The Fair Housing Council of San Fernando Valley and a council employee must face claims they violated retainer agreements with Washington law firm Relman, Dane & Colfax PLLC related to a pending False Claims Act case in California, a federal court said Aug. 12.
Claims that the council and Mei Ling voided contracts to avoid paying the firm a contingency fee from that case--where over $2 billion in damages is at stake--are ripe for review, said Magistrate Judge Robin M. Meriweather of the U.S. District Court for the District of Columbia.
The repudiation of the agreements is the alleged breach that provides a tangible injury-in-fact, the court said.
There is a live controversy regarding whether the breach was improper or justified for the firm’s alleged misconduct, whether the contract was voided, when the firm’s entitlement to fees arises, and whether entitlement to fees survives termination of the agreement, the court said.
Meriweather also said the case should be transferred to the U.S. District Court for the Central District of California.
The FCA litigation from which the suit arises is pending in that district, and the agreements make the firm’s recovery of fees contingent on the council and Ling’s ability to obtain relief in that case, the court said.
The parties have 14 days to object to these rulings, the court said.
The council and Ling retained the firm in 2010 to represent them in an FCA lawsuit accusing the City of Los Angeles and Community Redevelopment Agency of the City of Los Angeles (CRACLA) of submitting false claims to receive hundreds of millions of dollars of federal housing and community development funds.
The firm filed the suit on behalf of the council and Ling in February 2011. The federal government elected to intervene in the case in May 2017.
The council and Ling terminated the firm in December 2016 and accused it of unethical conduct.
The government seeks damages exceeding $2 billion in the pending FCA case. The council and Ling would be entitled to 15-25% of the proceeds in the action, the court said.
Warren Benson Law Group and Dennis J. Whelan P.C. represented the council. Baird Holm LLP and Hunton Andrews Kurth LLP represented Ling. Covington & Burling LLP represented the firm.
The case is Relman, Dane & Colfax PLLC v. Fair Housing Council of San Fernando Valley, D.D.C., No. 18-495, 8/12/19.