TAGGART v. UNITED STATES DEPARTMENT OF JUSTICE et al

Filing 27

MEMORANDUM AND OPINION. SIGNED BY HONORABLE GERALD J. PAPPERT ON 1/20/17. 1/20/17 ENTERED & E-MAILED.(fdc)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
KENNETH TAGGART,
Plaintiff,

CIVIL ACTION
NO. 16-04040

v.
UNITED STATES DEPARTMENT OF
JUSTICE, et al.,
Defendants.
PAPPERT, J.

January 20, 2017
MEMORANDUM

This case pertains to three Civil Investigative Demands issued by the Government and is
Kenneth Taggart’s third attempt to have the Court preclude the Government from investigating
potential violations of the False Claims Act. Taggart continues to confuse the investigation into
a possible violation of the statute with the filing of a lawsuit, the scope of the Court’s inquiry in
each phase and the proper stage at which to assert various arguments and defenses. For this and
other reasons discussed below, the Court grants the Government’s motion with respect to all but
one of Taggart’s myriad claims.
I.
In June 2008 Taggart, an appraiser, obtained a $658,648.00 mortgage insured by the
Department of Housing and Urban Development (“HUD”) for a property at 521 Cowpath Road
in Telford, Pennsylvania.1 (Pl.’s Am. Compl., at 1, ECF No. 6.) Taggart obtained his HUDinsured mortgage under Section 203(b) of the National Housing Act. See 12 U.S.C. § 1709. The

1

Taggart stopped paying the mortgage and it is now in default. (Defs.’ Mot., at 2.)

1

statute requires any HUD-insured mortgage to be for the primary or secondary residence of the
person receiving the mortgage. (Defs.’ Mot. to Dismiss (“Defs.’ Mot.”), ECF No. 10, at 8.)
Subsequent to obtaining the mortgage, Taggart, in an unrelated lawsuit, stated that 709
Schwab Road in Hatfield, Pennsylvania was his primary residence. See Taggart v. Wells Fargo
Home Mortg., Inc., No. 10-cv-00843, 2010 WL 3679091, at *1 (E.D. Pa. Sept. 27, 2010). This
led the United States (“the Government”) to investigate, pursuant to the False Claims Act
(“FCA”), see 31 U.S.C. § 3729, et seq., whether Taggart had maintained 521 Cowpath Road as
his primary residence during the relevant year, in accordance with the statutory occupancy
requirement. As part of that investigation, on October 21, 2015, the Government served upon
Taggart two Civil Investigative Demands (“CIDs”) requiring him to produce documents relating
to the HUD-insured mortgage and to appear for a deposition. (Pl.’s Am. Compl., at 1.)
Taggart initially challenged these CIDs in a separate proceeding before this Court. See In
re Taggart, No. 15-mc-255, 2016 WL 3902939 (E.D. Pa. July 19, 2016). In that case, on
November 11, 2015, Taggart filed a pro se petition under seal to quash the Government’s CIDs.
(No. 15-mc-255, ECF No. 1.) He contended that the CIDs should be quashed because: (1) they
were not made pursuant to a legitimate law enforcement investigation since any claim against
him under the FCA would be time-barred; (2) they failed to plead with particularity the evidence
supporting a claim under the FCA; (3) they failed to comply with procedural requirements under
12 U.S.C. 5562; (4) they interfered with his due process right to litigate claims without
interference from the government since the validity of the mortgage contract was being litigated
in another forum;2 and (5) they violated his First Amendment rights because they were issued
solely in retaliation for his “whistleblowing” against HUD. (Id.) Taggart also asserted several
2

There are apparently a number of ongoing suits litigating the validity of the mortgage, ownership of the
note and alleged defects in the perfection of the mortgage contract and the note. (Pl.’s Am. Compl., at 4–5.)

2

statutory defenses to a substantive claim under the FCA, including lack of knowledge, lack of a
false statement and lack of materiality. (Id.)
On December 24, 2015 Taggart, now represented by counsel, filed a motion to stay the
proceedings for 90 days. (ECF Nos. 6 & 7.) Following a telephone conference, the Court issued
an Order denying Taggart’s motion to stay, granting the Government’s motion for enforcement
of the CIDs and ordering Taggart to produce the documents requested by the Government by
April 15, 2016 and appear for oral testimony on April 25, 2016. (ECF No. 9.) The documents
Taggart subsequently produced to the Government did not clearly confirm which properties were
rented, which were not or where Taggart was living during the relevant year. (ECF No. 14.) The
documents did reveal that Taggart was a customer of TD Bank. (Id.)
The Government therefore issued on December 11, 2015 a third CID to TD Bank. (Id.)
This CID requested, among other things, Taggart’s deposit and withdrawal slips. (ECF No. 11.)
On May 23, 2016 Taggart moved to quash the CID pursuant to the Right to Financial Privacy
Act of 1978, see 12 U.S.C. § 3410, arguing that the CID constituted a “fishing expedition” and
was “oppressive because it [sought] to compel production of privacy records” which impinged
upon his “right to privacy.” (Id. at 8–9.) The Court held oral argument on the motion on June
27, 2016, (ECF No. 17), and denied it on June 29, 2016, (ECF Nos. 18–19). The Court found
that the request did not violate the statute since it was made pursuant to a legitimate law
enforcement inquiry into whether a violation of the FCA had occurred. (ECF No. 18.)
Taggart obtained a new lawyer and on July 6, 2016 appealed the Court’s decision
approving the TD Bank CID3 and moved for a stay pending his appeal. (ECF Nos. 20–22.) In
his motion for stay, Taggart argued for the first time that HUD did not have standing to issue the
3

On September 20, 2016 the Third Circuit dismissed Taggart’s appeal for lack of jurisdiction. (ECF No.

31.)

3

CIDs because the occupancy requirement had been waived or eliminated with respect to his
mortgage. (ECF No. 21.) He asserted that his mortgage contract, created by a HUD-approved
lender, LBA Financial, LLC, and drafted using a standard form allegedly approved by HUD
(“FHA Contract form”) delegated authority to the lender to waive the occupancy requirement.
(Id.) He further contended that the lender waived the requirement through a “1-4 Family Rider”
form which he claimed had been made part of his mortgage contract by reference. (Id.) He also
argued that the Government lacked standing to issue the CIDs because the limitations period in
which the Government could bring a FCA case against him had expired. (ECF No. 21.)
On July 19, 2016 the Court denied Taggart’s motion for stay, again stating that the
Government’s investigation was a legitimate law enforcement inquiry and the information
sought was relevant to that inquiry. (ECF No. 26.) The Court noted that the 1-4 Family Rider
form was undated, signed only by Taggart and that its relation to the HUD-insured mortgage was
unclear. (Id.) The Court further stated that it had no basis upon which to adjudicate any statute
of limitations issues and that such a determination would be premature in the pre-complaint
investigation phase. (Id.)
Taggart filed his complaint in this case on July 27, 2016. (No. 16-cv-4040, ECF No. 1.)
The Government filed a motion to dismiss the complaint on September 12, 2016. (ECF No. 5.)
Taggart filed an amended complaint on September 26, 2016, (ECF No. 6), and the Government
again moved for its dismissal on October 7, 2016, (ECF No. 10). Taggart’s amended complaint
is essentially a reiteration of his prior challenges to the CIDs, but this time he argues that the
issuance and enforcement of the CIDs violate his constitutional rights4 because (1) the

4

Taggart alleges violations of his constitutional rights to free speech, privacy and due process under the
First, Fourth and Fifth Amendments. (Pl.’s Am. Compl. ¶¶ 1–8, 9–18, 56–58.) He does not, however, identify any
property in which he has a reasonable expectation of privacy or any property rights upon which his due process
claims are based.

4

Government lacks standing to investigate an alleged FCA violation based on the occupancy
requirement since the 1-4 Family Rider form indicates that the requirement was waived (or at
least creates ambiguity as to whether the requirement was waived), (Pl.’s Am. Compl. ¶¶ 28–29,
71–72); (2) the Government lacks standing to investigate because any claim it asserts under the
FCA based on Taggart’s conduct in 2008 would be time-barred, (id. ¶¶ 86–87); (3) the CIDs
were issued and enforced without any adjudication of the applicability of the occupancy
requirement, (id. ¶¶ 33, 47, 70); (4) the CIDs were issued and enforced despite unresolved issues
regarding the validity of the mortgage contract, (id. ¶¶ 45, 51–52, 68); (5) the Government’s
claims rely on Ex Post Facto laws (FERA 2009), (id. ¶ 58); and (6) the Government is abusing
the low standard for issuing CIDs and making false representations to the Court regarding the
permissibility of waiving the occupancy requirement in order to retaliate against and harass
Taggart, (id. ¶¶ 21, 26, 42). Taggart also seeks a declaratory judgment as to the validity of the
purported waiver of the occupancy requirement. The Court held oral argument on the
Government’s motion on December 8, 2016. (ECF No. 23.)
II.

To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must plead factual
allegations sufficient “to raise a right to relief above the speculative level. . . on the assumption
that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). The “mere possibility of misconduct” is not enough.
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). The court must construe the complaint in the light
most favorable to the plaintiff. See Connelly v. Lane Constr. Corp., 809 F.3d 780, 790 (3d Cir.
2016) (citations omitted). However, a court need not accept as true inferences drawn by the
plaintiff that are unsupported by facts. See Cal. Pub. Emps.’ Ret. Sys. v. Chubb Corp., 394 F.3d
126, 143 (3d Cir. 2004).
5

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed
factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’
requires more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.” Bell, 550 U.S. at 555 (2007) (citations and alterations
omitted); see Iqbal, 556 U.S. at 678 (2009) (“Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.”). A court should “consider
only the allegations in the complaint, exhibits attached to the complaint, matters of public record,
and documents that form the basis of a claim.” Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d
Cir. 2004). Whether a complaint states a plausible claim for relief is a context-specific task that
“requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556
U.S. at 679 (citations omitted).
Under Twombly and Iqbal, a court reviewing the sufficiency of a complaint must take
three steps. See Connelly, 809 F.3d at 787. First, it must “tak[e] note of the elements [the]
plaintiff must plead to state a claim.” Id. (quoting Iqbal, 556 U.S. at 675). Second, it should
identify allegations that, “because they are no more than conclusions, are not entitled to the
assumption of truth.” Id. (quoting Iqbal, 556 U.S. at 679). Finally, “[w]hen there are wellpleaded factual allegations, [the] court should assume their veracity and then determine whether
they plausibly give rise to an entitlement to relief.” Id. (quoting Iqbal, 556 U.S. at 679).
III.
Many of Taggart’s claims and supporting arguments attack the legality and enforceability

of the CIDs. The Court has already held that the CIDs were properly issued pursuant to a
legitimate purpose, within the Government’s authority, and that they are reasonable in scope and
enforceable. See In re Taggart, 2016 WL 3538604, at *2 (E.D. Pa. June 29, 2016); In re
Taggart, 2016 WL 3902939, at *2–3 (E.D. Pa. July 19, 2016). Taggart’s attempt to relitigate the
6

Court’s prior decision is barred by claim preclusion and/or issue preclusion. Under the doctrine
of claim preclusion, a final judgment forecloses “successive litigation of the very same claim,
whether or not relitigation of the claim raises the same issues as the earlier suit.” New
Hampshire v. Maine, 532 U.S. 742, 748 (2001). Issue preclusion bars “successive litigation of
an issue of fact or law actually litigated and resolved in a valid court determination essential to
the prior judgment,” even if the issue recurs in the context of a different claim. Id. at 748–49.
The Court need not reexamine what it has already settled—that the Government was within its
authority to issue the three CIDs; the Court will, however, address more fully Taggart’s
purported constitutional claims.
IV.
Taggart bases Counts 2, 3, 6, 8 and 9 of his amended complaint on the 1-4 Family Rider
form, which he alleges was made part of his mortgage contract by reference and constitutes a
valid waiver of the statutorily-imposed occupancy requirement on HUD-insured mortgages.
Taggart obtained his HUD-insured mortgage under Section 203(b) of the National Housing Act.
See 12 U.S.C. § 1709. The statute requires any HUD-insured mortgage to be for the primary and
secondary residence of the person receiving the mortgage and states that the occupancy
requirement can be waived if the Secretary determines that it is necessary to avoid undue
hardship to the mortgagor. See 12 U.S.C. § 1709(g)(l). HUD’s position, consistent with the
statute, is that the occupancy requirement can only be waived pursuant to such a finding. See
(No. 16-cv-4040, Tr. of Oral Arg., ECF No. 24, at 25:11–18); see also (No. 15-mc-255, Tr. of
Hearing, ECF No. 30, at 23:16–24:3). The Secretary never found that the occupancy
requirement would impose undue hardship on Taggart.

7

Taggart nonetheless contends that private lenders have the authority to waive the
occupancy requirement absent a finding of undue hardship from the Secretary. As evidence of
this, Taggart contends that his lender, LBA Financial, was HUD-approved and used a standard
FHA Mortgage form, allegedly approved by HUD, containing language that grants private
lenders the authority to waive the occupancy requirement. (Id. ¶ 24.) Specifically, Taggart’s
mortgage states that the borrower must “occupy . . . the property as [his] principal residence
within sixty days of the election” of the mortgage and “continue to occupy the property as [his]
principal residence for at least one year after the date of occupancy unless Lender determines
that the requirement will cause undue hardship for Borrower, unless extenuating circumstances
exist which are beyond borrower’s control.” (Id. ¶ 13.) Taggart further claims that, pursuant to
this authority, LBA waived the occupancy requirement as to him by way of the 1-4 Family Rider
form, which states that: “Unless Lender and Borrower otherwise agree in writing, Section #6 of
Borrower’s occupancy of the property is deleted.” (Id. ¶ 14.)
Taggart advances three different arguments as to how the issuance and enforcement of
the CIDs violates his constitutional right to due process. First, he contends that the language in
the FHA Mortgage contract unequivocally shows that private lenders may waive the
requirement, and the 1-4 Family Rider form read in conjunction with the FHA Mortgage contract
constitutes clear evidence that Taggart’s lender validly waived the requirement as to him. See
(Pl.’s Am. Compl. ¶¶ 22, 28, 53, 71, 73, 74.) Therefore, the Government lacked standing to
issue CIDs premised on an alleged violation of a nonexistent requirement, and the enforcement
of the CIDs violates Taggart’s constitutional right to due process. (Id.) Second, he argues that
even if the FHA Mortgage contract and the 1-4 Family Rider form do not unequivocally
demonstrate a valid waiver, they raise questions about the applicability of the occupancy

8

requirement, and he is entitled to a determination, before the CIDs are issued and enforced, as to
whether the contract and its terms are legal, binding requirements which can be enforced. See
(id. ¶¶ 12–13, 17, 23–24, 28, 33, 51, 68, 75, 80–81). In Taggart’s view, the enforcement of the
CIDs prior to an adjudication of the validity of the mortgage or the applicability of the
occupancy requirement violates Taggart’s constitutional right to due process. (Id.) Finally, he
claims that even if the FHA Mortgage contract and the 1-4 Family Rider form do not
unequivocally demonstrate a valid waiver of the occupancy requirement, they create ambiguity
about the requirement’s applicability, and if the Government were to assert a claim against
Taggart under the FCA, any ambiguity with respect to Taggart’s legal obligations would be
resolved in his favor. See (id. ¶¶ 23, 29–32). Because the Government’s potential claims under
the FCA are “in doubt” due to this ambiguity, the enforcement of the CIDs violates Taggart’s
constitutional right to due process. (Id.)
A.
As an initial matter, Taggart’s legal conclusion that the documents he has proffered prove
that the occupancy requirement was validly waived is not entitled to a presumption of truth. See
Connelly, 809 F.3d at 787; Cal. Pub. Emps.’ Ret. Sys., 394 F.3d at 143. At worst, the proffered
documents are fraudulent or irrelevant. See (No. 15-mc-255, ECF No. 30, at 24:23–25). At best,
they may introduce some ambiguity as to whether the requirement was waived. In any event,
whether or not the lender validly waived the occupancy requirement and the legal effect of such
a waiver depends upon several unresolved facts, namely whether: private lenders have the
authority to waive the requirement absent a finding of undue hardship by the Secretary; the
statutory knowledge requirement can even be waived; the 1-4 Family Rider form was made a
part of Taggart’s mortgage contract by reference; the 1-4 Family Rider form signed only by

9

Taggart meets the requirements of a valid waiver; any equitable doctrines apply; and so on.
Thus, Taggart’s first argument, based entirely on the proposition that the CIDs violate his due
process rights because they were issued and enforced on the basis of an alleged requirement that
is indisputably waived as to him, necessarily fails.
B.
While Taggart’s remaining two arguments are more nuanced, they suffer from his
fundamental misunderstanding of the differences between the Government issuing a CID to
investigate a potential FCA violation and the Government asserting a claim under the FCA, the
scope of the Court’s inquiry at each stage and the proper stage at which to assert various
arguments. In Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 509 (1943), the Secretary of
Labor issued a CID against Endicott Johnson pursuant to an investigation into whether the
company had violated the Walsh-Healey Act, which applies to contractors who compete for
government business and imposes various requirements on their payment of employees working
on government contracts. Id. at 505–07. Endicott Johnson argued that it was not required to
comply with the CIDs because the alleged violations occurred in plants that were not involved in
government work and the relevant employees were therefore not subject to the Act’s
requirements. Id. Despite the Government’s contention that it had reason to believe that the
statute’s requirements were applicable to the employees at issue, the District Court refused to
enforce the CID before deciding whether the employees were subject to the Act’s requirements
and then ruled that the employees were not. Id. at 508. The Court of Appeals reversed and the
Supreme Court granted certiorari. Id. at 501.
The Court held that the District Court should not have decided the question of the
statute’s applicability and that the court had erred in conditioning the CID’s enforcement on that

10

issue. Id. at 508. Because “the evidence sought by the subpoena was not plainly incompetent or
irrelevant to any lawful purpose of the Secretary,” it was the District Court’s duty to order its
production for the Secretary’s consideration. Id. at 509. It was the Secretary’s role to investigate
facts relevant to the statute’s applicability and the contractor’s compliance with it and decide
whether a violation had occurred. See id. at 508–10. By refusing to enforce the CID before
deciding the fact-dependent question of whether the employees were subject to the law’s
requirements, the District Court usurped the Government’s role and “disable[d] the Secretary
from rendering a complete decision on the alleged violation as Congress had directed.” Id. at
509.
After deciding that the investigation was proper, the Court then turned to whether a
district court should consider a respondent’s affirmative defenses to a future complaint that
might be filed after an investigation. Endicott Johnson had raised four such defenses, including
arguments based on the meaning of the contract and the Walsh-Healey Act and on the retroactive
effect of one of the Secretary’s rulings. Id. at 509 n.11. The Court held that it was inappropriate
to interfere with an administrative investigation by exploring potential substantive defenses to a
later adversarial proceeding, stating that: “The petitioner has advanced many matters that are
entitled to hearing and consideration in its defense against the administrative complaint, but they
are not of a kind that can be accepted as a defense against the subpoena.” Id. at 509; see also,
e.g., E.E.O.C. v. Fed. Exp. Corp., 558 F.3d 842, 848 (9th Cir. 2009) (“[A] party may not defeat
agency authority to investigate with a claim that could be a defense if the agency subsequently
decides to bring an action against it.”); E.E.O.C. v. Randstad, 685 F.3d 433, 449 (4th Cir. 2012)
(“At the subpoena-enforcement stage, however, ‘any effort by the court to assess the likelihood
that the Commission would be able to prove the claims made in the charge would be reversible

11

error.’ The EEOC’s authority to investigate ‘is not negated simply because the party under
investigation may have a valid defense to a later suit.’” (quoting E.E.O.C. v. Shell Oil Co., 466
U.S. 54, 72 (1984); E.E.O.C. v. United Air Lines, Inc., 287 F.3d 643, 651 (7th Cir. 2002))).
Endicott Johnson makes clear that unresolved issues that may affect the applicability of
statutory requirements, the subject’s compliance with them or the availability of a valid defense
to a claim asserted in the future should not be litigated at the subpoena enforcement stage and
should not affect the court’s limited inquiry. 317 U.S. at 509; see also I. C. C. v. Gould, 629
F.2d 847, 852 (3d Cir. 1980) (same). Rather, a court must enforce an administrative subpoena
unless the evidence sought by the subpoena is “plainly incompetent or irrelevant” to “any lawful
purpose” of the agency. Endicott Johnson Corp., 317 U.S. at 509.
Taggart’s second argument—based entirely on the proposition that he was entitled to an
adjudication of the validity of the mortgage and its terms, the applicability of the occupancy
requirement and/or the validity of the purported waiver prior to the enforcement of the CIDs—
directly contravenes Endicott Johnson. Like Endicott Johnson’s argument that the statute’s
requirements were inapplicable to the employees because they were not working on government
contracts, Taggart’s challenge to the Government’s “jurisdiction” is really a fact-based claim
proffered to show that the FCA’s occupancy requirement is inapplicable to him.
Taggart contends that “the government ignored ‘due process’ of the validity of the
contract and other claims pending,” (id. ¶ 68), and that “[t]he court has clearly failed to
adjudicate the terms of the mortgage contract as provided by the HUD approved lender and on
the HUD approved form,” (id. ¶ 51). He states, without citing any support, that “if doubt still
exists, [Taggart] is entitled to litigate the claims to determine if the contract, and any provision of
the contract, is a legal, binding requirement,” (id. ¶ 33), and “until [he] has adjudicated the, inter

12

alia, validity of the mortgage and any occupancy requirement alleged, the government’s
demands simply violate [his] Constitutional rights to ‘Due Process’ and ‘Privacy,’” (id. at 2).
Taggart is not entitled to litigate these issues at the subpoena enforcement stage because
potential disputes regarding the validity of the mortgage contract, its terms or the accompanying
note are relevant only to whether the Government will actually be able to show that a violation of
the FCA occurred, not to its authority to gather information. The Government’s issuance of the
CIDs is not, as Taggart relentlessly argues, an “assertion” of the validity of the mortgage
contract, its terms or the accompanying note. See (id, ¶¶ 66, 71, 11–14, 17, 22–25, 28, 39). The
Government is investigating whether a violation of the FCA has occurred. It is the
Government’s role to determine whether the statute applies to Taggart and, if so, whether he
violated it. In fact, the Government states in its motion that it is currently investigating Taggart’s
argument that the requirement was waived as to his mortgage, (Defs.’ Mot., at 8 n.3), and stated
at oral argument that it has not actually taken a position on that question, (Tr. of Oral Arg., ECF
No. 24, at 39:9–11). The fact that litigation regarding these issues is pending or that these issues
may be in dispute does not preclude the possibility that Taggart violated the FCA and therefore
does not render the evidence the Government seeks plainly irrelevant. Because Taggart’s
arguments are fact-dependent claims relevant only to the applicability of the law and his
compliance with it (i.e. the merits of the underlying FCA claim), they were (and are) not
properly before the Court. Under Endicott Johnson, it would be error for a court to refuse
enforcement of CIDs on such bases or to adjudicate the validity of the mortgage contract, its
terms or the purported waiver at the enforcement stage. And as it would have been improper for

13

any court to do so at that time, Taggart’s argument that the enforcement of the CIDs prior to such
adjudication violates his constitutional rights necessarily must fail.5
C.
Finally, Taggart argues that enforcement of the CIDs despite evidence of the purported
waiver was unconstitutional because the documents at least create ambiguity as to whether the
requirement applied to him, the ambiguity would ultimately be resolved in his favor and he
would therefore eventually prevail on any claim brought against him under the FCA. See (Pl.’s
Am. Compl. ¶¶ 23, 29–32). In support of this argument, Taggart cites case law from the DC
Circuit holding that defendants cannot be held liable under the FCA for a reasonable
interpretation of an ambiguous requirement. (Id. ¶ 32.) He contends that any ambiguity as to
whether the occupancy requirement was waived would be resolved in his favor and the
Government would thus not be able to carry its burden as to the FCA’s scienter requirement.
According to Taggart, since an FCA claim would be dismissed for being premised on an
ambiguous requirement in his mortgage, the enforcement of the CIDs violates his due process
rights. This argument contravenes the second principle from Endicott Johnson—that courts
should not refuse to enforce an administrative subpoena on the basis of a potential substantive

5

Taggart misunderstands and mischaracterizes the Court’s July 19, 2016 decision when he states that “the
court concluded, ‘without due process’ of law that there was an occupancy requirement noted in one part of the
contract without considering the language in the 1-4 Family Rider, as made part of the contract as agreed by the
lender.” (Pl.’s Am. Compl. ¶ 48.) The Court was tasked with determining whether the CIDs were issued pursuant
to a legitimate law enforcement inquiry. The statutory occupancy requirement applicable to the type of mortgage
obtained by Taggart, the statutory specification that the Secretary can waive the requirement upon making a finding
of undue hardship and the Government’s position that private lenders cannot waive the requirement absent such a
finding, without more, were sufficient evidence that the Government’s inquiry into an alleged violation was
legitimate. While the Court noted that Taggart’s mortgage contained an occupancy requirement and stated that the
1-4 Family Rider form’s “relation and/or relevance to the HUD-insured mortgage is unclear,” see In re Taggart,
2016 WL 3902939, at *2, this was not an adjudication of the validity of the occupancy requirement or the purported
waiver. The descriptions of the documents were merely observations relevant to the Court’s conclusions that the
Government’s position that a violation of the FCA may have occurred was tenable, that the evidence sought was not
plainly irrelevant and that the purported waiver, given unanswered factual questions determinative of its relation to
the mortgage and its legal effect on the statutory requirement, neither precluded the Government’s position nor
rendered the evidence sought irrelevant.

14

defense that the subject may have to a future claim brought against him. See Endicott Johnson,
317 U.S. at 508–10; see also E.E.O.C. v. Am. Exp. Centurion Bank, 758 F. Supp. 217, 223 (D.
Del. 1991) (holding that it would be improper to interfere with the Government’s investigation
on the basis of a possible waiver defense to a later claim, especially since the issue of the
waiver’s effect would depend upon further factual determinations); E.E.O.C. v. Univ. of
Pennsylvania, 850 F.2d 969, 980 (3d Cir. 1988), aff’d, 493 U.S. 182 (1990) (“Courts must
refrain from allowing the subpoena enforcement proceeding to develop into a full-blown trial of
the underlying claim. If every possible defense, procedural or substantive, were litigated at the
subpoena enforcement stage, administrative investigations obviously would be subjected to great
delay.” (citations omitted)).
Again, uncertainty about whether the Government can ultimately prevail on a claim
under the FCA has no effect on its authority to investigate as long as the evidence sought is not
“plainly incompetent or irrelevant” to “any lawful purpose” of the agency. Taggart’s assertion
that there is ambiguity as to the validity of the waiver and/or applicability of the occupancy
requirement demonstrates that the evidence sought was not plainly irrelevant; this defense relates
to the merits of any claim the Government may assert against Taggart under the FCA and thus
may only be properly raised at that time.
V.
In Count 10, Taggart contends that the Government lacked standing to issue the CIDs
because any claim brought against him under the FCA would be time-barred, and the CIDs thus
violated his rights to privacy and due process. Although he cites no support for this argument, he
seems to rely on E.E.O.C. v. Ocean City Police Department, 820 F.2d 1378 (4th Cir. 1987). In
that case, the Fourth Circuit Court of Appeals held that “in a proceeding to enforce a subpoena

15

issued by EEOC, the district court should review the underlying charge and deny enforcement if
the charge shows on its face that it is untimely.” Id. at 1382, vacated on other grounds, 486 U.S.
1019, 108 (1988). The court refused to enforce the agency’s CID, premised on a charge which
was untimely, stating “[o]rdinary logic dictates that it is beyond the authority of EEOC to
investigate charges which cannot be pursued.” Id. at 1380.
In Ocean City, however, the charge of discrimination included the dates of the alleged
discriminatory practices on its face, making resolution of the statute of limitations issue “purely a
legal question of statutory construction.” Id. The court concluded that resolving the statute of
limitations issue did not contravene the Supreme Court’s holding in Endicott Johnson because
“the question of coverage there involved the resolution of factual questions, not merely the
application of law to facts not in dispute, as is the case here.” Id. at 1381. In cases where
resolution of a statute of limitations issue depends on disputed or unresolved facts, courts have
consistently refused to extend Ocean City’s logic to deny enforcement of CIDs on such grounds.
See, e.g., E.E.O.C. v. City of Norfolk Police Dep’t, 45 F.3d 80, 85 (4th Cir. 1995) (party may not
raise a factually-disputed statute of limitations defense in a challenge to an administrative
subpoena); E.E.O.C. v. S.C. Nat. Bank, 562 F.2d 329, 332 (4th Cir. 1977) (same); Pac. Mar.
Ass’n v. Quinn, 491 F.2d 1294, 1296 (9th Cir. 1974) (same).
To determine if a subsequent FCA claim against Taggart would be time-barred, the Court
would have to resolve several factual issues. The FCA’s statute of limitations states that:
(b) A civil action under section 3730 may not be brought—
(1) more than 6 years after the date on which the violation of section 3729
is committed, or
(2) more than 3 years after the date when facts material to the right of
action are known or reasonably should have been known by the official of the
United States charged with responsibility to act in the circumstances, but in no
event more than 10 years after the date on which the violation is committed,
whichever occurs last.
16

31 U.S.C. § 3731(b).
The timeliness of an FCA claim brought against Taggart may depend on what conduct
constitutes a violation of the FCA and when it occurred or on when the official responsible knew
or should have known the material facts underlying the violation. See 31 U.S.C. § 3731(b).
Courts have repeatedly recognized that the question of when the responsible government official
“should have known” facts material to the FCA is generally “a complex factual determination.”
See, e.g., United States v. Carell, 681 F. Supp. 2d 874, 883 (M.D. Tenn. 2009); United States ex
rel. Wyke v. Am. Int’l, Inc., No. 01-60109, 2005 WL 1529669, at *3 (E.D. Mich. June 20, 2005);
United States ex rel. Purcell v. MWI Corp., 254 F. Supp. 2d 69, 78 (D.D.C. 2003). The inquiry
hinges on specific determinations about the times at which certain facts became known to
various entities, including officials within the Department of Justice and officials within the
agencies responsible for investigating violations of the statute, such as HUD. See United States
v. Kensington Hosp., No. 90-5430, 1993 WL 21446 (E.D. Pa. Jan. 14, 1993); United States v.
Inc. Vill. of Island Park, 791 F. Supp. 354, 363 (E.D.N.Y. 1992).
Because the facts necessary to resolve the statute of limitations issue were neither clear
from the documents before the Court nor undisputed, it would have been improper for the Court
to refuse to enforce the subpoenas on that ground or litigate that issue at the enforcement stage.
See Endicott Johnson, 317 U.S. at 509; S.C. Nat. Bank, 562 F.2d at 332; Quinn, 491 F.2d at
1296; City of Norfolk Police Dep’t, 45 F.3d at 85. Thus, the Court had (and has) “no current
basis upon which to adjudicate any statute of limitations issues” and “such a determination
would be premature in the pre-complaint investigation phase.” In re Taggart, 2016 WL
3902939, at *3.

17

VI.
In Count 7, Taggart alleges that the Government committed a fraud on the Court by (a)
claiming that private lenders cannot waive the occupancy requirement absent a finding of undue
hardship by the Secretary when it knows that they can and (b) issuing CIDs on the basis of the
occupancy requirement when it knows that it has been validly waived as to Taggart. (Id. ¶¶ 61–
65.) He also contends that the Government made false representations to the Court by
suggesting that the 1-4 Family Rider form is an anomaly or otherwise irregular because (a) HUD
does not allow private lenders to waive the requirement, (b) HUD does not use this format (an
FHA Mortgage form with a 1-4 Family Rider form) and/or (c) it is only signed by Taggart. (Id.
at 65.) As evidence that these were misrepresentations, he attached six mortgages which are
recorded in the recorder of deeds office that contain both a mortgage form and a 1-4 Family
Rider form signed only by the borrower. (Id. ¶ 66, Ex. I.) Citing no further support, he states
that the form “is not an anomaly” and “there is estimated to be thousands of mortgages
containing the same format . . . an FHA Mortgage form with a Fannie Mae 1-4 Family Rider
form attached and made part of the mortgage.” (Id. ¶ 57.)
The Third Circuit has held that an independent cause of action based upon fraud on the
court is an extraordinary remedy and cannot lie unless it is based upon the “most egregious
misconduct directed to the court itself.” Herring v. United States, 424 F.3d 384, 386–87 (3d Cir.
2005). It requires “(1) an intentional fraud; (2) by an officer of the court; (3) which is directed at
the court itself; and (4) in fact deceives the court.” Id. at 386. “Only the most egregious
conduct, such as bribery of a judge or members of a jury, or the fabrication of evidence by a
party in which an attorney is implicated, will constitute fraud on the court.” Rozier v. Ford

18

Motor Co., 573 F.2d 1332, 1338 (5th Cir. 1978); see also Herring, 424 F.3d at 384 n.1 (citing
Rozier with approval).
Taggart fails to state a claim for fraud on the court. The “egregious misconduct” of
which he complains consists primarily of the Government’s assertion of factual and legal
positions with which Taggart disagrees. The Court has, for all of the reasons previously stated,
not yet even adjudicated any of these issues in the pre-complaint phase, much less been
“deceived” by the Government’s arguments. In any case, Taggart’s allegations are completely
conclusory and nothing in this case rises to the level necessary to allege a fraud on the court.
VII.
In Count 4, Taggart asserts that “the government has made use of FERA 2009 extension
and revision of the FCA to cite authority to go back to May 2008 asserting occupancy
requirement on May 7, 2008” and states that the “provision of the FCA citing retroactive
authority violates the United States Constitution and the Ex Post Fact Clause. [sic]” (Pl.’s Am.
Compl. ¶¶ 33–34.) Although it is not entirely clear, Taggart appears to be arguing that the
Government is attempting to rely on the Fraud Enforcement and Recovery Act of 2009 (FERA)
amendment to the FCA’s statute of limitations in order to render timely a potential FCA claim
against him.
The Government has not sued Taggart under the FCA, discussed the potential timeliness
of such a claim or even referenced FERA or its effect on the FCA’s statute of limitations.
Moreover, the FERA amendment to the FCA’s statute of limitations is relevant only where the
government intervenes in a qui tam action brought by a relator,6 which is not the case here. (No.
16-cv-4040, Tr. of Oral Arg., at 21:14–22:5). There is no controversy before the Court
6

The FERA amendment mandates that where this occurs, the Government’s claims can relate back to the
time of the relator’s original filing of the action for statute of limitations purposes. Pub. L. No. 111–21, 123 Stat.
1617 (2009).

19

concerning the retroactive application of the 2009 amendment to the FCA and any claim Taggart
may have in the future is purely speculative.
VIII.
Taggart is not entitled to the declaratory and injunctive relief he seeks in Counts 5 and
11. In Count 5, Taggart asks the Court to invalidate the “occupancy requirements,” stay all
actions based on the occupancy requirements and declare all claims under FERA 2009
unconstitutional. (Pl.’s Am. Compl. ¶¶ 44–55.) In Count 11, he seeks declarations as to
whether: (a) HUD grants the authority to the lenders to waive the occupancy requirement on
FHA loans; (b) the lender waived the occupancy requirement as to his loan; (c) the language in
his mortgage contract is ambiguous; (d) the occupancy requirement can be enforced despite this
ambiguity; and (e) Taggart can be held accountable under the FCA when the falsity of
information cannot be supported. (Pl.’s Am. Compl. ¶¶ 112–116.)
None of these issues are properly before the Court. Because the constitution prohibits
federal courts from deciding issues where there is no “case” or “controversy,” U.S. Const. Art.
III § 2, declaratory judgments can be issued only when there is an actual controversy. 28 U.S.C.
§ 2201. In determining whether an actual controversy exists, the most important guiding
principles are “the adversity of the interest of the parties, the conclusiveness of the judicial
judgment and the practical help, or utility of that judgment.” Coffin v. Malvern Fed. Sav. Bank,
90 F.3d 851, 854 (3d Cir. 1996) (quoting Step–Saver Data Systems, Inc. v. Wyse Technology,
912 F.2d 643, 647 (3rd Cir. 1990)). Moreover, federal courts “are without power to render an
advisory opinion on a question simply because we may have to face the same question in the
future.” N.L.R.B. v. Globe Sec. Servs., Inc., 548 F.2d 1115, 1118 (3d Cir. 1977) (citations
omitted).

20

The Government has not filed a complaint against Taggart alleging that he submitted a
false claim in connection with his HUD-insured mortgage; it is investigating the matter. As the
Third Circuit held in Armstrong World Indus., Inc. v. Adams, 961 F. 2d 405 (3d Cir. 1992), “to
protect against a feared future event, the plaintiff must demonstrate that the probability of that
future event occurring is real and substantial, of sufficient immediacy and reality to warrant the
issuance of a declaratory judgment.” Id. at 412 (citations omitted). “Where the plaintiff’s action
is based on a contingency, it is unlikely that the parties’ interests will be sufficiently adverse to
give rise to a case or controversy within the meaning of Article III.” Id. At this time, there is no
real and substantial probability of harm to Taggart and any harm he can allege is contingent on
the Government filing a complaint against him.
The declarations Taggart seeks would require the Court to interpret the terms of the
mortgage contract as well as the federal statute in order to make findings about the applicability
of the occupancy requirement and the validity of the purported waiver. As discussed above,
these tasks are not proper at the subpoena enforcement stage and are reserved for the time at
which the underlying claim is brought, if at all. See Endicott Johnson, 317 U.S. at 508–10.
Taggart also asks the Court to stay all proceedings based on the occupancy requirement
until such provision can be determined legal and enforceable. (Pl.’s Am. Compl. ¶ 53.) In order
to establish that he is entitled to injunctive relief, Taggart must show that he is: (1) likely to
succeed on the merits of his claim; (2) that irreparable injury is likely to occur; (3) that the
balance of equities tip in favor of the injunction sought; and (4) that an injunction is in the public
interest. Winter v. Natural Resource Defense Council, Inc., 555 US 7, 20 (2008). The standard
for granting permanent injunctive relief is the same as for a temporary injunction, except that the
moving party must show actual success, rather than probable success, on the merits. See Amoco

21

Products Co. v. Gambell, 480 U.S. 531, 546 n.12 (1987). Because there is no case or
controversy before the Court giving the Court occasion to adjudicate the applicability of the
occupancy requirement, however, Taggart does not have an underlying claim upon which to base
his request for injunctive relief.
IX.
In Count 1, Taggart alleges that the Government violated his First Amendment rights
because it issued the CIDs “in retaliation and punishment for suing the government and exposing
them [sic] of ‘Due Process’ violations against Plaintiff and depriving all FHA of Due Process
rights for over 12 years who deserved them.” (Pl.’s Am. Compl. ¶ 4.) Specifically, he contends
that the Government issued the CIDs in retaliation for his 2012 suit against HUD.7 Conduct by
government officials that does not independently infringe on a plaintiff’s constitutional rights
may nonetheless be actionable as retaliation. Allah v. Seiverling, 229 F.3d 220, 225 (3d Cir.
2000) (quotations omitted).
The Court’s prior conclusion that the CIDs were issued as part of a legitimate law
enforcement inquiry does not preclude such a claim. At the enforcement stage, the Court’s
inquiry was limited to determining whether, given the Government’s statutory authority and its
stated reason for pursuing the investigation, “the inquiry [was] within the authority of the
agency, the demand [was] not too indefinite, and the information [was] reasonably relevant” to
the agency’s inquiry. United States v. Morton Salt Co., 338 U.S. 632, 652 (1950). In that
7

In 2012, Taggart sued HUD after he was removed from HUD’s list of approved appraisers. See Taggart v.
GMAC Mortgage, LLC, No. 12-415, 2012 WL 5929000, at *1 (E.D. Pa. Nov. 26, 2012). He claimed that HUD
deprived him of his due process rights by removing him from the list without providing notice and a conference in
accordance with the statutory removal procedure. Taggart alleges that, in the course of that lawsuit, HUD admitted
to depriving Taggart of his due process right for two years and failing to follow the requisite statutory procedures for
over twelve years. (Pl.’s Am. Compl., at 3 n.1.) In any event, HUD subsequently reinstated him and removed him
again following the proper procedure. The District Court upheld the removal, see Taggart v. GMAC Mortgage,
LLC, No. 12-0415, 2013 WL 4079655, at *9 (E.D. Pa. Aug. 12, 2013), and the Third Circuit affirmed. See Taggart
v. GMAC Mortgage, LLC, 600 F. App’x 859 (3d Cir. 2015), cert. denied, 136 S. Ct. 358 (2015), reh’g denied, 136
S. Ct. 882 (2016). The CIDs were issued two days after the close of that case.

22

context, once the Government asserted that it was conducting the investigation for a legitimate
purpose and showed that its investigation satisfied the above factors, it was entitled to a
presumption of good faith. See e.g., United States v. Garden State Nat. Bank, 607 F.2d 61, 68
(3d Cir. 1979); United States v. Falgione, 395 F. Supp. 2d 241, 243–45 (W.D. Pa. 2005). And a
plaintiff seeking to challenge a CID on the ground that it was issued for an improper basis (such
as to retaliate or harass), as Taggart did, must assert “non-frivolous allegations” and submit
“meaningful evidence” sufficient “to make [the allegation] facially credible” in order to rebut
that presumption and render further inquiry into the Government’s intent appropriate. See, e.g.,
Sec. & Exch. Comm’n v. Wheeling-Pittsburgh Steel Corp., 648 F.2d 118, 128 (3d Cir. 1981);
United States v. McCarthy, 514 F.2d 368, 375 (3d Cir. 1975). Because Taggart failed to do so,
the Government’s intent was never placed at issue.
Taggart has now placed the Government’s intent at issue since “the issue in a First
Amendment retaliation claim is the grounds actually relied upon, not those that might have been
relied upon by some other government agent in a similar situation. . . Therefore, we have
repeatedly held that [a]n act taken in retaliation for the exercise of a constitutionally protected
right is actionable under § 1983 even if the act, when taken for a different reason, would have
been proper.” Wenk v. O’Reilly, 783 F.3d 585, 595 (6th Cir. 2015), cert. denied sub nom. Schott
v. Wenk, 136 S. Ct. 792 (2016) (internal citations and quotations omitted). Moreover, due to this
case’s posture, Taggart is no longer subject to the “heavy burden” that is placed on those seeking
to preclude enforcement of a CID on improper purpose grounds, see Wheeling-Pittsburgh Steel
Corp., 648 F.2d at 131; Falgione, 395 F. Supp. 2d at 244; Rather, the Court must now construe
Taggart’s complaint in the light most favorable to him and draw all reasonable inferences in his
favor, see Connelly, 809 F.3d at 790, and Taggart need only “raise a right to relief above the

23

speculative level. . . on the assumption that all the allegations in the complaint are tr ue (even if
doubtful in fact).” Twombly, 550 U.S. at 555.
In order to state a First Amendment retaliation claim pursuant to § 1983, Taggart must
allege: (l) constitutionally protected conduct; (2) retaliatory action sufficient to deter a person of
ordinary firmness from exercising his constitutional rights; and (3) a causal link between the
constitutionally protected conduct and the retaliatory action. Thomas v. Independence Twp., 463
F. 3d 285, 296 (3d Cir. 2006); see also McKee v. Hart, 436 F.3d 165, 170 (3d Cir. 2006) (“[T]he
key question in determining whether a cognizable First Amendment claim has been stated is
whether ‘the alleged retaliatory conduct was sufficient to deter a person of ordinary firmness
from exercising his First Amendment rights.’” (quoting Suppan v. Dadonna, 203 F.3d 228, 235
(3d Cir. 2000))). In its motion to dismiss, the Government cites Ashcroft v. Iqbal, 556 U.S. 662,
676 (2009), for the proposition that Taggart must also show that the Government acted with
discriminatory purpose. (Defs.’ Mot., at 13–14.) Iqbal, however, states that “[w]here the claim
is invidious discrimination in contravention of the First and Fifth Amendments,” the plaintiff
must plead facts to show that the defendant acted “not for a neutral, investigative reason but for
the purpose of discriminating on account of race, religion or national origin.” Iqbal, 556 U.S. at
676–677. Here, because Taggart does not allege that the Government discriminated against him
on any such basis, he need not make such a showing.
Taggart’s pleadings are sufficient to state a claim. First, the filing of a lawsuit constitutes
constitutionally protected activity. See, e.g., DeFranco v. Wolfe, 387 F. App’x 147, 157 (3d Cir.
2010); Anderson v. Davila, 125 F.3d 148, 161 (3d Cir. 1997). Moreover, the “[f]reedom to
criticize public officials and expose their wrongdoing is at the core of First Amendment values,
even if the conduct is motivated by personal pique or resentment.” Barrett v. Harrington, 130

24

F.3d 246 (6th Cir. 1997). Second, the issuance of the CIDs was “sufficient to deter a person of
ordinary firmness from exercising his constitutional rights.” Thomas, 463 F. 3d at 296. The
threshold for meeting this standard is “very low” and “a cause of action is supplied by all but
truly de minimis violations.” O’Connor v. City of Newark, 440 F.3d 125, 128 (3d Cir. 2006); see
also Suppan, 203 F.3d at 235. The threat of being subject to governmental investigation and
having to provide a substantial amount of personal and financial information in order to comply
with a subpoena is sufficient. See White v. Lee, 227 F.3d 1214, 1229 (9th Cir. 2000) (holding
that being subject to HUD’s eight-month long investigation and the threat of subpoena to
produce various documents “would have chilled or silenced a person of ordinary firmness from
engaging in future First Amendment activities”).
Third, Taggart has sufficiently alleged a causal link between his protected conduct and
the alleged retaliatory action. Specifically, Taggart alleges that the Government issued the CIDs
against him on the basis of a pretextual reason just days after the resolution of the lawsuit he
brought against HUD. See Mack v. Yost, 427 F. App’x 70, 73 (3d Cir. 2011). Plaintiffs can
show the requisite “causal link” by either “(1) an unusually suggestive temporal proximity
between the protected activity and the allegedly retaliatory action, or (2) a pattern of antagonism
coupled with timing to establish a causal link,” or (3) “from the ‘evidence gleaned from the
record as a whole.’” Lauren W. ex rel. Jean W. v. DeFlaminis, 480 F.3d 259, 267 (3d Cir. 2007)
(quoting Farrell v. Planters Lifesavers Co., 206 F.3d 271, 281 (3d Cir. 2000)). In order to be
probative of causation, the timing of the alleged retaliatory conduct must be “unusually
suggestive” of retaliatory motive. See Hammond v. City of Wilkes Barre, 628 F. App’x 806,
807–08 (3d Cir. 2015).

25

Although Taggart filed his lawsuit against HUD in 2012, he was arguably engaged in
protected activity throughout the duration of the litigation. See, e.g., Hill v. City of Scranton, 411
F.3d 118, 133 (3d Cir. 2005); Germantown Cab Co. v. Philadelphia Parking Auth., No. 14-4686,
2015 WL 4770722, at *7 (E.D. Pa. Aug. 12, 2015); Carmody v. Pennsylvania State Univ., No.
4:05-1645, 2007 WL 1074862, at *5 (M.D. Pa. Apr. 9, 2007). The District Court issued its
decision in that case on August 12, 2013. The Court of Appeals affirmed on January 30, 2015
and the Supreme Court denied certiorari on October 19, 2015. See Taggart v. GMAC Mortgage,
LLC, 136 S. Ct. 358 (2015). The Government served Taggart with the CIDs two days later, on
October 21, 2015. The Third Circuit has found a period of two days to be “unusually
suggestive” under some circumstances. See, e.g., Krouse v. Am. Sterilizer Co., 126 F.3d 494,
503 (3d Cir. 1997) (citing Jalil v. Avdel Corp., 873 F.2d 701, 708 (3d Cir. 1989)).
Ultimately, to survive summary judgment, Taggart may be required to proffer more
evidence than mere temporal proximity. See McLaughlin v. Fisher, 277 F. App’x 207, 219 (3d
Cir. 2008) (“‘[I]t is causation, not temporal proximity itself, that is an element of [a] plaintiff's
prima facie case, and temporal proximity merely provides an evidentiary basis from which an
inference can be drawn’ . . . Determining whether temporal proximity alone may create an
inference of retaliation is ‘essentially fact-based . . . depending . . . on how proximate the events
actually were, and the context in which the issue came before us.’” (quoting Kachmar v.
SunGard Data Sys., Inc., 109 F.3d 173, 178 (3d Cir. 1997); Farrell, 206 F.3d at 279). However,
Taggart has alleged sufficient facts to survive the Government’s motion to dismiss. See
Germantown Cab Co., 2015 WL 4770722, at *4 (denying motion to dismiss where plaintiff
alleged that defendant began taking harmful action within months after the resolution of longterm litigation brought against it by plaintiff); Hill, 411 F.3d at 133 (denying motion to dismiss

26

where plaintiffs alleged they were terminated within one year of the resolution of litigation they
brought against defendant); see also Mack, 427 F. App’x at 73 (discussing plaintiff’s burden at
pleading stage); McNeilly v. City of Pittsburgh, 40 F. Supp. 3d 643, 653–54 (W.D. Pa. 2014)
(same); Davis-Heep v. City of Philadelphia, No. 09-5619, 2010 WL 1568502, at *5 (E.D. Pa.
Apr. 19, 2010) (same).
X.
Under Federal Rule of Civil Procedure 15(a), “courts may grant... amendments ‘when
justice so requires.’” Fraser v. Nationwide Mut. Ins. Co., 352 F.3d 107, 116 (3d Cir. 2004)
(citing Fed. R. Civ. P. 15(a)). While Rule 15 states that “leave to amend should be ‘freely
given,’ a district court has discretion to deny a request to amend if it is apparent from the record
that (1) the moving party has demonstrated undue delay, bad faith or dilatory motives, (2) the
amendment would be futile, or (3) the amendment would prejudice the other party.” Id.; see also
Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002) (citing Foman v. Davis, 371
U.S. 178 (1962)). “Futility” means that the amended complaint would fail to state a claim upon
which relief could be granted. Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000) (citing In re
Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)). The Third Circuit
Court of Appeals has left the decision of whether to grant or deny leave to amend within the
sound discretion of the district court. Cureton v. Nat’l Collegiate Athletic Ass’n, 252 F.3d 267,
272 (3d Cir. 2001) (citations omitted).
With the exception of his First Amendment retaliation claim, Taggart’s claims pertain to
matters that have already been decided or that are not properly before the Court at this stage in
the proceedings. Amendment would be futile. All claims, except for the First Amendment
retaliation claim (Count 1), are therefore dismissed with prejudice.

27

An appropriate order follows.
BY THE COURT:

/s/ Gerald J. Pappert
GERALD J. PAPPERT, J.

28