The court previously dismissed with prejudice the claims
against the State of California. Defendants make the present
motion for summary judgment or partial summary judgment on the
first and third claims for relief of qui tam
relators/plaintiffs Carmen T. Rosales and Michael V. Meadows
("plaintiffs"). The court heard oral argument of the motion, but
later stayed all proceedings pending the U.S. Supreme Court's
decision in Vermont Agency of Natural Resources v. United
States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146
L.Ed.2d 836 (2000). After Vermont Agency was decided on May
22, 2000, the parties submitted supplemental briefing on the
applicability of that decision to the present case. The court
then heard further argument. Having considered the oral
arguments and written submissions of counsel, the evidence of
record, and the applicable law, the court now issues the
Plaintiffs Carmen T. Rosales and Michael V. Meadows filed this
action alleging, among other things, violations of the federal
False Claims Act ("FCA"), 31 U.S.C. § 3729-3733, by their
employer the SFHA, the City and County of San Francisco, and
individual employees of the SFHA. In their fourth amended
complaint ("complaint") plaintiffs allege that defendants made
false and fraudulent statements to the Department of Housing and
Urban Development ("HUD") in order to receive grant funds for
which the SFHA was not qualified. Plaintiffs also contend that
defendants issued so-called "Section 8" subsidized housing
certificates to ineligible individuals, and that SFHA employees
charged personal fees for this service. Finally, plaintiffs
claim that their supervisors retaliated against them for
complaining about these improprieties and for making the
Plaintiffs' complaint states three claims for relief. First,
plaintiffs allege that all of the defendants participated in
submitting false claims for payment to the United States
government in violation of the FCA, 31 U.S.C. § 3729. Second,
plaintiffs allege that defendants Nelson, Davis and the SFHA
retaliated against them for complaining about the SFHA's failure
to comply with HUD regulations and guidelines. This retaliation
allegedly consisted of derogatory remarks and epithets,
unwarranted reprimands, exclusion from meetings, and office
reorganizations eliminating plaintiffs' employment positions.
Plaintiffs claim that this retaliatory conduct was performed in
derogation of their rights under the First and Fourteenth
Amendments in violation of 42 U.S.C. § 1983. Third, plaintiffs
also claim that this retaliatory conduct by Nelson, Davis and
the SFHA violated the FCA's anti-retaliation provision,
31 U.S.C. § 3730(h). Plaintiffs seek, inter alia, treble and
Defendants' present motion for summary judgment or partial
summary judgment concerns only the first and third claims for
SUMMARY JUDGMENT STANDARD
Summary judgment should be granted if "there is no genuine
issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).
"Where the record taken as a whole could not lead a rational
trier of fact to find for the non-moving party, there is no
`genuine issue for trial.'" Matsushita Elec. Industrial Co. v.
Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538
(1986) (citing First National Bank of Arizona v. Cities Service
391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). "At
the summary judgment stage, the district court is not to weigh
the evidence or determine the truth of the matter but should
only decide whether there is a genuine issue for trial."
Washington v. Garrett, 10 F.3d 1421, 1428 (9th Cir. 1993)
(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249,
106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
The moving party bears the initial responsibility of
"informing the district court of the basis for its motion, and
identifying those portions of `the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any,' which it believes demonstrate the
absence of a genuine issue of material fact." Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265
(1986) (quoting from Fed.R.Civ.P. 56(c)).
When the nonmoving party will bear the burden of proof at
trial on a dispositive issue, she must then "go beyond the
pleadings and by her own affidavits, or by the `depositions,
answers to interrogatories and admissions on file,' designate
`specific facts showing that there is a genuine issue for
trial.'" Id. at 324, 106 S.Ct. 2548 (quoting from Fed.R.Civ.P.
56(c) & (e)). The court views all facts and draws all inferences
therefrom in the light most favorable to the nonmoving party.
United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct.
993, 8 L.Ed.2d 176 (1962). If, however, the nonmoving party's
evidence is "merely colorable" or "not significantly probative,"
summary judgment may be granted. Anderson, 477 U.S. at 249-50,
106 S.Ct. 2505 (citations omitted).
Plaintiffs allege that defendants violated the False Claims
Act ("FCA") by submitting false claims for payment to the
federal government. The allegations concern various grant and
subsidy programs administered by HUD.
To establish a violation of the FCA, plaintiffs must prove
three elements: (1) a "false or fraudulent" claim; (2) which was
presented, or caused to be presented, by defendants to the
United States for payment or approval; (3) with knowledge that
the claim was false. See United States v. Mackby,
243 F.3d 1159 (9th Cir. 2001) (citing 31 U.S.C. § 3729(a)(1)).
Defendants argue that plaintiffs' first claim for relief for
violation of the FCA is barred by the FCA's jurisdictional
requirements. They further maintain that plaintiffs present no
evidence that defendants' allegedly false submissions to HUD
wrongly qualified the SFHA for federal grant money, or that San
Francisco and the SFHA had the requisite scienter. Finally,
defendants contend that the FCA does not allow suit against San
Francisco or the SFHA under Vermont Agency of Natural Resources
v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858,
146 L.Ed.2d 836 (2000).
A. Jurisdictional Requirements
Rosales and Meadows, as the qui tam plaintiffs, bear the
burden of establishing subject matter jurisdiction by a
preponderance of the evidence. See United States v. Alcan
Electrical and Engineering, Inc., 197 F.3d 1014, 1018 (9th Cir.
1999) (citing United States ex rel. Biddle v. Board of Trustees
of the Leland Stanford, Jr. University, 161 F.3d 533, 540 (9th
Cir. 1998), cert. denied, 526 U.S. 1066, 119 S.Ct. 1457, 143
L.Ed.2d 543 (1999)).
Section 3730(e)(4) of the FCA requires, in pertinent part:
(A) No court shall have jurisdiction over an action
under this section based upon the public disclosure
of allegations or transactions in a criminal, civil,
administrative hearing, in a congressional,
administrative, or government Accounting Office
report, hearing, audit, or investigation, or from the
news media, unless . . . the person bringing the
action is an original source of the information.
(B) For purposes of this paragraph, "original source"
means an individual who has direct and independent
knowledge of the information on which the
allegations are based and has voluntarily provided
the information to the government before filing an
action under this section which is based on the
31 U.S.C. § 3730(e)(4) (emphases added).