66 F. Supp. 3d 1141
C.D. Ill.2013Background
- Relator Jacqueline Price was a Section 8 tenant at a duplex owned by Shirley Peters; the Springfield Housing Authority (PHA) set the reasonable monthly rent at $370 and executed a Housing Assistance Payments (HAP) Contract with Peters.
- The HAP Contract (Parts B and C/Tenancy Addendum) prohibited charging rent above the PHA-approved amount and required owners to provide the lease and any lease revisions to the PHA.
- Price and Peters separately agreed that Price would pay $280/month for use of a washer, dryer, and storage shed; Price paid $2,480 total above the $370 monthly rent during the lease year.
- The PHA had no record of the separate $280/month agreement; the $280 equals the difference between Peters’ originally proposed $650 rent and the PHA-approved $370.
- Price brought a qui tam action under the False Claims Act (FCA), alleging Peters knowingly collected excess rent causing improper Housing Assistance Payments; the court resolved cross-motions for summary judgment in Price’s favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Price waived FCA claim under HAP Contract | Price asserts she may sue on behalf of the U.S. under the FCA despite the Contract’s Part B prohibition on tenant enforcement | Peters contends Contract bars tenant enforcement and thus Price waived private action | Court: No waiver — Part B bars private enforcement of Contract terms but does not preclude qui tam FCA action on behalf of the United States |
| Whether payments for washer/dryer/shed constituted excess rent | Payments for use of premises (storage shed) are additional rent and thus exceed the PHA-approved $370 | Peters argues such separable fees are permitted as independent agreements if not constituting excess rent | Court: Payments for storage shed ($2,480) were excess rent in violation of Parts B/C of HAP Contract |
| Whether Peters acted knowingly for FCA purposes | Price argues Peters’ conduct—agreement matching the $650 requested rent and failure to disclose to PHA—shows deliberate ignorance or reckless disregard | Peters claims she misunderstood the Contract and believed PHA permitted such arrangements | Court: Knowledge requirement met via actual knowledge, deliberate ignorance, or reckless disregard; no specific intent to defraud required |
| Appropriate damages and penalties under the FCA | Price seeks treble damages and statutory penalties per violation | Peters argues single course of conduct should limit penalties | Court: Trebled excess rent = $7,440 plus a single civil penalty of $5,500 (total $12,940); amounts awarded to Land of Lincoln Legal Assistance Foundation; relator may seek fees/costs post-judgment |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment standard and movant’s burden)
- Brewer v. Board of Trustees of the University of Illinois, 479 F.3d 908 (7th Cir. 2007) (no genuine issue if reasonable jury could not find for nonmoving party)
- Woodruff v. Mason, 542 F.3d 545 (7th Cir. 2008) (courts construe facts in light most favorable to nonmovant on summary judgment)
- United States ex rel. Sutton v. Reynolds, 564 F. Supp. 2d 1183 (D. Or. 2007) (FCA liability in Section 8 cases where landlord collected excess rent)
- Sierra Club v. Franklin County Power of Illinois, LLC, 670 F. Supp. 2d 825 (S.D. Ill. 2009) (civil penalties awarded to a non-party organization where award furthered statute’s purposes)