The U.S. Attorney's office for Northern Illinois has filed a friend of the court brief in 7th District court that appears to support the legal grounds of a False Claims Act lawsuit filed by Lt. Craig Rutz last December against the River Forest police department.
Saying that acceptance of the defense argument would have "a devastating effect on the United State's ongoing efforts to protect the public fisc against fraud," the "amicus," or "friend of the court" brief filed last week opposed both the language and legal theory of the defense motion and asked Federal Judge James Zagel to deny the village's motion to dismiss the case.
The village's law firm, Chilton, Yambert, Porter and Young asked Zagel on July 27 to dismiss the False Claims suit and preclude it being refiled. The village's lawyers contend that Rutz's assertion of fraud under the False Claims Act fails to meet the criteria under the act because the village received the disputed funds not directly from "an officer or employee" of the federal government, but had come through Triton College and the Cook County Advisory Committee, which had received federal grants.
The government's brief appears to flatly refute that argument.
"This argument is clearly contrary to the plain language and legislative history of the False Claims Act, which clearly imposes liability on persons who fraudulently obtain federal money from government contractors and grantees," the brief reads. The U.S. Attorney argued two main points- that the False Claims Act should be construed broadly, not narrowly, and that the act "expressly applies to persons who wrongfully obtain funds from government grantees and contractors."
Still, attorney Joe Vallort of the Chilton law firm said Monday that the federal brief doesn't support Rutz's suit, saying, "It doesn't support the plaintiff's claim. It doesn't speak at all to the merits (of the case.) I would characterize it as a jurisdictional issue."
"It's an issue of where the funding came from," he added, saying he agrees with an earlier Washington, D.C. court split decision, Totten v. Bombardier Corp, that fraud against Amtrak was not necessarily actionable under the False Claims Act, since the railroad was "a federal grantee, rather than a federal agency or instrumentality...".
"The United States believes Totten was wrongly decided," the amicus brief states flatly. In 1986, that brief further argues, Congress bolstered the False Claims Act with amended language that it says makes it clear that any money fraudulently obtained from federal funds, either directly or through agents or grantees of the government, is cause for action under the False Claims Act.
"They're scrambling," Rutz' attorney David Thollander said Tuesday. "They're absolutely scrambling." Thollander replied that Vallort is quoting case law that is "not controlling in this district."
"We are quoting controlling (7th District) law," he said.
Thollander also said that the federal amicus brief blows a hole in the defense's claim that the federal government had declined to participate in the False Claims action. In their motion, the defense wrote, "It should be noted that the United States Attorney's office has reviewed (Rutz's) allegations and has declined the opportunity to participate in this case."
Rutz strongly contested that point, saying papers filed with the court stipulate that the federal government has no problem with the case proceeding, and further stipulates that no settlement can be agreed to between the two parties without the federal government's review and approval. The new brief, Thollander said, underscores that.
"If the government had no interest in this, do you think they'd take the time to file this motion," he asked.
Thollander filed a response to that motion last week before Zagel, who is scheduled to rule on the motion on Nov. 15.
In another case involving Rutz and the village, Thollander filed a response before Judge Matthew F. Kennelly seeking to compel the testimony of the village's trustees, including President Frank Paris.
At issue is whether the defense can deny Rutz and his attorney access to witnesses from whom they wish to take depositions. The defense had argued that Rutz's attorney must show a clear purpose for why they want to depose individual witnesses. Thollander says he has the right to explore possible evidence as widely as needed.
"Plaintiff has to show that the individuals he wants to depose either have relevant information, or that their testimony can lead to relevant information," Vallort said. "He hasn't done that?. And we're not going to produce them."
Thollander argued that the defense has had two opportunities in court, on Sept. 9 and Sept. 13, to respond to his request to schedule depositions for the trustees and Paris, but did not do so.
On Sept. 28, he said, Vallort told him by phone that he would not produce the trustees because they, "know nothing about the police department."
Thollander said that the same issue was addressed during discussions before the judge in the first lawsuit Rutz and others filed against the village. At that time, he said, an attorney from the village's law firm was admonished by the court regarding the production of witnesses. Thollander said he is now seeking sanctions regarding the defense's latest refusal to produce witnesses.
The parties are to appear before Kennelly this morning, at which time he is expected to make a ruling.