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United States v. Quicken Loans Inc.

United States District Court, E.D. Michigan

November 14, 2016

UNITED STATES OF AMERICA, Plaintiff,
v.
QUICKEN LOANS INC., Defendant.

          MEMORANDUM OPINION

          REGGIE B. WALTON, United States District Judge

         The government initiated this action against Quicken Loans Inc. ("Quicken") pursuant to the False Claims Act, 31 U.S.C. §§ 3729-3733 (2012), Complaint ("Compl.") ¶ 1, alleging asserts that, between September 1, 2007, and December 31, 2011, Quicken "knowingly approved loans that violated FHA [Fair Housing Act] rules while falsely certifying compliance with those rules, " id, which permitted Quicken "to profit from these loans, even if borrowers defaulted on their mortgages, while placing all of the risk" on the federal government, id ¶2. Currently before the Court is Quicken Loans Inc. 's Renewed Motion to Transfer this Action to the United States District Court for the Eastern District of Michigan ("Def.'sMot"). Aftercareful consideration of the parties' submissions, the Court concludes that it must grant Quicken's motion, and transfer this case to the United States District Court for the Eastern District of Mchigan.[1]

         I. BACKGROUND

         In April 2012, the government initiated an investigation into Quicken's origination and underwriting of single family residential mortgages insured by the FHA. Gov't Opp'n, Exhibit ("Ex.") 1 (Declaration of Christopher Reimer of May 14, 2015 ("Reimer Decl.")) ¶ 6. After unsuccessful settlement negotiations, the government informed Quicken on March 30, 2015, that it intended to file this suit during the week of April 20, 2015, Id. ¶ 10, and this action was filed on April 23, 2015, see Compl.

         On April 17, 2015, six days prior to the filing of the Complaint in this matter, Quicken filed an Administrative Procedure Act ("AP A") claim against the government in the United States District Court for the Eastern District of Michigan. Gov't Opp'n, Ex. 3 (Complaint ("AP A Compl.")) at 1. On April 29, 2015, Quicken filed in this matter a Motion to Stay or Transfer in Light of a First-Filed Action Pending in the Eastern District of Mchigan. Defendant Quicken Loans Inc.'s Motion to Stay or Transfer in Light of a First-Filed Action Pending in the Eastern District of Mchigan ("Defi's Mot. to Stay or Transfer"), ECF No. 4. On May 29, 2015, this Court stayed the proceedings in this case pending the resolution of the government's motion to dismiss the Mchigan AP A case, Order, ECF No. 18, and the AP A case was thereafter dismissed with prejudice on December 31, 2015. See Quicken Loans Inc. v. United States, 152 F.Supp.3d 938, 955 (E.D. Mch 2015), appeal docketed, No. 16-1250 (6th Cir. March 2, 2016).

         On January 19, 2016, the Court denied without prejudice Quicken's Motion to Stay or Transfer, "with permission to file a revised motion seeking such relief that reflects these developments in the Eastern District of Michigan." Minute Order, Jan. 19, 2016. On February 19, 2016, Quicken filed its Renewed Motion to Transfer this Action to the United States District Court for the Eastern District of Michigan. Def's Mot. at 1.

         II. STANDARD OF REVIEW

         28 U.S.C. § 1404(a) provides that, "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a) (2012). The decision to transfer a case is discretionary, and a district court must conduct "an individualized, 'factually analytical, case-by-case determination of convenience and fairness.'" New Hope Power Co. v. U.S. Army Corps of Eng'rs, 724 F.Supp. 90, 94 (D.D.C. 2010) (quoting SEC v. Savoy Indus. Inc., 587 F.2d 1149, 1154 (D.C. Cir. 1978)).

         As a threshold matter, a district court must determine that the proposed transferee court is located "in a district where the action 'might have been brought.'" Fed. Housing Fin. Agency v. First Term. Nat'l Bank, 856 F.Supp.2d 186, 190 (D.D.C. 2012) (Walton, J.). If so, then a district court

considers both the private interests of the parties and the public interests of the courts[.] The private interest considerations include: (1) the plaintiffs' choice of forum, unless the balance of convenience is strongly in favor of the defendants; (2) the defendants' choice of forum; (3) whether the claim arose elsewhere; (4) the convenience of the parties; (5) the convenience of the witnesses . . ., but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and (6) the ease of access to sources of proof. The public interest considerations include: (1) the transferee's familiarity with the governing laws; (2) the relative congestion of the calendars of the potential transferee and transferor courts; and (3) the local interest in deciding local controversies at home.

Shapiro, Lifschitz & Schram, PC. v. Hazard, 24 F.Supp.2d 66, 71 (D.D.C. 1998) (citation omitted).

         III. ANALYSIS

         There is no dispute that the current action could have been brought in the Eastern District of Michigan, see 31 U.S.C. § 3732(a) (stating that the government may file a False Claims Act suit in any district in which the defendant "can be found, resides, transacts business, or in which any act proscribed by [§] 3729 occurred"); accordingly, the Court turns to an analysis of the private and public interest factors.

         A. The Private Interest Factors1.The Parties' Choice of Forum and ...


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