THE UNITED STATES et al v. THE CITY OF PITTSBURGH, PENNSYLVANIA et al

Filing 88

MEMORANDUM ORDER denying 74 Plaintiffs/Relators' Motion for Reconsideration. Signed by Judge David S. Cercone on 3/31/17. (mwm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
THE UNITED STATES ex rel.
)
FREEDOM UNLIMITED, INC.,
)
NORTHSIDE COALITION FOR FAIR )
HOUSING, INC., THE HILL DISTRICT )
CONSENSUS GROUP, INC. and the
)
FAIR HOUSING PARTNERSHIP OF
)
GREATER PITTSBURGH,
)
)
Plaintiffs,
)
)
v.
)
)
THE CITY OF PITTSBURGH,
)
PENNSYLVANIA and LUKE
)
RAVENSTAHL, its Chief Executive
)
Officer,
)
)
Defendants.
)

2:12cv1600
Electronic Filing

MEMORANDUM ORDER
AND NOW, this 31st day of March, 2017, upon due consideration of the relators' motion
for reconsideration and the record as developed in conjunction therewith, IT IS ORDERED that
[74] the motion be, and the same hereby is, denied.
In the opinion of March 31, 2016, the court assumed that relators can and would prove
every factual averment that had been advanced in their First Amended Complaint. It then
considered the impact of those averments under the applicable standards of review. Relators
currently fail to advance any new fact or persuasive legal authority that was not considered in the
court's disposition. Offering evidence to prove a factual averment that the court has treated as
established in the First Amended Complaint does not change the scope of review. It merely
seeks to seine the ocean of additional information that discovery would make available in search
of new averments that will lead to claim upon which relief can be granted. We do not

understand the applicable standards of review to permit such an expedition. And relators cannot
change the core facts that preclude them from establishing original source status in any event.
Similarly, the referenced authority that HUD can withhold or adjust a recipient's future
Community Block Grant Development funding as one of several remedial measures in
implementing the administrative scheme, see Relators' Brief in Support (Doc. No. 75) at 5 (citing
City of Norwood, Ohio v. Harris, 683 F.2d 150, 151 (6th Cir. 1982)), merely supports the court's
determination that the malfeasance forming the foundation of the relators' claims distinguishes
them from the nonfeasance in U.S. ex rel. Anti-Discrimination Ctr. of Metro New York, Inc. v.
Westchester Cty., N.Y., 668 F. Supp.2d 548 (S.D. N.Y. 2009). And the actual setting and
context in which relators' claims arise make remediation of the relators' selected forms of
malfeasance a matter committed to the exercise of the Secretary's discretion rather than a
straightforward condition of payment. Repleading, recasting and rehashing the same facts and
arguments leads to the same disposition and is thus insufficient.
Moreover, the court does not disagree with any of the principles of law set forth in the
statement of interest filed by the United States. The difficulty with those principles and their
straightforward application to the "black-and-white" scenarios set forth in the statement of
interest is that those principles are only the beginning of the framework for evaluating whether
an actionable violation of the False Claims Act has been stated and they do not address
comprehensively the far more detailed situation presented by relators' averments and the matters
of which this court has taken notice. The statement of interest does not convincingly explain
how the principles highlighted therein supply such a ready-made disposition to this intricate and
complex setting and the implicit suggestion that the court should turn a blind eye to the context
in which the claims arise for the sake of maintaining a simplistic set of rules in qui tam
jurisprudence is at best untenable.
2

Moreover, the averments and information of which the court has taken notice reveal that
the City neither lied to HUD about its compliance and submitted false information to cover it up
nor sought to hide behind the intricacies of the regulatory scheme to benefit from its own lies;
the core information and reports forming the City's alleged deficient performance were disclosed
in the information submitted to HUD as ongoing proof of its certification of compliance to the
satisfaction of the Secretary. Of course, upon a finding of unsatisfactory compliance by the
Secretary HUD had and continues to have a panoply of remedies at its disposal to address and
correct the deficiencies as it deems appropriate. But a finding of unsatisfactory performance by
the Secretary has not been made and HUD's referral of the City's alleged deficient performance
to the Attorney General for appropriate civil action is not a fact of record; nor is it a fair
inference that either of these measures was contemplated before or after relators' initiation of this
action.
Furthermore, the CDGD and HOME funding is not a bill submitted for receipt of
payment upon concrete and specified representations. It is a stream of funding given to certain
government bodies under the pledge of complying with an array of policy objectives that reflect
national priorities, which priorities are identified in a broad network of statutes, regulations and
extensive administrative guidance. A relator's attempt to highlight the treatment of two or three
of the several statutorily mandated objectives pursuant to a contention of deficient performance
is not a sound basis to subject the affected government entity to the ramifications that flow from
holding the deficient performance was an actionable condition of payment under the False
Claims Act, particularly where there was performance that was disclosed in the mandated
submissions that were made as part of the effort to comply with the ongoing certification
process; the deficient performance is of course a reason for termination, adjustment or other
remedial sanction with regard to ongoing/future participation. The United States' ability to take
3

over, monitor or dismiss the litigation and/or its needed approval for any ultimate disposition
cannot change these core facts or the implications that flow from them.
The court in Wilkins aptly cautioned against extending the implied certification doctrine
in a manner that would make every violation of a complex regulatory scheme into a fraud claim.
We have heeded this sage admonishment given the specific circumstances presented. The
position advanced in the statement of interest effectively would do just the opposite and
eviscerate any limitation in this or any similar setting. And if the court has made an erroneous
decision as to whether any one or more of the relators' claims has survived defendant's motion,
then this court and the parties should understand the import and boundaries of the claim(s) which
may proceed under the circumstances presented before embarking on the undertaking that would
flow from such a determination.

s/David Stewart Cercone
David Stewart Cercone
United States District Judge

cc:

Donald Driscoll, Esquire
Kevin Quisenberry, Esquire
Michael A. Comber, AUSA
Colin J. Callahan, AUSA
Eric Schmeltzer, AAG
John C. Hansberry, Esquire
Adam B. Fisher, Esquire
Lourdes Sanchez Ridge, Esquire
(Via CM/ECF Electronic Mail)

4