United States ex rel. Lockey v. City of Dall.

Decision Date06 January 2014
Docket NumberCivil Action No. 3:11-cv-354-O
CourtU.S. District Court — Northern District of Texas

Before the Court are Relators' Rule 60(b)(2) Motion for Relief from Final Judgment and Request for Expedited Indicative Ruling under Rule 62.1 ("Rule 60(b)(2) Motion") (ECF No. 146), filed December 9, 2013; Relators' Brief in Support of Rule 60(b)(2) Motion (ECF No. 147), filed December 9, 2013; City of Dallas's Response to Relators' Rule 60(b)(2) Motion (ECF No. 150), filed December 17, 2013; The Housing Authority of the City of Dallas, Texas's Response to Relators' Rule 60(b)(2) Motion (ECF No. 151), filed December 17, 2013; and Relators' Reply in Support of their Rule 60(b)(2) Motion (ECF No. 152), filed December 20, 2013.

Relators, Curtis Lockey ("Lockey") and Craig MacKenzie ("MacKenzie") (collectively, "Relators"), seek an indicative ruling, pursuant to Federal Rule of Civil Procedure 62.1, on their motion for relief from judgment brought under Federal Rule of Civil Procedure 60(b)(2). This case is currently on appeal to the United States Court of Appeals for the Fifth Circuit. Having reviewed the motion, the related briefing, and the applicable law, the Court finds that Relators' Rule 60(b)(2) Motion should be and is hereby DENIED.


Relators began working with the City of Dallas ("the City") in May 2008 on a proposal for an affordable housing project called the LTV Tower Redevelopment ("LTV Tower"). Relators' App. Resp. Mot. Dismiss Tab 3 (Lockey & MacKenzie decl.), App. 44, ¶ 1, ECF No. 53-2. The LTV Tower would convert a vacant thirty-two story high-rise office building in downtown Dallas into a large affordable housing project, and a majority of people who would qualify for this type of housing would be minorities, particularly African-American and Latino individuals and families. Id. at 4445, ¶¶ 1, 3. In a meeting at City Hall on October 10, 2008, Relators spoke with Karl Zavitkovsky ("Zavitkovsky"), Director of Economic Development at the time, regarding funding sources for the LTV Tower, including funding from the U.S. Department of Housing and Urban Development ("HUD"). Id. at 45, ¶ 5.

Relators allege that "Mr. Zavitkovsky told us that Downtown Dallas is not the right place for low-income housing and that low-income housing 'is not part of the vision for Downtown Dallas.'" Id. Relators understood those to be "code words" indicating that the City did not want racially integrated and low-income housing in Downtown Dallas. Id. at 46, ¶ 9.Based on this conversation and other firsthand personal experiences, Relators suspected that the City was actively discouraging the development of low-income housing available for people of color outside of the Southern Sector, particularly any development of low-income housing in Downtown Dallas. Id. at 50, ¶ 25. Relators then embarked on "an extensive 15-month independent investigation" to corroborate their suspicions of the City's actions. Id. at 50, ¶ 26.

On February 22, 2011, Relators filed this suit on behalf of the United States alleging that the City and DHA (collectively, "Defendants") violated the False Claims Act ("FCA") regarding theirapplication to HUD for federal housing and community development funds. See Am. Compl., ECF No. 16. By requesting funds from the United States government, the City and DHA expressly and impliedly certified that they were complying with federal law and fulfilling their obligations to affirmatively further fair housing. Relators allege that, because the City and DHA were not in fact in compliance, their actions of requesting funds and certifying they were in compliance resulted in fraud against the government. See generally id.

In March 2012, Defendants filed motions to dismiss and attacked Realtors' FCA claims on two grounds: (1) lack of subject-matter jurisdiction under the FCA's public disclosure bar, and (2) failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Def. City's Mot. Dismiss Lack Jurisdiction, ECF No 26; Def. City's Mot. Dismiss Failure State Claim, ECF No. 28; Def. DHA's Mot. Dismiss, ECF No. 31. The Court granted Defendants' motions to dismiss because of a lack of subject-matter jurisdiction and denied the 12(b)(6) motions as moot. See Order, Jan. 23, 2013, ECF No. 101.

Relators' claims originated prior to and continued past the Patient Protection and Affordable Care Act's ("PPACA") amendments to the FCA's public disclosure bar. Id. at 8-11. Having found that the PPACA amendments did not apply retroactively, the Court applied the pre- and post-amendment versions of the statute to Relators' claims, respectively. See id. at 12, 24. Under both versions, the Court found that Relators claims had been publicly disclosed and that Relators were not original sources. See generally id. After the Court dismissed their claims, Relators filed a Rule 59(e) motion to alter or amend the judgment, which the Court denied. See Order, July 30, 2013, ECF No. 138.

On August 15, 2013, Relators filed their notice of appeal to the Fifth Circuit. See NoticeAppeal, ECF No. 139. Relators now seek relief from the Court's final judgment based on newly discovered evidence under Rule 60(b)(2). Because this case is on appeal, the motion is brought pursuant to Rule 62.1. Under Rule 62.1, if a timely motion for relief is made that a court lacks authority to grant because an appeal is docketed and pending, a court may (1) defer ruling on the motion, (2) deny the motion, or (3) "state either that it would grant the motion if the court of appeals remands for that purpose or that the motion raises a substantial issue." See Fed. R. Civ. P. 62.1(a). After the Court ordered expedited briefing, Defendants filed their responses on December 17, 2013, and Relators filed their reply on December 20, 2013. Accordingly, this matter has been fully briefed and is ripe for determination.

A. False Claims Act

The False Claims Act ("FCA") imposes monetary liability on any person who knowingly makes a false statement in order to have a false or fraudulent claim paid or approved by the government. 31 U.S.C. § 3729(a)(2). The qui tam provisions of the FCA authorize private persons to bring actions on behalf of the United States against those who have committed fraud on the federal government. See id. § 3730(b). However, courts have limited subject-matter jurisdiction when adjudicating qui tam actions under the FCA. See id. § 3730(e)(4)(A) (2006), amended by 31 U.S.C. § 3730(e)(4)(A) (Supp. 2011). The FCA states that a court does not have jurisdiction over the action when there has been a "public disclosure of allegations or transactions . . . unless . . . the person bringing the action is an original source of the information." Id. This public disclosure bar is designed to "(1) promot[e] private citizen involvement in exposing fraud against the government and (2) prevent[] parasitic suits by opportunistic late-comers who add nothing to the exposure of fraud."United States ex rel. Reagan v. E. Tex. Med. Ctr. Reg'l Healthcare Sys., 384 F.3d 168, 174 (5th Cir. 2004) (quoting United States ex rel. Laird v. Lockheed Martin Eng'g & Sci. Servs. Co., 336 F.3d 346, 351 (5th Cir. 2003)) (internal quotation marks omitted).

B. Rule 60(b)(2)

Under Rule 60(b)(2), a court may relieve a party from final judgment because of "newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b)." See Fed. R. Civ. P. 60(b)(2). To prevail under Rule 60(b)(2), the movant must show: "(1) that it exercised due diligence in obtaining the information; and (2) that the evidence is material and controlling and clearly would have produced a different result if present before the original judgment." Goldstein v. MCI WorldCom, 340 F.3d 238, 257 (5th Cir. 2003) (citing Provident Life & Accidental Ins. Co. v. Goel, 274 F.3d 984, 999 (5th Cir. 2001)).

The newly discovered evidence must be admissible and credible and "must be evidence of facts existing at the time of the original trial." Id.; Johnson v. Offshore Exp., Inc., 845 F.2d 1347, 1358 (5th Cir. 1988) (citing N.L.R.B. v. Jacob E. Decker and Sons, 569 F.2d 357, 364 (5th Cir. 1978); Mumford v. Bowen, 814 F.2d 328, 330 (7th Cir. 1986); Corex Corp. v. United States, 638 F.2d 119, 121 (9th Cir. 1981); Still v. Townsend, 311 F.2d 23, 24 (6th Cir. 1962); Ryan v. United States Lines Co., 303 F.2d 430, 434 (2d Cir.1962); Brown v. Pa. R.R. Co., 282 F.2d 522, 526-27 (3d Cir. 1960), cert. denied, 365 U.S. 818 (1961); 11 Wright & Miller ¶ 2859, at 182). Importantly, "[a] judgment will not be reopened if the evidence is merely cumulative or impeaching and would not have changed the result." Hesling v. CSX Transp., Inc., 396 F.3d 632, 639 (5th Cir. 2005).


The Court dismissed this action for lack of subject matter jurisdiction under the publicdisclosure bar to the FCA. See generally Order, Jan. 23, 2013, ECF No. 101. Under both versions of the statute, the Court found that Relators claims had been publicly disclosed and that Relators were not original sources. Id. Relators claims were publically disclosed in the following ways: a June 10, 2010 news article, the Walker v. City of Mesquite litigation, the Texas Affordable Housing Project's report card, and Relators' HUD complaint. Relators do not challenge this prong of the public disclosure bar in their Rule 60(b)(2) Motion. Rather, Relators argue that the Court's finding as to the second prong, whether Relators' where the original source of the publically disclosed information, was in error. See Mot. Relief J., ECF No. 146.

Relators contend two types of evidence warrant relief from judgment. The first is HUD's letter of findings ("Findings") issued November 22, 2013. See ...

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