United States ex rel. Grubea v. Rosicki, Rosicki & Assocs., P.C.
United States ex rel. Grubea v. Rosicki, Rosicki & Assocs., P.C.
Opinion of the Court
By Opinion and Order dated June 23, 2018, this Court, inter alia, dismissed with prejudice all claims filed in "qui tam" actions on behalf of the United States of America by Peter D. Grubea ("Relator") against mortgage servicers Bank of America *750Corporation, Bank of America, N.A. (collectively, "Bank of America"); Cenlar FSB; Citigroup Inc., Citibank, N.A., and CitiMortgage, Inc. (collectively, "Citi"); Ditech Financial LLC; EverHome Mortgage Company and EverBank FSB (collectively, "EverBank"); Flagstar Bank, FSB ("Flagstar"); Green Tree Credit; James B. Nutter & Co.; J.P. Morgan Chase & Co., JPMorgan Chase Bank, N.A. (collectively, "JPMorgan Chase"); MetLife Bank, N.A.; Nationstar Mortgage LLC; OneWest Bank FSB ("One West"); PHH Mortgage Corporation ("PHH"), PNC Bank, FSB ("PNC"); SunTrust Mortgage, Inc.; U.S. Bank N.A.; and Wells Fargo & Co. ("Wells Fargo"). Dkt. 180. Now before the Court is Relator's motion for reconsideration of the dismissal with prejudice and permission to replead as to seven of the servicers: Bank of America, Citi, Flagstar, JP Morgan Chase, Nationstar, U.S. Bank N.A., and Wells Fargo (collectively, "Servicer Defendants"). Dkt. 182. Servicer Defendants oppose. Dkt. 188.
The Court here assumes familiarity with the underlying facts, which are laid out in the Opinion and Order dated June 23, 2018. Dkt. 180. In brief, Relator alleges that Servicer Defendants submitted claims for reimbursement of foreclosure expenses to the Federal National Mortgage Association ("Fannie Mae"), the Federal Home Loan Mortgage Corporation ("Freddie Mac") and the Federal Housing Administration ("FHA"), in violation of those entities' rules prohibiting reimbursement of unreasonable and unnecessary costs and requiring servicers to engage in oversight to reduce the risk of such claims. Specifically, Relator asserts that the Servicer Defendants violated the False Claims Act ("FCA") by submitting false claims to Fannie Mae, Freddie Mac, and FHA in violation of
Servicer Defendants moved to dismiss with prejudice the claims against them under Rule 9(b), Fed. R. Civ. P., on the ground that Relator failed to adequately allege scienter. See Memorandum of Law in Support of the Servicer Defendants' Motion to Dismiss the Complaint, Dkt 124; United States ex rel. Tessler v. City of New York, 14-cv-6455,
For the reasons set forth below, the Court denies Relator's motion for reconsideration of this decision.
"Reconsideration of a court's previous order is an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources."
*751Melnitzky v. Rose,
Relator argues that dismissal of his claims with prejudice "conflict[s] with controlling precedent" as "[c]omplaints dismissed under Rule 9(b) are almost always dismissed with leave to amend." Relator's Memorandum of Law in Support of his Motion for Reconsideration ("Rel. Memo.") at 7 (quoting Pasternack v. Shrader,
Courts have regularly found amendment futile and dismissal with prejudice appropriate where a relator has failed to meet Rule 9(b)'s requirements despite previous opportunities for amendment. See, e.g., U.S. ex. rel. Bilotta v. Novartis Pharms. Corp.,
Moreover, mere disagreement with a discretionary decision made for good cause is not equivalent to "an intervening change of controlling law ... or the need to correct a clear error" sufficient to justify reconsideration. Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd.,
Relator argues that the Court's decision to dismiss with prejudice is not entitled to the deferential standard employed on a motion for reconsideration as dismissal with prejudice was not briefed. Relator cites no Second Circuit case law in support of this argument. Moreover, Relator was the one who failed to brief any opposition to dismissal with prejudice or to request leave to amend. See Memorandum of Law in Opposition to Defendants' Motions to Dismiss, Dkt. 150. The Second Circuit has held that it "will not deem it an abuse of the district court's discretion to order a case closed when leave to amend has not been sought." Campo v. Sears Holdings Corp.,
*753Separately, Relator's motion for reconsideration lacks merit because it is essentially a renewal of a request for discovery that this Court has already denied. Relator's motion provides no information illustrating how he could replead with sufficient specificity to meet the particularity requirement; instead, Relator argues that he could replead with sufficient specificity for Rule 9(b)if he can obtain limited discovery from the Government related to the Servicer Defendants. Relator made the same request for limited discovery before the initial conference with the Court. See Apr. 17, 2018 Tr. at 16:6-17. The Court denied it then, staying all discovery pending a decision on the motions to dismiss. Id. at 19:20-21. Relator acknowledges that he "did not press the issue further at the time," but now, in hindsight, argues that he "would have made a formal motion then for a limited exception to the discovery stay" if he had realized his claims might be dismissed with prejudice. Rel. Memo. at 4. However, hindsight is not a ground for reconsideration; it is an instance of the exact type of "taking a second bite at the apple" that the Second Circuit has emphasized does not justify reconsideration. Analytical Surveys,
Relator argues that he is entitled to use government information to amend his complaint. However, in each of these cases he cites to in support of this argument, the relator's claims had not been dismissed and relator already possessed the information from the government to be used in the amendment. See Vasallo v. Rural/Metro Corp., No. 15-cv-00119,
None of these cases stands for the principle that a relator can seek discovery in order to amend claims that have been dismissed. To the contrary, the Second Circuit has held that relators are not entitled to discovery to cure inability to meet Rule 9(b)'s particularity requirements. See Wood ex rel. U.S. v. Applied Research Assocs., Inc.,
*754Relator's separate argument that he should be given leave to amend as to JPMorgan Chase similarly fails. Relator seeks to amend on the basis of conversations he had with outside counsel for Chase surrounding a brief that relator submitted in a bankruptcy case in January 2012. To qualify as a ground for reconsideration, new evidence must have been "not previously available" to the movant. Almaty, Kaz. v. Ablyazov, No. 15-cv-5345,
For the foregoing reasons, defendants' motion for reconsideration is denied. The Clerk is directed to close the entry at docket number 182.
SO ORDERED.
Unless otherwise indicated, case quotations omit all internal quotation marks, alterations., footnotes, and citations.
Relator argues that he only declined to amend his claims then because he believed the Court had guaranteed him an opportunity to amend later. Specifically, Relator cites the Court's comments earlier in the colloquy that the Court "would be not quite compelled - but close to it - to grant leave to file an additional complaint" and that "the likelihood is extremely high that I would allow repleading" if the claims were dismissed for failure to satisfy Rule 9(b). See Rel. Memo at 4 (citing Apr. 17, 2018 Tr. at 4:4-16; 12:14-20). As this language makes clear, this was an expression of likelihood, not a guarantee, and thereafter Relator explicitly chose to "take [his] chances" on the present complaint rather than amend it, as the Court proposed. Apr. 17, 2018 Tr. at 7:1-10.
Moreover, Relator fails even to satisfactorily establish that discovery could enable him to cure the defects of his complaint, beyond making conclusory statements, such as that he "understands the Government to possess" "facts regarding Defendants actual servicing practices" that would make amendment "not be futile." Rel. Memo. at 11. These statements are insufficient to explain how amendment could affect the Court's conclusion that relator could not establish a basis to infer scienter such that leave to amend would be warranted, even if discovery was permissible. See Campo,
Reference
- Full Case Name
- UNITED STATES of America EX REL. Peter D. GRUBEA v. ROSICKI, ROSICKI & ASSOCIATES, P.C., Paramount Land, Inc., Threshold Land Inc., Enterprise Process Service, Inc., McCabe, Weisberg, & Conway, P.C., Attorney Outsourcing Support Services, Inc., REO America Abstract, Inc., Cenlar FSB, Citigroup, Inc., Citibank, N.A., CitiMortgage, Inc., Ditech Financial LLC, EverHome Mortgage Company, EverBank FSB, Flagstar Bank, FSB, Green Tree Credit, James B. Nutter & Co., MetLife Bank, N.A., Nationstar Mortgage LLC, OneWest Bank FSB, PHH Mortgage Corporation, PNC Bank, FSB, SunTrust Mortgage, Inc., U.S. Bank, N.A., and Wells Fargo & Co., United States of America, Plaintiff-Intervenor v. Rosicki, Rosicki & Associates, P.C., Enterprise Process Service, Inc., Paramount Land, Inc., United States of America ex rel. Peter D. Grubea v. Bank of America Corporation, Bank of America, N.A., J.P. Morgan Chase & Co., and JPMorgan Chase Bank, N.A.
- Cited By
- 6 cases
- Status
- Published