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UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

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UNITED STATES OF AMERICA, ex rel.

CURTIS LOCKEY and CRAIG MACKENZIE,
Relators,
v.
CITY OF DALLAS, TEXAS,
Defendant.

Civil Action No. 3:11-cv-354-O

RELATORS REPLY BRIEF IN SUPPORT OF MOTION TO AMEND

Relators submit this reply brief in further support of their motion for leave to replead an amended
complaint. This brief responds to the City of Dallas Response to Relators Motion for Leave to File an
Amended Complaint, Doc. 163 (Defs Resp.).
Relators proposed amendment is a technical one. It conforms the alleged fraud committed by the
City with Relators personal knowledge, thus conferring jurisdiction under the False Claims Act (FCA).
This Court dismissed the previous complaint without prejudice. In post-judgment motion practice, this Court
fully spelled out its reasoning. It acknowledged that Relators were the original sources of information
regarding the Citys intentional discrimination. It found, however, that Relators claims were not truly based
on that information, because such discrimination need not be shown to demonstrate that the City failed to
meet its promise to affirmatively further fair housing, as Relators then alleged.
Relators could not then have amended their complaint to conform to that reasoning, because an
appeal was pending. Within weeks of the Fifth Circuits mandate, Relators moved to amend. Nonetheless,
the Citys opposition is based largely on the notion that Relators should have amended earlier. The City
nowhere explains when this amendment should have been made. Relators had no reason to amend until this
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Court dismissed their original complaint; they believed that the original complaint would succeed. And by
the time this Court explained its reasoning in sufficient detail for Relators to conform their pleadings to it, the
appeal was pending. The Citys other objections are based either on overly restrictive readings of the law
governing the amending of complaints or on demonstrably untrue premises.
The bottom line is that this amendment would further the ends of justice by allowing consideration of
Relators claims on the merits. Relators have alleged serious malfeasance, and they should get the
opportunity to prove it. They have not passed up obvious earlier opportunities to amend. Nor are they
seeking to game the system or get a second bite at the same apple; to the contrary, they have not yet gotten
their first. Relators are simply trying in good faith to navigate the very choppy waters of FCA jurisprudence
and properly connect their personal experience of discrimination to the precise false certification for which
their experience creates FCA jurisdiction. The City offers no reason why Relators should not be permitted
the opportunity to follow the teachings of this Courts opinions and have the merits of their case heard.
Argument
1. This Courts Dismissal Was Without Prejudice
This Court could not have been clearer that it dismissed this case, in its entirety, without prejudice.
See Doc. 102 (It is therefore ORDERED, ADJUDGED, and DECREED that the case is DISMISSED
without prejudice.). The City nonetheless argues that this Court must act as though it actually dismissed
some of this case with prejudice. That is so, it contends, because Relators arguments, if accepted, would
have led to dismissal with prejudice. See Def.s Resp. at 2-3. But this Court did not accept Relators
arguments; neither did the Fifth Circuit. Whether or not this Court should have dismissed with prejudice is
now beside the point. There similarly is no basis for the Citys contention that Relators are collaterally
estopped from relying on this Courts actual judgment, since Relators did not convince this Court to do
anything. See Gabarick v. Laurin Mar. (America) Inc., 753 F.3d 550, 553 (5th Cir. 2014).

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In any event, nothing turns on this question. Even if this Court had dismissed on the merits with
prejudice some of Relators claim that the City falsely certified that it affirmatively furthered fair housing
(AFFH), such a ruling would have no preclusive effect on the very different claim that the City
intentionally discriminated. The very ground on which this Court dismissed the previous complaint was that
intentional discrimination is not a necessary element of the failure to AFFH; it thus cannot be said that
dismissing a complaint predicated on the latter necessarily decides the validity of a complaint predicated on
the former.
2. Relators Are the Original Sources of the Revised Allegations
The City argues that, because the alleged wrongdoing in Relators proposed amended complaint is a
subset of the prior complaints broader allegations, the dismissal of the prior complaint must doom the
amended complaint. See Def.s Resp. at 3-4. That might be true if this Court had held that the original
complaint stated no claim. But that is not what this Court found. What this Court instead found was that,
while Relators were the original sources of information related to the Citys discriminatory treatment of
prospective builders of low-income housing, they were not with respect to the Citys broader failure to
AFFH. Because the City could fail to AFFH regardless of whether it intentionally promoted segregation, this
Court found that the information for which Relators were original sources was surplusage to their FCA
claim. Doc. 153 at 8. Relators proposed amended complaint cures that problem. It seeks to hold the City
liable only for the more focused allegations for which Relators are the original sources of information.
The City does not engage with this reasoning. It concedes that Relators have removed references to
AFFH, see Def.s Resp. at 3-4, but without acknowledging the significance of this change. It also asserts that
the original complaint was dismissed for lack of evidence that Relators were original sources and not for
overbroad pleading. See id. at 3-4. But overbroad pleading and insufficient evidence are two sides of the
same coin: Relators evidence that they were original sources was insufficient precisely because the alleged

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wrongdoing extended too far past Relators original knowledge. Narrowing the allegations of wrongdoing
cures this problem as readily as adding new original-source allegations.
The City also asserts, again, that Relators suit is barred by a HUD proceeding involving the same
property. See Def.s Resp. at 4. Relators previously explained why this argument is mistaken. See Relators
Resp. in Opp. to City of Dallas Motion to Dismiss, Doc. 94 at 11-12.1
3. The Mandate Rule and Law of the Case Are Inapplicable
The City asserts that Relators, in seeking to conform their complaint to the holdings of this Court and
the Fifth Circuit, thereby ignor[e] the two rulings and run afoul of the mandate rule. See Def.s Resp. at 45. Nothing could be further from the truth. As Relators explained in their opening brief and as the City
makes no effort to rebut Relators amended complaint is fully consistent with the reasoning of both courts.
It is thus immaterial that Relators may not ask this Court to reexamine an issue already decided. Relators
make no such request. Neither this Court nor the Fifth Circuit has decided whether Relators are the original
sources of information regarding the scaled-back allegations of their proposed amended complaint.
4. Relators Could Not Have Amended Their Complaint Earlier Without Abandoning Their
Previous Cause of Action
The City asserts, in conclusory fashion, that Relators could have and should have amended their
complaint earlier. See Def.s Resp. at 6-7. But Relators could not have done so without abandoning entirely
their previous claim that the City had failed to AFFH (as the proposed amendment does). The logic of the
Citys position is that Relators had to make an irrevocable election between litigating their original claim (and
abandoning the narrower claim they make now) or dismissing it to replead their revised claim at a time
when this Court had not yet explained why the distinction between intentional discrimination and failure to
AFFH made all the difference. It is not unjust for Relators to pursue in good faith an arguable claim and then,

Among other things, the FCA provision in question applies only where the United States is a party to the
other proceeding. The United States is not a party to the proceeding at issue.
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upon learning during their appeal that a different pleading approach could yield different results, amend at the
first opportunity consistent with this Courts decision.2
5. Relators May Amend Pursuant to 28 U.S.C. 1653
The City argues that 28 U.S.C. 1653 cannot be used to create jurisdiction not existing when a suit is
filed. See Def.s Resp. at 7-9. This statement is true, but it does not apply here. The allegations in the
amended complaint create jurisdiction at all times since this suits inception. This case is thus unlike Arena v.
Graybar Electric Co. Inc., 669 F.3d 214 (5th Cir. 2012). In Arena, when federal question jurisdiction proved
lacking, the plaintiff amended his complaint to allege diversity jurisdiction. However, while diversity
jurisdiction then existed, the plaintiff might have changed state citizenship during the case. The Fifth Circuit
remanded for determination of whether diversity citizenship existed at the original filing. See id. at 224-25.
This case, instead, is on all fours with Whitmire v. Vitcus, Ltd., 212 F.3d 885 (5th Cir. 2000). In
Whitmire, the plaintiff could have alleged diversity jurisdiction from the outset but did not. After her federallaw claims were dismissed, she added allegations demonstrating diversity jurisdiction. Id. at 888-89. This
was held proper, because the additional facts existed at the time the complaint was filed; they could be treated
as always having been part of the complaint, such that the courts jurisdiction was unbroken. Id. at 888.
Relators seek to do the same thing here. They propose to allege violations over which this Court has, and
always has had, jurisdiction. This is exactly the sort of technical amendment that should be permitted so
that this case can be decided on the merits. See Whitmire, 212 F.3d at 888.
The City also argues that any amendment to an FCA complaint is barred by United States ex rel.
Jamison v. McKesson Corp., 649 F.3d 322 (5th Cir. 2011). See Def.s Resp. at 9. Jamison does not support

The City also argues that this Court must reopen the case under Rule 60 before granting permission to
replead. See Def.s Resp. at 6-7. This point is immaterial. As Relators argued in their initial motion, see
Relators Br. in Supp. of Mot. to Amend, Doc. 162-1 at 8, and as the City does not contest, the same standard
applies whether this Court directly grants leave to replead or does so after granting Relators Rule 60 motion.
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such a broad proposition. In Jamison, the relator originally filed a bare-bones complaint that named 450
defendants and provided little detail about the alleged misconduct. The relator then attempted to amend to
eliminate most of the defendants and explain the defendants conduct. See 649 F.3d at 325-26. The Fifth
Circuit looked to the relators original complaint to define the scope of his action and to determine whether it
was based on public disclosures of allegations or transactions. Id. at 328. It found the original complaint
insufficient because [i]t takes no particular knowledge or effort to describe a general scheme of fraud and
then list arbitrarily a large group of possible perpetrators. Id. at 331. Permitting the relator to amend, the
court found, would permit future relators to arbitrarily select a large group of defendants in any industry in
which public disclosures have revealed significant fraud, in hopes that his allegations will prove true for at
least a few defendants. We do not countenance such relator lotteries. Id. at 332.
Jamison did not hold that an FCA complaint cannot be amended; it merely held that a relator cannot
file a bare-bones complaint, relying entirely on publicly disclosed allegations, and then add more specific,
original content to escape the public disclosure bar. This case is far different. Relators did not file a barebones complaint lacking the content necessary to confer jurisdiction. To the contrary, the amended complaint
contains little information not in the original complaint or in declarations filed in previous motion practice and
properly considered by this Court. The amendments merely conform previously pleaded allegations to the
more targeted FCA claim those allegations support. Courts routinely permit FCA relators to file amended
complaints so long as the decision to do so does not smack of the gamesmanship present in Jamison. See,
e.g., United States ex rel. Antoon v. Cleveland Clinic Found., 978 F. Supp. 2d 880 (S.D. Ohio 2013).
6. Relators Satisfy Rule 60s Requirements
The City is simply wrong in asserting that Relators cannot satisfy the requirements for a Rule 60
motion to reopen a judgment, either with respect to the Rules substantive requirements or the timing of the
motion. See Def.s Resp. at 9-12. Rule 60 should be liberally construed in order to do substantial justice,
and the interest in deciding cases on the merits can outweigh the interest in encouraging finality. Edward
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H. Bohlin Co., Inc. v. Banning Co., Inc., 6 F.3d 350, 357 (5th Cir. 1993). As the City correctly surmises,
Relators motion is under Rule 60(b)(6). The ground for relief is that the FCAs unusual scheme precluded
Relators from bringing this claim and their previous one simultaneously and left them guessing which one
had a better chance of succeeding. Now that this Court and the Fifth Circuit have drawn a roadmap as to how
to properly connect the Citys wrongdoing and Relators personal knowledge of it a roadmap that did not
fully emerge until Relators post-judgment motions for reconsideration it would be in the interest of justice
to give Relators a chance to follow it. On the timing, Relators made this motion as soon as they practically
could once their appellate proceedings finished. They could not have made this motion before then without
giving up their right to appeal.
The bottom line is that Relators ask this Court for a chance to pursue the merits of their claim, which
have never been reached because of the fog of technicalities surrounding FCA claims. Relators submit that
the interest of substantial justice is best served by permitting a true airing of the merits of their allegations
that Defendants deliberately discriminate in allocating federal housing funds.
7. Relators May Amend Pursuant to Rule 15
The City contends that this Court should not apply Rule 15 standards to Relators motion, see Def.s
Resp. at 12-15, and that Relators do not meet those standards. Id. at 15-16. Both arguments are mistaken.
The City overreaches in asserting that Rule 15 has no application once the deadline for pleading
amendments has expired. Def.s Resp. at 12. In fact, the Rule 15 standards still apply so long as the moving
party shows good cause for not amending earlier. See Fahim v. Marriott Hotel Servs., Inc., 551 F.3d 344,
348 (5th Cir. 2008). Here, as explained earlier, Relators could not have offered this amendment earlier
without abandoning their earlier claim. This situation is not comparable to that of Fahim, where the plaintiff
had no good reason not to add a claim earlier. Id. The City errs in pointing to Relators earlier offer to, if
necessary, plead further detail regarding why the Citys behavior rose to the level of fraud. See Def.s Resp.

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at 16 (citing ECF No. 52 at 11). Such additional facts, unlike the amendments now proposed, could have
been added without abandoning the operative claim.
For similar reasons, the City errs in comparing this case to Rosenzweig v. Azurix Corp., 332 F.3d 854
(5th Cir. 2003). In Rosenzweig, the plaintiffs learned of additional facts while the district court considered a
motion to dismiss but did not seek to amend until after the motion was granted. 332 F.3d at 865. Their
motion was denied both because it was made belatedly and because plaintiffs failed to submit a proposed
amended complaint or explain why the additional facts changed the outcome. Id. None of that is relevant
here. Relators are moving to amend at their first opportunity to do so without abandoning their previous
claim, have attached a proposed amended complaint, and have explained how the amended complaint
conforms the allegations to those required by this Court and the Fifth Circuit.
The City also argues that Relators were not diligent because they filed this motion five weeks from
the date the Fifth Circuits mandate issued. Def.s Resp. at 13. Five weeks was a reasonable amount of time
to analyze the Fifth Circuits reasoning, prepare an amended complaint conforming to it (as well as this
Courts holdings), and prepare this motion. Even assuming the motion could have been filed a few days
earlier, the difference is of little significance.
The City makes the unremarkable assertion that it is prejudicial to the defendant and wasteful to the
court to unnecessarily wait until after the close of discovery to add a claim that requires additional discovery.
Def.s Resp. at 14. Relators proposed amended complaint does not add to the discovery required; it requires
less discovery than did the previous complaint, and much of the discovery required has been completed.
There is no basis for the Citys claim that the proposed amendments are not offered in good faith. See Def.s
Resp. at 15-16. Relators current motive is the same one that has animated them throughout this litigation
and that this Court has held constitutes good faith: they believe they have a meritorious claim.
Finally, the City makes two other arguments that boil down to a complaint that Relators, in their
effort at brevity and alacrity, did not in their opening brief march through considerations that seemed to need
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no briefing. It is self-evident that, without an amendment, the case is over; hence, an amendment is of
maximal importance. See Def.s Resp. at 14. Similarly, Relators did not address whether a continuance
could cure any prejudice because, since there are no current deadlines, there is nothing to continue. Id.
8. The Proposed Amended Complaint Would Not Be Futile
The extent to which analysis of public disclosure is limited to allegations in the original complaint is
irrelevant. See Def.s Resp. at 16. Relators do not dispute that the allegations of the proposed amended
complaint have been publicly disclosed. The only question is whether they were the original sources of the
amended complaints pared-down allegations. Neither precedent nor logic suggests that the original
complaint informs the answer. Relators claim the same original knowledge as before; the proposed
amendment is simply a technical one that better aligns that original knowledge to the alleged fraud.
The City argues that an FCA complaint cannot include any publicly disclosed allegations. See Def.s
Resp. at 17. But a relator need not be the original source of every fact in the complaint. Rather, it is sufficient
that a relators original knowledge contains some additional compelling fact or demonstrate[s] a new and
undisclosed relationship between disclosed facts, that puts a government agency on the trail of fraud, where
that fraud might otherwise go unnoticed. United States ex rel. Reagan v. East Texas Med. Ctr. Regional
Healthcare Sys., 384 F.3d 168, 179 (5th Cir. 2004). Here, it is Relators own experiences that make the
Citys fraud apparent. To be sure, it was public knowledge that the City approved other projects with
restrictions that are consistent with Relators allegations. See Def.s Resp. at 17. But without Relators
original information, those approvals, by themselves, would not evidence a policy inconsistent with the Citys
civil rights certifications to the federal government.
The City contends that its earlier support for Relators quite different proposal for market-rate
development undermines the claim that discrimination lies behind the Citys refusal to similarly support
Relators low-income development project. See Def.s Resp. at 17. In fact, a comparison of the Citys
treatment of the two projects supports Relators claim. Meanwhile, the City points to two motions to dismiss
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that this Court denied as moot. To the extent the City properly incorporates the arguments in those motions
by reference, Relators stand by their responses, which demonstrate that the arguments are meritless. The City
also asks this Court to take judicial notice of factual assertions not contained in the complaint and infer from
them that Relators allegation that the City acted with discriminatory motivation is untrue. See Def.s Resp. at
18-19. On this motion, none of that is proper.
Finally, only in the alternative do Relators ask this Court to treat the proposed amended complaint as
a new case filing. It is not Relators preference to open a new case; it is their preference to continue this one,
in the interest of judicial efficiency. In response, the City merely cites the procedural requirements for new
cases. See Def.s Resp. at 19. Should Relators have to file as a new case, they will of course comply with
every applicable requirement.
CONCLUSION
This Court should grant Relators leave to amend their complaint.

Respectfully submitted,
/s/ Michael Allen
Michael Allen* (VA Bar No. 25141)
RELMAN, DANE & COLFAX, PLLC
1225 19th Street, N.W., Suite 600
Washington, DC 20036-2456
mallen@relmanlaw.com
Tel.: (202) 728-1888
Fax: (202) 728-0848
*Admitted to appear pro hac vice
Brian DeVoss (TX Bar No. 24052885)
Hartine Dacus Barger Dryer LLP
6688 N. Central Expressway, # 100
Dallas, TX 75206
bdevoss@hdbdlaw.com
Tel.: (214) 346-3742
ATTORNEYS FOR PLAINTIFFS-RELATORS
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CERTIFICATE OF SERVICE
I hereby certify that true and correct copies of the foregoing Brief were filed and served this 7th day
of November, 2014, using the CM/ECF system, which will serve as notification of such filings on the
following:
Earsa Jackson; Strasburger & Price, LLP; 901 Main Street, Suite 4400; Dallas, TX 75202
Counsel for Defendant Dallas Housing Authority
Charles Estee; Assistant City Attorney; 7BN Dallas City Hall; 1500 Marilla Street; Dallas, TX 75201
Counsel for Defendant City of Dallas
Clayton Ray Mahaffey; Asst U.S. Attorney; 801 Cherry St., Suite 1700 Unit 4; Fort Worth, TX
76102
Attorney for United States
/s/ Michael Allen
Michael Allen

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