The Justice Department is objecting to a request by Quicken Loans Inc. to have its lawsuit against the mortgage giant’s past lending practices heard in Detroit rather than Washington.
In a filing late Thursday in U.S. District Court in for the District of Columbia– the case’s current location — government attorneys argued that Quicken’s decision to file its own lawsuit against the Justice Department last month in Detroit should have no bearing on the venue of the government’s lawsuit against Quicken.
The government’s lawyers called Quicken’s lawsuit a surprise “preemptive strike” that came just hours after a phone call in which U.S. attorneys told Quicken’s founder Dan Gilbert and senior executives that they would soon file a lawsuit against Quicken Loans if there was no progress in reaching a settlement.
Quicken filed its lawsuit on April 17 against the Justice Department and the Department of Housing and Urban Development, calling the government’s three-year investigation of Quicken a flawed effort and a strong-armed attempt to simply extract a big settlement.
The Justice Department followed with its lawsuit on April 23. The government alleges that Quicken improperly originated and underwrote hundreds of government-insured mortgages between 2007 and 2011 amid a company culture that emphasized quantity over quality and awarded “speed bonuses.”
Quicken Loans denies those allegations.
The mortgage company’s lawyers have argued that their case should take precedence as the first one filed. They want the government’s case to either be delayed until Quicken’s case is heard, or to have both cases consolidated and heard in Detroit.
The Justice Department objected to the claims in Thursday’s court filing. Its lawyers said Washington D.C. has strong ties to the matters at hand and is a convenient location for witnesses.
“The United States chose to bring this action in [Washington] because of its strong connection to the nationwide misconduct perpetrated by Quicken on the American taxpayers,” the government’s lawyers wrote in Thursday’s court filing.
They accuse Quicken of “forum shopping” by attempting to move the case to the federal courthouse in Detroit, which is a short walk from Quicken’s headquarters in the Compuware building. They also accuse Quicken of mischaracterizing the settlement discussions in court filings and in the media.
Quicken Loans spokesman Aaron Emerson said in an email Friday that Detroit Federal Court is the logical and correct location for the case. The Justice Department’s choice of Washington D.C. was “an obvious effort to cause undue burden and expense to its latest target, Quicken Loans.”
Earlier this week U.S. District Judge Reggie Walton granted Quicken a one-month extension to June 17 for its official reply to Justice’s allegations of improper mortgage lending.
In an interview last month, Gilbert said the government’s investigation is aimed at a big settlement from his company.
“This is what happens when you dare to stand up for justice and the truth to the Department of Justice,” Gilbert told the Free Press last month.
