Appeal 19-7025 Appellant Opposition To DOJ Mot. Summary Affirmance, June 21, 2019 PDF

USCA Case #19-7025 Document #1793942 Filed: 06/21/2019 Page 1 of 38
NOT SCHEDULED FOR ORAL ARGUMENT
UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT
LAURENCE SCHNEIDER, )
)
Appellant, )
)
vs. )
) Case No. 19-7025
UNITED STATES OF AMERICA )
)
and )
)
JP MORGAN CHASE BANK, NATIONAL )
ASSOCIATION, et al., )
)
Appellees. )
)
APPELLANT LAURENCE SCHNEIDER’S OPPOSITION TO

UNITED STATES’ MOTION FOR SUMMARY
AFFIRMANCE AND MOTION FOR AFFIRMATIVE RELIEF
Robert L. Di Marco Joseph A. Black

WALKER & DI MARCO, P.C. Daniel E. Cohen
350 Main Street, First Floor THE CULLEN LAW FIRM PLLC
Malden, MA 02148 1101 30th Street NW, Suite 300
Tel: (781) 322-3700 Washington, D.C. 20007
Fax: (781) 322-3757 Tel: (202) 944-8600
Fax: (202) 944-8611
Counsel for Appellant

CORPORATE DISCLOSURE STATEMENT
Pursuant to Federal Rules of Appellate Procedure 26.1, Appellant Laurence
Schneider states that he is a private individual and not subject to Rule 26.
ii
TABLE OF CONTENTS
CORPORATE DISCLOSURE STATEMENT…………………………………….ii
TABLE OF CONTENTS………………………………………………………….iii
TABLE OF AUTHORITIES……………………………………………………….v
INRODUCTION……………………………………………… ............................... 1
PROCEDURAL HISTORY………………………………………… ...................... 1
SUMMARY OF ARGUMENT………………………………………………….... .3
ARGUMENT…………………………………………………………………… ... .4
I. THE GOVERNMENT DOES NOT HAVE ABSOLUTE

DISCRETION TO DISMISS FCA CASES UNDER 31 U.S.C. §
3730(c)(2)(A)............................................................................................. 4
A. The Government’s Motion to Dismiss May be Denied if it is Found

to be Arbitrary and Capricious. ............................................................ 4
B. The Government’s Argument that it is Owed Complete Deference

Under Section 3730(c)(2)(A) Violates Normal Tenets of Statutory
Construction.. ........................................................................................ 6
II. THE GOVERNMET’S MOTION TO DISMISS IS ARBITRARY

AND CAPRICIOUS .................................................................................. 9
A. Chase Violated the Conditions for Payment under the HAMP by

Failing to Meet the Servicing and Loan Modification Requirements
of the HAMP for Loans in RCV1 ...................................................... 12
B. Schneider Has Sufficient Evidence that Would Support Judgment

on a Motion for Summary Judgment ................................................. 21
iii
C. The Government will use Minimal Resources to Monitor this Case

with a Potentially Huge Return to the Treasury .................................. 27
D. The Court Should Deny the Government’s Motion for Summary

Affirmance Since the Government Efforts at Justification do not
Withstand Scrutiny .............................................................................. 29
CONCLUSION ........................................................................................................ 29
CERTIFICATE OF COMPLIANCE
CERTIFICATE OF SERVICE
ADDENDUM
iv
TABLE OF AUTHORITIES
Cases
Abourezk v. Reagan,
785 F.2d 1043 (D.C.Cir.1986) ................................................................................7
Beck v. Prupis,
529 U.S. 494, 120 S.Ct. 1608, 146 L.Ed.2d 561 (2000) ........................................7
Corley v. United States,

556 U.S. 303 (2009) ................................................................................................7
Hibbs v. Winn,
542 U.S. 88 (2004) ..................................................................................................7
Hoyte v. Am. Nat’l Red Cross,

518 F.3d 61(D.C. Cir. 2008) .......................................................................... 3, 4, 5
Ridenour v. KaiserHill Co., L.L.C.,

397 F.3d 925 (10th Cir. 2005) ................................................................................7
Swift v. United States,

318 F.3d 250, (D.C. Cir. 2003) .................................................................. 2, 3, 4, 5
United States ex rel. Cimznhca, LLC v. UCB, Inc.,

2019 WL 1598109 (S.D. Ill. April 15, 2019) .........................................................8
United States ex rel. Longhi v. Lithium Power Tech. Inc.,

575 F3d 458 (5th Cir. 2009) .................................................................................16
United States ex rel. Schneider v. J.P. Morgan Chase Bank, N.A.,

224 F. Supp. 3d 48 (D.D.C. 2016) ..........................................................................2
United States ex rel. Schneider v. J.P. Morgan Chase, N.A.,

Appeal No. 17-7003, 878 F.3d 309 (D.C. Cir. 2017) .............................................2
United States ex rel. Schwelzer v. Onc N.V.,

677 F. 3d 1228 (D.C. Cir. 2012) .............................................................................7
v
United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp.,

151 F.3d 1139 (9th Cir. 1998) ................................................................................7
United States ex rel. SMSPF, LLC. v. EMD Serono, Inc.,

2019 WL 1468934 (E.D. Pa. April 3, 2019)...........................................................8
United States ex rel. Stovall v. Webster Univ.,

2018 WL 3756888 (D.S.C. Aug. 8, 2018) ..............................................................4
United States ex rel. Thrower v. Academy Mortgage Corp.,

2018 WL 3208157 (N.D. Cal. June 29, 2018) ........................................................8
United States v. Rogan,

517 F.3d 449 (7th Cir. 2008) ................................................................................17
Universal Health Services, Inc. v. United States ex rel. Escobar,

136 S. Ct. 1989 (2016) ..........................................................................................17
Statutes
15 U.S.C. § 1601 ......................................................................................................14
15 U.S.C. § 41 ..........................................................................................................14
15 U.S.C. § 701 ........................................................................................................14
15 U.S.C. § 1639 ......................................................................................................14
15 U.S.C. § 1681 ......................................................................................................14
31 U.S.C. § 3730(c)(2)(A) ............................................................................... passim
31 U.S.C. § 3730(c)(2)(B) .........................................................................................7
31 U.S.C. §§ 3729-3733 ..........................................................................................16
vi
INTRODUCTION
On May 23, 2019, Appellee United States filed a Motion for Summary
Affirmance of the March 6, 2019, Memorandum Opinion (R.138) and Order
(R.139) of the Honorable Judge Rosemary M. Collyer, which granted the United
States’ motion to dismiss pursuant to the False Claims Act (“FCA”), 31 U.S.C. §
3730(c)(2)(A) (R.135). On May 24, 2019, Appellee JP Morgan Chase Bank, N.A.
(“Chase”) filed a Notice of Joinder in United States Motion for Summary
Affirmance.
Appellant Laurence Schneider files this response in opposition to the
Government’s motion for summary affirmance and moves simultaneously for
affirmative relief in the form of reversal of the District Court’s Order granting the
Government’s motion to dismiss.
PROCEDURAL HISTORY
The Government’s motion for summary affirmance presents a fair
description of the procedural history of this action. Gov. Mot. 2-4. Therefore, it is
unnecessary to repeat most of that history here.
This is the second appeal in this action. At the time of that appeal this case
involved claims that Chase submitted false claims of certification with the National
Mortgage Settlement Agreement (“NMS”) and Housing Affordable Modification
Program (“HAMP”). The District Court dismissed Relator’s second amended
1
complaint in full on December 22, 2016, with prejudice as to the NMS claims and
without prejudice as to the HAMP claims. R.118. United States ex rel. Schneider
v. J.P. Morgan Chase Bank, N.A., 224 F. Supp. 3d 48, 61-62 (D.D.C. 2016).
Relator appealed this decision and the United States participated as amicus curiae
regarding the District Court’s ruling on Schneider’s need to exhaust contractual
remedies before filing a qui tam action on the NMS claims. R.120; United States
ex rel. Schneider v. J.P. Morgan Chase, N.A., Appeal No. 17-7003, 878 F.3d 309
(D.C. Cir. 2017). On December 22, 2017, this Court, while agreeing with the
Relator as to his argument on the District Court’s decision, affirmed the dismissal
with prejudice of the NMS Claims on alternative grounds and affirmed the
dismissal without prejudice of the HAMP claims. Schneider, 878 F.3d at 314-15.
On remand, Relator sought leave to file a third amended complaint to revive
his HAMP Claims (“TAC”) (R.125) Add 036-088, which Chase opposed (R.126).
After briefing concluded, the United States informed the District Court and the
parties that it was evaluating whether to seek dismissal under the FCA. R.130. On
November 13, 2018, the United States moved to dismiss the action under Section
3730(c)(2)(A). R.135. Schneider requested a hearing as provided for by the
statute, R.136, and, after the hearing, the District Court granted the United States’
motion to dismiss. R.138. Add 001-006. The District Court held that it was
bound by this Court’s previous decisions in Swift v. United States, 318 F.3d 250,
2
(D.C. Cir. 2003), and United States ex rel. Hoyte v. Am. Nat’l Red Cross, 518 F.3d
61(D.C. Cir. 2008). The United Stated requested that the relief sought by it should
not include any review of the merits arguments made by Schneider. In rendering
its decision, the District Court did not address Schneider’s legal or factual
arguments.
SUMMARY OF THE ARGUMENT
The primary basis for the Government’s motion to dismiss is that it has
absolute discretion to dismiss FCA cases under 3730(c)(2)(A) regardless of the
Court’s view of the case’s merits. Two earlier cases from the D.C. Circuit do hold
that the Government does have “virtually unfettered discretion” to dismiss cases.
Hoyte, 518 F.3d at 65. Although it is a high bar, that discretion is not absolute.
Those cases acknowledge that there are exceptions to that discretion where it can
be shown was “arbitrary and capricious, illegal, or fraudulent.” Swift, 318 F. 3d at
254. Moreover, carving out this limited exception comports with the statute by not
making its requirement for a hearing superfluous. It also harmonizes the holdings
of this court with the decisions of other circuit courts addressing dismissals under
3730(c)(2)(A).
Schneider can demonstrate that the Government’s stated reasons for
dismissing the case – that it is without merit and there is a need to preserve the
Government’s resources – do not comport with the facts of this case. First, the
3
Government acknowledged at the hearing on its motion to dismiss that it agrees
with Schneider’s underlying legal theory of the case; second, Schneider has
obtained independent discovery from Chase that prove his allegations; and third,
the potential recovery overwhelms any possible costs in a cost/benefit analysis.
Therefore, the Government’s decision to seek dismissal of this case can only be
described as arbitrary and capricious.
ARGUMENT
I. THE GOVERNMENT DOES NOT HAVE ABSOLUTE DISCRETION

TO DISMISS FCA CASES UNDER 31 U.S.C. § 3730(c)(2)(A).
A. The Government’s Motion to Dismiss May be Denied if it is

Found to be Arbitrary and Capricious.
The United States premised its motion to dismiss on the belief that it has
absolute discretion to dismiss FCA case over relator’s objections. It bases this
belief on two early cases from this Circuit, Swift and Hoyte. While the Hoyte
Court noted that the Government has “‘virtually unfettered discretion’ to dismiss a
qui tam suit,” Hoyte, 518 F.3d at 65 (citing Swift 318 F.3 at 251-54) both Courts
acknowledged that there were clear exceptions to this discretion. Particularly, “the
Swift court indicated that it may be appropriate to consider whether the relator can
establish that the Government’s prosecutorial judgment was arbitrary and
capricious, illegal, or fraudulent.” United States ex rel. Stovall v. Webster Univ.,
2018 WL 3756888 at *2 (D.S.C. Aug. 8, 2018) (quoting Swift, 318 F. 3d at 254).
4
Similarly, Hoyte, held, following Swift, that any exception to the Government’s
discretion must be like, although not limited to, “‘fraud on the court.’” Hoyte, 518
F.3d at 65.
This position is consistent with the legislative history of the 1986
amendments of the FCA, where the Senate Report states that the relator must be
afforded the opportunity to “present[] a colorable claim that the settlement or
dismissal is unreasonable in light of existing evidence, that the Government has not
fully investigated the allegations, or that the Government's decision was based on
arbitrary and improper considerations.” S. Rep. No. 99-345, at 26
In Hoyte the Court noted:
As in Swift, there is no evidence here of fraud on the court or any

similar exceptional circumstance to warrant departure from the usual
deference we owe the Government’s determination whether an action
should proceed in the Government’s name.
Hoyte, 518 F.3d at 65 (emphasis added).
Schneider’s case stands in a different position than the relators in either Swift
or Hoyte, because he does offer convincing demonstration that the Government
action to dismiss his FCA case is arbitrary and capricious, which, if shown, is one
of the factors the Swift court held would lead to a denial of the Government’s
motion to dismiss. This demonstration consists of the legal merits of his case and
clear and convincing evidence that Chase did make the false certifications alleged
in the complaint. This is not conjecture or simply an unsubstantiated belief, but

5
documentary evidence obtained through discovery in a separate private action
pending in the Southern District of New York where Schneider is seeking
damages and other relief, Mortgage Resolution Servicing, LLC, et al. v. JPMorgan
Chase Bank, N.A., et al., No. 1:15-cv-00293-LTS (S.D.N.Y. Dec. 24, 2014).
Chase has produced over 200,000 documents, many with multiple pages, in
discovery in that case. Bates numbers for these documents exceed 1.1 million
pages. Documents produced in that discovery clearly support and prove
Schneider’s HAMP claims in this FCA case.
As demonstrated below, Schneider has met his burden of showing that the
Government’s motion to dismiss is arbitrary and capricious because it lacks
foundation either legally or factually. Therefore, the Court should deny
Government’s motion for summary affirmance and grant Schneider’s motion to
reverse the District Court’s Order granting the Government’s motion to dismiss.
B. The Government’s Argument that it is Owed Complete Deference

Under Section 3730(c)(2)(A) Violates Normal Tenets of Statutory
Construction.
The Government’s argument is that it is entitled to absolute deference
regarding its decision to dismiss this action under section 3730(c)(2)(A) and that
the requirement for a hearing under that provision is no more than a proforma
exercise. This position violates “one of the most basic interpretive canons that ‘[a]
statute should be construed so that effect is given to all its provisions, so that no
6
part will be inoperative or superfluous, void or insignificant ....’” Corley v. United
States, 556 U.S. 303, 314 (2009) (quoting Hibbs v. Winn, 542 U.S. 88, 101
(2004)). Similarly, as this Court recognized when analyzing a complementary
provision of the FCA, 31 U.S.C. § 3730(c)(2)(B), dealing with the requirement for
a hearing to assess the fairness of a settlement:
[A]llowing dismissal without judicial review of the settlement would

render § 3730(c)(2)(B) a nullity and thus contravene “the
longstanding canon of statutory construction that terms in a statute
should not be construed so as to render any provision of that statute
meaningless or superfluous.” Beck v. Prupis, 529 U.S. 494, 506, 120
S.Ct. 1608, 146 L.Ed.2d 561 (2000); see also Abourezk v. Reagan,
785 F.2d 1043, 1054 (D.C. Cir.1986).
United States ex rel. Schwelzer v. Onc N.V., 677 F. 3d 1228, 1234 (D.C. Cir.
2012).
For this reason, other circuit courts have taken the position that the
Government’s discretion to dismiss under section 3730(c)(2)(A) is not absolute.
The Ninth and Tenth Circuits have adopted a “two-step analysis ... to test the
[Government’s] justification for dismissal: (1) identification of a valid Government
purpose; and (2) a rational relation between dismissal and accomplishment of the
purpose. If the United States satisfies the two-step test, the burden switches to the
relator to demonstrate that the dismissal is fraudulent, arbitrary and capricious, or
illegal.” United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp.,
151 F.3d 1139, 1145 (9th Cir. 1998); see also, Ridenour v. KaiserHill Co., L.L.C.,
7
397 F.3d 925, 936 (10th Cir. 2005). As noted by other courts in adopting the Ninth
Circuit test:
“The rational relationship test strikes a balance among the branches of

government. It does not give unlimited power to the Executive to
dismiss a legitimate action the Legislature created. Nor does it give
the Judicial Branch unrestrained power to stop the Executive from
acting to dismiss an action in the government’s interest. Requiring the
Executive to give a reason for a decision to dismiss a qui tam action
the Legislature intended to be pursued is consistent with the notion of
independent, co-equal branches of government.”
United States ex rel. Cimznhca, LLC v. UCB, Inc., 2019 WL 1598109 *3 (S.D. Ill.
April 15, 2019) quoting United States ex rel. SMSPF, LLC. v. EMD Serono, Inc.,
2019 WL 1468934 *4 (E.D. Pa. April 3, 2019).
Following this standard, a district court in the Ninth Circuit recently denied
the Government’s motion to dismiss under section 3730(c)(2)(A). United States ex
rel. Thrower v. Academy Mortgage Corp., 2018 WL 3208157 (N.D. Cal. June 29,
2018) (appeal filed United States v. Academy Mortgage Corp., No.18-16408 (9th
Cir.)). Similarly, the court in Cimznhca denied the Government’s motion to
dismiss after finding that its rationale for dismissal was arbitrary and capricious.
2019 WL 1598109 at *4.
There is in effect little difference between the standards set by the Ninth
Circuit in Sequoia Orange and this Circuit in Swift for granting dismissal by the
government. In both Circuits the relator must ultimately show that the
Government’s motion is arbitrary and capricious or otherwise illegal. Under both

8
standards, the Circuit Courts recognize that the relator should be allowed to make
that showing. Therefore, the Government’s insistence that it has absolute
discretion to FCA cases is without merit.
II. THE GOVERNMENT’S MOTION TO DISMISS IS ARBITRARY

AND CAPRICIOUS.
In an internal memorandum from Michael D. Granston, Director,
Commercial Litigation Branch, Fraud Section, addressed to his staff and Assistant
U.S. Attorneys handling false claims act cases, dated January 10, 2018, the
Department of Justice set out a new policy for seeking dismissal of FCA cases
under 31 U.S.C. § 3730(c)(2)(A). (“Granston Memorandum”) Add 090-097. (This
memorandum, labeled “Privileged and Confidential,” is widely available on the
internet, see e.g. https://assets.documentcloud.org/documents/4358602/Memo-for-
Evaluating-Dismissal-Pursuant-to-31-U-S.pdf.) The memorandum sets out seven
factors for seeking a dismissal: (1) Curbing Meritless Qui Tams; (2) Preventing
Parasitic or Opportunistic Qui Tam Actions; (3) Preventing Interference with
Agency Policies and Programs; (4) Controlling Litigation Brought on Behalf of the
United States; (5) Safeguarding Classified Information and National Security
Interests; (6) Preserving Government Resources; and (7) Addressing Egregious
Procedural Errors. None of these factors provide justification for dismissing
Schneider’s FCA action.
9
The Government asserted in its motion to dismiss that it relied on two of
Granston factors, suggesting that Schneider’s claim lacks merit and the need to
preserve Government resources. Given the status of Schneider’s litigation against
Chase, neither of these assertions withstands any level of reasonable scrutiny.
Since the Government has set out a standard to determine when to seek dismissal
of a case under section 3730(c)(2)(A), the Court should use that standard to
determine whether the Government’s motion is arbitrary and capricious.
Most of the allegations in Schneider’s complaint centered around Chase’s
failure to continue to service loans that had charged off because they were no
longer performing. These loans had been taken out of its normal system of records
and placed in a pool of loans called “Recovery One” (“RCV1”). As alleged in the
TAC, the failure to service these loans is a violation of the HAMP.
The totality of the Government’s analysis of the TAC is contained in one
paragraph:
In his TAC, Relator alleges that Chase violated the FCA by

submitting claims for HAMP incentive payments that were false
because Chase failed to adhere to HAMP servicing standards. See
generally TAC ¶ 1. Specifically, Relator alleges that Chase failed to
solicit properly borrowers for HAMP modifications and perform other
HAMP servicing obligations for loans that Chase charged-off for
accounting purposes and placed onto its “Recovery One” loan
platform. See TAC ¶ 20. Notwithstanding these alleged violations,
Relator alleges that Chase submitted annual certifications with the
HAMP compliance agent attesting to Chase’s compliance with
program rules. See TAC ¶¶ 195-201. Notably, Relator does not allege
that Chase received HAMP incentive payments on loans migrated
10
onto Recovery One. See generally TAC. Additionally, Relator

concedes that Chase released liens on loans in Recovery One (id. ¶
18), which eliminated any chance of Chase foreclosing on a defaulting
homeowner because the mortgage was no longer secured by the
property.
United States’ Motion to Dismiss at 3, R. 135.
This paragraph contains two statements that appear to be the basis of the
Government’s conclusion that Schneider’s FCA case lacks merit. The first is that
“Relator does not allege that Chase received HAMP incentive payments on loans
migrated onto Recovery One.”1 As demonstrated below, the identification of
specific loans that did not meet the requirement for HAMP payments is not
necessary for demonstrating that Chase was not eligible for any HAMP payments.
The second irrelevant statement is that “Relator concedes that Chase released liens
on loans in Recovery One (id. ¶ 18), which eliminated any chance of Chase
foreclosing on a defaulting homeowner because the mortgage was no longer
secured by the property.” As explained in the TAC at ¶¶ 106-110, releasing liens
was a necessary, but not a sufficient, condition for Chase to avoid the requirements
of the HAMP. Chase also had to release the underlying debt and notify the
1
After the Government filed its motion to dismiss, Schneider found in the
voluminous discovery Chase produced in his private action filed in the SDNY a
document that describes the volume and value of incentive payments Chase
received under the HAMP for extinguishment of second liens contained in RCV1.
This information was provided separately to the Government along with the
evidence that these values are for HAMP incentive payments.
11
borrowers. MHA Handbook v. 4.0 at 60. Add 149. For most of the charged-off
loans where Chase released the lien, it failed to also release the underlying debt
and notify the borrower. This failure was not a simple error, but instead, it was an
intentional bank policy that enabled Chase to continue efforts to collect on the debt
even though it was on longer secured by the lien. Thus, these loans were still
subject to the requirements of the HAMP.
A. Chase Violated the Conditions for Payment under the HAMP by

Failing to Meet the Servicing and Loan Modification
Requirements of the HAMP for Loans in RCV1.
The HAMP created two separate but necessary conditions for payment under
the HAMP. The first is that the servicer was required to follow the HAMP loan
modification procedures for each loan for which the servicer claimed credit. The
second condition is that Chase had to certify that it was in overall compliance with
the HAMP servicing and loan modification requirements of the HAMP. The
Government is correct that Schneider did not allege any specific loan that did not
qualify for an incentive payment under the HAMP. The Government’s argument is
misleading since Schneider’s case is not limited to invalidating the payments made
for a few loans. Schneider alleged that Chase could not certify that any of its loans
that had been moved to RCV1 could meet the requirements of the HAMP. Since
the loans that were in RCVI were subject to the HAMP, all of Chase’s
12
certifications of compliance with the servicing requirement of the HAMP were
false.
The voluntary Servicer Participation Agreement (“SPA”) that Chase signed
contained two explicit statements that incentive payments under the HAMP were
conditioned on meeting the overall servicing requirements of the HAMP. The first
is contained in the basic agreement. It states:
4. Agreement to Purchase Financial Instrument: Payment of Purchase Price.
B. The conditions precedent to the payment by Fannie Mae of the

Purchase Price with respect to the Services described on the Initial
Service Schedules are:
* * *
(d) the performance by Servicer of the Services described in the

Agreement, in accordance with the terms and conditions thereof, to
the reasonable satisfaction of Fannie Mae and Freddie Mac; and (e)
the satisfaction by Servicer of such other obligations as are set forth
in the Agreement.
Amended and Restated Commitment to Purchase Financial Instrument and
Servicer Participation Agreement, ¶ 4.B. at 3 (emphasis added). Add 101.
The “Financial Instrument” referred to above is part of the SPA and contains
similar language requiring that servicers meet the servicing requirements of the
HAMP as one of the conditions precedent to payment:
(a) The conditions precedent to the payment by Fannie Mae of the

Purchase Price with respect to the Services described on the Initial
Service Schedules are:
13
* * *
(iv) the performance by Servicer of the Services described in the

Agreement; and (v) the satisfaction by Servicer of such other
obligations as are set forth in the Agreement. Servicer shall perform
all Services in consideration for the Purchase Price in accordance
with the terms and conditions of the Agreement, to the reasonable
satisfaction of Fannie Mae and Freddie Mac.
SPA, Ex. B, Financial Instrument, §1(a) (emphasis added) Add 103.
Chase was required to certify that it was in compliance with the servicing
terms of the Agreement on an annual basis. That requirement is completely
unambiguous. Any other interpretation afforded it by the Government is arbitrary,
unsupported anywhere in the agreements or policies, and a demonstrably erroneous
basis for the Government’s present action. This is further bolstered by the
subsequent certifications, filed after the initial certification, which contained the
following statements:
2. In connection with the Programs, Servicer is in material

compliance with, and certifies that all Services have been materially
performed in compliance with, all applicable Federal, state and local
laws, regulations, regulatory guidance, statutes, ordinances, codes
and requirements, including, but not limited to, the Truth in Lending
Act, 15 U.S.C. 1601 § et seq., the Home Ownership and Equity
Protection Act, 15 U.S.C. § 1639, the Federal Trade Commission Act,
15 U.S.C. § 41 et seq., the Equal Credit Opportunity Act, 15 U.S.C. §
701 et seq., the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.,
the Fair Housing Act and other Federal and state laws designed to
prevent unfair, discriminatory or predatory lending practices and all
applicable laws governing tenant rights, bankruptcy, mediation and
foreclosure. . . .
14
3. Servicer has materially complied with the following: (i)

performed its obligations in accordance with the Agreement and in
accordance with accepted servicing practices, and has promptly
provided such performance reporting on the Programs as Fannie Mae
and Federal Home Loan Mortgage Corporation, a federally chartered
corporation, acting as compliance agent of the United States
(“Freddie Mac”) have reasonably required; (ii) all Services relating
to benefits under the Programs available to eligible borrowers have
been offered by Servicer to such borrowers, fully documented and
administered by Servicer in accordance with the applicable Program
Documentation then in effect; and (iii) all data, collection information
and other information reported by Servicer to Fannie Mae and Freddie
Mac under the Agreement, including, but not limited to, information
that was relied upon by Fannie Mae and Freddie Mac in calculating
the Purchase Price and in performing any compliance review, was
true, complete and accurate in all material respects, and consistent
with all relevant business records of the Servicer, as and when
provided or, if such information was provided from third parties,
including borrowers or prior servicers, Servicer has no knowledge that
such information is incorrect or incomplete at the time it was provided
to Fannie Mae or Freddie Mac. Notwithstanding the above, Servicer
may have inadvertently violated any of the above, but has taken or
will take all necessary actions to rectify any such violation or lack of
compliance.
4. Servicer has materially complied with the following: (i)

performed the Services required under the Program Documentation
and the Agreement in accordance with the practices, professional
standards of care, and degree of attention used in a well-managed
operation, and no less than that which the Servicer exercises for itself
under similar circumstances; and (ii) used qualified individuals with
suitable training, education, experience and skills to perform the
Services. Servicer acknowledges that participation in the Programs
required changes to, or the augmentation of, its systems, staffing and
procedures. Servicer took all reasonable actions necessary to ensure
that it had the capacity to implement the Programs in which it is
participating in accordance with the Agreement.
5. Servicer acknowledges that the provision of false or misleading

information to Fannie Mae or Freddie Mac in connection with the
15
Programs or pursuant to the Agreement may constitute a violation of:

(a) Federal criminal law involving fraud, conflict of interest, bribery,
or gratuity violations found in Title 18 of the United States Code; or
(b) the civil False Claims Act (31 U.S.C. §§ 3729-3733). Servicer has
disclosed to Fannie Mae and Freddie Mac any credible evidence
known to Servicer, in connection with the Services, that a
management official, employee, or contractor of Servicer has
committed, or may have committed, a violation of the referenced
statutes.
TAC ¶ 23 (emphasis added) Add 045-046.
There is no question that the certifications by the Servicer relating to
compliance with servicing contained in the annual certifications is a condition
precedent to the payment to the Servicer contained in the SPA regarding servicing.
The Government’s insistence that Schneider identify individual loans that
did not qualify for incentive payments is inexplicable. It represents a false
limitation on the duties Chase was required to perform when the certifications
focused on the banks’ overall servicing practices. The Government was not paying
incentives to Chase simply for it to modify individual loans and otherwise keep its
bad practices intact. The Government was incentivizing Chase and the other
Servicers to change their actions for the benefit of all their borrowers. Moreover,
the position taken by the Government in this case is contradicted by the position it
has taken in analogous cases. See e.g. United States ex rel. Longhi v. Lithium
Power Tech. Inc. 575 F3d 458, 473 (5th Cir. 2009)(damages equaled the
Government’s total payments for falsely claiming eligibility for a Small Business
16
Innovation Research program grant even though the delivered product met
specifications); United States v. Rogan, 517 F.3d 449, 453 (7th Cir. 2008) (“The
Government offers a subsidy . . . with conditions. When the conditions are not
satisfied, nothing is due.”). At the hearing on the motion to dismiss, the
Government’s counsel stated that he agreed with this analysis:
On Longhi, the scope of Longhi, because I actually may agree one

hundred percent with them on what Longhi stands for, in the theory of
the implied, the theory of fraudulent inducement under the False
Claims Act, we may be in complete accord on that.
Transcript 24: 13-17 Add 030.
This admission by the Government demonstrates that one of the key
justifications for seeking dismissal (that Schneider’s allegations are without
merit) is completely unjustified.
Since the Government agrees with Schneider’s underlying legal theory, the
only outstanding legal issue is the materiality of those false claims. The decision
in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989
(2016) suggests that if the Government continued to pay the defendant after it had
proof of the defendants violations that this fact may be a demonstration that the
violations were not material. Even if the Government continued to pay with actual
knowledge of the violations, the Court in Escobar identified four factors that could
independently demonstrate that the violations were still material: (1) whether there
exists an express condition of payment; (2) whether the violation is significant or

17
“minor or insubstantial;” (3) whether the violation goes to the “essence of the
bargain;” and (4) the actions the Government took with regard to similar
violations.2 Depending on circumstance, any one of these factors could
demonstrate materiality. In this case, all these factors point to a finding Chase’s
servicing violations were material to the Government’s decision to pay the
incentive payments under the HAMP.
First, as demonstrated, the Servicer Participation Agreement contains several
express “conditions precedent to the payment.” Chase submitted annual
certifications containing numerous statements that it was incompliance with all
applicable Federal and state law and regulations and servicing obligations under
the SPA. Thus, while under Escobar an express condition of payment is not
sufficient to establish materiality, it is a strong indication that any false
certifications are material to the Government.
Second there can be no question that the violations related to the RCV1
population of loans were significant. Chase’s documents indicate that there were
approximately 400,000 loans in RCV1 that were not being serviced by Chase.
Add 120. Moreover, the principal focus of the HAMP were mortgages in which
“[d]efault on the payment of such mortgage has occurred, is imminent, or is
2These four factors were set out in the Government’s Amicus Curiae brief in
United States ex rel. Freedom Unlimited, Inc. v. City of Pittsburgh, 3rd Cir. NO.
17-1987, Doc. 00312697656 at 12-14 (Aug. 9, 2017).
18
reasonably foreseeable,” MHA Handbook v. 4.0 at 21. Add 145. This describes
the universe of loans in RCV-1 precisely.
Third, the fact that meeting servicing requirements was material to the
Government’s decision to pay for HAMP modifications is made clear by the
complaint the Government filed in the National Mortgage Settlement action.
There, the banks’ failure to follow the servicing requirements of the HAMP was
one of the principal reasons why the Government forced the banks into the NMS.
This demonstrates that the Government believed that meeting the servicing
conditions of the HAMP went to the “essence of the bargain” that Chase undertook
to be eligible for HAMP payments.
The NMS complaint’s servicing allegations are contained in ¶¶ 47-64, No.
1:12-cv-00361-RMC, Doc. 1 (D.D.C. Mar. 3, 2012). Paragraph 54 specifically
states:
Under the Treasury’s various rescue and stimulus programs, the

Banks received monetary incentives from the Federal Government in
exchange for the commitment to make efforts to modify defaulting
borrowers’ single family residential mortgages. See, e.g., Making
Home Affordable Handbook v.1.0, ch. 13 (“Incentive
Compensation”) (Aug. 19, 2010). Under the programs, the Banks
agreed to fulfill requirements set forth in program guidelines and
servicer participation agreements.
Id. at 23 (emphasis added). Add 108. This paragraph was followed by a litany of
alleged servicing violations. Id. 24-26, ¶ 58 Add 109-111.
As a result of the Government’s action, Chase entered into the NMS in

19
which it undertook to meet the servicing of the requirements of Exhibit A of the
Consent Judgment. 1:12-cv-361, Doc 10 (D.D.C. April 4, 2012). Those
requirements are largely identical to the servicing requirements of the HAMP.
Further, Chase was required to make direct payment to the Government to resolve
many of these servicing allegations. Consent Judgment Ex. B. (Note, the
Government’s NMS complaint does not allege that the banks committed fraud in
connection with the individual modifications for which they received incentive
payments.) As part of the NMS the Government released any claims it had for
servicing violations occurring before February 8, 2012. Since the NMS arose out
of the bank’s failure to follow the HAMP servicing requirements, it is an explicit
demonstration that following those requirements was material and a condition
precedent to payment under the HAMP.
Therefore, even if Chase could prove that the Government continued to pay
Chase after it learned of learn of the servicing violations, under all of the factors
that Escobar identified as demonstrating materiality, Chase’s false certifications
would still be material.
Moreover, the allegations that the Government resolved in the NMS
settlement for Chase’s conduct occurring before February 8, 2012 is exactly the
same conduct that Schneider alleges occurred after that date. The Government’s
assertion now that allegations concerning that conduct is without merit can only be
20
viewed as arbitrary and capricious and against the weight of its own precedents.
B. Schneider Has Sufficient Evidence that Would Support Judgment

on a Motion for Summary Judgment.
The theory of Schneider’s case is simple and direct. In order to receive
incentive payments under the HAMP Chase had to certify that it complied with the
servicing requirements for all loans subject to the HAMP. Since the loans in
RCV1 were not serviced in compliance with the HAMP, any certification of
compliance was necessarily false, and any incentive payment based on those
certifications resulted in damages to the Government. While Chase may be able to
show that they helped some borrowers, they could never claim that they had ceased
harming the rest.
1. Discovery Documents Demonstrate that Chase Applied for

and Received Incentive Payments under the HAMP.
As indicated above, Schneider has found evidence that Chase received
incentive payments for full extinguishment of RCV1 second liens under the 2MP
program of the HAMP. This evidence is contained in documents both confidential
and non-confidential under the protective order in the SDNY case. An example of
a non-confidential exhibit is found in DiMarco Decl. Exhibit D Add 118. It lists
the revenues received by RVC1 from 2012 to 2014 by category. Each table in that
exhibit contains an entry for “Misc. Entries (2MP).” The amounts in those rows
represent the amount of incentive payments received under the HAMP. The total
21
of these payments for the period February 2012 through October 2014 is $78.9
million. The fact that these amounts represent HAMP incentive payments is
confirmed by reference to a second document that has been labeled confidential by
Chase in the SDNY discovery. Both documents have been shared with the
Government. Since the lack of an allegation that Chase received incentive
payments is the principal reason that the Government asserts that Schneider’s FCA
action is without merit, and these documents demonstrate that Chase did receive
such payments, the Government should withdraw its motion and allow this case to
proceed.
2. Evidence Demonstrates that Chase’s Servicing and Loan

Modification Practices Regarding RCV1 Made any Claim
of Compliance with the HAMP an Actionable False Claim.
The RCV1 population of loans was not insignificant or de minimis. During
the relevant time period RCV1 contained approximately 400,000 loans. TAC ¶ 28.
The following represents conclusive evidence that Chase’s servicing practices
regarding RCV1 did not comply with the HAMP.
On August 1, 2011 Chase’s Audit Department issued an internal audit report
entitled “Home Lending – Recovery Operations and Recovery One (RVC)
Application.” The period covered by the Audit included year 2010. The “Key
Findings of the report stated:
The current operational and technology controls over Recovery

operations are not sufficient to ensure compliance with bank policies,
22
laws and regulations, therefore, an Inadequate rating is assigned.

Issues were identified that could cause legal and reputational risk in
particular relating to the execution of sworn documents and the need
for personal knowledge prior to signing assertions. Issues were also
identified relating to data integrity, risk management and access
administration.
DiMarco Decl. Exhibit E Add 121.
Under Chase’s own audit rating system “Inadequate” means: “Internal
control processes are generally ineffective. Risk management processes are
ineffective, as several issues were noted.” DiMarco Decl. Exhibit F Add 130.
Among the findings of the August 2011 audit report was that sworn
documents were signed without personal knowledge as required by the HAMP.
Also, the audit report found that RCV1 lacked data integrity as required by the
HAMP. DiMarco Decl. Exhibit E Add 121. Chase’s August 1, 2011, internal
audit report confirms that Chase’s 2010 and 2011 Certifications of Compliance
with the SPA represented material false claims.
A Chase Audit document describing the RCV1 servicing during the 2012-
2015 period contained the following statements, which indicated that Chase’s
practices had not improved.
Operational processes that are not compliant with existing policy

subject the firm to financial, regulator, and reputational risk. DiMarco
Decl. Exhibit F Add. 125.
Regarding Quality Assurance the document stated:
23
Ineffectively designed key controls increase the risk of operational

issues that may result in financial loss or regulatory action taken
against the firm. DiMarco Decl. Exhibit F Add. 126.
In a section titled “Bankruptcy/Foreclosure Activities performed by
Recovery Operations,” the document stated:
Recover Operations performs bankruptcy and foreclosure activities

for charged off loans with processes that are not consistent with
similar, more stringent processes in place with Mortgage Banking
teams who service pre-charge off loans (MB Bankruptcy and MB
Foreclosure Operations teams). Specifically, chain-of-title reviews
are not being performed to verify and document ownership of Notes
prior to a POC or surplus funds foreclosure filing, which are both
sworn documents. DiMarco Decl. Exhibit F Add 126
The statements made in DiMarco Decl. Exhibit F confirm that Chase’s
Certifications of Compliance with the SPA filed between 2013 through 2015
represented material false claims.
A document titled “Mortgage Business Banking Requirements,” completed
in the spring of 2013 stated regarding Chase’s lien release project:
No letters will be sent to borrowers or municipalities to alert that

Chase is releasing the lien on the loans in scope for this project.
No debt will be forgiven of borrowers associated with the properties

which have received a lien release as part of this project, with the
exception of states where an amended release is not possible. In such
cases the release will state that all obligations have been satisfied.
DiMarco Decl. Exhibit G at 13 Add 134.
24
The foregoing documents represent clear admissions that Chase was not
meeting the requirements of the HAMP to exempt lien released loans from the
HAMP’s provisions.
Schneider conducted a deposition of a third party which provides various
mortgage lien related services to various banks, including the filing of lien releases
in various jurisdictions around the country. The deponent testified that their
normal practice was to send copies of lien releases to borrowers for its various
lender clients, but that Chase was different. Chase gave specific instructions not to
send the recording of the lien release to all borrowers. This testimony is further
confirmation that Chase’s practices regarding charged-off loans violated the
HAMP, indicating that Chase did not want to alert borrowers that their homes were
no longer subject to a lien. This deposition is currently subject to an agreement to
treat it as confidential. It will be available to Schneider, if necessary, at summary
judgment or at trial.
In an email dated June 21, 2013, to Robert K. Admovic, Patrick M. Boyle,
Omar Kassem, and Panickos Palettas, Krista R. Hensley, VP Recovery Operations,
Mortgage Banking, Chase, stated “We have not taken into account whether or not
the property is occupied in the past (for DOJ or current 1st lien releases to meet
DOJ requirements), so I am not sure why we would need to start using that as a
determining factor.” DiMarco Decl. Exhibit H Add 137. This email represents a
25
clear admission that Chase failed to determine whether the borrower occupied the
property, one of the prime criteria to determine if the loan was eligible for a
HAMP modification. MHA Handbook V. 4.0 at 58 Add 147.
The practice of filing lien releases without basic due diligence and with lack
of care for the truth of the recording led to hundreds of the Relator’s loans being
lien released. When Chase was informed of these lien releases, it filed “vacations”
to attempt to reinstate the liens without informing the borrower. These vacations
are of two varieties. One variation indicates that “[t]hrough inadvertence and
mistake the undersigned executed a Release of Mortgage,” or equivalent document
of recording. DiMarco Decl. Exhibit I Add 140. The other variation states that
“[t]hrough inadvertence and mistake the undersigned executed a Home Affordable
Modification.” DiMarco Decl. Exhibit J Add 142. The indication that Chase had
executed Home Affordable Modifications, or HAMP modifications, inadvertently,
was in fact false. Schneider and his staff conducted numerous interviews of such
borrowers and determined that Chase had never contacted any of the borrowers
whose liens had been released to determine if those loans were eligible for
modification under the HAMP. Since Chase could not unilaterally execute a Home
Affordable Modification, these vacations are a clear indication that Chase
intentionally falsified HAMP modifications.
26
The documentary evidence and deposition testimony set out above confirm
the allegations in TAC that Chase could not, and did not, service and provide loan
modifications to charged-off mortgages it had relegated to RCV1 as required by
the HAMP. Therefore, since mortgages in RCV1 where the very loans that HAMP
was designed to protect and address, any certifications of compliance with the
HAMP were materially false claims and invalidate any incentive payments made to
Chase.
C. The Government will use Minimal Resources to Monitor this Case

with a Potentially Huge Return to the Treasury.
The Granston Memorandum states “[t]he department should also consider
dismissal under section 3730(c)(2)(A) when the Government’s expected costs are
likely to exceed any expected gain.” The single damages in this case potentially
exceed hundreds of millions of dollars. Even if the damages are limited to Chase’s
claims for incentive payments for RCV1second liens under the Government’s
theory of the case, those damages will likely exceed 65 million dollars for the
entire period of the HAMP after February 2012. Whatever minimal resources the
Government expends in monitoring this case are fully justified by the potential
payoff.
At the hearing on the motion to dismiss, the Government proffered a new
reason for seeking dismissal related to cost. Government’s counsel stated:
27
[I]f this case were to proceed, large amounts of discovery from the
Department of the Treasury because materiality would be at play and
what treasury knew and when they knew it would be a centralized
question in any false claims act case especially under the Supreme
Court's test in Escobar.
Transcript at 24:18-23 Add 033.
Essentially, the Government’s justification for dismissing this action is
concern that the defendant may propound discovery upon it. Thus, the
Government is admitting that it is being held hostage to the fear an aggressive
defendant will cause it to do too much work or cause it to be embarrassed by an
investigation into its performance in monitoring Chase’s actions under the HAMP.
Certainly, the avoidance of discovery is not a justification envisioned by Congress
when it gave the Government the ability to dismiss under section 3730(c)(2)(A).
The cost to the Government of submitting to discovery or reading the filings
in this case is infinitesimal compared to the millions it will receive if Schneider
prevails. Schneider has himself expended millions of his own funds in his private
action, which directly benefit this case. Instead of seeking dismissal of this case,
the Government should permit Schneider to vindicate these violations to ensure a
maximum recovery and prompt resolution of this case. Given the potential payoff
compared with the minimal cost to the Government, using the cost to the
Government as a justification for dismissing this case is indeed arbitrary and
capricious, without any reasonable explanation for its decision.
28
D. The Court Should Deny the Government’s Motion for Summary

Affirmance Since the Government Efforts at Justification do not
Withstand Scrutiny.
It is evident that the Government’s expressed reasons for dismissing this
case do not withstand scrutiny. Without other explanation, the Government’s
motion is arbitrary and capricious. Given the strength of this case, it can only be
that the Government no longer wants to penalize banks for their fraud that had
roots in the lead up to the financial crisis of 2007-08. If that is the reason for this
motion, then the Government should so state it. But its failure to do so means that
its reasoning must be guided and judged by reasoning of the Granston
Memorandum. Since the Government cannot find a justification for dismissal in
that memorandum, the Court should deny the Government’s motion and allow this
case to proceed.
CONCLUSION
For the foregoing reasons, Appellant Laurence Schneider requests that the
Court deny the Government motion for summary affirmance and grant his motion
for affirmative relief to reverse the District Court’s Order granting the
Government’s motion to dismiss.
29
Dated: June 21, 2019 Respectfully submitted,

/s/ Joseph A. Black .
Joseph A. Black (D.C. Bar No. 414869)
Daniel E. Cohen (D.C. Bar No. 414985)
THE CULLEN LAW FIRM, PLLC
1101 30th Street, NW, Suite 300
Washington, D.C. 20007
Tel. (202) 944-8600
Fax. (202) 944-8611
Roberto L. Di Marco
FOSTER, WALKER & DI MARCO, P.C.
350 Main Street
First Floor
Malden, MA 02148
Tel. (781) 322-3700
Fax. (781) 322-3757
30
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 21st day of June 2019, I caused a true and
correct copy of the foregoing to be served upon all other counsel of record through
the Court’s CM/ECF system.
s/ Joseph A. Black
Joseph A. Black
CERTIFICATE OF COMPLIANCE
The text of the foregoing was prepared using a computer with Times New
Roman, 14-point font and contains 6943 words as counted by Microsoft Word,
which meets the word requirement of Circuit Rule 27(c) for a response that also
seeks affirmative relief.
s/ Joseph A. Black
Joseph A. Black

Appeal 19-7025 Appellant Opposition To DOJ Mot. Summary Affirmance, June 21, 2019 PDF

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USCA Case #19-7025 Document #1793942 Filed: 06/21/2019 Page 1 of 38

NOT SCHEDULED FOR ORAL ARGUMENT

UNITED STATES COURT OF APPEALS

APPELLANT LAURENCE SCHNEIDER’S OPPOSITION TO

Robert L. Di Marco Joseph A. Black

Counsel for Appellant

CORPORATE DISCLOSURE STATEMENT

Pursuant to Federal Rules of Appellate Procedure 26.1, Appellant Laurence

CORPORATE DISCLOSURE STATEMENT…………………………………….ii

PROCEDURAL HISTORY………………………………………… ...................... 1

I. THE GOVERNMENT DOES NOT HAVE ABSOLUTE

A. The Government’s Motion to Dismiss May be Denied if it is Found

B. The Government’s Argument that it is Owed Complete Deference

II. THE GOVERNMET’S MOTION TO DISMISS IS ARBITRARY

A. Chase Violated the Conditions for Payment under the HAMP by

B. Schneider Has Sufficient Evidence that Would Support Judgment

C. The Government will use Minimal Resources to Monitor this Case

D. The Court Should Deny the Government’s Motion for Summary

Corley v. United States,

Hoyte v. Am. Nat’l Red Cross,

Ridenour v. KaiserHill Co., L.L.C.,

Swift v. United States,

United States ex rel. Cimznhca, LLC v. UCB, Inc.,

United States ex rel. Longhi v. Lithium Power Tech. Inc.,

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

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

United States ex rel. Schwelzer v. Onc N.V.,

United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp.,

United States ex rel. SMSPF, LLC. v. EMD Serono, Inc.,

United States ex rel. Stovall v. Webster Univ.,

United States ex rel. Thrower v. Academy Mortgage Corp.,

United States v. Rogan,

Universal Health Services, Inc. v. United States ex rel. Escobar,

15 U.S.C. § 701 ........................................................................................................14

15 U.S.C. § 1639 ......................................................................................................14

15 U.S.C. § 1681 ......................................................................................................14

31 U.S.C. § 3730(c)(2)(A) ............................................................................... passim

31 U.S.C. § 3730(c)(2)(B) .........................................................................................7

31 U.S.C. §§ 3729-3733 ..........................................................................................16

Affirmance of the March 6, 2019, Memorandum Opinion (R.138) and Order

(“Chase”) filed a Notice of Joinder in United States Motion for Summary

Appellant Laurence Schneider files this response in opposition to the

Government’s motion for summary affirmance and moves simultaneously for

Government’s motion to dismiss.

The Government’s motion for summary affirmance presents a fair

unnecessary to repeat most of that history here.

Mortgage Settlement Agreement (“NMS”) and Housing Affordable Modification

Program (“HAMP”). The District Court dismissed Relator’s second amended

regarding the District Court’s ruling on Schneider’s need to exhaust contractual

On remand, Relator sought leave to file a third amended complaint to revive

3730(c)(2)(A). R.135. Schneider requested a hearing as provided for by the

SUMMARY OF THE ARGUMENT

absolute discretion to dismiss FCA cases under 3730(c)(2)(A) regardless of the

be shown was “arbitrary and capricious, illegal, or fraudulent.” Swift, 318 F. 3d at

Schneider can demonstrate that the Government’s stated reasons for

Government acknowledged at the hearing on its motion to dismiss that it agrees

the potential recovery overwhelms any possible costs in a cost/benefit analysis.

described as arbitrary and capricious.

I. THE GOVERNMENT DOES NOT HAVE ABSOLUTE DISCRETION

A. The Government’s Motion to Dismiss May be Denied if it is

establish that the Government’s prosecutorial judgment was arbitrary and

capricious, illegal, or fraudulent.” United States ex rel. Stovall v. Webster Univ.,