Reported / Citable
Background
Relator Mei Ling and a fair-housing organization accused Los Angeles of falsely certifying compliance with federal accessibility rules. The United States intervened. After years of litigation, the government, one relator, and the city settled the False Claims Act case for about $38.3 million. Separately, the city agreed with HUD to spend at least $200 million over ten years on accessible housing improvements.
The Court’s Holding
The Ninth Circuit affirmed approval of the settlement. A relator receives a share when the government pursues its claim through an alternate remedy, but the HUD compliance agreement did not take the place of the False Claims Act action; it addressed regulatory remediation while expressly preserving the litigation claims. The district court also reasonably found the negotiated settlement fair given proof risks, litigation costs, public-budget effects, discovery, and mediation.
Key Takeaways
- An alternate remedy must function as a substitute for the government’s False Claims Act claim.
- Parallel regulatory relief is not enough when the FCA case continues separately.
- Relators receive statutory shares of qualifying recoveries, not every related public benefit.
- Courts may consider litigation risk and public consequences when reviewing government settlements.
Why It Matters
The opinion clarifies how California municipalities and qui tam counsel should structure overlapping regulatory resolutions and fraud settlements. Express carve-outs and the practical relationship between proceedings matter. Relators should evaluate whether another process truly displaced the FCA claim; large compliance expenditures alone do not create a right to share in their value.