1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

__________________________________ ) United States of America, et al ., ) ex rel . LAURENCE SCHNEIDER, ) ) Plaintiffs, ) ) v. ) Civil Action N o. 14-1047 (RMC) ) J.P. MORGAN CHASE BANK, N.A., ) ) Defendant. )

_________________________________ ) OPINION Pursuant to the Federal False Claims Act and similar State laws , Relator Laurence Schneider asserts that J.P. Mor gan Chase Bank, N.A. (Chase) sub mitted false claims relating to the National Mortgage Settlemen t and false claims relating to t he Home Affordable Modification Program (HAMP) to decrease its li ability to the Federal Governm ent. However, the National Mortgage Settlement claims are barred because Mr. Schneider fai led to engage in the alternative dispute resolution process ma ndated by the Settlement on which the claims are based. Mr. Schneider also fails to state a c laim that Defendant falsely ce rtified HAMP compliance because he does not allege, with factual a llegations in support, that t he certifications were materially false. The Complaint will be dismissed. I. FACTS A. Background Following the burst of the housi ng bubble in 2008, the Federal Government began to institute measures designed t o stabilize the housing and cre dit markets. Those measures included the Troubled Asset Relief Program (TARP) and the Makin g Home Affordable Program, both programs in the Departm ent of the Treasury. See U.S. Department of the Treasury, TARP2 Programs (Nov. 15, 2016), https://www.treasury.gov/initiatives /financia l-stability/TARPPrograms/Pages/default.aspx; U.S . Department of the Treasury, Making Home Affordable (July 22, 2012), https://www.treasury.gov/initi atives/financial-stabi lity/TARP-Programs/housing/ mha/Pages/hamp.aspx. The Making H ome Affordable Program includ ed the Home Affordable Modification Program (HAMP), whi ch used funds from TARP as ince ntives for banks to modify first-lien mortgages so that homeo wners could lower their mortg age payments. HAMP continues to this day; its goa l is to encourage modification of loans that are at risk of default and make them more affordable. In March 2012, the Federal Gove rnment, 49 States, and the Distr ict of Columbia filed complaint in the United Sta tes District Court for the Dis trict of Columbia against “numerous banks and loan servici ng companies, including Chase, for misconduct related to their origination and servi cing of single family residential mortgage s.” 1 Second Am. Compl. [Dkt. 102] (SAC) ¶ 56. Other defendant b anks included Bank of Americ a Corporation; Countrywide Bank, FSB; Citibank, N.A.; and We lls Fargo Bank, N.A. Prior to filing the National Mortgage Complaint, its parties had negotiated a national settlement of its allegations, i.e. , the National Mortgage Settlement. On April 4, 2012, this Court entered cons ent judgments approving the National Mortgage Settlement. See e.g. , Consent Judgments, United States v. Bank of America Corp. , No. 12-361 (RMC) [Dkts. 10, 11, 12, 13, 14]. The National Mortgage Settlemen t was intended “to provide immed iate relief to enable struggling homeowners t o avoid foreclos ure; to bring bad ly needed reform to the mortgage servicing industry; to e nsure that foreclosures are lawfully conducted; and to penalize

1 The March 2012 complaint will be referenced herein as the “Nat ional Mortgage Complaint” and the resulting settlement as t he “National Mortgage Settleme nt.”3 the banks for robo-signing misc onduct.” SAC ¶ 63. The Court appointed Joseph A. Smith to serve as Monitor of the Settlem ent and thereby to oversee imple mentation of the reforms of mortgage loan servicing and evalu ate compliance by the signatory banks. Exhibit A to the National Mortgage Settlement wa s a list of Servicing Standards, which included the following kinds of standards: 1. Standards for documents used in foreclosure and bankruptcy proceedings; 2. Standards for qualifications, training and supervision of employees; 3. Requirements for accuracy and verification of borrower’s account information; 4. Standards to ensure documentation of note, holder status and chain of assignment; 5. Loss mitigation requirements; 6. Requirements for an easily accessible and reliable single point of contact for potentially-eligi ble first lien mortgage borrowe rs; and 7. Restrictions on servicing fees. See Consent Judgment, Ex. A, United States v. Bank of America Corp., et al. , No. 12-361 (RMC) [Dkt. 10-1]; see also SAC ¶ 74. The Servicing Standards were implemented through a work plan for each signatory bank. Compliance was ascertained by the Mon itor using “29 Metrics to test the application and performance of the required Servicing Stand ards.” SAC ¶ 88. “[T]he Monitor, through the chain of pro cess, relied on the IRG’s [Int ernal Review Group’s] testing of the metrics pursuant to the ter ms of the Consent Judgment to de termine the Defendant’s compliance with the Consent Judgment.” Id . ¶ 96. At the end of each quarter, Monitor Smith submitted a report to the Court indicating “(i) the Metrics for that Quarter; (ii) Servicer’s progress toward meeting its paym ent obligations under th[e] Con sent Judgment; [and] (iii)4 general statistical data on Ser vicer’s overall servicing perfor mance.” Consent Judgment, Ex. E, United States v. Bank of America Corp., et al. , No. 12-361 (RMC) [Dkt. 10-1] at E-9. 2 In addition to the Servicing Standa rds, the National Mortgage S ettlement required each Defendant to provide a speci fic dollar amount in consumer relief, which totaled about $25 billion overall. Chase was re quired “to provide over $4 billio n in consumer relief in the form of loan forgiveness and refinan cing.” SAC ¶ 97. Specifically, Ch ase was required to provide “$3,675,400,000 of relief to consumers who me[t] the eligibility requirements in paragraphs 1-8 of Exhibit D” to the National Mortgage Settlement and “$537,000 ,000 of refinancing relief to consumers who me[t] the requirements of paragraph 9 of Exhibit D.” Id . ¶ 101. Chase received credits toward its consumer relief amount when it:

 Allowed borrowers to make First Lien and Second Lien Modifications;

 Allowed borrowers to make Second Lien Portfolio Modifications;

 Provided borrowers Enhanced Transitional Funds;

 Facilitated Short Sales for borrowers;

 Provided borrowers Deficiency Waivers;

 Provided Forbearance for Unemployed Borrowers; and

 Assisted in Anti-Blight efforts.

2 The participating state and feder al agencies also “designate[d ] an Administration and Monitoring Committee,” which “serv e[d] as the representative of the participating state and federal agencies in the admin istration of all aspects of . . . [the] Consent Judgment and the monitoring of complian ce.” Consent Judgment, United States v. Bank of America Corp., et al. , No. 12-361 (RMC) [Dkt. 10] ¶ 8. The responsibilities and autho rities of Monitor Smith and the Monitoring Committee were detaile d in Exhibit E to the Consent Judgment. See Consent Judgment, Ex. E.5 See Consent Judgment, Ex. D, United States v. Bank of America Corp., et al. , No. 12-361 (RMC) [Dkt. 10-1] at D1-D7. B. Relevant Terms of the National Mortgage Settlement The National Mortgage Settlemen t also provided a process for no tice and cure in the event a bank failed to satisfy a Servicing Standard. If Mo nitor Smith determined that a bank had exceeded the “negotiated threshold error rate assigned to [ any] Metric,” he would notify that bank and trigger a corrective procedure. United States v. Bank of America , 78 F. Supp. 3d 520, 528 (D.D.C. 2015); see also Consent Judgment, Ex. E at E-11-E-12. “The [bank] ha[d] a rig ht to cure a Potential Vi olation within a setcure period.” Id . If the bank cured the errors then “no Party to the Consent Judgment can sue on the Potential Violatio n.” Id

. Parties and the Monitoring Committee were only permitted to “su e to enforce (a) uncured Potential Violations of Servicing Standards covered by a Metric and (b) Servicing Standards that are outsi de the Metric testi ng/Potential Violati on process.” Id . at 532. Prior to commencing any enforcement ac tion arising out of the Consent Ju dgment a party was required to “provide notice to the Monitoring Committee of its intent to br ing an action” and allow the Monitoring Committee 21 days to cons ider bringing the action it self. Consent Judgment, Ex. E at E-15. If the Monitoring Comm ittee declined to bring an enfo rcement action, the party was obligated to wait an additi onal 21 days before filing suit. See id

. C. Home Affordable Modification Program (HAMP) HAMP is a federally-funded for eclosure relief program operated by the Department of the Treasury, whic h provides incentive payments t o mortgage servicers 3 in

3 A mortgage servicer receives mo rtgage payments from homeowners , maintains all records, and enforces the obligations to pa y, then forecloses on the home if need be. Mortgage servicers can6 exchange for modifying eligible m ortgage loans. Eligibility fo r modification is determined through an application process, s ubject to some exceptions. Mo rtgage servicers participate in HAMP through a Servicer Participat ion Agreement with the Federa l National Mortgage Association (Fannie Mae), Treas ury’s designated financial agentfor HAMP. Treasury also provided guidance regarding HAMP through the Making Home Afford able Handbook (MHA Handbook), which requires Servicer s to solicit eligible borrowe rs for HAMP loan modification. See MHA Handbook at 75-76 (version 5.1 May 26, 2016), available at https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/mha handbook _51.pdf. The MHA Handbook provides ex ceptions to the solicitat ion requirement, including when “the servicer has released t he borrower from liability for the debt and provided a copy of such release to the borrower,” id . at 69, or in active bankruptcy cases. See id . at 73. Freddie Mac monitors compliance with HAMP through annual compli ance certificates from the Servicers. In the compliance certificate s, each Servicer must report any instances of noncompliance thathad “a material effect on its a bility to comply with . . . program requirements.” Id . at 39. D. Chase Bank’s Performance under th e National Mortgage Settlement and HAMP Chase generally maintains records of the mortgage loans it serv ices through an electronic “System of Records.” However, loans considered unco llectable (usually because the value of the property was much l ess than the ou tstanding loan) are put in the “Recovery One population” (RCV1) and those record s are maintained outside the primary System of Records. RCV1 loans are those that Chase deems “valueless based on Gener al Acceptable Accounting

include the originating bank whi ch loaned the money and held th e lien or the papers could be sold to other banks or servicers.7 Principles (GAAP) and other in ternal methods of bookkeeping.” SAC ¶ 174. When Chase determines that a loan is valuel ess, it “charges off” the loan, i.e. , enters it as a loss on the bank’s books, and then transfers the loan f rom its System of Records t o RCV1. Chase does not foreclose on RCV1 loans because it would make no financial sens e to foreclose on a valueless loan; the cost to Chase of attempting foreclosure could never b e regained since, by definition, the residence is worth less tha n the loan. Both first and second l ien mortgages may be transferred to RCV1, as well as “mortgages that a re subject to bankruptcies an d post-foreclosure deficiencies.” Id . ¶ 172. Once a loan is transferred to RCV1, its documentation often becomes “corrupted, ignored or allowed to fall int o disarray,” because it has no bu siness value to Chase. Id

. Monitoring for compliance with t he National Mortgage Settlement continued for three years for the initial signatories. At that point, Monito r Smith determined that Chase had provided $4.463 billion in consumer r elief, thereby “satisf[yin g] the minimum requirements and obligations . . . imposed upon it under . . . the [National Mor tgage Settlement] to provide Consumer Relief.” Monitor’s Fina l Consumer Relief Report Regar ding Defendant J.P. Morgan Chase Bank, N.A., United States v. Bank of America Corp., et al. , No. 12-361 (RMC) (March 18, 2014) [Dkt. 143] at 20-22, 25. E. Relator’s Interest Relator’s allegations arise fro m certain non-performing mortgag e loans that were serviced by Chase. Over 3,000 loans from Chase’s RCV1 files we re sold to companies owned by or affiliated with the Relator , including S&A Capital Partne rs, Inc., 1st Fidelity Loan Servicing, LLC, and Mortgage Re solution Servicing, LLC. Chase later “charged off” or canceled the amount owed on numerous loans owned by Relator’s e ntities. In return, Chase received credit against the Nati onal Mortgage Settlement consum er relief amount it was required to provide because it had released the borrower from liability for the debt.8 II. LEGAL STANDARD A. Motion to Dismiss A motion to dismiss for failure t o state a claim pursuant to Fe deral Rule of Civil Procedure 12(b)(6) challenges th e adequacy of a complaint on it s face. See Fed. R. Civ. P. 12(b)(6). To survive a motion to di smiss, a complaint must con tain sufficient factual information, accepted as true, to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007)). A court must assume the truth of all well-pleaded factual alleg ations and construe reasonable inferences from those allegatio ns in favor of the plaintiff. See Sissel v. Dep’t of Health & Human Servs. , 760 F.3d 1, 4 (D.C. Cir. 2014). A court need not accept infe rences drawn by a plaintiff if such inferences ar e not supported by the facts setout in the complaint. See Kowal v. MCI Commc’ns Corp ., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Further, a court does not need to accept as true legal conclusions set forth in a complaint. See Iqbal , 556 U.S. at 678. In deciding a motion under Rule 12(b)(6), a court may consider the facts al leged in the complaint, documents attached to the complaint as e xhibits or incor porated by refere nce, and matters about which the court may take judicial notice. See Abhe & Svoboda, Inc. v. Chao , 508 F.3d 1052, 1059 (D.C. Cir. 2007). A court may take jud icial notice of public records from other proceedings. See id. at 1059; Covad Commc’ns Co. v. Bell Atlantic Co. , 407 F.3d 1220, 1222 (D.C. Cir. 2005) (permitting judicial notice of f acts contained in public record s of other proceedings); Mintz v. FDIC , 729 F. Supp. 2d 276, 277 (D.D.C. 2010) (j udicial notice of st atement contained in an SEC filing). B. False Claims Act (FCA), 31 U.S.C. § 3729 et seq . The False Claims Act’s “chie f purpose . . . is to prevent the c ommission of fraud against the federal government and to provide for the restituti on of money that was taken from9 the federal government by fraudulent means.” United States ex rel. Purcell v. MWI Corp. , 824 F. Supp. 2d 12, 15-16 (D.D.C. 2011). The FCA imposes civil penalt ies for the submission of false claims to the United States gove rnment. Private parties, calle d relators, can sue for violations of the FCA in the name of the United States. See 31 U.S.C. § 3730(b)(1). Sp ecial procedures apply in such cases, which are called qui tam actions—“short for the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur , which means ‘who pursues this action on our Lord the King’s behalf as well as his own.’” Vt. Agency of Nat’l Res. v. United States ex rel. Stevens , 529 U.S. 765, 768 n.1 (2000). When a plai ntiff-relator files an initial complaint, it is not immediately served on the defenda nt, but is instead served on t he United States along with “written disclosure of substanti ally all material evidence and information the [plaintiff] possesses.” 31 U.S.C . § 3730(b)(2). Thereaf ter, the case is s tayed for a minimum of sixty days, plus any extensions, while the Uni ted States determines whether it will intervene—that is, whether it will “proceed with the action, in which case the act ion shall be conducted by the Government; or . . . decline[ ] to take over the action, in whi ch case the person bringing the action shall have the rig ht to conduct the action.” Id . § 3730(b)(4). If the government declines to intervene, as happened here, t he complaint i s unsealed, and the plaintiff-relator may proceed with the case. Even in cases i n which the government has decli ned to intervene, the government retains special rights atypical in traditional civil actions, s uch as the right to r eceive all pleadings, intervene at any time for good cause, id . § 3730(c)(3), and petition the Court for a stay of discovery, id . § 3730(c)(4). C. Heightened Pleading Requirement for Fraud Federal Rule of Civil Procedure 8 requires that every complaint include “a short and plain statement of the claim showing that the pleader is en titled to relief” and that “[e]ach10 allegation . . . be simple, concis e, and direct.” Fed. R. Civ. P. 8(a)(2), (d)(1). “[B]ecause the False Claims Act is self-evident ly an anti-fraud statute, compl aints brought under it must [also] comply with Rule 9(b).” United States ex rel. Totten v. Bombardier Corp. , 286 F.3d 542, 551-52 (D.C. Cir. 2002) (noting uniform a pproach of circuit courts to this issue). Rule 9(b) provides a heightened pleading standard f or a party alleging fraud or mist ake, requiring any such party to “state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleg ed generally.” Fed. R. Civ. P. 9(b). The D.C. Circuit has noted tha t Rules 8 and 9(b) are not contra ry and should be read in conjunction: [T]his means that the pleader m ust state the time, place and co ntent of the false misrepresentations, the fact misrepresented and wh at was obtained or given up as a consequence of the fraud. The rul e serves to discourage the initiation of suits brought solely for their nuisance value, and safeguards potential defendants from frivol ous accusations of moral turpitude. . . . And because “fraud” encompasses a wide variety of activities, the requirements of R ule 9(b) guarantee all defendants sufficient information to allow f or preparation of a response. United States ex rel. Joseph v. Cannon , 642 F.2d 1373, 1385 (D.C. Cir. 1981) (internal quotation marks and citations omitted); see also United States ex rel. Williams v. Martin-Baker Aircraft Co. , 389 F.3d 1251, 1256 (D.C. Cir. 2004); McQueen v. Woodstream Corp. , 248 F.R.D. 73, 77 (D.D.C. 2008) (“Rule 9(b) simpl y requires the pleader to provid e a higher degree of notice by adequately alleging all of the req uisite elements for the cause of action invoked.”). Rule 9(b) is satisfied when the pleader “prov ide[s] the ‘who, what, when, wh ere, and how’ with respect to the circumstances of the fraud.” Anderson v. USAA Cas. Ins. Co. , 221 F.R.D. 250, 253 (D.D.C. 2004).11 Pleading on “information and belief” for claims subject to the strictures of Rule 9(b) is permitted when essentia l information lies uniquely with in another party’s control. Kowal , 16 F.3d at 1279 n.3 (citing Craftmatic Sec. Litig. v. Kraftsow , 890 F.2d 628, 646 (3d Cir. 1989)). To plead on information and belief , however, the plaintiff must allege “that the necessary information lies within the defe ndant’s control” and include “astatement of the facts upon which the allegations are based.” Id. ; see also Anderson , 221 F.R.D. at 253. D. Procedural History On May 6, 2013, Mr. Schneider filed his initial Complaint as Relator under the False Claims Act, see 31 U.S.C. § 3730(b)(1), in the Un ited States District Court fo r the District of South Carolina. See Compl. [Dkt. 1]. The Federal G overnment declined to intervene on January 13, 2014. See Notice [Dkt. 24]. The case wa s transferred to this Court on J une 19, 2014. See Transfer Order [Dkt. 58]. Relato r filed his First Amended Com plaint on November 17, 2014. See FAC [Dkt. 80]. On August 31, 2015, t he Federal Government aga in declined to intervene. See FAC Notice [Dkt. 96]. Relator filed a Second Amended Complain t on October 2, 2015. See SAC [Dkt. 102]. Defendant moved to dismiss on November 12, 20 15. See Mot. [Dkt. 105]. Relator opposed, see Opp’n [Dkt. 110], and D efendant replied, see Reply [Dkt. 112]. 4 This Court has subject matter jurisdiction pursu ant to 28 U.S.C . § 1331 and 31 U.S.C. § 3730(a). The Court also h as supplemental jurisdictionover the State-law counts under the State False Claims A cts pursuant to 28 U.S.C. § 1367. 5 This Court is the proper venue

4 Relator filed a Notice of Supplemental Authority, see Notice of Supp. Auth. [Dkt. 116], to which Defendant responded, see Response [Dkt. 117].

5 Section 1367 provides for supplem ental jurisdiction “over all other claims that are so related to claims in the action within such or iginal jurisdiction that the y form part of the same case or controversy under Article III of the United States Constitution .” 28 U.S.C. § 1367(a). The12 because the underlying National Mo rtgage Settlement was approve d by this Court and Defendant conducts business in the D istrict of Columbia. See 31 U.S.C. § 3732(a). III. ANALYSIS Relator alleges that Chase viol ated the False Claims Act by fal sely claiming (1) that it met Servicing Standards and complied with the consumer relief requirements of the National Mortgage Settlement a nd (2) that it met the servicing standards specified in HAMP and, as required, provided loan modifi cations to sufficient numbers of eligible borrowers. 6
A. National Mortgage Settlement Claims Relator alleges that Chase’s fal se claims regarding its complia nce with the National Mortgage Settlement pr ovided Chase with the benefit of credit for consumer relief that it otherwise should not have rece ived. Chase moves to dismiss for procedural failures and failure to state a claim upon whic h relief may be granted. Chase cites two issues that it c ontends preclude Relator’s suit concerning the National Mortgage Settlement: ( 1) Relator failed to exhaust th e dispute resolution procedures required by the National Mortgage Settlement before filing suit ; and (2) Relator improperly attacks the Monitor’s determinations that Chase complied with t he National Mortgage Settlement. Indeed, the National Mortgage Settlement provided specific procedures before suit

State-law claims are State Fal se Claims Act claims based on the same facts as the Federal False Claims Act claims, specifically f alse claims regarding complian ce with the National Mortgage Settlement.

6 Relator’s State law claims re st on the same factual allegation s as Count I, the federal False Claims Act claim based on alleged f alse statements regarding co mpliance with the National Mortgage Settlement. Relator p rovides no additional facts to s upport the State law claims and does not argue that any of the S tate laws would provide for liability in the absence of liability under the Federal False Claims Act. Therefore, each of the Sta te-law counts will be dismissed for the same reasons as Count I.13 or challenge to determinations made by the Monitor. Because Re lator stands in the position of the Federal Government in this case, he is required to have exh austed all remedies the Federal Government would have been requi red to exhaust prior to suit. See United States ex rel. Morgan v. Sci. Applications Int’l Co. , 604 F. Supp. 2d 245, 249 (D.D.C. 2009) ( finding relator “stan ds in the shoes of the federal govern ment as a plaintiff”). Under th e National Mortgage Settlement, a party wishing to dispute compliance by a signatory bank was req uired to follow explicit steps: (1) give notice to the alleged ly noncompliant bank, the Monitor , and the Monitoring Committee; and (2) “engage in good faith effo rts to reach agreement on the proper resolution of any dispute.” Consent Judgment, Ex. E at E-14; see also id . at E-15. If the aggrieved party were not assuaged, it could then notify the Monitori ng Committee of its intent to file an enforcement action. The Monitoring Committee was afford ed 21 days to consider whether i t would sue before any other enforcement action could be filed and if the Committee decided not to sue, the moving party was required to wait another 21 days before commencing litigation. See id . at E-15. Chase argues that because Relator failed to follow these mandat ory pre-litigation steps, which would have constrai ned the United States, any clai ms of noncompliance with the Settlement must be dismissed. Rel ator responds that the disput e resolution procedures in the National Mortgage Settlement ar e not applicable to his FCA alle gations because the National Mortgage Settlement must be rea d in a manner consistent with th e Servicer Participation Agreement between Fannie Mae and Treasury under HAMP. 7 The Servicer Participation Agreement specifically provides that violations of its terms ar e subject to the FCA and states:

7 The National Mortgage Settlement indicates that: The provision of consumer relie f by the Servicer in accordance with this Agreement in connection with any residential mortgage loan is expressly subject to, and shall be interpreted in accordance wi th, as applicable, the terms and provisions of the Servicer Participat ion14 Servicer acknowledges that the provision of false or misleading information to Fannie Mae or Freddie Mac in connection with any of the Programs or pursuant to the Agreement may constitute a violation of: (a) Federal cri minal law involving fraud, confli ct of interest, bribery, or gratuity v iolations found in Title 18 of the United States Code; or (b) the civil False Claims Act (3 I U.S. C. §§ 3729-3733). Opp’n, Ex. 1 [Dkt. 110-1] (Amended and Restated Commitment to P urchase Financial Instrument and Servicer Particip ation Agreement) at B-4. Relat or’s confusion between the National Mortgage Settlement a nd HAMP pervades his arguments. Agreements, like statutes, shoul d be read to avoid surplusage w here possible. See Freeman v. Quicken Loans, Inc. , 132 S. Ct. 2034, 2043 (2012) (“[T]he canon against surplusage merely favors that interpretati on which avoids surplusage.”). While Relator would like the Court to read the National Mortgage Set tlement’s alternative dispute resolution process as inconsistent with the remedies under the HAMP Servicer Participation Agreeme nt, the Court finds they can readily be reconciled. The Nati onal Mortgage Settlement is sui generis and the United States is a signatory. Relator, who acts on behalf of the United States, i s simply bound to its terms in any complaint of noncompliance. Had R elator first completed the al ternative dispute procedure in the National Mortgage Settlemen t, he then might have sued. Not having completed the former, he cannot begin the later.

Agreement with the U.S. Department of Treasury, . . . provided, however, that the inability of a Servicer to offer a type, form or feature of the consumer relief payments by virtue of an Applica ble Requirement shall not relieve the Servicer of its aggregate con sumer relief obligations imposed by this Agreement. Consent Judgment, Ex. D at D-12.15 B. HAMP Claim Relator argues that Chase viol ated the FCA by knowingly submitt ing false or fraudulent annual certifications that it had complied with HAMP , even though the certifications “failed to disclose that Cha se did not solicit RCV1 borrowers t o apply for HAMP loan modifications.” Opp’n at 31. Cha se responds that Relator’s HA MP claims fail as a matter of law because he “does not adequate ly allege that Chase’s non-sol icitation of RCV1 borrowers constituted ‘material’ violati on of HAMP’s requirements” and “ material compliance” is all that is required under HAMP. Id . (emphasis in original). Chase a dds that Relator has failed t o allege that any statements in the Chase HAMP compliance reports were f alse. Chase also argues that Relator failed to allege that any false statements were made kn owingly because the Federal Government knew that Chase had not solicited RCV1 borrowers bef ore it wrote off their debts. Chase identifies three reasons t hat its claims, even if “false, ” were not “material.” First, Chase argues Relator fa ils to allege that a substantial number of borrowers was affected because RCV1 borrowers might not ha ve qualified for HAMP at all , in that Chase wrote off second-lien mortgages and forga ve others. Chase also argues th at Relator does not allege that “non-solicitation of RCV1 borrowers resulted in i njury to those borrowers or interfered with the goals of the HAMP program,” the f undamental purpose of which “i s to avoid unnecessary foreclosures.” Mot. at 33. Becau se Chase forgave many RCV1 lo ans, they were not foreclosed upon and HAMP was not implicated. Finally, Chase argues Relato r failed to allege that Treasury was unaware of the non-solic itation of RCV1 loans. Relator focuses on the definition of “material” in the FCA, whi ch it defines as “having a natural tendency to inf luence, or be cap able of influ encing, the payment or receipt of money or property.” 31 U.S.C. § 3729( b)(4). Relator argues th at his Second Amended16 Complaint infers that a substa ntial number of borrowers was imp acted due to his allegations concerning the number of loans i n the RCV1 system and the Monit or’s final report concerning Chase’s loans reported eligible for modification under the Nati onal Mortgage Settlement. 8 Relator urges the Court to assume that HAMP compliance personne l had no notice of Chase’s policies and procedures relate d to RCV1 loans. His argument st arts with his allegations that “Chase underreported to the Monito r” and concludes that Chase m ust also have underreported to HAMP. Finally, Relator argues th at the materiality of the viol ations can be presumed because the United States Trustee Program found that Chase violated a s eparate 2011 Consent Judgment with the Office of the Comptroller of the Currency (OCC). The False Claims Act imposes liability on any person who “knowi ngly presents, or causes to be presented, a f alse or fraudulent claim for paym ent or approval.” 31 U.S.C. § 3729(a)(1)(A). 9 There are three elements to F CA presentment under § 3729(a)(1 )(A): (1) the defendant presented a claim for pa yment or approval to the Fede ral Government; (2) the claim was “false or fraudulent”; a nd (3) the defendant acted knowing that the claim was false or fraudulent when he submitted it. United States ex rel. Schwed t v. Planning Research Corp. , 59 F.3d 196, 198-99 (D.C. Cir. 1995). A “cl aim,” as relevant here , is “any request or demand, whether under a contract or ot herwise, for money or property an d whether or not the United States has title to the mone y or property, that (i) is presente d to an officer, employee, or agent of

8 Relator does not respond to Chase ’s argument concerning HAMP’s materiality requirement, focusing instead on the Monitor’s reports of compliance with th e National Mortgage Settlement; he, thus, waives the argument. See Jones v. Air Line Pilots Ass’n , 713 F. Supp. 2d 29, 39 (D.D.C. 2010).

9 31 U.S.C. § 3729 was amended in May 2009, see Pub. L. 111-21, § 4(a), 123 Stat. 1621 (May 20, 2009), and § 3730 was amended in July 2010, see Pub. L. 111-203, Title X, § 1079 A(c), 124 Stat. 2079 (July 21, 2010). The post-amendment versions apply to the allegations here, all of which took place in September 2010 or later. See SAC ¶¶ 297-304.17 the United States.” 31 U.S.C . § 3729(b)(2)(A). The term “know ing” means that a person either “(i) has actual knowledge of the information; (ii) acts in deli berate ignorance of the truth or falsity of the information; or (ii i) acts in reckless disregard of the truth or falsity of the information,” but it does not req uire “proof of specific intent to defraud.” Id . § 3729(b)(1)(A), (B). The FCA also provides a cause of action against any person who “knowingly makes, uses, or causes to be mad e or used, a false record or st atement material to a false or fraudulent claim.” Id . § 3729(a)(1)(B). “Material” is de fined as “having a natural tendency to influence, or be capable of infl uencing, the payment or receiptof money or property.” Id

. § 3729(b)(4). Thus, under the law, a plaintiff must allege th at (1) the defendant made or used a “record or statement”; (2) the r ecord or statement was false; ( 3) the defendant knew it was false; and (4) the record or statement w as “material” to a false or fr audulent claim. Id . § 3729(a)(1)(B). Because Rule 9(b) applies, “the pleader must state the time, pl ace and content of the false misrepresentations [and] t he fact misrepresented.” Joseph , 642 F.2d at 1385 (interpreting prior section (a)(2)). A plaintiff’s task is to “plea d factual content that allows the court to draw the reasonable inference that the defendant is liable for the misco nduct alleged,” United States ex rel. Westrick v. Second Chance Body Armor, Inc. , 685 F. Supp. 2d 129, 133 (D.D.C. 2010), because “[w]hile . . . Rule 9(b) requires more particularity than Rule 8 . . . Rule 9(b) does not completely vitiate the liberality of Rule 8.” United States ex rel. Pogue v. Diabetes Treatment Ctrs. of Am.,
Inc. , 238 F. Supp. 2d 258, 269 (D.D.C. 2002). 10 Chase contends that its HAMP disclosures to

10 Rule 8 requires that every compl aint include “a short and plai n statement of the claim showing that the pleader is entitled to r elief” and that “[e]ach allega tion . . . be simple, concise, and direct.” Fed. R. Civ. P . 8(a)(2), (d)(1).18 Fannie Mae were not materially false because HAMP imposes a dis tinct disclosure requirement of “instances of noncompliance th at [the servicer] believes hav e a material effect on its ability to comply with MHA program requirements .” MHA Handbook at 38 (emphasi s added). In light of the terms set by Treasury, noncompliance with HAMP would be sho wn only if Chase’s nonsolicitation of RCV1 loa ns for HAMP modification had a material effect on Chase’s “ability to comply” with the Makin g Home Affordable program requirements. Relator makes no such allegations. His arguments conc erning RCV1 loans eligible for modification focus on their eligibility under the National Mo rtgage Settlement, not HAMP. Although this is an FCA lawsuit, a violation of the certification prong of FCA can be f ound only if a party makes a “false representation of comp liance with an applicable federal statute , federal regulation, or contractual term.” SAIC , 626 F.3d at 1266. Such has not been alleged. Federal Rule of Civil Procedure 9(b) requires Mr. Schneider to allege “the time, place and content of the false misrepresentations [and] the fac t misrepresented.” Joseph , 642 F.2d at 1385. Section VI of Mr. S chneider’s Second Amended Com plaint identifies the “Documentation Containing False Claims” and notes the date of e ach document. SAC at 66. The Court identifies two instances of alleged false claims rele vant to HAMP in t he Complaint: On September 10, 2010, Chase filed a Certification of complianc e with its “Commitment to Purchase Financial Instrument and Servicer Participation Agreement.” This certification containe d False Claims. On September 10, 2010, Chase’ s subsidiary, EMC, filed a Certification of compliance with its “Commitment to Purchase Financial Instrument and Servicer Participation Agreement.” Th is Certification contained False Claims.19 SAC ¶¶ 303-04. 11 Both of these instances of alle ged false claims occurred in 2 010, before the National Mortgage Settlemen t in 2012 and, therefore, any data a bout RCV1 loans discharged and reported to the Monitor as a resu lt of the National Mortgage Se ttlement in 2012 or later are irrelevant to the falsity of the alleged claims made under HAMP in 2010. Relator’s Complaint focuses on actions during the 3- year compliance period of the N ational Mortgage Settlement period and provides no allegations i dentifying the “fact misrep resented” to the HAMP compliance monitor in 2010. Relator’s argument that the 2011 Consent Judgment with the OCC also demonstrates material false statements by Chase fares no better . Relator does notallege that the OCC Consent Judgment includes a determination that Chase violat ed HAMP or failed to comply with the notice requirements of HAMP. Additionally, Relator fa ils to allege that any part of the OCC Consent Judgment was substa ntially similar to requirements under HAMP and could, therefore, demonstrate material misrepresentations by Chase und er HAMP. Relator is effectively asking the Court to assume that Chase’s admission o f wrongdoing in an unrelated Consent Judgment is evidence that Chase made false statements t o Fannie Mae regarding its HAMP compliance. Without facts sp ecific to HAMP and allegation s regarding the materiality of any misrepresentations concerning Chase’s HAMP-specific complia nce obligations, Relator’s FCA claims under HAMP must be dismissed. C. State Claims Counts III through XXIII raise the following State law claims: Count III: California False Claims Act, Cal. Gov’t Code § 12651(a)(7)

11 All other paragraphs in Sec tion VI of the Second Amended Compl aint specify notices or reports submitted by Chase to Monitor Smith under the National Mortgage Settlement.20 Count IV: Delaware False Claim s Act, Del. Code Ann. tit. 6, § 1201(a)(7) Count V: District of Columbia False Claims Act, D.C. Code § 2- 308.14(a)(7) 12 Count VI: Florida False Claim s Act, Fla. Stat. § 68.082(2)(g) Count VII: Georgia False Claims Act, Ga. Code Ann. § 23-3- 121(a)(7) Count VIII: Hawaii False Claims Act, Haw. Rev. Stat. § 661- 21(a)(6) Count IX: Illinois Whistleblower Reward and Protection Act, 74 0 Ill. Comp. Stat. § 175/3(a)(1)(G) Count X: Indiana False Claims a nd Whistleblower Protection Act , Ind. Code § 5-11-5.5-2(b)(6) Count XI: Iowa False Clai ms Act, Iowa Code § 685.2(1)(g) Count XII: Massachusetts False C laims Act, Mass. Gen. Laws ch. 12, § 5B(a)(9) Count XIII: Minnesota False Claims Act, Minn. Stat. § 15C.02(a)(7) Count XIV: Montana False Claims Act, Mont. Code Ann. § 17-8- 403(1)(g) Count XV: Nevada False Claims Act, Nev. Rev. Stat. § 357.040(1)(g) Count XVI: New Hampshire False Claims Act, N.H. Rev. Stat. Ann. § 167:61-b(I)(e) Count XVII: New Jersey False Claims Act, N.J. Stat. Ann. § 2A:32C-3(g)

12 The District of Columbia False Claims Act has been recodified at D.C. Code Ann. § 2-381-02.21 Count XVIII: New Mexico Fraud Against Taxpayers Act, N.M. Stat. Ann. § 44-9-3(A)(8) 13 Count XIX: New York False Claims Act, N.Y. State Fin. Law § 189(1)(g) Count XX: North Carolina False Claims Act, N.C. Gen. Stat. § 1

- 607(a)(7) Count XXI: Rhode Island False Claims Act, 9 R.I. Gen. Laws § 9

- 1.1-3(a)(7) Count XXII: Tennessee Fraud Ag ainst Taxpayers Act, Tenn. Code Ann. § 4-18-103(a)(7) Count XXIII: Virginia Fraud Against Taxpayers Act, Va. Code Ann. § 8.01-216.3(A)(7) Each State law count includes the same claim based on the Natio nal Mortgage Settlement, to which each of the States and the D istrict of Columbia was a par ty and signatory. Relator alleges: Chase knowingly, or acting in de liberate ignorance and/or reckl ess disregard of the truth, made, used, or caused to be made or use d, false records and/or statements material to an obligation to pay or transmit money or property to the State of California, and/or knowingly, or acting in deliberat e ignorance and/or with reckle ss disregard of the truth, made, used, or caused to be made or use d false records and/or statements to conceal, avoid, or decrease an obligation to pay or transmit money or property to the State of California. These false statements and false records include v arious reports to the Monitor and th e IRG Assertions containing certifications that Chase had complied with the Servicing Stand ards and Consumer Relief Requirements of the Consent Judgment. E.g. , SAC ¶ 317 (Count III). Because R elator’s State law claims re st on the same allegedly false allegations as the Federal FCA claim, dismissed above, the Stat e law claims will also be dismissed.

13 The Complaint cites to the New Mexico Medicaid False Claims Ac t, N.M. Stat. Ann. § 27-14- 5; but the Court interprets the C omplaint as intending to refer ence the New Mexico Fraud Against Taxpayers Act.22 D. Leave to Amend In Opposition, Relator asks for leave to file a third amended c omplaint should the Court find merit in the Motion to Dismiss. “[T]he D.C. Circuit has cautioned that ‘failure to plead fraud with particular ity . . . does not support a dismiss al with prejudice; to the contrary, leave to amend is almost always allowed to cure deficiencies in pleading fraud.’” Pencheng Si v. Laogai Research Found. , No. 09-2388, 2013 WL 4478953, at *2 (D.D.C. Aug. 21, 2013) (quoting Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996)). Relator has already fil ed two amended complaints. He intimates no facts that could rescu e his FCA allegations relating to the National Mortgage Settlement and the undisputed facts show that an amendment would be futile. The Court will dismiss Relator’s claims of Chase nonco mpliance with the National Mortgage Settlement with prej udice and his claims of Chase nonc ompliance with HAMP without prejudice. IV. CONCLUSION For the reasons set forth above , Defendant’s Motion to Dismiss, Dkt. 105, will be granted. Counts I and III through XXIII will be dismissed with prejudice. Count II will be dismissed without prejudice. A memorializing Order accompanies this Opinion.

Date: December 22, 2016 /s/ ROSEMARY M. COLLYER United States District Judge