 31 U.S.C. § 3730(b)(1), in the United States District Court for the District of South Carolina. See Compl. [Dkt. 1]. The Federal Government declined to intervene on January 13, 2014. See Notice [Dkt. 24]. The case was transferred to this Court on June 19, 2014. See Transfer Order [Dkt. 58]. Relator filed his First Amended Complaint on November 17, 2014. See FAC [Dkt. 80]. On August 31, 2015, the Federal Government again declined to intervene. See FAC Notice [Dkt. 96]. Relator filed a Second Amended Complaint on October 2, 2015. See SAC [Dkt. 102]. Defendants moved to dismiss on November 12, 2015. See Mot. [Dkt. 105]. The Court granted the motion to dismiss and dismissed Mr. Schneider's HAMP claim without prejudice and all other claims with prejudice. See Schneider I, 224 F. Supp. 3d 48. The D.C. Circuit affirmed and remanded the case to this Court to allow Mr. Schneider an opportunity [*4]  to file a motion to amend his complaint to modify the claim that had been dismissed without prejudice. See United States ex rel. Schneider v. JPMorgan Chase Bank, Nat'l Ass'n, 878 F.3d 309 (D.C. Cir. 2017) (Schneider II).

Mr. Schneider filed a Motion for Leave to File a Third Amended Complaint; Chase opposed; and that Motion is currently ripe for review.1 On July 2, 2018, after the briefing on Mr. Schneider's Motion was completed, the United States filed a Notice indicating its intent to evaluate the proposed amendments to determine if dismissal is appropriate. See Notice of Intent to Evaluate Proposed Am. Compl. and Request to Abstain Ruling on Mot. for Leave to Amend [Dkt. 130]. The Court stayed the Motion and granted three extensions of time to the United States as it considered whether to move to dismiss. See 9/18/2018 Minute Order; 10/10/2018 Minute Order; 10/23/2018 Minute Order. On November 13, 2018, the United States moved to dismiss the case pursuant to 31 U.S.C. § 3730(c)(2)(A). See United States' Mot. to Dismiss [Dkt. 135]. Mr. Schneider opposed and requested a hearing on the motion. See Relator Laurence Schneider's Notice of Request for Hearing Regarding United States' Mot. to Dismiss [Dkt. 136]. The Court conducted that hearing on February 27, 2019.

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2019 U.S. Dist. LEXIS 35393 *; 2019 WL 1060876

United States of America, et al., ex rel. LAURENCE SCHNEIDER, Plaintiffs, v. J.P. MORGAN CHASE BANK, N.A., et al., Defendants.

Subsequent History: Affirmed by United States ex rel. Schneider v. JPMorgan Chase Bank, N.A., 2019 U.S. App. LEXIS 25339 (D.C. Cir., Aug. 22, 2019)

Prior History: United States ex rel. Schneider v. JPMorgan Chase Bank, N.A., 878 F.3d 309, 2017 U.S. App. LEXIS 26316 (D.C. Cir., Dec. 22, 2017)

CORE TERMS

motion to dismiss, qui tam, amended complaint, false claim, intervene, federal government