The opinion of the court was delivered by: Legge, District Judge.
ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
This matter comes before the Court on the motion for summary
judgment or partial summary judgment of defendants the San
Francisco Housing Authority ("SFHA"), the City and County of San
Francisco ("San Francisco" or "the city"), and individual
defendants Albert Nelson and David I. Gilmore (collectively
Although this case was filed in 1995, it did not progress
significantly between 1995 and 1997, when the United States
finally decided not to intervene. Discovery commenced in early
1998. An amended complaint was filed in 1999, and the case was
set for trial in late 1999. But extensive criminal proceedings
were initiated in November of 1999 and have only recently been
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).
The United States Supreme Court, construing § 3730(e)(4), has
stated that the FCA authorizes "qui tam suits based on
information in the government's possession, except where the
suit was based on information that had been publicly disclosed
and was not brought by an original source of the information."
Hughes Aircraft Co. v. United States ex rel. Schumer,
520 U.S. 939, 946, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997). To qualify as
an "original source," a qui tam plaintiff must show that he or
she: (1) has direct and independent knowledge of the information
on which the allegations are based; (2) voluntarily provided the
information to the government before filing the qui tam
action; and (3) had a hand in the public disclosure of
allegations that are a part of the suit. See United States ex
rel. Devlin v. California, 84 F.3d 358, 360 fn. 3 (9th Cir.
1996), cert. denied, 519 U.S. 949, 117 S.Ct. 361, 136 L.Ed.2d
Accordingly, this court must examine each alleged false claim
to determine whether the allegation or transaction had been
publicly disclosed before filing of the suit, and if so whether
plaintiffs were the original source of the information. If the
jurisdictional hurdle is cleared as to each alleged false claim,
the court will then address the further arguments raised by the
parties. See Vermont Agency of Natural Resources v. United
States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 1865, 146
L.Ed.2d 836 (2000) ("Questions of jurisdiction, of course,
should be given priority — since if there is no jurisdiction
there is no authority to sit in judgment of anything else.");
Wang v. FMC Corp., 975 F.2d 1412, 1415 (9th Cir. 1992) ("We
must examine whether any of Wang's claims are blocked by the
jurisdictional bar of section 3730(e)(4) before we can
consider any other question.") (emphasis in original).
B. HOPE VI and COMP Grants
Plaintiffs allege that defendants knowingly made false claims
for moneys to the United States by applying for and receiving
HOPE VI and Comprehensive ("COMP") grants from HUD based on
inaccurate assessments of management performance under the
Public Housing Management Assessment Program ("PHMAP"). Based on
these falsified figures, HUD allegedly awarded the SFHA
$49,992,377 in HOPE VI grant funds in 1994 and more than
$58,173,963 in COMP grant funds for 1992-1995.
The PHMAP is a system designed to allow HUD, in concert with
local public housing authorities, to improve management of
public housing programs by evaluating the authorities'
performance according to a number of key indicators. See
42 U.S.C. § 1437d(j). The indicators include vacancy rates,
modernization, rents uncollected, operating reserves, routine
operating expenses, and annual inspection of units and systems.
See 24 C.F.R. § 901.10-901.45. Public housing authorities
assign themselves a "score" on each indicator and certify the
accuracy of the data. See 24 C.F.R. § 901.105,
Plaintiffs contend that from 1992 to 1995 the SFHA manipulated
its PHMAP scores by knowingly misstating its operating reserves
and occupancy/vacancy figures. The SFHA allegedly did so in
order to appear to be in compliance with HUD regulations and
gain removal from HUD's "troubled" housing authority list, which
the SFHA was on from 1989 to 1992.
Citing two documents — a 1992 HUD Inspector General audit of
the SFHA dated September 10, 1992 and a newspaper article dated
September 8, 1992 — defendants argue that plaintiffs'
allegations were publicly disclosed before the filing of the
present lawsuit on December 15, 1995.
The HUD audit report, entitled "The SFHA's Questionable Fiscal
Year 1991 PHMAP Certification Led to HUD's Premature Removal of
the Authority's `Troubled' Designation," certainly draws
attention to irregularities in the SFHA's PHMAP self-assessment
and certification. See Def. Req. for Jud. Not., Exh. A ("HUD
audit"). It states: "Based on our review, we believe that the
SFHA's PHMAP certification and PHMAP self-assessment were of
questionable accuracy. Indications are that the SFHA scored
itself higher than warranted and certified to questionable PHMAP
performance data which prompted HUD to remove the Authority's
`troubled' agency designation prematurely." Id. at H00468. The
HUD audit concluded, inter alia, that the SFHA had understated
the actual number and percentage of vacancies by leasing vacant
units and counting them as occupied even though they were not
occupied. See id. at H00474. It also found that the SFHA had
not overstated its operating reserves although there appeared to
be some discrepancies in the reported figures. See id. at
The Employment and Housing Subcommittee on government
Operations of the U.S. House of Representatives held a public
hearing concerning the HUD audit on September 14, 1992. See
Def. Req. for Jud. Not., Exh. D ("subcommittee hearing"). U.S.
Representative Tom Lantos, chairman of the subcommittee,
repeated many of the findings of the HUD audit. See, e.g., id.
at 3 ("The IG found that the San Francisco Housing Authority was
counting vacant units as occupied as of the dates they were
leased to a new tenant, even though the units were empty and not
Defendants also cite an article published in the San Francisco
Independent on September 8, 1992, two days before release of
the official HUD audit, entitled "Feds Slam Housing Authority."
See Def. Req. for Jud. Not., Exh. E ("Independent article").
The Independent article recapitulated many of the findings in
the HUD audit. For example, the article reported that, according
to a draft report of the HUD audit, "the Housing Authority
provided HUD with an erroneous self-assessment in order to
convince the federal office to remove the housing agency from
the `troubled list.'" Id. at H02148. It also stated: "As part
of that self-assessment, the Authority did not report all of its
vacancies to HUD and knowingly submitted false information."
Id. The Independent article further reported that "[n]o
acceptable documentation could be provided for the $7.8 million
operating reserves reported by the Housing Authority." Id. at
Audits performed and released to the public by inspectors
general qualify as public disclosures under
31 U.S.C. § 3730(e)(4)(a). See United States ex rel. Fine v. Chevron,
Inc., 72 F.3d 740, 743 (9th Cir. 1995) (en banc), cert.
denied, 517 U.S. 1233, 116 S.Ct. 1877, 135 L.Ed.2d 173 (1996).
Prior media coverage of
allegations can also raise the jurisdictional bar. See, e.g.,
United States ex rel. Aflatooni v. Kitsap Physicians Services,
163 F.3d 516, 521 (9th Cir. 1998) (citing United States ex rel.
Biddle v. Board of Trustees of the Leland Stanford, Jr.
University,  F.3d [533, 540] (9th Cir. 1998)).*fn2
"Where the information underlying the relator's complaint has
already been publicly disclosed, the government receives no
additional benefit from the relator's filing of a qui tam suit."
Aflatooni, 163 F.3d at 522.
Faced with the prior public information cited by defendants,
plaintiffs make two arguments. First, citing Biddle, 
F.3d at , they maintain that a qui tam claim is not
"based upon" a public disclosure within the meaning of
31 U.S.C. § 3730(e)(4)(a) unless the claim "repeats" information that has
already been disclosed to the public. See Opposition at
6:20-25. Plaintiffs assert that their allegations go beyond mere
overstatements of operating reserves and occupancy rates. The
present lawsuit does not "repeat" the public disclosures,
plaintiffs maintain, because the factual allegations underlying
the suit are more specific and detailed than the previously
disclosed information. See id. at 7:1-8:11.
In support of their position, plaintiffs cite to evidence that
SFHA Executive Director David Gilmore "instituted an aggressive
leasing strategy to falsely inflate the SFHA's [PHMAP] score by
beginning to lease all possible vacant units, whether habitable
or occupied, or not." Jones Decl., Exh. D., Rosales Interrog.
Resp. No. 2 at 3:11-13. Gilmore allegedly directed SFHA staff to
indicate units were leased and occupied when they were not.
See Jones Decl., Exh. B, Bains Depo. at 185:16-193:25. Gilmore
reportedly asked staff to "pull a dollar from [their] own pocket
if necessary to constitute deposits for the units, whether
habitable or not, so they could be counted as rented for
purposes of SFHA occupancy rates." Jones Decl., Exh. C., Meadows
Interrog. Resp. No. 1 at 3:3-6.*fn3 Plaintiffs argue that
these and other similar factual allegations do not "repeat"
information disclosed in the HUD audit, the subcommittee
hearing, or the Independent article and therefore do not
trigger the FCA's jurisdictional bar.
Plaintiffs' argument misinterprets the FCA's public disclosure
provisions. Biddle does not hold that publicly disclosed
information must precisely mirror the allegations stated in the
qui tam lawsuit in order for the jurisdictional bar to
operate. Plaintiffs quote Biddle for the proposition that "a
claim is `based upon' public disclosure when the claim repeats
allegations that have already been disclosed to the public."
See Opposition at 6:20-25 (citing Biddle,  F.3d at
). However, the full sentence from Biddle reads: "This
language [ie., the language from Wang v. FMC Corp.,
975 F.2d 1412, 1417 (9th Cir. 1992) just cited by the court] supports
[one party's] view that a claim is `based upon' public
disclosure when the claim repeats allegations that have already
been disclosed to the public." Biddle, 161 F.3d at 537
(emphasis added). However, Biddle omitted the "repeats"
language that plaintiffs emphasize: "We, therefore, hold that if
at the time a relator files a qui tam
complaint, the allegations or transactions of the complaint have
been publicly disclosed, then the allegations are `based upon'
the publicly disclosed information, and the relator must show
that he is an original source of the information in order for a
district court to have jurisdiction over the lawsuit." Id. at
540. The Ninth Circuit reached this conclusion relying on a
passage from Wang that belies plaintiffs' emphasis on the term
It is true that Wang's allegation about the Bradley
is supported by a few factual assertions never before
publicly disclosed; but "fairly characterized" the
allegation repeats what the public already knows:
that serious problems existed with the Bradley's
Biddle, 161 F.3d at 537 (quoting from Wang, 975 F.2d at
1417). Thus Biddle does not stand for the proposition that a
plaintiffs allegation must precisely repeat a public disclosure
for the jurisdictional bar to arise; rather, it is the qui tam
allegation, "fairly characterized," that must be considered to
determine whether it has already been disclosed to the public.
In Wang the Ninth Circuit clarified that an "allegation" and
the "information" on which the allegation is based are distinct
Courts sometimes speak loosely of barring a qui tam
suit because it is based on "publicly disclosed
information." . . . But the Act bars suits based on
publicly disclosed "allegations or transactions," not
information.  U.S.C. § 3730(e)(4)(A). The point
is not mere semantics: the Act distinguishes between
"allegations" and the "information on which the
allegations are based."  U.S.C. § 3730(e)(4)(B).
The Act appears to be invoking the common logical
distinction between an assertion and its proof.
Although not empty, this distinction rarely matters
in applying the Act, because where the public knows
of information proving an allegation, it necessarily
knows of the allegation itself. But the reverse is
not always true. An allegation can be made public,
even it its proof remains hidden.
Wang, 975 F.2d at 1418 (citations omitted). As the Ninth
Circuit has later stated, "allegations divorced from the
information upon which they are based can constitute public
disclosure." United States v. Alcan Electrical and Engineering,
Inc., 197 F.3d 1014, 1020 (9th Cir. 1999) (citing Wang, 975
F.2d at 1418).
The gravamen of plaintiffs' present claim, fairly
characterized, is that the SFHA through its agents fraudulently
manipulated SFHA's PHMAP scores and certified their accuracy in
order to gain removal from HUD's "troubled" list and receive
HOPE VI and COMP grant funds. This allegation was clearly
publicized at least three years before plaintiffs filed the
original complaint in this lawsuit. Although all of the
purported means by which the SFHA's fraud was perpetrated may
not have been commonly known, the prior public disclosures
contained enough information to enable the government to pursue
an investigation into them. This is enough to trigger the
jurisdictional bar. See id. at 1019 (citing United States ex
rel. Fine v. Sandia Corp., 70 F.3d 568, 571 (10th Cir. 1995)).
Plaintiffs' second argument concerns the timing of the public
disclosures. Because the HUD audit, subcommittee testimony, and
Independent article concerned transactions in 1992 and before,
plaintiffs argue that post-1992 transactions were not publicly
disclosed. Separate grant applications were made for each year
after 1992, plaintiffs contend, so "[e]ach application
constituted a new and separate transaction by which false
statements were knowingly made to obtain grant funds."
Opposition at 8:13-14.
This argument is also answered by the plain terms of the FCA
and applicable Ninth Circuit precedent. Even if each allegedly
fraudulent application for grant funding constitutes a "new
transaction," the FCA's jurisdictional bar applies not only to
publicly disclosed transactions but also to publicly disclosed
allegations. See 31 U.S.C. § 3730(e)(4)(A) ("the public
disclosure of allegations or transactions") (emphasis added);
United States ex rel. Dunleavy v. County of Delaware,
123 F.3d 734, 740 (3d Cir. 1997) ("It is clear that the FCA's reference
to `allegations or transactions' is in the disjunctive, so that
disclosures which reveal either the allegations of fraud or the
elements of the underlying fraudulent transaction are sufficient
to invoke the jurisdictional bar.").
As discussed above, plaintiffs' allegations, fairly
characterized, are that the SFHA defrauded the U.S. government
by falsely inflating its PHMAP scores from 1992 to 1995.
Although the fraudulent transactions may change with each
iteration during the relevant period, the allegation of fraud
remains substantially the same. The allegation was first
disclosed in 1992; it cannot be reanimated simply by complaining
that defendants performed the same fraudulent acts in succeeding
This interpretation is supported by the Ninth Circuit's
decision in United States ex rel. Lujan v. Hughes Aircraft
Co., 162 F.3d 1027 (9th Cir. 1998). In Lujan the qui tam
relator alleged that her employer submitted fraudulent claims to
the U.S. government as a defense subcontractor on the B2 bomber
and other projects from 1982 to 1989. Id. at 1029. In an
earlier filed case, however, a qui tam relator named Schumer
had already alleged fraud in connection with Hughes'
cost-sharing transactions, commonality agreements and radar
program contracts. See id. at 1032-33. Schumer's allegations
concerned only false claims submitted to the government between
1982 and 1984. See id. at 1032. Noting the temporal
discrepancy, the Lujan Court nevertheless held that Schumer's
publicly disclosed 1982-1984 allegations also disclosed Lujan's
1982-1989 allegations, including the 1985-1989 allegations.
"Lujan's allegations are substantially similar to those
disclosed in the earlier Schumer action, thereby constituting
`public disclosure' of Lujan's qui tam claims." Id. at 1033.
The same is true in the present case. Regardless which annual
grant application the court considers, plaintiffs' allegations
remain substantially the same as those previously disclosed,
i.e., fraudulent PHMAP self-assessment and certification. As
such, plaintiffs' 1995 allegations were publicly disclosed by
the 1992 HUD audit, the subcommittee hearing and the
To avoid the jurisdictional bar, plaintiffs must therefore
show that they were the original source of the information on
which the publicly disclosed allegations were based. "A
`whistleblower' sounds the alarm; he does not echo it." Wang,
975 F.2d at 1419.
To qualify as an "original source," a plaintiff must show that
he or she: (1) has direct and independent knowledge of the
information on which the allegations are based; (2) voluntarily
provided the information to the government before filing the
qui tam action; and (3) had a hand in the public disclosure of
allegations that are a part of the suit. See United States ex
rel. Devlin v. California, 84 F.3d 358, 360 fn. 3 (9th Cir.
1996) (citing Wang, 975 F.2d at 1418).
To satisfy the "direct and independent knowledge" requirement,
plaintiffs must "see the fraud with their own eyes or obtain
their knowledge of it through their own labor unmediated by
anything else." Id. at 361. Defendants cite plaintiff Meadows'
deposition testimony that he had no independent knowledge of the
SFHA's procedure for reporting vacancy rates in 1991. See
Margolis Decl., Exh. C., Meadows Depo. at 186:7-11. Plaintiffs
point out that Meadows had direct information concerning "Ronnie
Davis' alleged errant expenditure of COMP Grant funds."
Opposition at 10:23-24 (citing Jones Decl., Exh. F, Meadows
Depo. at 323:12-329:4). The record does not demonstrate that
either side has proffered substantial evidence concerning the
directness and independence of Meadows' knowledge of the
allegations in suit.
Defendants contend that plaintiff Rosales could not have
observed firsthand or directly participated in the misreporting
of vacancy rates for the periods when she was Director of Grants
and was not Eligibility Manager, i.e., the periods from March
1994 to November 1995, and April 1998 to the present. See
Margolis Decl., Exh. B., Rosales Depo. at 26:1-11. Plaintiffs
respond, to the contrary, that even as Director of Grants
Rosales was present at staff meetings where the allegedly
fraudulent conduct was encouraged by Gilmore. See Jones Decl.,
Exh. D., Rosales Interrog. Resp. No. 2. Defendants also assert
that Rosales had no direct and independent knowledge concerning
the SFHA operating reserves, and admitted receiving her
information from Controller Lugenia Yates and Director of
Finance Barry Stewart. See Margolis Decl., Exh. B, Rosales
Depo. at 438:3-13. Plaintiffs do not counter this assertion.
The record on the "direct and independent knowledge" prong of
the Devlin test is, at best, inconclusive. Since plaintiffs
bear the burden of establishing by a preponderance of the
evidence that they were the original source of the public
allegations, and bear their burdens under Celotex and
Matsushita, this failure of proof weighs heavily against
jurisdiction. However, there is another decisive reason why
jurisdiction does not lie.
Defendants contend that plaintiffs have offered no evidence
that they had a hand in the public disclosures discussed above.
Even though they are the parties bearing the burden of proof on
the issue, plaintiffs have simply responded in conclusory
fashion that they satisfy the third prong of the Devlin
standard. See Opposition at 11:5-8. The only evidence
proffered to support the contention that plaintiffs had a hand
in the public disclosure of the allegations is a memorandum
written by Rosales to Ronnie Davis dated December 10, 1996.
See Rosales Decl. (filed Oct. 19, 1999), Exh. A. This memo is
dated after the filing of the present lawsuit and long after
the HUD audit, the subcommittee hearing and the Independent
article became public. Even if the memorandum had been disclosed
before suit, though, it was addressed to Ronnie Davis, who was
then Acting Director of the SFHA. Thus, without more, it does
not appear to have been part of any "public" disclosure of the
Because plaintiffs' allegations regarding improprieties in the
SFHA's applications for HOPE VI and COMP grants were publicly
disclosed before this suit, and plaintiffs have not established
that they were original sources of the information, this court
lack subject matter jurisdiction under 31 U.S.C. § 3730(e)(4).
Accordingly, the court GRANTS summary judgment in favor of
defendants on the HOPE VI and COMP grant claims.
Plaintiffs allege that defendants made false claims to the
United States by applying for and receiving Youth Apprenticeship
Program ("YAP") and Apprenticeship Demonstration Program in the
Construction Trades ("ADPCT") grant funds, despite the presence
of a "union only" clause in the memorandum of understanding
("MOU") in support of the grant application. In 1994-1995 the
SFHA and San Francisco purportedly received $1,200,000 in YAP
funds and $250,000 in ADPCT funds. But HUD regulations do not
allow "union only" clauses in MOUs. Plaintiffs claim that the
SFHA and San Francisco received the funds after promising to
rewrite the MOU to comply with HUD regulations, a promise that
was never kept.
Defendants argue that plaintiffs' allegations regarding the
MOU were publicly disclosed by a prior lawsuit. United States
ex rel. McKenzie v. BellSouth Tel., Inc., 123 F.3d 935, 939
(6th Cir. 1997), cert. denied, 522 U.S. 1077, 118 S.Ct. 855,
139 L.Ed.2d 755 (1998) and Federal Recovery Servs., Inc. v.
United States, 72 F.3d 447, 450 (5th Cir. 1995) hold that
31 U.S.C. § 3730(e)(4)(A) treats information disclosed through
civil litigation and on file with the clerk's office as a public
disclosure of allegations.
On December 5, 1995 certain labor unions brought suit in this
court in San Francisco Building and Construction Trades
Council, et al. v. United States Department of Housing and Urban
Development, San Francisco Housing Authority, et. al., No.
C96-4328 SBA. See Def. Req. for Jud. Not., Exh. C. That
complaint alleged that the SFHA had not complied with the MOU
because it had been informed by HUD that compliance would
violate HUD regulations. See id. at ¶¶ 11, 14. The complaint
was filed ten days before plaintiffs filed the present lawsuit.
Plaintiffs do not make any arguments or offer any evidence to
counter defendants' point. In fact, the only trace of opposition
occurs in a footnote that addresses the merits of the claim and
not the threshold issue of jurisdiction. See Opposition at 12
fn.8.*fn4 Given that plaintiffs bear the burden of proof on
subject matter jurisdiction, this does not suffice.
Defendants have established that the prior suit recited the
contested terms of the MOU and aired the allegations that the
MOU violated HUD regulations. Since plaintiffs fail to contest
the public disclosure and offer no evidence that they were the
original source of the information, this court lacks subject
matter jurisdiction. The court therefore GRANTS summary judgment
in favor of defendants on the YAP and ADPCT grant claims.
D. Section 8 Certificates
Under the Section 8 program "tenants make rental payments to
private landlords based on the tenants' income and ability to
pay, and HUD subsidizes that rent with assistance payments
intended to provide the landlord with a fair rent." Bellevue
Manor Associates v. United States, 165 F.3d 1249, 1250 (9th
Cir. 1999) (citing 42 U.S.C. § 1437f; Cisneros v. Alpine Ridge
Group, 508 U.S. 10, 12, 113 S.Ct. 1898, 123 L.Ed.2d 572
(1993)). Congress mandated such assistance for "the purpose of
aiding low-income families in obtaining a decent place to live
and of promoting economically mixed housing."
42 U.S.C. § 1437f(a). Each year, housing authorities like the SFHA enter
into an Annual Contributions Contract ("ACC") with HUD. See
id. § 1437f(b). Under its ACC, the SFHA requisitions the funds
from HUD for eligible participants, see id. § 1437n, and HUD
disburses the money to the SFHA via electronic fund transfers.
The SFHA in turn disburses Section 8 checks to landlords, or
transfers funds to their designated financial institutions, as
rental assistance for the Section 8 certificate holders. See
Cal. Health & Saf.Code § 34327.3; Cal. Welf. & Inst.Code §
Plaintiffs contend that at least 148 individuals who had not
submitted applications and were not on the Section 8 waiting
list received Section 8 housing, some at the behest of various
San Francisco officials. They claim that the SFHA has not even
accepted applications for Section 8 assistance since 1986
because the waiting list has been continuously full since that
time. They also allege that their boss, former SFHA Executive
Director David I. Gilmore, ordered plaintiff Rosales to ...