United States ex rel. Adams v. Aurora Loan Servs., No. 14-15031 (9th Cir. 2016)
Annotate this CaseRelators filed suit under the False Claims Act, 31 U.S.C. 3729(b)(2)(A), against various lenders and loan servicers, alleging that defendants certified that loans purchased by Fannie Mae and Freddie Mac were free and clear of certain home owner association liens and charges when they were not. At issue was whether Fannie Mae and Freddie Mac are officers, employees, or agents of the federal government for purposes of the Act. The court concluded that the district court properly held that a claim presented to Fannie Mae or Freddie Mac is not presented to an “officer, employee or agent” of the United States. Fannie Mae and Freddie Mac are private companies, albeit companies sponsored or chartered by the federal government. The court's prior decision in Rust v. Johnson, where it held that Fannie Mae was a federal instrumentality for state/city tax purposes, does not change the result, because Rust does not address Fannie Mae or Freddie Mac’s status under the False Claims Act. Accordingly, the court affirmed the judgment.
Court Description: False Claims Act. The panel affirmed the district court’s dismissal of an appeal brought by relators in a False Claims Act suit against various lenders and loan servicers. Relators alleged that the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) were federal UNITED STATES EX REL. ADAMS V. AURORA LOAN SERVS. 3 instrumentalities for purposes of giving rise to liability under 31 U.S.C. § 3729(b)(2)(A)(i) of the Act. The panel held that a claim presented to Fannie Mae or Freddie Mac was not presented to an “officer, employee, or agent” of the United States under 31 U.S.C. § 3729(b)(2)(A)(i), because Fannie Mae and Freddie Mac are private companies, albeit companies sponsored or chartered by the federal government.
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