good morning ladies and gentlemen i will mention that judge rover is here with us by video so the lawyers arguing we'll see her on the screen the rest of you will just have to take this on face listen to her but we are ready this morning for our first case which is hannah against city of chicago st samberg champ my name a saucer samper champion i'm here on behalf of albert hanna the appellant in this case your honor is our contention is that this is a straightforward fraud on the government each year the city of chicago applied for and received millions of segregated and what was the secret here i guess i'm trying to get at what the public the public housing aspect is a little bit different as you as you well know judge what the they they have a separate issue with their public housing but they did not file anything with  the federal government that would have put the federal government on notice that it's affordable housing was ended up concentrated almost entirely in predominantly african american and minority neighborhoods in direct like this mom was based on a generalized obligation because a court can determine that such a generalized promise is an objective false heard there fair housing ok well let me let me answer your question twice because there are thankfully two major duties that we're talking about and i'll start with the one that you just named the promise to affirmative y further fair housing this is not such a and nebulous promise it actually is very well defined both in the guidance that hud gives and actually it's defined even in the certifications that the where that this certification actually signed says the jurisdiction will ferment a plea further fair housing which means it will conduct an analysis of impediments to fair housing choice within the jurisdiction and take appropriate actions to overcome the effects of any impediments identified through that analysis that's what actually signs and that's what it says also in the hud handbook for participants which we which we are provided you with a link to in which is cited in our complaint so there's actually considerable specific procedural and substantive content that is provided to the city it was well on notice that it had to look for impediments of fair housing which we submit any fair analysis would have identified what we're actually talking about is is more of is more of a de facto than a days or it just it's the accepted practice within within the city so how i guess i'm having specificity problems even with that this you agree you not that this complaint is governed by rule nine b with respect to the circumstances constituting fraud yes right so so we need to know something more than well the alderman exercise a lot of powers all the men are different for one thing the way each ward is run probably reflects the political base for the alderman lots of other things i'm having trouble just sort of waving my hands and saying aldermanic privilege well let me be clear we're not saying the older man of privilege constitutes the fraud or could be the other way around some alderman could be exercising their authority to enhance affordable housing in their ward well one might think that in theory but their results which we've al genera complaint are stark which is that affordable housing never gets built in predominantly white wealthy neighborhoods and it doesn't get built and predominately white now white wealthy neighborhoods because the ultimate in those jurisdictions have predictable political incentives to oppose them why isn't the reason because property values are high well again what so it's only for one reason but let me back up for a minute the reasons that they do what they do are actually not the fraud the fraud is that the city was promising outcomes it was promising outcomes with respect to the placement of affordable housing and removing impediments they're all saying outcomes or process will do ok so that's the second so remember i  said that was the forte of the if that was the affirmatively furthering fair housing obligation in addition there are regulations that specifically require certain outcomes and i think that the regulation that best describes this duty which unfortunately we didn't provide in our brief but it's in compass among the regulations in the complaint is twenty four c f r ninety three point five seven and that sets out exactly where on horrible housing built with home funds can and can't be built and it clearly says that you can't build affordable housing only in predominantly minority neighborhoods it's a clearly stated duty that also again appears in all the hard guidance this is not surprising obligation it's not an unclear obligation but you know i guess i want to get back to what you think this specifics are that the city did wrong because that's what ninety calls for kids as you just alluded to a few minutes ago the process in chicago of coming up with affordable housing whether it's a whether it's other kinds of housing whether it's section eight is a lengthy saga in this city starting with maybe even before the contro case but obviously that prominently and you are in fact looking if not it purely private federally assisted affordable housing and the city has admitted it was heavily segregated it seems to me the map that you put in is something that anybody could draw with the assistance of census data so i don't know what the big secret is about that and i don't know what mr han of brings to the table ok so let me take your last point first about what mr hannah brings to the table although of course we're not right now talking about public disclosure before this court i you know obviously this court is interested in that the fact that we've pleaded regarding where this of these supportable housing ended up being located almost entirely during this period in predominately african american predominately poor neighborhoods that has never been disclosed in any public document never been compiled before this is his original is original study with his time and his money but based on publicly available data some of that based on publicly available data some of it not but this is but and again we haven't gotten into it we haven't you know gotten into the details of that because that hundred received certifications each year from the city saying that it will affirmative fully and identify impediments to fair housing that will ferment only address it and that will comply with these regulations regarding where housing affordable might well i had known about this it might well have part of our claim here is that the city did not provide hard with the information that would have been necessary for hard to pursue it it certainly did not provide hard with the information that we played in the complaint in terms of the imagine maybe in year one or even in years one through three that you're asking us to assume that since nine hundred sixty five hundred years blindly gone along discover that nothing ever changes and somehow things that the city's doing all that it could and you're always suggestions about other things the city should do is somehow bring the alderman under control and change the zoning law well let me there's a promise in there that i want to push back on because i think it may be important to you that you're thinking about this the current situation in terms of the alderman having the authority to do blah these developments as a comparatively new situation and toll relatively recently there were there was a period of time in which this money went directly to went directly to developers rather than being funneled through the city council and therefore the alterman couldn't control that in addition with the outcomes better and the other hearing that and the outcomes were significantly different that's and that's one thing we pleaded during that time it was almost an even balance in terms of where the where things are ok well the other major thing that has changed during the during the period that we've described is that in more recently in two thousand and two thousand we can't hear you judge a rumor oh gee do you it seems to me that you must think that hud is made up of a group of is well without getting into what i think of what i want i want to address that question but the but but seriously hide relies heavily on these certifications it cannot and does not regularly fall through to see whether people are in fact complying with what they're saying they're doing the affirmatively furthering their housing requirement particular height of what is doing well what is unfortunately oftentimes that's what it's doing because it doesn't have it doesn't have the police force to go out and do more but it reviews carefully the submissions that the city maze what's that i'm sorry humane investigators soon but what i want to know again i want to get back to ninety particularly already first of all you're you're talking about all the manic privilege but t i didn't see specifics of alderman a over road project b i didn't see specifics about the so called up zoning that you're talking about how exactly that happened what it did for the possibility of affordable care even if one were to agree with your position john inclined to agree with that you don't have to get right down to the bureaucrat who said no on that particular day but but i just have the are it's not our contention that any particular action by any particular alderman constitutes the fraud here our contention is that the city was aware or should have been aware of the collective effect of these aldermanic practices and that's what's doing everything we can to spread affordable housing around the city and not to concentrated in majority minority neighborhoods but in fact what the city is doing is just sitting on its hands doing nothing and filing reports but what if the recipient actually doesn't intend to do a thing they just want the alderman to keep running their wards just the way they want to and as long as in the cities as well as long as we report accurately every year that chicago is still deeply segregated we're off the hook is that really what the federal laws and regulations require well a respect for your honor that's not what's being alleged here there's no allegation for example that the city promised to spend money on affordable housing but spent it on something else or that the city lied about the location of any of its construction projects there's no allegation of that kind of deception and i'd like to if i hadn't have the court's indulgence here i'd like to quote from the height other things how they define fair housing and its impediments and what actions they will undertake to overcome the effects of those impediments so by the very nature of this relationship between high and funding recipients recipients have considerable discretion in how they choose to handle issues such as housing segregation in the strand and they have a different opinion about how the city should best approach issues such as segregation but his opinion does not give rise or does not support the idea that the find the person who was responsible for the certification your honor our position is that mr head didn't necessarily have to name names in his complaint but here at least had to allege facts supporting an in knowledge cannot be attributed to the city absent knowledge among its actual employees in the strand it makes no allegation regarding the knowledge of any city employee and indeed any any such inference would be impossible here given that h of fraud press on his subjective interpretation of what the federal civil rights obligations mean but knowledge can be pleaded generally even under nine b you don't have to you know delve into somebodies brain to plead that sure you don't just sort of drop them you know into the proverbial mailbox or e mail or whatever it is you do for these reports upload them somehow there are there are responsible people in the city and they are taken to stand behind the certifications they make and it's very troubling to think i guess on your view an acceptable outcome is for the city to say well residential segregation is incurable in chicago discretion but in that is it ok for a period of forty or fifty years to pursue the same unsuccessful strategies if if indeed these strategies are unsuccessful  choice rights was a key to him correct suit but they opted against what right does you don't read anything into that by the way but you know it's a fact we're giving given the scope of the fraud alleged here that we said it that the fact that the united states chose not you can read something into yes it may have a large agency which is said to be a victim of fraud you think that says something absolutely and given the amount of money steer housing in a manner that might possibly increase ecru get action certainly your honor that would be a different case from what we have here if there were an allegation that for example the city engage purposeful discrimination in for example blocking a particular housing development in a certain part of the city but that's to be sure not with being alleged here rather it's that the city has in place general policies that mr han believes have had the effect of not furthering affirmative i was for it now furthering fair housing to the extent that he would prefer but about the change he meant mr samberg champion mentioned from  having the money go directly to the developers to this aldermanic system he says the results used to be better until the mid two thousand so whenever that was it we accept that allegation as stated in the complaint is true however there is no allegation that how it was deceived to three with respect to this change in policy knew that this change took place and so the change involves a different just rehearsed to it's germanic privilege i'm sorry your honor could you repeat that how usual all across the country is aldermanic privilege or are we want to have a very few cities the only city or i'm sorry your honor i just don't know and i don't want to speculate on that question of how other jurisdictions handle their disbursement of funds but again there's no allegation that in this case i did not know about the policy of or the practice of all the men of privilege so isn't this aren't we really talking around the public disclosure bar here which is appointed may not quite be before us well your honor as we understand the public disclosure of our word for that part to apply all of the elements of the fraud had to been publicly disclosed and it's our position based on the status of the case right now at least that there's no there has not been public disclosure that would support an inference of c enter in this case that the city knowingly you fraud at the federal government by virtue of these policies that it hasn't plates and what kind of evidence do you think would do the trick do the trick that this is some hypothetical other case not yours you know well your honor the the only  other case that we're aware of that where there has been successful false claims that case based on these housing certifications was the question county case which is cited in this tremendous briefs but in that case that case involved a specific promise to the government to consider race in conducting an analysis of an atom and it was found that the county in fact despite making that promise was not actually considering race and so that promise as an objective matter was false it was a black and white question and that's just not the cut type of promises that we have issue in this case here has chicago ever promised to conduct  some kind of objective assessment of where housing should go because it seems to me one of the roots of mr hanna's complaint is that it's all extremely subjective you know wherever the alderman wants it to go wherever you know wink understand correctly this kind of objective analysis on the contrary the city has disclosed the fact of segregation in the city and the longstanding segregation that has existed so there's there's been absolutely no deception meet a standard of proof ultimately which we don't have to meet we don't have to show that anyone or the city as a hall had actual knowledge of the falsity of its claims we only have to show that it was recklessly that acted in reckless disregard of the truth or deliberat indifference it may well turn out that no one ever bothered to check where these affordable housing units were built for example we think that would qualify as sufficient scienter it may be that no one ever bothered to check what was required to do a proper analysis of impediments again we think that would satisfy the c enter requirement we don't have to show that anyone had actual knowledge otherwise you probably you really could never bring a false claims act against a bureaucracy like this one for failing to meet its promises the second point that i want to address that was just raised was it is entirely true that hud gives a great deal of discretion to jurisdictions as to how they want to affirmatively further fair