WASHINGTON — Quicken Loans' effort to get a more favorable venue in its legal dispute with the Department of Justice has been dismissed by a federal judge in Michigan.
The ruling in Quicken Loans v. United States means the case will be heard in a U.S. district court in Washington, D.C., instead of Detroit, Quicken's hometown.
"This temporary procedural setback does not deter Quicken Loans from exposing the truth about the DOJ's egregious attempts to coerce unjust settlements from its victims including Quicken Loans by using the guise of the heavy hand and power of the federal government in doing so," Bill Emerson, Quicken Loans' chief executive, said in a statement.
The Justice Department was preparing to sue Quicken Loans in April of last year for alleged shoddy underwriting of hundreds of Federal Housing Administration-insured single-family loans and pursuing civil penalties of between $5,500 and $11,000 for each under the False Claims Act.
But Quicken filed a preemptive lawsuit against the DOJ in the U.S. District Court for the Eastern District of Michigan, alleging the government had "retroactively changed its process of evaluating loans" in pursuing settlements with FHA lenders.
On Dec. 31, U.S. district court judge Mark Goldsmith found that "Quicken's complaint was filed for the purpose of acquiring a favorable forum." He did not give a ruling on the merits of Quicken's complaint.
While there "may have been settlement demands" by the Justice Department, the judge indicated in his Dec. 31 decision, "Quicken has not yet been deprived of any property interest and it will have an opportunity to be heard at a meaningful time and in a meaningful manner prior to any actual deprivation."
In a statement issued by Quicken Loans, the company said it "intends to explore its options in its claims against the government while fighting to defeat the government's retaliatory lawsuit wrongly alleging that Quicken Loans violated the False Claims Act related to a minuscule cherry-picked sample of loans Quicken Loans originated with FHA insurance."
Quicken Loans is still hoping to get the case moved to Detroit.
"We are confident that judge Reggie Walton of the Federal District Court in Washington will recognize that the proper venue for consideration of the government's allegations is Detroit," Emerson said.