[00:00:20] Speaker 02:
Good morning, Your Honors.

[00:00:21] Speaker 01:
Good morning.

[00:00:21] Speaker 02:
Good morning. Nick Harrison for Appellant Mei Ling.

[00:00:26] Speaker 02:
The government's exclusion of the Voluntary Compliance Agreement, which has a value of $200 million to $750 million from the settlement case proceeds or as an alternate remedy, makes the settlement unfair to Relator Miss Ling. In addition to unfairness, Ms. Ling would argue that the settlement, which is $38 million in cash, is inadequate. It's inadequate because it doesn't provide any meaningful deterrent effect for future violations.

[00:01:03] Speaker 02:
And the reason it doesn't, as the record reflects, is that the government originally requested $582 million in damages for the city of Los Angeles' false claims.

[00:01:15] Speaker 01:
Well, Council, what's the significance of the fact that there's a specific carve-out in the voluntary compliance agreement?

[00:01:23] Speaker 01:
It carves out the current lawsuit. It says, okay, we're going to settle these other matters. There will be ADA compliance that the city would have to comply with, but we're going to continue to litigate the lawsuit that's pending. And, in fact, it did continue with years of additional discovery negotiations. What do we do with that?

[00:01:44] Speaker 02:
So I think there are two components of your Honor's question. The first is the significance of the language in the VCA itself.

[00:01:51] Speaker 02:
I don't think the parties can decide to carve out from the False Claims Act the requirement that the relator get a fair share of an alternate remedy. They could say that if they want in a voluntary compliance agreement or other settlement, but the fact that they say it doesn't change the law, doesn't change the facts. you either still have an alternate remedy or you don't. But now the fact that they continue to litigate is another component. It would suggest that the voluntary compliance agreement didn't resolve all of the government's losses.

[00:02:29] Speaker 02:
The real key in this case, Your Honor, I think is, I mean, there are other components.

[00:02:34] Speaker 01:
The voluntary compliance agreement gave... Well, it has relevance in that the statute seems to require... that the alternate remedy take the place of the FCA action?

[00:02:46] Speaker 02:
Well, Your Honor, I don't think the statute requires that. There are some cases which are consistent with Your Honor's statement, but I think the only consistent way to uphold the intent of Congress, which is that a relator would get paid a fair share of a recovery, is that you have to look at not only the claims, but the damages or relief sought, if, as in this case, the federal government gets a large part of what it bargained for, which was accessible housing, the accessible housing originally lost because of the false claims, if the government gets that back through a voluntary compliance agreement, then most of the government's damages are moot.

[00:03:29] Speaker 02:
The government can proceed to litigate in a false claims case to get the remainder of its loss or harm or damages, for example, it can ask for monetary penalties, it can ask for traveling.

[00:03:41] Speaker 05:
But isn't it, don't, wouldn't, isn't, I mean, the system has built in limiting principles. There is a fairness yearning. So you would think logically HUD would want Los Angeles to pump $200 million immediately in 2019 into fair access. It would make sense they'd want to get the underlying access issues fixed as quickly as possible. But it would also make sense they'd say you still can't lie to the government. So we're going to spend five more years pursuing the lies. So we get to 2024 and they resolve that. That all makes sense unless what the government is doing is this subterfuge to make sure the key template doesn't get money.

[00:04:18] Speaker 05:
But you had your chance to make that. I didn't see in the fairness hearing any suggestion of collusion. Didn't even bring up the word.

[00:04:25] Speaker 02:
Your Honor, we didn't get a chance to put on evidence of collusion.

[00:04:28] Speaker 05:
Right, but you would have been able to had you made any argument that there was collusion.

[00:04:33] Speaker 02:
Well, we did make that argument in the motion for evidentiary hearing, and we indicated the challenging dilemma Ms. Ling faced, which was that the government's only witness, declarant in support of the settlement and its fairness, Mr. William Edgar from DOJ, advised the court that there were facts regarding the settlement history, the negotiations, that he had not disclosed, but he would disclose them only if the court ordered him to, and the court did not order him to.

[00:05:08] Speaker 02:
We had asked to, of course, examine Mr. Edgar at the hearing as a sort of compromise compared to a full evidentiary hearing. We were not allowed to do even that.

[00:05:18] Speaker 05:
So it's hard to know whether... But even if you're right in the disputed point about there was an unrestricted $100 million offer just to resolve the FCA, even if you're right, five years later you get $38 million after multiple mediations fail...

[00:05:34] Speaker 05:
And there's a pretty extensive inquiry by the district court into what are the risks, materialities, see enter. So $38 million out of $100 million, five years later, get closure. You don't want to hit the taxpayers of Los Angeles. Where does that look like that's not a good result for the government?

[00:05:50] Speaker 02:
Well, that's a key question. The answer is the government's litigation position actually strengthened after the $100 million offer. It didn't weaken because they prevailed on the city's second motion to dismiss. the amended complaint, a lot of litigation expense was over the dam between 2016 when that settlement offer was made and 2024 when the final settlement was reached. So the government had less future expenses to look at.

[00:06:20] Speaker 02:
So our question to the court was, what real evidence-based reason is there for dropping from $100 million, which was actually offered, to $38 million, I mean, all the government had to do was accept a $100 million offer to have almost three times the amount that was ultimately settled for. Appellant Lange just felt that question needed an answer based in evidence. The only answer the court got was argument from counsel, not been under oath, not subject to cross-examination, counsel not supposed to testify, and there's nothing in the record from any party that would suggest any basis for the government's ultimate argument, it wasn't evidence, that the reason it settled for $38 million was a calculation based on the proportional share of accessible housing versus affordable housing.

[00:07:18] Speaker 02:
That is a post hoc rationalization. There's nothing in the record to support it.

[00:07:22] Speaker 02:
So it leaves the question, what was the real reason?

[00:07:26] Speaker 00:
Meaning what? That you think you're entitled to know kind of the back end? You want to see the actual back end calculations for this other settlement?

[00:07:36] Speaker 02:
to a certain extent. If the real reason, which is what Ms. Ling's suspicion is, I mean, the city, if you look at the history of this case, the city, how should I say this, requested repeatedly a global settlement, a voluntary compliance agreement, and a settlement of the False Claims Act. It wanted both. It wanted credit in the False Claims Act settlement for the expenses it was going to commit to in the VCA And I think the city ultimately got that in the settlement.

[00:08:08] Speaker 02:
There's just nothing on the record where the parties have admitted it. The only thing that explains a drop from $100 million to $38 million from 2016 to 2024, I mean, what happened during that time period other than the government's litigation position improving and their expenses going down? What happened is the city signed the VCA and promised to give the government the bulk of its remedy, the bulk of its damages, for lost accessible housing by paying for it up to 750 million.

[00:08:39] Speaker 02:
The city says to date, maybe more now.

[00:08:41] Speaker 00:
I mean, I guess it's sort of assuming you're, I appreciate the argument, right? Which is that there's, everything was kind of packed into the DCA.

[00:08:48] Speaker 00:
should have been part of this case, and it wasn't. But were these underlying statutory violations themselves remediable under the FCA? Because the FCA is about false claims, and then there's these other allegations. They're just sort of independent violations of other federal statutes.

[00:09:05] Speaker 02:
So the D.C. Circuit case that the district court relied on, I think it was Kennedy v. Novo, U.S. Attorney Kennedy v. Novo, sort of it was decided in that case on different facts and a different procedural history, which I'll point out in a moment, was decided that, well, just because the government does an enforcement action under another statutory authority doesn't make it an alternate remedy because it isn't really about fraud, it isn't really about dishonesty.

[00:09:37] Speaker 02:
And I understood that decision, and the distinction here is, and it's worth noting, that the court in the Kennedy case actually said near the end of the decision that stated a very important qualification to its ruling, and it said, well, there are safeguards built in to the statute. If the relator thinks they're being treated unfairly because they're not getting a share of this administrative action remedy, they can ask for an evidentiary hearing and try to prove it up to the district court. That didn't happen in the Kennedy case.

[00:10:09] Speaker 02:
There was no effort to demonstrate that. Ms. Ling did.

[00:10:13] Speaker 01:
I'm not sure I understand your answer to that question, counsel, because I think what Novo says is it doesn't matter if the underlying facts are the same or arising out of the same course of conduct, right? The false claims are distinct. It's about lying to the government. And so if the government chooses to resolve related separate problems, here in this case bringing the units up to accessibility standards, That's separate and distinct, so therefore it's not an alternate remedy.

[00:10:44] Speaker 01:
So how do you respond to that? Could you have pursued the same claims that were resolved in the VCA agreement in this FCA action?

[00:10:54] Speaker 02:
I think they were, effectively, Your Honor. I was sneaking up on saying that, and I was a little too long-winded in my last answer. So let me get to the point. This isn't a typical enforcement of a statute case where, like, say, the city... innocently broke the housing discrimination law, even self-reported it. HUD did a routine enforcement action. They settled it. That wouldn't be an alternate remedy. Okay, what we have here, though, is years and years of the city knowingly violating the anti-discrimination provisions of the housing statutes, concealing it, not just by not reporting it, but by misrepresenting certifications and giving certifications of compliance to So HUD had to go for years and only found out about it when Ms.

[00:11:42] Speaker 02:
Ling and her correlator disclosed the evidence they had compiled in their own investigation. In this case, not in every case of enforcement of a statute, but in this case, what was really happening with the VCA, which, by the way, HUD attempted to negotiate from day one after the key TAM filing, what really is happening here is the government is seeking a remedy not just for routine noncompliance. They're actually seeking a remedy for the history of dishonesty that led to years and years of delay and noncompliance.

[00:12:14] Speaker 02:
It's a different fact pattern than a normal enforcement case.

[00:12:16] Speaker 00:
I mean, I guess the difficulty a little bit with the theory as applied to this case is just what happened after the VCA was entered, which was then years of additional litigation followed by a $38 million settlement. So if they had just settled the FCA case for a penny the next day, I think we're in a different situation, but you're basically asking us to assume that the five years of litigation and the $38 million was kind of part of a grand scheme to limit the FCA liability and to kind of limit the relator's recovery.

[00:12:55] Speaker 02:
Well, Your Honor, our position, appellant's position, has nothing to do with assumptions. We want the opportunity in an evidentiary hearing to prove what really happened. And we think what really happened is the government finally caved in and gave the city what it wanted, which is a credit or an offset for the value of the voluntary compliance agreement. And we think that Mr. Edgar, if he had been allowed to testify, would have said something to that effect.

[00:13:22] Speaker 05:
But then aren't we looking at the fairness hearing in terms of I didn't see any mention even to the court that there was a worry about collusion. And I didn't even see any mention of prior offers, unrestricted offers. So if you don't mention these concerns, what's the trigger that gets you the evidentiary hearing? So I'm asking specifically, can you point to a moment in the fairness hearing where you said something that should have triggered evidentiary inquiry? Can you recall any moment in that fairness hearing?

[00:13:55] Speaker 05:
I don't know if I can recall it in quoting what I would have argued, but... Does it surprise you if you never said the word collusion or if you never said there were prior offers to resolve just the FCCA?

[00:14:08] Speaker 02:
That would surprise me.

[00:14:10] Speaker 05:
Okay.

[00:14:10] Speaker 02:
Yeah. No, I think we had a clear record, at least in our written filings, of the two offers as being distinct. Right. The judge below, the court below, did recognize the two offers in this decision. It also references, I recall, collusion in the decision itself and finding that the court didn't find evidence of that. But the court recognized we were concerned about that possibility.

[00:14:39] Speaker 02:
I mean, there are a lot of unanswered questions here, but the two offers, particularly the second one.

[00:14:43] Speaker 00:
There's another relator in this case, right? You're not the only one? Fair Housing Council is the second co-relator. So what are we to make of the fact that your client is concerned about this, but the other relator is not?

[00:14:54] Speaker 02:
I think you'd probably have to ask Fair Housing, but I found it curious that, you know, they could have adopted Ms. Lane's position and hoped to recover, you know, a bigger relator share. I don't understand why they're not doing that.

[00:15:10] Speaker 02:
Right. My time is up, I'm afraid.

[00:15:12] Speaker 01:
Thank you, counsel.

[00:15:13] Speaker 02:
Thank you.

[00:15:23] Speaker 04:
Good morning, your honors. May it please the court. Stephen Myers for the United States.

[00:15:28] Speaker 04:
The government reached the settlement at issue here almost five years after the voluntary compliance agreement was reached with HUD. That settlement came after years of hard-fought litigation. And in the government's judgment, it struck an appropriate balance between, on the one hand, remedying the city's fraud, and on the other, taking account of the litigation risk the government would face, the costs of litigation, and the policy and public policy consequences of causing the city to spend money on an FCA settlement that it couldn't spend on other important public goods.

[00:16:03] Speaker 04:
And mislaying is simply wrong to suggest that that voluntary compliance agreement represented an alternate remedy for the government's fraud claims.

[00:16:12] Speaker 04:
The first reason we know that is that, as your honors were alluding to, the False Claims Act case didn't go away. It continued, and it was ultimately resolved in a really substantial $38 million settlement. And if you look at the text of the statute, It presupposes that the False Claims Act case didn't continue for the alternate remedy provision to be implicated. It talks about the rights the relator would have if the action had continued and provides the relator rights in that circumstance.

[00:16:43] Speaker 00:
Could it not continue as sort of a cover for hiding recovery that really should have gone to the relator? I mean, in other words, the theory, I think, is that the government – dealt with this FCA liability on the side, but it didn't want to disclose that affirmatively, so it then kind of papered over that with some discovery and then a further settlement. I mean, is that not a plausible theory, even if it's not a good one on these facts?

[00:17:15] Speaker 04:
Your Honor, I could imagine a much more difficult case, or I think Your Honor was alluding to earlier, where the FCA action was settled for a penny the day after the voluntary compliance agreement was reached. That would be a harder case, but it's so far from the facts of this case.

[00:17:32] Speaker 05:
It's important. I mean, I had the same line of inquiry. There's no bright-line rule government wins here in terms of any time.

[00:17:41] Speaker 05:
FCA claims continue after, there could not be an alternate remedy, nor is there a bright line rule that any time the FCA is severed from the underlying fraud, or here the access issues, there can't be a recovery. In other words, there's always going to be a fairness inquiry that would look into just that point, which is has the government structured this where they're severing the counts, paying off a ton, cut out the key template, and then pennies on the dollar, resolve the FCA later.

[00:18:12] Speaker 05:
That would still always be, in other words, I don't want to make the Barajas claim a toothless, giving the government a blueprint to get around the Barajas concern.

[00:18:22] Speaker 04:
Right, Your Honor. So there is always the fairness inquiry under C2B, and that inquiry happened here, and of course the district court said, yes, this settlement is fair.

[00:18:31] Speaker 05:
And if in that inquiry... one discovered that the underlying crimes were resolved in big dollar amounts so as to not give the key TAM their share, then that would contemplate invalidation of the settlement.

[00:18:44] Speaker 04:
Right, but that would be an analytically distinct question, I think, from the alternate remedy question. It is the government's position that in the overwhelming majority of cases, sort of absent fraud or collusion or sort of cooking the books, that if the FCA action does continue, we don't have an alternate remedy.

[00:19:02] Speaker 04:
But there is a separate question.

[00:19:03] Speaker 05:
That's still a little perplexing just because the Fifth Circuit case that's similar, right, Babaloa? Is that correct?

[00:19:09] Speaker 04:
Yes.

[00:19:10] Speaker 05:
That was a criminal case initiated before the FCA claim. I can easily understand there couldn't be an alternate reality there.

[00:19:17] Speaker 04:
Right.

[00:19:18] Speaker 05:
But in this situation, there actually really could be an alternate solution if the government were to work with Los Angeles and say, why don't we both save as much money as we can for the taxpayer and give as little as we can to the key template?

[00:19:31] Speaker 04:
So again, not what happened here. And take a step back, too. I think it's important to underscore that the government has no interest in cheating relators out of a fair share. The government benefits when relators bring allegations of fraud to its attention. The government wants this system to work. And so there is a sort of conspiratorial flavor to some of what Ms. Ling is arguing here. The government has no interest in blowing this system up. It didn't here. Again, the relators are presumably going to take somewhere between 15% and 25% of a $38 million settlement.

[00:20:05] Speaker 04:
That's an awful lot of money.

[00:20:10] Speaker 04:
But under Ms. Ling's view of the law, if the $200 million VCA were counted as part of the settlements, I think it's likely that the relators would take as much or potentially even more than the United States. And that's a particularly odd outcome in part because the VCA actually contemplates that the city can meet some of their obligations using federal money. So it's not even like all of it is money that the city is putting up.

[00:20:42] Speaker 04:
And so for all of those reasons, that would be a really strange place for us to land.

[00:20:45] Speaker 00:
One of your argument hinges on disaggregating the VCA from the later False Claims Act settlement. What do we make of the city's correspondence talking about a set-off of the $111 million and then treating there being a set-off for the VCA, which seems to kind of join the two back again?

[00:21:06] Speaker 04:
Right. I think the record, you know, what limited information about the history of the negotiations is in the record suggests that the city had been interested in a proposal like that, but it's not the settlement that was ultimately negotiated.

[00:21:19] Speaker 00:
And how do we know that?

[00:21:20] Speaker 04:
Because the voluntary compliance agreements expressly carves out the fraud claims. That's at Supplemental Excerpts of Record 55. It says specifically that the VCA does not compromise the fraud claims. So I think, yes, the city at one point did want a global settlement. It was hoping to resolve everything around 2019, but that isn't what happened. Instead, the parties continued to litigate the False Claims Act case for almost five years.

[00:21:51] Speaker 05:
Your position of the record is not open to the conclusion there was ever a specific unrestricted $100 million offer to settle just the FCA, just doesn't exist in the record.

[00:22:01] Speaker 04:
Right. As we set out in our Sir Reply brief, the district court made no such finding. We don't think the evidence supports such a finding. And in light of the extraordinary and unwarranted allegations of misconduct, we asked around, and we have no reason to think that's what happened. And if you look at the city's brief, that appears to be their understanding as well.

[00:22:23] Speaker 04:
The district court explained why it didn't think it needed discovery or an evidentiary hearing into the history of the settlement negotiations. And so there isn't a comprehensive recitation of every offer that was exchanged by the parties in the record. But we think it would be quite extraordinary for the district court to have engaged in that sort of exercise. The district court explained, this is at 1ER18, why there was no need for that sort of discovery or evidentiary hearing.

[00:22:55] Speaker 04:
it would cause delay, it would cause burden, and the relator simply had not laid the sort of foundation that would be required to turn a settlement hearing into a mini-trial.

[00:23:05] Speaker 00:
What's the story with Mr. Edgar who said, well, I have some information, but I can't get into it? Is that because it's essentially privilege from settlement discussions?

[00:23:12] Speaker 04:
Yeah, Mr. Edgar was the government's trial counsel, and so he appeared at arguments to explain what had happened.

[00:23:20] Speaker 04:
I think that's correct that his declaration suggested that if the court ordered him to, obviously he could say more, but usually the parties don't get into the nitty-gritty of their settlement negotiations. Again, because the law favors settlement, we want to encourage settlements, and the system that Ms. Ling is arguing for would really discourage the parties from reaching settlements.

[00:23:46] Speaker 04:
Going back to the alternate remedy issue, we talked a bit about the importance of the FCA action having continued. I also want to just make sure we talk about the point that the voluntary compliance agreement did not resolve fraud claims. So the DC Circuit's case in Novo that you were talking about with my friend makes very clear that for a separate proceeding to be an alternate remedy, it needs to have resolved claims that could have been brought in the False Claims Act case.

[00:24:17] Speaker 04:
And here, certainly Rehab Act claims and ADA claims cannot be brought.

[00:24:22] Speaker 00:
in a false claims act does that just depend on the theory of damages in the false claims that case because in other words the the huge theory of damages in the false claims that case could be well if we had if you had not falsely certified this we never would have awarded any of this in the first place and that's some massive number a more modest number is to say well there's a benefit of the bargain and that's the damages and that seems to be maybe what you're arguing is the proper measure of damages, but does this argument about what goes in what bucket just depend on the theory of damages for the False Claims Act?

[00:24:56] Speaker 04:
I don't think so, Your Honor. I think it depends on the theory of liability. And so the theory of liability in the Voluntary Compliance Agreement is civil rights violations. The theory of liability in the False Claims Act case is fraud.

[00:25:08] Speaker 00:
No, true, but could the damages for that fraud be the undoing of all of these contracts?

[00:25:15] Speaker 04:
I guess I'm not sure, Your Honor, but I don't think that whether or not the Rehab Act claims, ADA claims, could have been brought in the...

[00:25:26] Speaker 04:
False claims that case turns on that question and I wanted to highlight the case that my friend raised in a 28 J letter I think last week this court's Adventist decision we actually think that's quite helpful for the government. Because it talks about there being a categorical distinction between a prototypical FCA action on the one hand. and a case that alleges violations of a statutory or regulatory requirement, in that case Section 340B, on the other. And that's really our point here. There is a categorical distinction between the civil rights violations that were at issue in the voluntary compliance agreements and the fraud claims that were at issue in the False Claims Act case.

[00:26:06] Speaker 05:
Just intellectually, that's a little hard to understand. I mean, what's happening here is they're lying that they are in compliance. So the lies are furthering the underlying fraud. They're indivisible. They're not categorically distinct. In other words, it's any crime, medical fraud, insurance fraud, at the end the agents say, did you do it? And the person says no. That is a separate 1001 false statement, but it's indivisible with the underlying crime. It would be easy for the government to sever one from the other, resolve one, To save money.

[00:26:37] Speaker 05:
So I'm not sure what's the rule of law you're urging that categorically, as long as the government severs, counts, lies from the underlying fraud, they don't have to face any problem? Or you would always still have the check that the D.C. Circuit acknowledged that if there's collusion, right, you would always have that check?

[00:26:55] Speaker 04:
Sure. Yes. What the D.C. Circuit says is that it having arisen from the same facts is not enough to create an alternate remedy, and we think that's exactly correct. But we're not fighting what the D.C. Circuit says at the end of the Novo opinion. We actually think it's quite helpful, which is to say that, yes, obviously at the end of the day, there's still a fairness requirement under C2B. The district court needs to make that determination. It did exactly that here. It made that determination. It explained why the settlement was

[00:27:24] Speaker 05:
was reasonable in light, again, of... And I'm curious, this is a little bit different, very different than your facts, but let's say the fairness hearing had led to suspicions.

[00:27:34] Speaker 05:
Then a district court in these civil matters can force the government to continue litigating the FCA? They can actually do that? Is there a case law that actually has a district court saying, I know you want to settle, but I'm telling you you've got to continue to litigate it?

[00:27:45] Speaker 04:
So C2B says the settlement needs to be approved. And whether the government at that point would continue litigating?

[00:27:51] Speaker 05:
I know, but is there a case law where a district court has said government is not going to let you settle? You have to continue to litigate.

[00:27:56] Speaker 04:
I'm not aware of such a case off the top of my head.

[00:27:59] Speaker 05:
It's a little different than in the criminal world, right, which we're seeing a lot of, where the government's saying you can never tell us to continue to prosecute. You can't look behind our dismissal decision.

[00:28:08] Speaker 04:
So again, there is some inquiry under C2B, and I suppose that the consequence of a settlement being rejected is that at some point it could lead to more litigation. I think Polanski is helpful here under C2A, where it says that it's really going to be an exceptional case where the government's dismissal decision is overturned, given that the government is the injured party and the government is executing and enforcing the law. I think all of those same considerations apply here. And so it would be very unusual to reject a settlement, and the court shouldn't do so here.

[00:28:40] Speaker 04:
Thank you, counsel.

[00:28:48] Speaker 01:
Mr. Warren.

[00:28:49] Speaker 02:
I'm sorry.

[00:28:53] Speaker 03:
Thank you, Your Honor. Don Warren here for the Fair Housing Council of San Fernando Valley. As you know, the Fair Housing Council, we submitted a brief to assist the court in the proper application of the alternate remedy rule. If the court chooses to address that as part of its decision, I don't believe the court needs to address it as part of its decision, much like the district court noted it in a footnote, agreed with our position, but the case turned on other issues about whether the settlement was fair, adequate, and reasonable.

[00:29:26] Speaker 03:
And so I am here to answer your questions. If you have any, otherwise.

[00:29:29] Speaker 00:
So why are you on this side of the table here? I mean, you could stand, your client could apparently stand to benefit if you join Ms. Ling in opposing the settlement. Why do you take a different position?

[00:29:42] Speaker 03:
I've been in this case a long time. I watched Munger, Tolles, and Olson, which I'm sure you're all familiar with their reputation. They're a great law firm. I was involved in the depositions all along the way. I was involved in discovery all along the way. I was working with the DOJ behind the scenes during the depositions, providing information, research, rebuttals, questions.

[00:30:04] Speaker 03:
I watched those. I watched the Munger Tolls firm do a great job. I watched the facts unfold.

[00:30:14] Speaker 03:
And at the end of the day, I believe the judge made the correct decision, that it was fair, adequate, and reasonable. Not because the government intervened, you saw in our brief, I don't believe that's the standard at all, nor should it be. but because there was no futility by settling the False Claims Act and the VCA, there was no futility to continue the False Claims Act case.

[00:30:45] Speaker 03:
An alternate remedy should occur any time the government decides to collect or pursue a portion or all of its remedy in an alternate proceeding. They can proceed in parallel, as this court recently said, last year in the island industry case, that there's nothing in the alternate remedy part of the statute that states that false claims act and the alternate remedy cannot proceed in parallel. The government's hands are not tied in which form it can pursue its remedy, nor should it be tied.

[00:31:22] Speaker 03:
And I believe the test is, though, if the government does pursue its alternate remedy, a portion of its alternate remedy, of its remedy in an alternate proceeding, is the government or the relator then barred from pursuing that further in the false claim type case. For instance, here, in the Barajas case, which I stood up 25 years ago before this court and successfully argued for Leo Barajas, my client.

[00:31:50] Speaker 01:
There, the government had... I didn't realize you were connected to the Barajas case.

[00:31:54] Speaker 03:
Very connected.

[00:31:55] Speaker 01:
If you can wrap it up, please, you're over time.

[00:31:59] Speaker 03:
Thank you.

[00:32:01] Speaker 03:
There, the government entered into a settlement of part of the Baraha's claim, of the government's claim, and settled it with claim preclusion so that it could not be pursued later again, no matter what happened, intervention or not intervention, in the False Claims Act case.

[00:32:21] Speaker 03:
And as a result, it got its suspension and debarment proceeding proceeds with a retrofit of the damping fluid and the flight data transmitter for a cruise missile, got their work done in an alternate proceeding in the agency proceedings, suspension and debarment proceeding, and issued into a settlement of the False Claims Act same allegation so it can never be pursued regardless of whether the government intervened or didn't intervene, the very first Rule 12 motion would have been if the government or the relator had tried to pursue that claim again or further in the false claim of that case, it would have been a successful collateral estoppel motion, excuse me, res judicata motion.

[00:33:04] Speaker 01:
All right. Thank you, counsel.

[00:33:05] Speaker 03:
Okay.

[00:33:06] Speaker 01:
We appreciate your input. Let's put a couple of minutes on the clock for Mr. Harrison.

[00:33:14] Speaker 02:
So in terms of avoiding giving the government a path for working around alternate remedy provisions, I don't see any way if this approach the government is proposing here is approved, and the district court did approve it, in any future case, if it involves a false certification of statutory compliance, I don't see any reason why the government can't learn from this experience and do the very same thing And every one of those cases about health funding, education grants, environmental contracts, housing contracts, I think this is creating a major loophole that Congress did not contemplate.

[00:33:56] Speaker 02:
And with due respect, I don't think this court has the authority to create a statutory amendment that would provide such a loophole. Here it's a sizable one. The relators get a share of $38 million.

[00:34:09] Speaker 02:
The government gets the benefit of $750 million plus $38 million. That does not resemble what Congress intended. The unrestricted offer, Ms. Fling's declaration, volume two of the record extract at 299, talks about the unrestricted offer, and also there's an email there, exhibit E in the district court.

[00:34:37] Speaker 02:
In terms of the benefit of the bargain, the government's experts at 2, Volume 2, Extract of Record 204, 2, Extract of Record 196 say that they thought, because of the accessible housing not being provided, that the government's damages were $582 million. That was the bargain. That's what the government bargained for. Thank you very much.

[00:35:05] Speaker 01:
Thank you, counsel, all three counsel, for your arguments in this last case on today's calendar. The matter is submitted and will be in recess until tomorrow morning.