NO.

19-678

In the
Supreme Court of the United States

UNITED STATES OF AMERICA, EX REL.

LAURENCE SCHNEIDER, ET AL.
AND LAURENCE SCHNEIDER,

Petitioners,
v.

JPMORGAN CHASE BANK,

NATIONAL ASSOCIATION, ET AL.,
Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the D.C. Circuit

REPLY BRIEF OF PETITIONERS

ROBERTO L. DIMARCO JOSEPH A. BLACK

COUNSEL OF RECORD DANIEL E. COHEN
JENNIFER MARTIN FOSTER THE CULLEN LAW FIRM, PLLC
FOSTER, WALKER & DI MARCO, P.C. 110 30TH STREET NW
350 MAIN STREET SUITE 300
MALDEN, MA 02148 WASHINGTON, DC 20007
(781) 322-3700 (202) 298-4761
RDIMARCO@FWD-LAW.COM JAB@CULLENLAW.COM

MARCH 12, 2020 COUNSEL FOR PETITIONERS

SUPREME COURT PRESS ʕ (888) 958-5705 ʕ BOSTON, MASSACHUSETTS
 i

TABLE OF CONTENTS
Page

TABLE OF AUTHORITIES ....................................... ii

REPLY BRIEF OF PETITIONER ............................. 1
I. DESPITE THE INSISTENCE OF THE RESPOND-
ENTS THAT THE CIRCUIT SPLIT HAS NO REAL
IMPACT, THE SPLIT IS NOT SIMPLY ACADEMIC. .... 1
II. SINCE MERITS OF SCHNEIDER’S ARGU-
THE
MENT THAT THE GOVERNMENT’S MOTION TO
DISMISS IS ARBITRARY AND CAPRICIOUS
HAVE NOT BEEN ADDRESSED BY THE LOWER
COURTS, IT WOULD NOT BE APPROPRIATE TO
DO SO AT THE PETITION STAGE. .......................... 4
III. WHERE THE FCA ASKS PRIVATE CITIZENS TO
ENTER INTO ENFORCEMENT ACTIONS IN AID
OF THE GOVERNMENT, THE COURT MUST
PROTECT SUCH RELATORS TO AVOID A
CHILLING EFFECT THAT UNDERMINES THE
OBJECTIVES OF THE STATUTE. ........................... 6
CONCLUSION.......................................................... 10
 ii

TABLE OF AUTHORITIES
Page
CASES
Holmes v. Securities Investor Protection Corp.,
503 U.S. 258 (1992) .............................................. 3
Husky Intern. Electronics, Inc. v. Ritz.,
136 S.Ct. 1581 (2016) ........................................... 3
In re Murchison,
349 U.S. 133, 75 S.Ct. 623,
99 L.Ed. 942 (1955) ............................................. 8
Jones v. Harris Associates, LLP,
559 U.S. 335 (2010) .............................................. 3
Mims v. Arrow Financial Services, LLC,
565 U.S. 368 (2012) ............................................. 3
Rubin v. Islamic Republic of Iran,
138 S.Ct. 8169 (2018) .......................................... 3
Salazar v. Ramah Navajo Chapter,
567 U.S. 182 (2012) ............................................. 3
Schuster v. City of New York,
5 N.Y.2d 75 (1958) ............................................... 9
United States ex rel. Sequoia Orange Co.
v. Baird-Neece Packing Corp.,
151 F.3d 1139 (9th Cir. 1998),
cert. denied, 525 U.S. 1067 (1999) ........................ 1
Vartelas v. Holder,
566 U.S. 257 (2012) ............................................. 3

STATUTES
31 U.S.C. § 3730(c)(2)(A) ...................................passim
 1

REPLY BRIEF OF PETITIONER

This Petition presents an important question

regarding the proper role of courts in reviewing the
actions of the Executive Branch and the Government
in dismissing relators’ claims under 31 U.S.C. § 3730(c)
(2)(A) and, within that role, the proper standard to
apply. That role is central to the False Claims Act and,
at its heart, asks whether citizens who seek to aid in
the enforcement of the law are to be protected and
encouraged in such a role or chilled and urged to stay
silent.

I. DESPITE THE INSISTENCE OF THE RESPONDENTS

THAT THE CIRCUIT SPLIT HAS NO REAL IMPACT,
THE SPLIT IS NOT SIMPLY ACADEMIC.

Nowhere in the filings of the Government or

JPMorgan Chase Bank (“Chase”) do the parties dispute
that a split exists between the Circuits. As specifically
referenced in the Per Curiam Order of the Court of
Appeals for the District of Columbia, issued August
22, 2019 (App.1a.), the Court references the split and
“decline[s] to adopt the standard of the Ninth Circuit
under which the Government must initially show
that dismissal is rationally related to a valid purpose
. . . ” citing United States ex rel. Sequoia Orange Co. v.
Baird-Neece Packing Corp., 151 F.3d 1139, 1145 (9th
Cir. 1998)). (App.2a). Left with no choice, the Respond-
ents agree the split exists (Gov.Opp.8 and Chase.Opp.6)
but attempt to minimize its impact and call it “aca-
demic” (Chase.Opp.1). Yet this attempt to diminish the
split with a dismissive comment does not eliminate the
split in the law, nor lessen its extent. This split in
 2

the circuits has clearly been called out in other deci-

sions from district courts around the nation as cited
in Petitioner’s brief and should be addressed.
More troubling than the existence of a split, the
Government appears reluctant to have the law made
w oea
whole andd tthe
e sp
splitt remedied.
e ed ed. The e Gove
Government e t see
seekss
to ignore the split, downplay it and argue that no
e ect ve d
effective e e ce eexists
difference sts betwee
between tthe e sta da ds set
standards
by the DC Circuit (“ ( DC Standard d ”)) and the 9th and
10th
0t C cu ts ((“ 9t
Circuits 9th Sta
Standard
da d ”).). Thee reason
easo Chase
C ase
argues that this matter not to be heard is obvious.
Chase wishes to escape any true assessment of its
behavior
be av o aand d hidede its
ts malfeasance.
a easa ce. But ut tthee G
Govern-
ment’s rationale is more difficult to ascertain. While
the Government states that multiple courts have
declined to choose between the competing standards,
the Government also cites to the Third Circuit’s recent
statement that the 9th Standard is “the more rest-
rictive standard” (Gov.Opp.16). The Government even
reluctantly acknowledges that such a difference e ce could
cou d
be “outcome determinative” (Gov.Opp.16). The Gov-
outcome determinative Gov
e t cites
eernment c tes to various
va ous cases to arguea gue that
t at the
t e split
sp t
had no impact. Then the Government does something
more
o e cu
curious,
ous, itt dismisses
d s sses tthe e cases a areed e e t and
different a d
infers that the differenc
difference was not the reason for the
denial of the dismissal. T The Government argues that
the two cases using the 9th Standard to deny the
dismissal “reflect misapplications of Section 3730(c)(2)
(A) eve
even u de tthe
under e Sequo
Sequoia aOOrange
a ge stastandard”
da d (Gov.Opp.
17). This wordplay indicates the Government’s
Government s acknow-
acknow
ledgement
edge e t tthat at ttheeddifference
e e ce iss real
ea aand d impactful,
pact u , but
it leaves an impression that the Government seeks
a ddifferent
e e t route
oute to its objective of unfettered and
unreviewable power. The Government appears to be
 3

trying to whittle down the more restrictive standard

to reduce judicial review through other means that
are less absolute than a head on resolution of the
split by this Court.
The Government and Chase cite cases in which
t ey cclaim
they a tthat
at tthe
e eend
d result
esu t wou d be tthe
would e sa e, a
same,
quasi outcome determinative argument. They argue
quasi-outcome
t at nothing
that ot g has
as happened
appe ed so far
a tthat
at needs
eeds tthiss
Court s attention, so let the split remain. The problem
Court’s
is that this is not true.
Allowing the current split would permit the Gov Gov-
ernment to whittle down the more restrictive standard
to the
t e point
po where the Executive Branch acts without
question. The Government seeks to interpret the
language of the 9th Standard itself, taking for the
Executive Branch the role of the courts. Such a
method of arriving at their final objective must not
be allowed. This variance in the law should be remedied
by this Court. A split between the circuits is frequently
cited as reason for granting of a petition. Holmes v.
Securities Investor Protection Corp., 503 U.S. 258, 286
(1992); Vartelas v. Holder, 566 U.S. 257, 265 (2012);
Husky Intern. Electronics, Inc. v. Ritz., 136 S.Ct. 1581,
1585 (2016); Jones v. Harris Associates, LLP, 559 U.S.
335, 343 (2010); Rubin v. Islamic Republic of Iran,
138 S.Ct. 8169, 821 (2018); Mims v. Arrow Financial
Services, LLC, 565 U.S. 368, 376 (2012); Salazar v.
Ramah Navajo Chapter, 567 U.S. 182, 188 (2012).
Further, the split leaves the law unclear and FCA
w st eb owe s chilled
whistleblowers c ed by the
t epprospect
ospect oof noo recourse
ecou se
for their sacrifice. The split forces the Government
a d Relators
and Re ato s in d different
e e t pa
parts
ts oof tthe
e nation
at o to face
ace
different standards of review following Section 3730(c)
(2)(A) dismissals. DC Circuit U.S. Attorneys are able
 4

to act wwithout
t out ove
oversight
s g t oof tthe
e cou
courts,
ts, d
dismissing
s ss g
with no concern for whether they will be challenged
o whether
or w et e they
t ey mayay have
ave eve
even eerred,
ed, a
an eerror
o tthat
at
will never matter. U.S. Attorneys in the 9th and 10th
Circuits are held to a more restrictive standard and
ust actually
must actua y perform
pe o t e investigations
the vest gat o s aandd reviews
ev ews
justif dismissing cases brought forward
necessary to justify
by public actors. The Government’s (and Chase’s)
dependence on a determinative argument to avoid
review, only to allow for attrition to act on the issue
is not the proper way of addressing a split in the
Circuits, a split that is more than academic.

II. SINCE
C THE MERITS R S OOF SCCHNEIDER’S ARGU RGUMENT
RGUMENT
THAT THE GOVERNMENT’S MO OTION
O TO O DISMISS
S SS IS
AR
RBITRARY
RBITRA
RAR Y AND CAPRICIOUS
RY R C OUS HAV VE NO
AVE OT BEEN
ADDR
DDRESSED
D DRESSED
SS D BY
YTTHE LOW
OWERR COURTS S, IT WOULD NOT
BE AP ATE TO DO SO AT
PPROPRIATE
PROPRIA T THE PETITION STAAGE.
TAGE

This split and its harm to predictability in our

laws is not where the Government, and Chase, choose
to focus
ocus ttheir
e atte
attention
t o in ttheir
e oppositions.
oppos t o s. While
W e itt
is completely understandable and self- self-serving
self
f serving for
Chase
C ase to do so, tthee Gove
Governmente ta aids
ds tthe
e Defendants
ee d
in their objective of hiding their malfeasance. The
two Respondents artificially minimize the effect of the
split while redirecting this Court’s attention toward
an unjustified
just ed attack
attac ono tthe
e merits
e ts oof tthee Petitioner’s
et t o e s
case. The e Respo
Respondents’
de ts merits
e ts a argument
gu e t iss w wholly
o y
unsupported. Since the lower courts conducted no
review
ev ew oof Sc
Schneider’s
e de s demonstration
de o st at o tthat at tthe
e Gove
Govern-
ment’ss motion to dismiss was arbitrary and capricious,
ment
itt iss inappropriate
app op ate a anddu unjust
just to add
address
ess tthee merits
e ts
for the very first time in a Petition for Certiorari
Review.
Rev ew. Noo facts
acts we
weree tested by tthe
e lower
owe coucourts.
ts. There
e e
was only a complaint and an attempted amendment.
 5

Further
u t e aggaggravating
avat g tthiss tact
tacticc iss tthat
at suc
such a test
of the merits would have been simple at the lower court,
w t little
with tt e to noo risk
s to tthe e Gove
Government,e t, a anddw t tthe
with e
potential for a great return for the taxpayers. The
present case’s
case s companion case brought in the Southern
st ct oof New
District ew York
o presents
p ese ts a unique
u que opportunity.
oppo tu ty.
That companion case has had extensive factual discov- discov
e y, including
ery, c ud g extraordinarily
e t ao d a y te telling g depos
depositions
t o s of
o
one of the main actors in the FCA case, the National
o tgage Sett
Mortgage Settlement
e e t Monitor.
o to . Suc
Such d discovery
scove y cclearly
ea y
and appreciably reduces the claimed risk to the Gov- Gov
ernment. Yet the Government has made no effort to
vest gate or
investigate o review
ev ew documentation
docu e tat o from o thet e compan-
co pa
ion case. Indeed, it appears that the Government even
a ed to p
failed present
ese t tthee Petitioner’s
et t o e s case to aud auditors
to s aandd
other investigators during its many extensions of the
C sea
FCA seal pe
periods.
ods. If,, as has
as bee
been cclaimed,
a ed, an a investi-
vest
gation was done into the case, why would such easily
accessible discovery go completely unreviewed. Instead,
ow tthe
now e Gove
Government e t atte pts to bootst
attempts bootstrap ap oon this
failure to argue merits that it never investigated.
Both
ot Respo
Respondents
de ts seek
see to redirect
ed ect atte
attention
to
towards claimed factual issues in the underlying case.
Thiss misdirection
sd ect o misses
sses tthe
e po
pointt oof tthe
e Petitioner’s
et t o e s
claim, intentionally so. But should a test be made; the
et t o e wou
Petitioner wouldd pass. Ass but oonee eexample,
a p e, tthee Gov
Gov-
petitioner ‘d[id]
ernment argues that “petitioner d[id] not allege that
C ase received
Chase ece ved HAMP incentive
ce t ve payments
pay e ts on’ o anya y of
o
t e loans
the oa s tthat
at we
weree tthe
e subject oof hiss cclaims”.
a s . (Gov.
Opp.18). What the Government does not admit is that
C ase issued
Chase ssued b ata t y co
blatantly t a y ce
contrary t cat o s to tthe
certifications e
Government that were false on their face, false as a
atte of
matter o law,
aw, and
a d that
t at Chase
C as did not have an explan-
ation for such a flagrant lie. In fact, when such infor-
 6

mation
at o was made ade available
ava ab e at thet e Sect o 3730(c)
Section
(2)(A) dismissal hearing, the lower court’scourt s response
was tthat
at itt lacked
ac ed d sc et o to make
discretion a eaanyy ot e finding.
other d g.
(App.3a). But this Court is not the forum to test the
point by point merits of the Petitioner’s
Petitioner s case. As stated,
if ca
called
ed to do so, tthe e Petitioner
et t o e cou
could
d eas
easilyy add
address
ess
each claim, but the DC Standard d makes such a prapractice
not only impossible, but its denial unreviewable.
The Government argues that its dismissal was
“rational”
at o a (Gov.Opp.
(Gov.Opp.18) 8) a
and d tthat
at tthere
e e was nothing
ot g
arbitrary in its decision. In truth, the very fact that
the Petitioner
Petitioner’ss case was subjected to a Section 3730
)( ) dismissal
(c)(2)(A)
(c)( d s ssa without
w t out review
ev ew ofo any
a y of
o tthee readily
ead y
available
ava ab e information
o at o iss tthe e esse
essencece oof a
arbitrariness.
b t a ess.
Thee Gove
Government’s
e ts wwholly
o yu unsupported
suppo ted a argument
gu e t that
t at
it would be dealing with “largelarge amounts of discovery”
discovery
iss countered
cou te ed by tthe e fact
act tthat
at itt failed
a ed to eveever as
ask for
o
any discovery while supposedly investigating the claim.
(Gov.Opp.18). To now make a merit based argument
merit-based
after
a te failing
a g to eexamine
a e tthee merits,
e ts, iss to ststrip any
semblance that the process was not arbitrary.

III. WHERE THE FCA

C ASSKSS PR ATE CITIZENS
RIVATE
RIV
VA
V S TO ENTER
NTO ENFORC
INTO NFORCEMENT T ACT
CTIONS N AID
ONS IN D OF THTHE
GOV
OVERNMENT
R , THE COURT
R MUS UST PRO C SUC
ROTECT UCH
RELAATORS TO AVOID
ELATORS
ATORS VO D A CH HILLING
L EFF CT TH
FFECT HAT
UNDERMINES THE OBJECTIVES OF THE STATUTE.
Thee Respo
Respondents
de ts have
ave tthiss Cou
Courtt leave e DC
eave tthe C
Standard in place and relegate the presiding judge of
a ddismissal
s ssa hearing
ea g to tthe position
e pos t o oof a spectato
spectator,,
albeit one with the best seat in the house. They
would
wou d reduce
educe the
t e judicial
jud c a role
o e and
a d power
powe ofo the
t e
judiciary to that of a casual observer. The DC Standard
forces the court to act as the preverbal potted plant.
 7

But ut the
t e Judiciary
Jud c a y iss not ot subordinate
subo d ate to tthe e Executive
ecut ve
Branch. It is a foundational element of our laws that
t e co
the co-equal
equa b branches
a c es eaceach p play
ay a role
o e in ou
our legal
ega
framework, and the judiciary’sjudiciary s role is not one of a
bystander. By applying the DC Standard d, the only
review
ev ew allowed,
a owed, according
acco d g to w whatat tthe
e Gove
Government e t
stated at the hearing, would be for a fraud on the court
((App.25a).
pp. 5a). Suc
Such a sta standard
da d a allows
ows a litany
ta y oof abuses
and errors of executive power to occur without review,
all a
a aimeded at ccitizens
t e sw who od
didd nothing
ot g more
o e tthan
a step
into the shoes of the Government and assume all of
the risk to prevent fraud on taxpayers. Meanwhile, on
tthee other
ot e side
s de of o tthee be
bench,
c , tthe
e Gove
Government e t ssits
ts
beside the alleged fraudulent actor, an unnatural
alliance
a a ce ccreated
eated by a an uunreachable
eac ab e sta
standard.
da d. Limiting
t g
the judge’s
judge s involvement to fraud on the court leaves
tthe
e de
defendant
e da t free ee to act fraudulently
audu e t y w without
t out fear,
ea ,
so long as they can threaten the Executive Branch
with additional work. Yet, even if this current matter
were
we e eexamined
a oug the
ed tthrough t e lens
e s of
o a cost benefit
be e t
analysis, the potential return to the taxpayers is far
greater
g eate tthana tthe e cost oof aallowing
ow g tthe e Re
Relator
ato to moveove
forward in his attempts to hold Chase accountable,
especially
espec a y since the Relator is bearing the majority of
the costs.
t a y to tthe
Contrary
Co e Government’s
Gove e ts aargument
gu e t (Gov.
Opp.12) that “[t]he
[t]he hearing that Section 3730(c)(2)(A)
mandates
a dates se
serves
ves use
useful
u functions
u ct o s even
eve if the
t e court
cou t
cannot
ca ot review
ev ew tthe substantive
e substa t ve reasonableness
easo ab e ess oof tthee
government’s decision, public confidence is
government s dismissal decision,”
eroded
e oded by a hearing
ea g tthatat se
serves
ves noo pu pose other
purpose ot e tthan
a
to allow the Government to publicly punish a whistle-
whistle
blower
b owe for attempting
o atte pt g to hold
o d co
corporations
po at o s accou
accountable
tab e
while being cheered on by the accused fraudulent
 8

actor.
acto . “To perform
o pe o its
ts high
g function
u ct o in tthe e best way
‘justice must satisfy the appearance of justice.’” In re
Murchison, 349 U.S. S. 133,
33, 136,
36, 75 S.Ct. 623,
6 3, 625,
6 5, 99
L.Ed. 942 (1955). Here, there is no appearance of
justice, not even a small one. The balance against
being
be g attac
attacked
ed by tthe e Gove
Government,
e t, tthe
e ve
veryy pa
party
ty
the Relator sought to help, can only be determined
w t tthe
with e aaid
d oof tthee judge. The e False
a se C Claims
a s Act ct
makes a request on the public to come forward and
a d tthe
aid e Gove
Governmente t in co
combatting
batt g fraud.
aud. For
o a relator
e ato
to have entered into the legal fray with an eye toward
bringing malfeasance to light and to find no unbiased
seeker
see e oof truth
t ut prepared
p epa ed to test tthee case
case’ss merit,
e t, iss
to abandon the very idea that our courts have an
appearance of justice.
This type of public chastisement without the pro- pro
tect o s oof a
tections an u
unbiased
b ased jud
judiciary
c a y chills
c s the
t e involvement
vo ve e t
of the public in upholding the laws of the United States.
stead of
Instead o engendering
e ge de g pub publicc involvement,
vo ve e t, itt p ov des
provides
a disturbing image for the prospective whistleblower:
Offenders punishing whistleblowers with unending
t gat o costs which
litigation w c onlyo y come
co e to ana end
e d when
w e thet e
Government aides those perpetrators with a dismissal
untested
u tested by a depe de t judiciary.
an independent jud c a y. Too argue
a gue that
t at
such an image is “increasing
increasing public confidence”
confidence would
be laughable
aug ab e if itt was notot so ttroubling.
oub g. The e ssingular
gu a
recourse of a relator is to seek the protection of an
unbiased
u b ased judge, a protection
p otect o denied
de to him when all
powers only aid the defendants.
Such a limitation of the judiciary in favor of the
e ecut ve iss a misapplication
executive sapp cat o of o the
t e law.
aw. Itt wou
would
d be
harsh enough to leave an individual to the whims of
ate a
fate te tthey
after ey rose
ose to tthe
e occas o a
occasion and sought to aid
the Government in its enforcement. Schuster v. City
 9

oof New ew York

o , 5 N.Y.2d
. . d 75, 81 8 (1958)
( 958) (“The
(“The e duty oof
everyone to aid in the enforcement of the law, which
iss as oold
d as history,
sto y, begets a an a
answering
swe g duty oon tthe e
part of government, under the circumstances of contem contem-
porary life, reasonably to protect those who have come
ts assistance
to its ass sta ce in this
t s manner.”)
a e . ) While
W e the t e Gove
Govern-
ment does have absolute discretion not to prosecute
c
criminal a a d most
and ost ccivil
v cases, tthat at d sc et o in tthiss
discretion
instance is circumscribed by the existence of the
C , which
FCA, w c gives
g ves the
t e public
pub c a role
o e in co batt g fraud
combatting aud
against the Government. The FCA asks the public
to take a direct part in enforcing our laws, it is an
v tat o , a
invitation, andd tthe
e pub
public,c, as a
an invitee,
v tee, iss owed tthee
minimum of a right to be judged by an unbiased party.
In suc
such an a instance,
sta ce, thet e pub
publicc actor,
acto , the
t e relator,
e ato ,
trusts that the risk in voluntarily entering into an
e o ce e t act
enforcement o w
action will notot harm
a him but w ep
will help
the greater good. The judge’sjudge s role must be to ensure
that the public actor is protected for his sacrifice and
notot ssimply
p y dismissed out of hand without recourse to
the courts.
 10

CONCLUSION
For the foregoing reasons, as well as those con-
tained in the Petition for Certiorari, the Petition should
be granted.

Respectfully submitted,

ROBERTO L. DIMARCO
COUNSEL OF RECORD
JENNIFER MARTIN FOSTER
FOSTER, WALKER & DI MARCO, P.C.
350 MAIN STREET
MALDEN, MA 02148
(781) 322-3700
RDIMARCO@FWD-LAW.COM

JOSEPH A. BLACK
DANIEL E. COHEN
THE CULLEN LAW FIRM, PLLC
110 30TH STREET NW
SUITE 300
WASHINGTON, DC 20007
(202) 298-4761
JAB@CULLENLAW.COM

COUNSEL FOR PETITIONERS

MARCH 12, 2020