Preview
Hearing Date: No hearing scheduled
Location: <>
Judge: Calendar, W
FILED
9/15/2023 8:29 PM
IRIS Y. MARTINEZ
CIRCUIT CLERK
COOK COUNTY, IL
FILED DATE: 9/15/2023 8:29 PM 2017L000289
2017L000289
Calendar, W
24401368
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS
COUNTY DEPARTMENT, LAW DIVISION
STATE OF ILLINOIS ex rel. EDELWEISS ) Case No. 2017 L 000289
FUND, LLC, )
) CAL. W
Plaintiff, ) JUDGE THOMAS MORE DONNELLY
v. )
)
JPMORGAN CHASE & CO., et al., )
Defendants. )
)
)
RELATOR’S RESPONSE TO THE STATE OF ILLINOIS’
MOTION FOR APPROVAL OF QUI TAM SETTLEMENT
September 15, 2023
TABLE OF CONTENTS
FILED DATE: 9/15/2023 8:29 PM 2017L000289
INTRODUCTION ........................................................................................................................................... 1
FACTUAL BACKGROUND......................................................................................................................... 3
ARGUMENT..................................................................................................................................................... 8
I. The State’s power to settle an IFCA action extends only to claims involving
Defendants’ liability to the State, not to collateral claims that belong to Relator. .................. 9
A. The IFCA’s structure demonstrates the State may not settle Relator’s fee claim. ......11
B. Precedent forecloses the State’s argument that it may settle Relator’s fee claim. .......15
C. The State’s construction of the IFCA undermines the statute’s purposes, leads to
absurd results, and defies logic. ..........................................................................................21
D. The State’s interpretation of the IFCA violates black-letter contract law and would
result in an unconstitutional taking of Relator’s right to a “reasonable” fee. ..............25
E. The State’s attempt to settle Relator’s fee claim is inconsistent with the actual
practice of parties that settle qui tam cases under false-claims statutes. ........................27
II. The State’s attacks on the merits of Relator’s case are gratuitous and wrong. ......................29
III. The State’s views of Relator’s fees are premature and legally groundless. .............................33
CONCLUSION ...............................................................................................................................................35
CERTIFICATE OF SERVICE ....................................................................................................................37
ii
TABLE OF AUTHORITIES
FILED DATE: 9/15/2023 8:29 PM 2017L000289
Cases
Canel v. Topinka,
212 Ill. 2d 311 (2004) ..................................................................................................................................26
Canel v. Topinka,
342 Ill. App. 3d 65 (1st Dist. 2003) ..........................................................................................................26
Carter v. SSC Odin Operating Co., LLC,
2012 IL 113204 ............................................................................................................................................25
Coldwell Banker Havens, Inc. v. Renfro,
288 Ill. App. 3d 442 (5th Dist. 1997) ........................................................................................................17
Customs Fraud Investigations, LLC v. Victaulic Co.,
No. 13-2983, 2019 WL 4280494 (E.D. Pa. Sept. 9, 2019) ....................................................................34
Duncan Pub., Inc. v. City of Chicago,
304 Ill. App. 3d 778 (1st Dist. 1999) ........................................................................................................17
Gaffney v. Bd. of Trustees of Orland Fire Prot. Dist.,
2012 IL 110012 ............................................................................................................................................22
Ill. Physicians Union v. Miller,
675 F.2d 151 (7th Cir. 1982) ......................................................................................................................30
In re Marriage of Mathis,
2012 IL 113496 ............................................................................................................................................21
Law Offs. of Colleen M. McLaughlin v. First Star Fin. Corp.,
2011 IL App (1st) 101849 ..........................................................................................................................25
McAleer Buick-Pontiac Co. v. Gen. Motors Corp.,
95 Ill. App. 3d 111 (4th Dist. 1981) ..........................................................................................................27
Molino v. Bast Servs., Inc.,
No. 08 C 4399, 2011 WL 841891 (N.D. Ill. Mar. 7, 2011)............................................................. 13, 34
Morton Grove Park Dist. v. Am. Nat. Bank & Tr. Co.,
78 Ill. 2d 353 (1980) ....................................................................................................................................26
Murphy v. Smith,
138 S. Ct. 784 (2018) ...................................................................................................................................34
New York v. Egon Zehnder Int’l, Inc.,
No. 21-cv-06883, 2022 WL 3927942 (S.D.N.Y. Aug. 31, 2022) ..........................................................15
iii
People ex rel. Schad, Diamond & Shedden, P.C. v. My Pillow, Inc.,
2017 IL App (1st) 152668 ................................................................................................................... 18, 22
FILED DATE: 9/15/2023 8:29 PM 2017L000289
Poilevey v. Spivack,
368 Ill. App. 3d 412 (1st Dist. 2006) ........................................................................................................17
Rodriguez v. W. Publ’g Corp.,
563 F.3d 948 (9th Cir. 2009) ......................................................................................................................33
Roxana Cmty. Unit Sch. Dist. No. 1 v. Env’t Prot. Agency,
2013 IL App (4th) 120825 .........................................................................................................................17
Scachitti v. UBS Financial Services,
215 Ill. 2d 484 (Ill. 2005) .................................................................................................................... passim
Solon v. Midwest Med. Recs. Ass’n, Inc.,
236 Ill. 2d 433 (2010) ..................................................................................................................... 21, 22, 23
Stahelin v. Forest Pres. Dist. of Du Page Cnty.,
401 Ill. App. 3d 1030 (2nd Dist. 2010).....................................................................................................17
State ex rel. Foy v. Vanderbilt Capital Advisors, LLC,
511 P.3d 329 (N.M. Ct. App. 2020) ................................................................................................... 20, 21
State ex rel. Schad, Diamond & Shedden, P.C. v. My Pillow, Inc.,
2018 IL 122487 ........................................................................................................................ 18, 19, 22, 28
State of Illinois ex rel. Beeler, Schad & Diamond v. Target Corp.,
367 Ill. App. 3d 860, 865 (1st Dist. 2006) ................................................................................................11
Stein v. Spainhour,
196 Ill. App. 3d 65 (4th Dist. 1990) ..........................................................................................................17
United States ex rel. Averback v. Pastor Med. Assocs., P.C.,
224 F. Supp. 2d 342 (D. Mass. 2002) .......................................................................................................35
United States ex rel. Balko v. Senior Home Care, Inc.,
No. 8:13-cv-03072, 2017 WL 3268200 (M.D. Fla. Aug. 1, 2017) ........................................................16
United States ex rel. Bibby v. Wells Fargo Bank, N.A.,
369 F. Supp. 3d 1346 (N.D. Ga. 2019) ....................................................................................................16
United States ex rel. Bryant v. Cmty. Health Sys., Inc.,
24 F.4th 1024 (6th Cir. 2022).....................................................................................................................17
United States ex rel. Burr v. Blue Cross Blue Shield of Fla., Inc.,
882 F. Supp. 166 (M.D. Fla. 1995)............................................................................................................16
United States ex rel. Cody v. ManTech Int’l. Corp.,
No. 1:16-cv-00132, 2017 WL 5146019 (E.D. Va. Aug. 30, 2017)........................................................16
iv
United States ex rel. Fallon v. Accudyne Corp.,
97 F.3d 937 (7th Cir. 1996) ........................................................................................................................35
FILED DATE: 9/15/2023 8:29 PM 2017L000289
United States ex rel. Gathman v. CareOne Mgm’t LLC.,
No. 17-6180, 2021 WL 4295519 (D.N.J. Aug. 23, 2021) ......................................................................16
United States ex rel. Hartnett v. Physicians Choice Lab. Serv.,
No. 3:17-cv-00037, 2021 WL 3072460 (W.D.N.C. July 20, 2021) .......................................................16
United States ex rel. Horsley v. Comfort Care Home Health, LLC,
No. 2:19-cv-00029, 2020 WL 4002005 (N.D. Ala. July 15, 2020)........................................................15
United States ex rel. Howard v. Urban Inv. Trust, Inc.,
No. 03 C 7668, 2013 WL 4804832 (N.D. Ill. Sept. 9, 2013) .......................................................... 13, 34
United States ex rel. John Doe I v. Penn. Blue Shield,
54 F. Supp. 2d 410 (E.D. Pa. 1999) ..........................................................................................................35
United States ex rel. Johnson v. Universal Health Servs., Inc.,
889 F. Supp. 2d 791 (W.D. Va. 2012) ......................................................................................................16
United States ex rel. Karlin v. Noble Jewelry Holdings, Ltd.,
No. 08 Civ. 7826, 2012 WL 1228199 (S.D.N.Y. Apr. 9, 2012) ............................................................16
United States ex rel. Koo v. HS Caltex,
No. 2:18-cv-00174, 2020 WL 8477217 (S.D. Ohio Mar. 23, 2020) .....................................................16
United States ex rel. Lazar v. S.M.R.T., LLC,
No. 3:18-cv-00822, 2022 WL 17994015 (S.D. Cal. Dec. 29, 2022) .....................................................25
United States ex rel. Lefan v. Gen. Elec. Co.,
394 F. App’x 265 (6th Cir. 2010) ..............................................................................................................35
United States ex rel. Liotine v. CDW-Gov’t, Inc.,
No. 3:05-cv-00033, 2013 WL 11267176 (S.D. Ill. May 17, 2013) ................................................. 16, 35
United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corp.,
793 F. Supp. 2d 1260 (D. Colo. 2011)......................................................................................................35
United States ex rel. Nudelman v. Int’l Rehab. Assocs., Inc.,
No. 00-1837, 2006 WL 925035 (E.D. Pa. Apr. 4, 2006) .......................................................................15
United States ex rel. Perez v. Williams,
No. 08 C 4326, 2013 WL 1181487 (N.D. Ill. Mar. 19, 2013) ...............................................................16
United States ex rel. Peterson v. Sanborn Map Co., Inc.,
No. 4:11-cv-00902, 2014 WL 414358 (E.D. Mo. Feb. 4, 2014) ...........................................................25
United States ex rel. Poulton v. Anesthesia Assocs. of Burlington, Inc.,
87 F. Supp. 2d 351 (D. Vt. 2000) ..............................................................................................................35
v
United States ex rel. Price v. Peters,
No. 12-03107, 2014 WL 9866915 (C.D. Ill. Aug. 21, 2014) .................................................................16
FILED DATE: 9/15/2023 8:29 PM 2017L000289
United States ex rel. Resnick v. Weill Med. Coll. of Cornell Univ.,
No. 04 Civ. 3088, 2009 WL 637137 (S.D.N.Y. Mar. 5, 2009) ..............................................................16
United States ex rel. Schweizer v. Oce N. Am.,
956 F. Supp. 2d 1 (D.D.C. 2013) ..............................................................................................................15
United States ex rel. Shea v. Verizon Comm. Inc.,
844 F. Supp. 2d 78 (D.D.C. 2012) ............................................................................................................16
United States ex rel. Shepard v. Grand Junction Reg’l Airport Auth.,
No. 13-cv-00736, 2017 WL 11556405 (D. Colo. Jul. 24, 2017) ...........................................................34
United States ex rel. Shutt v. Cmty. Home & Health Care Servs., Inc.,
550 F.3d 764 (9th Cir. 2008) ......................................................................................................................17
United States ex rel. Tommasino v. Guida,
No. 10-cv-4644, 2017 WL 878587 (E.D.N.Y. Mar. 6, 2017) ................................................................34
United States ex rel. Williams v. Williams,
No. 2:15-cv-00054, 2023 WL 3179331 (D. Utah May 1, 2023)............................................................16
United States ex rel. Wittenberg v. Public Utility Dist.,
No. 3:14-cv-00213, 2016 WL 6518438 (D. Or. Nov. 1, 2016) .............................................................16
United States ex rel. Zediker v. OrthoGeorgia,
407 F. Supp. 3d 1330 (M.D. Ga. 2019) ............................................................................................. 14, 15
United States v. Allergen,
No. SACV 18-203 JVS, 2023 WL 4754637 (C.D. Cal. July 24, 2023) .................................................16
United States v. Cooper Health Sys.,
940 F. Supp. 2d 208 (D.N.J. 2013) ...........................................................................................................35
United States v. Evercare Hospice, Inc.,
No. 11-cv-00642, 2017 WL 491168 (D. Colo. Feb. 7, 2017) ................................................................16
United States v. Everglades Coll., Inc.,
855 F.3d 1279 (11th Cir. 2017)........................................................................................................... 15, 18
United States v. Fadul,
No. 11-0385, 2013 WL 781614 (D. Md. Feb. 28, 2013) ........................................................................30
United States v. United States ex rel. Thornton,
207 F.3d 769 (5th Cir. 2000) ......................................................................................................................14
United States, ex rel. Polansky v. Exec. Health Res., Inc.,
599 U.S. 419 (2023) .....................................................................................................................................11
vi
Wade v. City of N. Chicago Police Pension Bd.,
226 Ill. 2d 485 (2007) ..................................................................................................................................27
FILED DATE: 9/15/2023 8:29 PM 2017L000289
Watson v. S. Shore Nursing & Rehab. Ctr., LLC,
2012 IL App (1st) 103730 ..........................................................................................................................13
White v. N.H. Dep’t of Emp’t Sec.,
455 U.S. 445 (1982) .....................................................................................................................................17
Statutes
31 U.S.C. §§ 3729–3733 ..................................................................................................................................12
740 ILCS 175/1.................................................................................................................................................. 1
740 ILCS 175/3................................................................................................................................................12
740 ILCS 175/4........................................................................................................................................ passim
Treatises
John T. Boese & Douglas W. Baruch, Civil False Claims and Qui Tam Actions § 3.09[A][1][b]
(Fifth Edition, 2023-2 Supp. 2020) ...........................................................................................................28
vii
INTRODUCTION
Nearly a decade ago, Plaintiff-Relator Edelweiss Fund, LLC (“Relator”) brought this case
FILED DATE: 9/15/2023 8:29 PM 2017L000289
under the Illinois False Claims Act, 740 ILCS 175/1 et seq. (the “IFCA”). Relator broadly alleged that
the Defendants Banks systemically and collusively inflated the rates of municipal bonds. That
violated the IFCA because Defendants claimed they were doing the job the government hired them
to perform—obtaining the lowest interest rate they could—but in fact did the opposite—setting
objectively inflated rates for their own profit. This cost Illinois taxpayers hundreds of millions of
dollars, and Relator set out to remedy Defendants’ misconduct.
The State indicated early on that it would not join in Relator’s efforts. So Relator assembled
a team of highly skilled counsel and industry experts to prosecute the action, as the IFCA allows.
For years, Relator and its team worked tirelessly, spending many thousands of hours and millions of
dollars. Meanwhile, the State sat on the sidelines.
Just weeks before the case was set to go to trial, the State announced to Relator and the
Court that it had reached a proposed settlement with Defendants. Under the proposed settlement,
Defendants will pay $53 million to the State to resolve their liability for violating the IFCA. Relator
believes it would have obtained a larger recovery if it were to take the case to trial, but it does not
challenge the amount. That is because Relator appreciates the State may determine how much it will
accept to settle claims that allege harm to the State. That is also because $53 million is a hefty sum
by any measure. Indeed, it would be the largest recovery Illinois has ever obtained under the IFCA.
However, the proposed settlement contains a highly unusual term to which Relator
vigorously objects. Specifically, the State purports to “allocate” $15 million of the total $68 million
Defendants would pay to compensate Relator for its attorneys’ fees, expenses, and costs (the “fee
claim”). The IFCA’s fee-shifting provision provides that Relator “shall [] receive an amount for
reasonable expenses which the court finds to have been necessarily incurred, plus reasonable
1
attorneys’ fees and costs,” which “shall be awarded against the defendant.” 740 ILCS 175/4(d)(2).
But the amount the State “allocates” to Relator’s fee claim—far less than half the amount Relator
FILED DATE: 9/15/2023 8:29 PM 2017L000289
incurred to successfully prosecute this action and achieve a historic recovery—is not “reasonable.”
In its motion, the State asserts that the Court need not be troubled by Relator’s objection
because the State has a “clear right” to settle Relator’s fee claim. Going further, the State usurps the
traditional judicial role and demands this Court’s deference to the State’s view of a “reasonable”
amount. The State’s position is legally groundless. In the deep body of case law that relates to the
resolution of actions under the IFCA and federal False Claims Act (“FCA”), on which the IFCA is
patterned, not a single case holds that the State may settle Relator’s fee claim. And no court has ever
adjudicated a relator’s fee claim under the deferential standard the State demands. Indeed, the State’s
position is a reversal for the State itself, which previously asserted that the State plays “no role” in
determining the reasonableness of a relator’s fee claim.
The troubles with the State’s anomalous legal position do not end there. The State’s
construction of the IFCA is incompatible with the statute’s text, undermines the law’s core purpose,
and leads to absurd results. It also violates black-letter contract law and would result in an
unconstitutional taking of a relator’s right to a “reasonable” fee. And beyond that, the State’s
position represents a radical break from established practice. That is likely why the State cannot
identify a single case in which the government, state or federal, has ever settled a relator’s fee claim.
That is telling, as there are thousands of resolved cases to examine.
The State’s motion asks the Court to approve a proposed settlement that is predicated on
legal authority that no court, in Illinois or elsewhere, has ever recognized. This Court should decline
the State’s invitation to “leave the island of safety.”
But Relator is reasonable and realistic. As the existence of the proposed settlement indicates,
the end of this matter may be in sight—and Relator is committed to finding it. Relator seeks only its
2
“reasonable” fees, costs, and expenses, not a “maximalist” recovery, as the State says. Relator has no
interest in scuttling the State’s recovery. Like the State and Defendants, Relator hopes to get this
FILED DATE: 9/15/2023 8:29 PM 2017L000289
case settled. To that end, Relator would welcome the Court convening a settlement conference
among the parties to find a resolution, at any time.
If a negotiated resolution proves impossible, however, the Court should proceed as it would
in the normal course. First, the Court should confirm, as a legal matter, that Relator is entitled to a
judicial determination of its “reasonable” fee claim. Second , the Court should enter an order
approving the two parts of the proposed settlement into which the State and Defendants have
authority to enter: (1) the $53 million payment the State has agreed to accept to release Defendants
from liability for violating the IFCA, and (2) the State’s agreement that Relator should receive 30
percent of the proceeds of the action, which Relator accepts. In its order, the Court should retain
jurisdiction over the matter to hear Relator’s fee claim. And third , the Court should set a briefing
schedule for Relator’s fee petition. If the State and Defendants will not resolve Relator’s fee claim,
then the Court must decide it as the law requires, on a complete record.
FACTUAL BACKGROUND
Relator brought this case on behalf of Illinois taxpayers around nine years ago. 1 The State
declined to intervene a year later. Since then, Relator and a team of experienced counsel have
vigorously litigated the matter. Relator took and defended more than 100 depositions; reviewed and
produced nearly 9 million pages from more than 1.5 million files, including approximately 267,000
spreadsheets; prepared several highly complex expert reports; litigated discovery disputes; briefed
and responded to multiple summary judgment motions; and expended significant resources
preparing for trial. See Motion for Settlement Approval (“Mot.”) at 4–6.
1
Given the Court’s familiarity with this matter, Relator summarizes only the facts relevant to the
State’s present motion.
3
In March 2023, Relator and Defendants began to discuss mediating this action. Retired
United States District Judge Layn Phillips and two of his colleagues facilitated an all-day mediation
FILED DATE: 9/15/2023 8:29 PM 2017L000289
on May 12, 2023. It included all Defendants, the State, and Relator. The mediation was not
successful. Id. Ex. 1 at 2 (Jones Decl. ¶ 8). Thereafter, without Relator’s knowledge or participation,
the State and Defendants continued discussions regarding a settlement. Id. (Jones Decl. ¶ 9).
On June 13, 2023, the Court denied Defendants’ motion for summary judgment on public
disclosure grounds, and partially granted Relator’s cross-motion for summary judgment on public
disclosure grounds.
In or about early July 2023, Relator learned that Defendants and the State had agreed to a
proposed settlement. Its material terms were that (a) Defendants would pay the State $68 million;
(b) the State would “allocate” $10 million of that amount to Relator’s claim for fees and expenses;
and (c) the State would allocate 25 percent of the $58 million in net proceeds to the State to Relator
as a relator share. Relator learned the proposed settlement was contingent on the Relator receiving
not more than $10 million for its fee claim, and Defendants not paying more than $68 million in
total. See Corrected Declaration of Daniel W. Levy (“Levy Decl.”) at ¶ 7.
Relator expressed its view that the proposed settlement was unacceptable. Relator did not
challenge the State’s agreement to accept $58 million to settle Defendants’ liability to the State.
Relator did, however, disagree with the proposed settlement because (1) Relator pursued this action
without intervention or assistance from the State, entitling Relator to more than the statutory
minimum percentage of the recovery; and (2) the IFCA guarantees Relator its “reasonable”
4
attorneys’ fees, costs, and expenses, see 740 ILCS 175/4(d)(2), and the amount the proposed
settlement allocated for Relator’s fee claim did not provide that. Levy Decl. at ¶ 8. 2
FILED DATE: 9/15/2023 8:29 PM 2017L000289
Soon after, the State and Defendants modified the proposed settlement. Under the revised
settlement, Defendants would still pay the State $68 million. But the State now proposed to allocate
$15 million of that amount to Relator’s fee claim. The State also proposed that Relator would
receive 30 percent of the State’s net proceeds, which were now reduced to $53 million. Id. at ¶ 9.
The contingent aspects of the settlement remained: The proposed settlement was contingent on the
Relator receiving not more than $15 million for its fee claim and Defendants not paying more than
$68 million in total. Id.
On July 11, 2023, the day before the Court was to hear oral argument on the parties’ fully
briefed cross-motions for summary judgment, the State informed the Court of certain material
aspects of the proposed settlement, while omitting others. Mot. Ex. 3. The letter the State sent to
the Court announcing the proposed settlement did not explain that the proposed settlement was
contingent on the Relator receiving not more than $15 million for its fee claim and Defendants not
paying more than $68 million in total, nor did it explain that if either term changed, either the State
or Defendants could walk away from the proposed settlement.
On the same day, Defendants filed an emergency motion to strike various trial-related
deadlines the Court had set. The motion relied exclusively on the State’s letter. See Emer. Mot. at 1.
Like the State’s letter, Defendants’ emergency motion did not explain that the proposed settlement
was contingent on the Relator receiving not more than $15 million for its fee claim and Defendants
2
For ease, unless otherwise noted, the phrase “fee claim” refers to the statutory right under 740
ILCS 175/4(d)(2) to “an amount for reasonable expenses which the court finds to have been
necessarily incurred, plus reasonable attorneys’ fees and costs.”
5
not paying more than $68 million in total. It also did not explain that if either term changed, the
State or Defendants could walk away from the proposed settlement.
FILED DATE: 9/15/2023 8:29 PM 2017L000289
Relator opposed the motion, arguing the proposed settlement was “illusory” in that it was
contingent on Relator receiving no more than $15 million for its fee claim, an amount the Court was
highly unlikely to find “reasonable.” See Emer. Opp. at 1–2. Relator’s preliminary review estimated
that Relator would seek not less than $9 million in expenses and costs and not less than $30 million
in attorneys’ fees in a fee petition, making it “virtually certain” the Court eventually would conclude
that $15 million is insufficient to compensate Relator’s “reasonable” fee claim. See Levy Decl. ¶ 10;
Emer. Opp. at 1, 9. Relator also opposed the motion because the proposed settlement imposed an
ethical conflict on Relator’s counsel, pitting the interests of Relator against its counsel in a zero-sum
game over finite dollars. Emer. Opp. at 12.
In their reply, Defendants again failed to explain the contingent aspects of the proposed
settlement. Instead, they stated, without elaboration, that “Relator’s representations about the terms
of the settlement agreement between the State and Defendants . . . are [] incorrect in material
respects.” Emer. Reply at 3.
On July 17, 2023, the parties appeared before the Court for argument on Defendants’
motion. Relator reiterated its understanding that the settlement was contingent. See Emer. Mot.
Hearing Tr. at 10–12, 13, 15, 17. In response, Defendants stated:
All of the comments about what the settlement does or does not say is exactly what
will be put before your Honor in a full factual record when the attorney general
makes its motion. This representation about a settlement being contingent is false.
Id. at 18 (emphasis added). The Court then pressed: “So it’s a settlement agreement and if
the court awards fees over and above, you’re on the line.” Id. Defendants responded, “Precisely,
your Honor.” Id. Moments later, the Court explained that Defendants had “made a judicial
admission that the [C]ourt is not bound by the settlement in terms of the fee award.” Id. at 20.
6
The Court directed the State to file its motion for approval of the settlement. Id. at 19. In
response to Relator’s counsel’s inquiry, the Court stated that Relator does not “need to file a fee
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petition.” Id. at 21. Instead, the Court would make a “decision as a question of law whether [Relator
is] entitled to a fee over and above the amount provided for by the attorney general in the allocation
of settlement”; “that is a legal question” the Court would decide “and then give [Relator] leave to file
[its] fee petition.” Id. Following argument, the Court granted Defendants’ motion to strike various
trial-related deadlines.
On July 26, 2023, the State filed a motion seeking approval of the proposed settlement. The
motion appended the complete settlement agreement for which Defendants and the State seek the
Court’s approval. See Mot. Ex. 4. This was the first time Relator saw its terms.
Contrary to Defendants’ representations to this Court, the written agreement confirms the
settlement is contingent on Relator receiving not more than $15 million for its fee claim and
Defendants not paying more than $68 million in total. As Relator previously indicated, if either term
is changed, the State and Defendants can walk away from the proposed settlement. Specifically, with
respect to the State’s contingent commitment to execute the settlement, Paragraph 6 of the
agreement provides:
The State has the right to withdraw from this Settlement if a court of competent jurisdiction for the
Action enters any order(s) at any time (i) requiring any changes to the allocation of funds determined
by the Attorney General and memorialized in § 1 of this Settlement, or (ii) purporting to
approve a settlement containing terms that are different from or that impose o
Preview
Hearing Date: No hearing scheduled Location: <> Judge: Calendar, W FILED 9/15/2023 8:29 PM IRIS Y. MARTINEZ CIRCUIT CLERK COOK COUNTY, IL FILED DATE: 9/15/2023 8:29 PM 2017L000289 2017L000289 Calendar, W 24401368 IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION STATE OF ILLINOIS ex rel. EDELWEISS ) Case No. 2017 L 000289 FUND, LLC, ) ) CAL. W Plaintiff, ) JUDGE THOMAS MORE DONNELLY v. ) ) JPMORGAN CHASE & CO., et al., ) Defendants. ) ) ) RELATOR’S RESPONSE TO THE STATE OF ILLINOIS’ MOTION FOR APPROVAL OF QUI TAM SETTLEMENT September 15, 2023 TABLE OF CONTENTS FILED DATE: 9/15/2023 8:29 PM 2017L000289 INTRODUCTION ........................................................................................................................................... 1 FACTUAL BACKGROUND......................................................................................................................... 3 ARGUMENT..................................................................................................................................................... 8 I. The State’s power to settle an IFCA action extends only to claims involving Defendants’ liability to the State, not to collateral claims that belong to Relator. .................. 9 A. The IFCA’s structure demonstrates the State may not settle Relator’s fee claim. ......11 B. Precedent forecloses the State’s argument that it may settle Relator’s fee claim. .......15 C. The State’s construction of the IFCA undermines the statute’s purposes, leads to absurd results, and defies logic. ..........................................................................................21 D. The State’s interpretation of the IFCA violates black-letter contract law and would result in an unconstitutional taking of Relator’s right to a “reasonable” fee. ..............25 E. The State’s attempt to settle Relator’s fee claim is inconsistent with the actual practice of parties that settle qui tam cases under false-claims statutes. ........................27 II. The State’s attacks on the merits of Relator’s case are gratuitous and wrong. ......................29 III. The State’s views of Relator’s fees are premature and legally groundless. .............................33 CONCLUSION ...............................................................................................................................................35 CERTIFICATE OF SERVICE ....................................................................................................................37 ii TABLE OF AUTHORITIES FILED DATE: 9/15/2023 8:29 PM 2017L000289 Cases Canel v. Topinka, 212 Ill. 2d 311 (2004) ..................................................................................................................................26 Canel v. Topinka, 342 Ill. App. 3d 65 (1st Dist. 2003) ..........................................................................................................26 Carter v. SSC Odin Operating Co., LLC, 2012 IL 113204 ............................................................................................................................................25 Coldwell Banker Havens, Inc. v. Renfro, 288 Ill. App. 3d 442 (5th Dist. 1997) ........................................................................................................17 Customs Fraud Investigations, LLC v. Victaulic Co., No. 13-2983, 2019 WL 4280494 (E.D. Pa. Sept. 9, 2019) ....................................................................34 Duncan Pub., Inc. v. City of Chicago, 304 Ill. App. 3d 778 (1st Dist. 1999) ........................................................................................................17 Gaffney v. Bd. of Trustees of Orland Fire Prot. Dist., 2012 IL 110012 ............................................................................................................................................22 Ill. Physicians Union v. Miller, 675 F.2d 151 (7th Cir. 1982) ......................................................................................................................30 In re Marriage of Mathis, 2012 IL 113496 ............................................................................................................................................21 Law Offs. of Colleen M. McLaughlin v. First Star Fin. Corp., 2011 IL App (1st) 101849 ..........................................................................................................................25 McAleer Buick-Pontiac Co. v. Gen. Motors Corp., 95 Ill. App. 3d 111 (4th Dist. 1981) ..........................................................................................................27 Molino v. Bast Servs., Inc., No. 08 C 4399, 2011 WL 841891 (N.D. Ill. Mar. 7, 2011)............................................................. 13, 34 Morton Grove Park Dist. v. Am. Nat. Bank & Tr. Co., 78 Ill. 2d 353 (1980) ....................................................................................................................................26 Murphy v. Smith, 138 S. Ct. 784 (2018) ...................................................................................................................................34 New York v. Egon Zehnder Int’l, Inc., No. 21-cv-06883, 2022 WL 3927942 (S.D.N.Y. Aug. 31, 2022) ..........................................................15 iii People ex rel. Schad, Diamond & Shedden, P.C. v. My Pillow, Inc., 2017 IL App (1st) 152668 ................................................................................................................... 18, 22 FILED DATE: 9/15/2023 8:29 PM 2017L000289 Poilevey v. Spivack, 368 Ill. App. 3d 412 (1st Dist. 2006) ........................................................................................................17 Rodriguez v. W. Publ’g Corp., 563 F.3d 948 (9th Cir. 2009) ......................................................................................................................33 Roxana Cmty. Unit Sch. Dist. No. 1 v. Env’t Prot. Agency, 2013 IL App (4th) 120825 .........................................................................................................................17 Scachitti v. UBS Financial Services, 215 Ill. 2d 484 (Ill. 2005) .................................................................................................................... passim Solon v. Midwest Med. Recs. Ass’n, Inc., 236 Ill. 2d 433 (2010) ..................................................................................................................... 21, 22, 23 Stahelin v. Forest Pres. Dist. of Du Page Cnty., 401 Ill. App. 3d 1030 (2nd Dist. 2010).....................................................................................................17 State ex rel. Foy v. Vanderbilt Capital Advisors, LLC, 511 P.3d 329 (N.M. Ct. App. 2020) ................................................................................................... 20, 21 State ex rel. Schad, Diamond & Shedden, P.C. v. My Pillow, Inc., 2018 IL 122487 ........................................................................................................................ 18, 19, 22, 28 State of Illinois ex rel. Beeler, Schad & Diamond v. Target Corp., 367 Ill. App. 3d 860, 865 (1st Dist. 2006) ................................................................................................11 Stein v. Spainhour, 196 Ill. App. 3d 65 (4th Dist. 1990) ..........................................................................................................17 United States ex rel. Averback v. Pastor Med. Assocs., P.C., 224 F. Supp. 2d 342 (D. Mass. 2002) .......................................................................................................35 United States ex rel. Balko v. Senior Home Care, Inc., No. 8:13-cv-03072, 2017 WL 3268200 (M.D. Fla. Aug. 1, 2017) ........................................................16 United States ex rel. Bibby v. Wells Fargo Bank, N.A., 369 F. Supp. 3d 1346 (N.D. Ga. 2019) ....................................................................................................16 United States ex rel. Bryant v. Cmty. Health Sys., Inc., 24 F.4th 1024 (6th Cir. 2022).....................................................................................................................17 United States ex rel. Burr v. Blue Cross Blue Shield of Fla., Inc., 882 F. Supp. 166 (M.D. Fla. 1995)............................................................................................................16 United States ex rel. Cody v. ManTech Int’l. Corp., No. 1:16-cv-00132, 2017 WL 5146019 (E.D. Va. Aug. 30, 2017)........................................................16 iv United States ex rel. Fallon v. Accudyne Corp., 97 F.3d 937 (7th Cir. 1996) ........................................................................................................................35 FILED DATE: 9/15/2023 8:29 PM 2017L000289 United States ex rel. Gathman v. CareOne Mgm’t LLC., No. 17-6180, 2021 WL 4295519 (D.N.J. Aug. 23, 2021) ......................................................................16 United States ex rel. Hartnett v. Physicians Choice Lab. Serv., No. 3:17-cv-00037, 2021 WL 3072460 (W.D.N.C. July 20, 2021) .......................................................16 United States ex rel. Horsley v. Comfort Care Home Health, LLC, No. 2:19-cv-00029, 2020 WL 4002005 (N.D. Ala. July 15, 2020)........................................................15 United States ex rel. Howard v. Urban Inv. Trust, Inc., No. 03 C 7668, 2013 WL 4804832 (N.D. Ill. Sept. 9, 2013) .......................................................... 13, 34 United States ex rel. John Doe I v. Penn. Blue Shield, 54 F. Supp. 2d 410 (E.D. Pa. 1999) ..........................................................................................................35 United States ex rel. Johnson v. Universal Health Servs., Inc., 889 F. Supp. 2d 791 (W.D. Va. 2012) ......................................................................................................16 United States ex rel. Karlin v. Noble Jewelry Holdings, Ltd., No. 08 Civ. 7826, 2012 WL 1228199 (S.D.N.Y. Apr. 9, 2012) ............................................................16 United States ex rel. Koo v. HS Caltex, No. 2:18-cv-00174, 2020 WL 8477217 (S.D. Ohio Mar. 23, 2020) .....................................................16 United States ex rel. Lazar v. S.M.R.T., LLC, No. 3:18-cv-00822, 2022 WL 17994015 (S.D. Cal. Dec. 29, 2022) .....................................................25 United States ex rel. Lefan v. Gen. Elec. Co., 394 F. App’x 265 (6th Cir. 2010) ..............................................................................................................35 United States ex rel. Liotine v. CDW-Gov’t, Inc., No. 3:05-cv-00033, 2013 WL 11267176 (S.D. Ill. May 17, 2013) ................................................. 16, 35 United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corp., 793 F. Supp. 2d 1260 (D. Colo. 2011)......................................................................................................35 United States ex rel. Nudelman v. Int’l Rehab. Assocs., Inc., No. 00-1837, 2006 WL 925035 (E.D. Pa. Apr. 4, 2006) .......................................................................15 United States ex rel. Perez v. Williams, No. 08 C 4326, 2013 WL 1181487 (N.D. Ill. Mar. 19, 2013) ...............................................................16 United States ex rel. Peterson v. Sanborn Map Co., Inc., No. 4:11-cv-00902, 2014 WL 414358 (E.D. Mo. Feb. 4, 2014) ...........................................................25 United States ex rel. Poulton v. Anesthesia Assocs. of Burlington, Inc., 87 F. Supp. 2d 351 (D. Vt. 2000) ..............................................................................................................35 v United States ex rel. Price v. Peters, No. 12-03107, 2014 WL 9866915 (C.D. Ill. Aug. 21, 2014) .................................................................16 FILED DATE: 9/15/2023 8:29 PM 2017L000289 United States ex rel. Resnick v. Weill Med. Coll. of Cornell Univ., No. 04 Civ. 3088, 2009 WL 637137 (S.D.N.Y. Mar. 5, 2009) ..............................................................16 United States ex rel. Schweizer v. Oce N. Am., 956 F. Supp. 2d 1 (D.D.C. 2013) ..............................................................................................................15 United States ex rel. Shea v. Verizon Comm. Inc., 844 F. Supp. 2d 78 (D.D.C. 2012) ............................................................................................................16 United States ex rel. Shepard v. Grand Junction Reg’l Airport Auth., No. 13-cv-00736, 2017 WL 11556405 (D. Colo. Jul. 24, 2017) ...........................................................34 United States ex rel. Shutt v. Cmty. Home & Health Care Servs., Inc., 550 F.3d 764 (9th Cir. 2008) ......................................................................................................................17 United States ex rel. Tommasino v. Guida, No. 10-cv-4644, 2017 WL 878587 (E.D.N.Y. Mar. 6, 2017) ................................................................34 United States ex rel. Williams v. Williams, No. 2:15-cv-00054, 2023 WL 3179331 (D. Utah May 1, 2023)............................................................16 United States ex rel. Wittenberg v. Public Utility Dist., No. 3:14-cv-00213, 2016 WL 6518438 (D. Or. Nov. 1, 2016) .............................................................16 United States ex rel. Zediker v. OrthoGeorgia, 407 F. Supp. 3d 1330 (M.D. Ga. 2019) ............................................................................................. 14, 15 United States v. Allergen, No. SACV 18-203 JVS, 2023 WL 4754637 (C.D. Cal. July 24, 2023) .................................................16 United States v. Cooper Health Sys., 940 F. Supp. 2d 208 (D.N.J. 2013) ...........................................................................................................35 United States v. Evercare Hospice, Inc., No. 11-cv-00642, 2017 WL 491168 (D. Colo. Feb. 7, 2017) ................................................................16 United States v. Everglades Coll., Inc., 855 F.3d 1279 (11th Cir. 2017)........................................................................................................... 15, 18 United States v. Fadul, No. 11-0385, 2013 WL 781614 (D. Md. Feb. 28, 2013) ........................................................................30 United States v. United States ex rel. Thornton, 207 F.3d 769 (5th Cir. 2000) ......................................................................................................................14 United States, ex rel. Polansky v. Exec. Health Res., Inc., 599 U.S. 419 (2023) .....................................................................................................................................11 vi Wade v. City of N. Chicago Police Pension Bd., 226 Ill. 2d 485 (2007) ..................................................................................................................................27 FILED DATE: 9/15/2023 8:29 PM 2017L000289 Watson v. S. Shore Nursing & Rehab. Ctr., LLC, 2012 IL App (1st) 103730 ..........................................................................................................................13 White v. N.H. Dep’t of Emp’t Sec., 455 U.S. 445 (1982) .....................................................................................................................................17 Statutes 31 U.S.C. §§ 3729–3733 ..................................................................................................................................12 740 ILCS 175/1.................................................................................................................................................. 1 740 ILCS 175/3................................................................................................................................................12 740 ILCS 175/4........................................................................................................................................ passim Treatises John T. Boese & Douglas W. Baruch, Civil False Claims and Qui Tam Actions § 3.09[A][1][b] (Fifth Edition, 2023-2 Supp. 2020) ...........................................................................................................28 vii INTRODUCTION Nearly a decade ago, Plaintiff-Relator Edelweiss Fund, LLC (“Relator”) brought this case FILED DATE: 9/15/2023 8:29 PM 2017L000289 under the Illinois False Claims Act, 740 ILCS 175/1 et seq. (the “IFCA”). Relator broadly alleged that the Defendants Banks systemically and collusively inflated the rates of municipal bonds. That violated the IFCA because Defendants claimed they were doing the job the government hired them to perform—obtaining the lowest interest rate they could—but in fact did the opposite—setting objectively inflated rates for their own profit. This cost Illinois taxpayers hundreds of millions of dollars, and Relator set out to remedy Defendants’ misconduct. The State indicated early on that it would not join in Relator’s efforts. So Relator assembled a team of highly skilled counsel and industry experts to prosecute the action, as the IFCA allows. For years, Relator and its team worked tirelessly, spending many thousands of hours and millions of dollars. Meanwhile, the State sat on the sidelines. Just weeks before the case was set to go to trial, the State announced to Relator and the Court that it had reached a proposed settlement with Defendants. Under the proposed settlement, Defendants will pay $53 million to the State to resolve their liability for violating the IFCA. Relator believes it would have obtained a larger recovery if it were to take the case to trial, but it does not challenge the amount. That is because Relator appreciates the State may determine how much it will accept to settle claims that allege harm to the State. That is also because $53 million is a hefty sum by any measure. Indeed, it would be the largest recovery Illinois has ever obtained under the IFCA. However, the proposed settlement contains a highly unusual term to which Relator vigorously objects. Specifically, the State purports to “allocate” $15 million of the total $68 million Defendants would pay to compensate Relator for its attorneys’ fees, expenses, and costs (the “fee claim”). The IFCA’s fee-shifting provision provides that Relator “shall [] receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable 1 attorneys’ fees and costs,” which “shall be awarded against the defendant.” 740 ILCS 175/4(d)(2). But the amount the State “allocates” to Relator’s fee claim—far less than half the amount Relator FILED DATE: 9/15/2023 8:29 PM 2017L000289 incurred to successfully prosecute this action and achieve a historic recovery—is not “reasonable.” In its motion, the State asserts that the Court need not be troubled by Relator’s objection because the State has a “clear right” to settle Relator’s fee claim. Going further, the State usurps the traditional judicial role and demands this Court’s deference to the State’s view of a “reasonable” amount. The State’s position is legally groundless. In the deep body of case law that relates to the resolution of actions under the IFCA and federal False Claims Act (“FCA”), on which the IFCA is patterned, not a single case holds that the State may settle Relator’s fee claim. And no court has ever adjudicated a relator’s fee claim under the deferential standard the State demands. Indeed, the State’s position is a reversal for the State itself, which previously asserted that the State plays “no role” in determining the reasonableness of a relator’s fee claim. The troubles with the State’s anomalous legal position do not end there. The State’s construction of the IFCA is incompatible with the statute’s text, undermines the law’s core purpose, and leads to absurd results. It also violates black-letter contract law and would result in an unconstitutional taking of a relator’s right to a “reasonable” fee. And beyond that, the State’s position represents a radical break from established practice. That is likely why the State cannot identify a single case in which the government, state or federal, has ever settled a relator’s fee claim. That is telling, as there are thousands of resolved cases to examine. The State’s motion asks the Court to approve a proposed settlement that is predicated on legal authority that no court, in Illinois or elsewhere, has ever recognized. This Court should decline the State’s invitation to “leave the island of safety.” But Relator is reasonable and realistic. As the existence of the proposed settlement indicates, the end of this matter may be in sight—and Relator is committed to finding it. Relator seeks only its 2 “reasonable” fees, costs, and expenses, not a “maximalist” recovery, as the State says. Relator has no interest in scuttling the State’s recovery. Like the State and Defendants, Relator hopes to get this FILED DATE: 9/15/2023 8:29 PM 2017L000289 case settled. To that end, Relator would welcome the Court convening a settlement conference among the parties to find a resolution, at any time. If a negotiated resolution proves impossible, however, the Court should proceed as it would in the normal course. First, the Court should confirm, as a legal matter, that Relator is entitled to a judicial determination of its “reasonable” fee claim. Second , the Court should enter an order approving the two parts of the proposed settlement into which the State and Defendants have authority to enter: (1) the $53 million payment the State has agreed to accept to release Defendants from liability for violating the IFCA, and (2) the State’s agreement that Relator should receive 30 percent of the proceeds of the action, which Relator accepts. In its order, the Court should retain jurisdiction over the matter to hear Relator’s fee claim. And third , the Court should set a briefing schedule for Relator’s fee petition. If the State and Defendants will not resolve Relator’s fee claim, then the Court must decide it as the law requires, on a complete record. FACTUAL BACKGROUND Relator brought this case on behalf of Illinois taxpayers around nine years ago. 1 The State declined to intervene a year later. Since then, Relator and a team of experienced counsel have vigorously litigated the matter. Relator took and defended more than 100 depositions; reviewed and produced nearly 9 million pages from more than 1.5 million files, including approximately 267,000 spreadsheets; prepared several highly complex expert reports; litigated discovery disputes; briefed and responded to multiple summary judgment motions; and expended significant resources preparing for trial. See Motion for Settlement Approval (“Mot.”) at 4–6. 1 Given the Court’s familiarity with this matter, Relator summarizes only the facts relevant to the State’s present motion. 3 In March 2023, Relator and Defendants began to discuss mediating this action. Retired United States District Judge Layn Phillips and two of his colleagues facilitated an all-day mediation FILED DATE: 9/15/2023 8:29 PM 2017L000289 on May 12, 2023. It included all Defendants, the State, and Relator. The mediation was not successful. Id. Ex. 1 at 2 (Jones Decl. ¶ 8). Thereafter, without Relator’s knowledge or participation, the State and Defendants continued discussions regarding a settlement. Id. (Jones Decl. ¶ 9). On June 13, 2023, the Court denied Defendants’ motion for summary judgment on public disclosure grounds, and partially granted Relator’s cross-motion for summary judgment on public disclosure grounds. In or about early July 2023, Relator learned that Defendants and the State had agreed to a proposed settlement. Its material terms were that (a) Defendants would pay the State $68 million; (b) the State would “allocate” $10 million of that amount to Relator’s claim for fees and expenses; and (c) the State would allocate 25 percent of the $58 million in net proceeds to the State to Relator as a relator share. Relator learned the proposed settlement was contingent on the Relator receiving not more than $10 million for its fee claim, and Defendants not paying more than $68 million in total. See Corrected Declaration of Daniel W. Levy (“Levy Decl.”) at ¶ 7. Relator expressed its view that the proposed settlement was unacceptable. Relator did not challenge the State’s agreement to accept $58 million to settle Defendants’ liability to the State. Relator did, however, disagree with the proposed settlement because (1) Relator pursued this action without intervention or assistance from the State, entitling Relator to more than the statutory minimum percentage of the recovery; and (2) the IFCA guarantees Relator its “reasonable” 4 attorneys’ fees, costs, and expenses, see 740 ILCS 175/4(d)(2), and the amount the proposed settlement allocated for Relator’s fee claim did not provide that. Levy Decl. at ¶ 8. 2 FILED DATE: 9/15/2023 8:29 PM 2017L000289 Soon after, the State and Defendants modified the proposed settlement. Under the revised settlement, Defendants would still pay the State $68 million. But the State now proposed to allocate $15 million of that amount to Relator’s fee claim. The State also proposed that Relator would receive 30 percent of the State’s net proceeds, which were now reduced to $53 million. Id. at ¶ 9. The contingent aspects of the settlement remained: The proposed settlement was contingent on the Relator receiving not more than $15 million for its fee claim and Defendants not paying more than $68 million in total. Id. On July 11, 2023, the day before the Court was to hear oral argument on the parties’ fully briefed cross-motions for summary judgment, the State informed the Court of certain material aspects of the proposed settlement, while omitting others. Mot. Ex. 3. The letter the State sent to the Court announcing the proposed settlement did not explain that the proposed settlement was contingent on the Relator receiving not more than $15 million for its fee claim and Defendants not paying more than $68 million in total, nor did it explain that if either term changed, either the State or Defendants could walk away from the proposed settlement. On the same day, Defendants filed an emergency motion to strike various trial-related deadlines the Court had set. The motion relied exclusively on the State’s letter. See Emer. Mot. at 1. Like the State’s letter, Defendants’ emergency motion did not explain that the proposed settlement was contingent on the Relator receiving not more than $15 million for its fee claim and Defendants 2 For ease, unless otherwise noted, the phrase “fee claim” refers to the statutory right under 740 ILCS 175/4(d)(2) to “an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs.” 5 not paying more than $68 million in total. It also did not explain that if either term changed, the State or Defendants could walk away from the proposed settlement. FILED DATE: 9/15/2023 8:29 PM 2017L000289 Relator opposed the motion, arguing the proposed settlement was “illusory” in that it was contingent on Relator receiving no more than $15 million for its fee claim, an amount the Court was highly unlikely to find “reasonable.” See Emer. Opp. at 1–2. Relator’s preliminary review estimated that Relator would seek not less than $9 million in expenses and costs and not less than $30 million in attorneys’ fees in a fee petition, making it “virtually certain” the Court eventually would conclude that $15 million is insufficient to compensate Relator’s “reasonable” fee claim. See Levy Decl. ¶ 10; Emer. Opp. at 1, 9. Relator also opposed the motion because the proposed settlement imposed an ethical conflict on Relator’s counsel, pitting the interests of Relator against its counsel in a zero-sum game over finite dollars. Emer. Opp. at 12. In their reply, Defendants again failed to explain the contingent aspects of the proposed settlement. Instead, they stated, without elaboration, that “Relator’s representations about the terms of the settlement agreement between the State and Defendants . . . are [] incorrect in material respects.” Emer. Reply at 3. On July 17, 2023, the parties appeared before the Court for argument on Defendants’ motion. Relator reiterated its understanding that the settlement was contingent. See Emer. Mot. Hearing Tr. at 10–12, 13, 15, 17. In response, Defendants stated: All of the comments about what the settlement does or does not say is exactly what will be put before your Honor in a full factual record when the attorney general makes its motion. This representation about a settlement being contingent is false. Id. at 18 (emphasis added). The Court then pressed: “So it’s a settlement agreement and if the court awards fees over and above, you’re on the line.” Id. Defendants responded, “Precisely, your Honor.” Id. Moments later, the Court explained that Defendants had “made a judicial admission that the [C]ourt is not bound by the settlement in terms of the fee award.” Id. at 20. 6 The Court directed the State to file its motion for approval of the settlement. Id. at 19. In response to Relator’s counsel’s inquiry, the Court stated that Relator does not “need to file a fee FILED DATE: 9/15/2023 8:29 PM 2017L000289 petition.” Id. at 21. Instead, the Court would make a “decision as a question of law whether [Relator is] entitled to a fee over and above the amount provided for by the attorney general in the allocation of settlement”; “that is a legal question” the Court would decide “and then give [Relator] leave to file [its] fee petition.” Id. Following argument, the Court granted Defendants’ motion to strike various trial-related deadlines. On July 26, 2023, the State filed a motion seeking approval of the proposed settlement. The motion appended the complete settlement agreement for which Defendants and the State seek the Court’s approval. See Mot. Ex. 4. This was the first time Relator saw its terms. Contrary to Defendants’ representations to this Court, the written agreement confirms the settlement is contingent on Relator receiving not more than $15 million for its fee claim and Defendants not paying more than $68 million in total. As Relator previously indicated, if either term is changed, the State and Defendants can walk away from the proposed settlement. Specifically, with respect to the State’s contingent commitment to execute the settlement, Paragraph 6 of the agreement provides: The State has the right to withdraw from this Settlement if a court of competent jurisdiction for the Action enters any order(s) at any time (i) requiring any changes to the allocation of funds determined by the Attorney General and memorialized in § 1 of this Settlement, or (ii) purporting to approve a settlement containing terms that are different from or that impose o