UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

)
UNITED ST ATES OF AMERICA, )
ex rel. LAURENCE SCHNEIDER, et al., )
)
Plaintiffs, ) Civil Action No. 14-1047 (RMC)
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V. ) UNDER SEAL 1
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J.P. MORGAN CHASE BANK, .A., et al., )
)

________________
Defendants. )
)

UNITED STATES' APPLICATION FOR AN EXTENSION OF TIME

TO CONSIDER ELECTION TO INTERVENE AND TO STAY
For the reasons set forth herein, the United States respectfully applies, ex parte, under the

False Claims Act, as amended, 31 U.S.C. § 3730(b)(3), for a six (6) month extension -- through

July 16, 2015 -- of its time to notify this Court of its decision whether to intervene as to the

allegations set forth in Relator's Amended Complaint. The United States also requests that the

State parties' time to intervene be similarly extended. Lastly, during this time, the Government

requests that other proceedings in this matter be stayed and that the Amended Complaint remain

under seal, except as previously ordered by the Court. Relator and Defendants consent to this

Application. This is the first request by the United States for an extension of this deadline. A

proposed order is enclosed herewith.

The United States files this Application under seal pursuant to the terms of the False
Claims Act. The United States does not file this Application on an in camera basis because the
Court has partially lifted the seal as to Defendants and this Application does not otherwise
contain sensitive information regarding the United States' investigation of this matter.
 BACKGROUND
Relator Laurence Schneider ("Relator") commenced this action on May 6, 2013, in the

U.S. District Court for the District of South Carolina ("DSC") under the qui tam provisions of

the federal False Claims Act ("FCA") and companion state statues on behalf of the United States

and several states and the District of Columbia (collectively, the "States"), respectively, against

J.P. Morgan Chase Bank .A.; J.P. Morgan Chase & Company; and Chase Home Finance LLC

(collectively, "Chase"). See R.l. Initially, Relator's claims focused on allegations that Chase

claimed credits under its National Mortgage Settlement ("NMS") for forgiving loans that

Relator, and not Chase, owned. The United States declined to intervene in Relator's initial

claims and filed a notice with the DSC indicating as such on January 13, 2014. See R.24. The

States similarly declined and filed notices thereafter. See, e.g., R.25-37. Relator then moved to

transfer his case to this Court, which the DSC granted on June 19, 2014. See R.57, 58.

In October 2014, Relator moved for leave to file an Amended Complaint in this action

under seal pursuant to the FCA, which the Court subsequently granted. See R.78, 79. The Clerk

docketed Relator's Amended Complaint on November 17, 2014. The United States understands

that its intervention period regarding the Amended Complaint is currently set to expire on

January 16, 2015.

Relator's Amended Complaint repeats a number of the same allegations contained in his

initial Complaint, but adds other distinct theories of liability. Specifically, Relator now also

alleges that Chase violated certain servicing standards set forth in the NMS and other authorities

regarding the servicing of home loans, which allegedly allowed Chase to avoid penalties and

claim credits to which it was not entitled.

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 THE GOVERNMENT'S REVIEW OF THE AMENDED COMPLAINT

Promptly after the Clerk docketed Relator's Amended Complaint, the United States

began efforts to review Relator's new allegations to determine whether it is in the best interests

of the United States to intervene in them. Undersigned counsel met with Relater and his counsel

to further understand Relater's new allegations and the bases for them. Thereafter, Government

counsel requested that Relator provide certain additional information regarding his claims.

Earlier today, the United States provided Chase a copy of Relator's Amended Complaint

and has requested that Chase respond to the new allegations contained therein. Government

counsel anticipates meeting with Chase and its counsel in near future to learn Chase's positon on

and defenses to Relator's new claims.

After conducting these initial evaluative steps, Government counsel intends to caucus

with the allegedly affected Government agencies and components to develop a plan for any

further steps the United States needs to undertake to render a well-informed intervention

decision. These further steps may include requesting additional information from Relator and

Chase, retrieving information from Government sources, and interviewing persons with

knowledge of the events underlying Relator's allegations.

As such, the Government seeks this extension to complete its diligent review of Relator's

new allegations and to make a fully-informed decision on intervention regarding them. The

United States also seeks an order keeping the Amended Complaint under seal during the

requested extension, except as previously ordered, to protect the integrity of the United States'

review of Relator's new allegations. For example, the public disclosure of these new allegations

may thwart future attempts to gather information from as-of-yet unidentified sources.

DISCUSSION

The qui tam provisions of the False Claims Act provide in pertinent part that:

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 (2) A copy of the complaint and written disclosure of substantially all material
evidence and information the person possesses shall be served on the Government
pursuant to Rule 4(d)(4) of the Federal Rules of Civil Procedure. The complaint
shall be filed in camera, shall remain under seal for at least 60 days, and shall not
be served on the defendant until the court so orders. The Government may elect to
intervene and proceed with the action within 60 days after it receives both the
complaint and the material evidence and information.

(3) The Government may, for good cause shown, move the court for
extensions of the time during which the complaint remains under seal under
paragraph (2).

31 U.S.C. § § 3730(b)(2), (b)(3). Based on this statutory authority and the Government's efforts

to review Relator's Amended Complaint to date, the United States respectfully submits that it

has good cause for an extension in this case.

The United States' review of Relator's new allegations just began, before the recent

holidays. The Government requires additional time to learn Defendants' position on these

allegations and to gather any additional information necessary for the United States to make a

well-informed decision on intervention. Additionally, after they reach a tentative position on

intervention, undersigned counsel must seek approval from Department of Justice officials with

delegated authority to implement the United States' intervention decision. Accordingly, the

United States seeks this extension. See generally United States. ex rel. Siller v. Becton

Dickinson & Co., 21 F.3d 1339, 1345 (4th Cir. 1994) ("[T]he intervention decision may at times

require substantial, time-consuming investigation" beyond the 60-day period).

The United States also seeks to otherwise stay activities in this matter to reduce the

burdens on the parties and the Court while the Government decides whether to take over the

litigation of this matter. See generally United States ex rel. Summers v. LHC Group, Inc., 623

F.3d 287, 292 (6th Cir. 2010) ("[T]he primary purpose of the under-seal requirement is to permit

the Government sufficient time in which it may ascertain the status quo and come to a decision

as to whether it will intervene in the case filed by relater."). Lastly, the United States seeks a

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similar extension of the States' time to intervene, and an order keeping the Amended Complaint

under seal during the requested extension, except as previously ordered, to protect the integrity

of the Government's investigation. See generally Am. Civil Liberties Union v. Holder, 673 F.3d

245, 250 (4th Cir. 2011) (noting that if a court decides to extend the seal, "the qui tam complaint,

the docket sheet, the government's in camera submission, and the order extending the seal all

remain sealed").

* * *

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 CONCLUSION
For the foregoing reasons, the United States respectfully requests that the time for its

intervention decision, and that of the States', regarding the Amended Complaint be extended

through and including July 16, 2015.

Dated: January 16, 2015

Washington, DC
Respectfully submitted,

JOYCE R. BRANDA
Acting Assistant Attorney General

RONALD C. MACHEN JR., D.C. Bar #447889

United States Attorney

DANIEL F. VAN HORN, D.C. Bar #924092

Chief, Civil Division, U.S. Attorney's Office

By: Isl Brian P. Hudak

BRIAN P. HUDAK
Assistant United States Attorney
555 Fourth Street, NW
Washington, DC 20530
(202) 252-2549

MICHAEL D. GRANSTON
RENEE BROOKER
WILLIAM C. EDGAR
Attorneys, Commercial Litigation Branch
Civil Division, Department of Justice
P.O. Box 261 Ben Franklin Station
Washington, D.C. 20044
(202) 353-7950

Attorneys for the United States of America

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