Gordon Rees Scully Mansukhani Denver Partner Tamara Seelman, Of Counsel Megan Jones, Associate Morgan Hamrick, and Associate Stephanie Hiquiana recently obtained dismissal of a complaint against 10 separate clients, resort associations and country clubs, filed in the United States District Court for the District of Colorado.
The plaintiff filed a qui tam lawsuit under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-32, against 25 different homeowners associations, condominium associations, and country clubs in Colorado. The lawsuit, which mirrors other lawsuits across the nation, alleged that the defendants made misrepresentations and falsely procured loans under the Paycheck Protection Program ("PPP") during the COVID-19 global pandemic. The Department of Justice elected not to proceed with the lawsuit but, under the FCA, reserved the right to intervene later in the litigation. Under the FCA, the defendants were facing potential damages of three times the actual damages suffered by the United States, civil penalties, and attorneys’ costs and fees.
On behalf of their 10 clients, the GRSM team proactively and aggressively engaged the plaintiff’s counsel to consider voluntary dismissal based on documents showing that their clients were, in fact, entitled to the PPP loans they received. Additionally, GRSM filed a joint motion to dismiss with the other defendants arguing that the plaintiff (1) failed to overcome the FCA’s public disclosure bar because he has no relationship to GRSM's clients and relied exclusively on public record to support his claim, (2) lacked standing, and (3) failed to state a claim upon which relief can be granted because the complaint lacked specific facts supporting the allegation that our clients knowingly made false representations for the purpose of obtaining PPP loans.
Shortly after filing the motion to dismiss, the plaintiff voluntarily dismissed all claims.