Bates v. Mortgage Electronic Registration System, Inc.

Plaintiff Barrett R. Bates, a realtor, filed suit under the California False Claims Act (“CFCA”), Cal. Gov’t Code §§ 12650-12655, against Defendants Mortgage Electronic Registration System, Inc. (“MERS”), Bank of America, N.A., Countrywide Home Loans, Inc., Citimortgage, Inc., GMAC Mortgage LLC, J.P. Morgan Chase Bank, and Wells Fargo, N.A. (collectively, “Defendants”) on behalf of numerous California counties. Bates alleged that Defendants made false representations in naming MERS as a beneficiary in recorded mortgage documents in order to avoid paying recording fees. Defendants moved to dismiss the qui tarn action under Federal Rules of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim upon which relief may be granted. Following Defendants’ motions, Bates filed a motion for leave to file a Second Amended Complaint. The district court concluded that the public disclosure provision in the CFCA required dismissal of the action for lack of subject matter jurisdiction and, as a result, it did not analyze the 12(b)(6) motion or the motion to amend. Because Bates has failed to demonstrate that the district court erred in…