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Rutz v. Village of River Forest

October 25, 2007

CRAIG RUTZ AND THOMAS LUDVIK PLAINTIFFS,
v.
VILLAGE OF RIVER FOREST, A MUNICIPAL CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Judge Joan B. Gottschall

MEMORANDUM OPINION AND ORDER

Plaintiffs and Relators Craig Rutz ("Rutz") and Thomas Ludvik ("Ludvik") have brought suit against defendant Village of River Forest ("River Forest") alleging, inter alia, violations of the False Claim Act (the "Act" or "FCA") under 31 U.S.C. § 3729(a)(7) and unlawful retaliation as proscribed by the same Act under 31 U.S.C. § 3730(h). River Forest has moved for summary judgment on these two claims. For the reasons set forth below, summary judgment in favor of defendant River Forest is granted with respect to both the FCA claim under 31 U.S.C. § 3729 (a)(7) and the retaliation claim under 31 U.S.C. § 3730(h).

I. BACKGROUND

Briefly, plaintiffs' complaint against River Forest has its origins in a grant provided to the River Forest Police Department ("Police Department") by the Cook County Judicial Advisory Committee ("JAC"). Rutz, a lieutenant in the Police Department, originally submitted an application on behalf of the Police Department in June of 2000 for a Balanced Approach to Drug and Gang Elimination ("BADGE") grant.

Funds for the grant originate in the federal Local Law Enforcement Block Grant ("LLEBG") Program and are under the control and supervision of the JAC, a county agency, which reviews and approves the BADGE grant applications. According to the terms of the BADGE grant, the funds supplied must be used for the purposes specified in the grant award, and any funds not so used must be returned.

One of the programs enumerated in the budget of the BADGE grant application was a tactical unit targeting crime prevention and drug, alcohol, and gang suppression. The personnel of the unit were to consist of Police Department officers paid on an overtime basis from the grant's budget; the budget for the proposed unit constituted approximately half of the overall grant budget. The grant was approved in due course by the JAC, and the grant funds were made available to the Police Department.

In June of 2001, the JAC requested an evaluation (the "report") by the Police Department's Chief of Police of the programs funded by the BADGE grant. Prior to the submission of the report to the JAC, Rutz, the project manager of the BADGE program, informed the Chief of Police that the report contained misleading statistics which implied that the tactical unit program had been implemented. In point of fact, Rutz claims, the unit had not been formed. Nevertheless, the study containing the misrepresentations was submitted to the JAC. Rutz subsequently filed this suit claiming, inter alia, multiple counts of age and gender discrimination, and violation of, and retaliation under, the FCA. It is these latter two claims that the court now addresses.

Defendant has moved for summary judgment of plaintiffs' claims under the FCA; specifically, violation of the FCA under 31 U.S.C. § 3729(a)(7) and unlawful retaliation under 31 U.S.C. § 3730(h). Under Rule 56(c) of the Federal Rules of Civil Procedure, a movant for summary judgment bears the burden of establishing that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to that party's case on which that party will bear the burden of proof at trial, then Rule 56(c) mandates a grant of summary judgment. Celotex, 477 U.S. at 322-23. When considering a motion for summary judgment, the court will consider the evidentiary record in the light most favorable to the nonmoving party and will draw all reasonable inferences in its favor. Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir. 2002).

II. ANALYSIS

A. Violation of the False Claims Act, 31 U.S.C. § 3729(a)(7)

For plaintiffs to succeed on a claim under the FCA, they must demonstrate (1) that the defendant made a statement or record in order to obtain money from the government; (2) that the record was false or fraudulent, and; (3) that the defendant knew the record was false or fraudulent. 31 U.S.C. § 3729(a)(7);See alsoUnited States ex rel. Gross v. AIDS Research Alliance-Chicago, 415 F.3d 601, 604; (7th Cir. 2005); United States. ex rel. Lamers v. City of Green Bay,168 F.3d 1013, 1018 (7th Cir. 1999). Defendants argue that there are no facts to indicate that the report alleging financial misrepresentations made by the Police Department was ever made directly to an officer or employee of the federal government for purposes of obtaining grant funding or payment and that therefore plaintiffs' case must fail.

In 1986, Congress amended the FCA definition of "claim" to permit FCA lawsuits where the alleged fraud is against a federal grantee. See United States ex rel. Yesudian v. Howard Univ., 153 F.3d 731, 737 (D.C. Cir. 1998). Under this new definition, "claim" was to be construed to be:

[A]ny request or demand . for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.

31. U.S.C. §3729(c). Combining 31 U.S.C. §§ 3729(a) and 3729(c), the court in Yesudian found that the elements of a ...


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