Mueller v. Sylacauga Housing Authority

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

EASTERN DIVISION

HEATHER MUELLER, et al., )

)

Plaintiffs, )

)

v. ) Case No. 1:20-cv-00029-SGC

)

SYLACAUGA HOUSING )

AUTHORITY, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER1

Plaintiffs Heather Mueller, Nicole Daniels, and Daniell Womack are former

executive officers of defendant Sylacauga Housing Authority (“SHA”). (Doc. 1).2

During their tenure, audits of SHA’s records and financial statements revealed

deficiencies in SHA’s internal controls and procedures. Also during the plaintiffs’

tenure, the U.S. Department of Housing and Urban Development (“HUD”) alerted

them to a possible misuse and misclassification of one of SHA’s residential

properties. In August 2019, the plaintiffs informed the SHA board of

commissioners (the “Board”) they had reported both issues to HUD and the

housing classification issue to the Department of Justice (“DOJ”). The next month,

1 The parties have unanimously consented to magistrate judge jurisdiction pursuant to 28 U.S.C.

§ 636(c). (Doc. 14).

2 Citations to the record refer to the document and page numbers assigned by the court’s

CM/ECF electronic document system and appear in the following format: (Doc. __ at __).

they were placed on administrative leave by a new acting executive director, and

they were ultimately fired in November 2019.

The plaintiffs filed this action against SHA in January 2020, asserting claims

for retaliation in violation of both the False Claims Act (“FCA”) and the Fair

Housing Act (“FHA”). (Doc. 1). Presently pending is SHA’s motion for summary

judgment on the plaintiffs’ claims, which is fully briefed and ripe for adjudication.

(Docs. 55-60; 63, 64). As explained below, SHA’s motion is due to be granted in

its entirety.

I. Standard of Review

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary

judgment is proper “if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

The party asking for summary judgment always bears the initial responsibility of

informing the court of the basis for its motion and identifying those portions of the

pleadings or filings which it believes demonstrate the absence of a genuine issue of

material fact. Id. at 323. Once the moving party has met its burden, Rule 56(e)

requires the non-moving party to go beyond the pleadings and by his own

affidavits, or by the depositions, answers to interrogatories, and admissions on file,

designate specific facts showing there is a genuine issue for trial. See id. at 324.

The substantive law identifies which facts are material and which are

irrelevant. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All

reasonable doubts about the facts and all justifiable inferences are resolved in favor

of the non-movant. See Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir.

1993). A dispute is genuine “if the evidence is such that a reasonable jury could

return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. If the

evidence is merely colorable or is not significantly probative, summary judgment

may be granted. See id. at 249.

II. Facts and Procedural History

SHA is a public housing authority that owns and manages more than 600

residential housing units in Sylacauga and Talladega County. (Doc. 56-1 at 1).

Founded in 1941, it provides housing to families, the elderly, and the disabled

pursuant to laws and regulations administered by HUD. (Id.). SHA receives an

operating subsidy and capital funds from HUD. (Doc. 56-3 at 12).

The Board oversees SHA, which is managed by an executive director

responsible for running the day-to-day operations and supervising all other

employees. (Doc. 56-8 at 3-4). In November 2017, the Board hired Michael

Threatt as its executive director. (Doc. 56-17).

Threatt hired the plaintiffs in August and September 2018 to be new

members of SHA’s executive team. (Doc. 1 at 3). Mueller (the chief financial

officer) and Daniels (the chief human resource officer) each initially received a

$60,000.00 salary. (Doc. 56-3 at 9; Doc. 56-12 at 16). Womack, SHA’s chief

housing officer, received an initial salary of $65,000. (Doc. 56-13 at 7). By the

time the plaintiffs were placed on administrative leave the next year, their salaries

had significantly increased: Mueller’s salary exceeded $107,000, Daniels’s salary

was $109,000, and Womack’s salary was $120,000. (Doc. 56-3 at 9-10; Doc. 56-

12 at 16; Doc. 56-13 at 8-9).

A. Audit and Forensic Review

The plaintiffs allege they became aware of potential issues with SHA’s

billing and procurement practices in September 2018. (Doc. 1 at 4). Along with

Threatt, they searched for and selected vendors to conduct a forensic review and

audit of SHA’s practices and financial statements. (Id.).

Under the plaintiffs’ leadership, SHA hired Henderson & Dejohn, LLC, to

conduct an independent audit of SHA’s financial statements for the year ending

June 30, 2018. (Doc. 56-4). In Henderson & Dejohn’s opinion, issued in March

2019, “the financial statements . . . present fairly, in all material respects, the

respective financial position of the [SHA], as of June 30, 2018 . . ..” (Id.at 7). In

performing the audit, Henderson & Dejohnn considered SHA’s internal controls,

and the audit revealed four major findings resulting from lack of controls or

documentation:

• SHA was not properly monitoring its bank accounts to ensure its

uninsured deposits were adequately collateralized. This resulted in an

increased risk of loss of $176,986 of SHA’s deposits and violated both

HUD cash management policies and the Annual Contributions Contracts

between HUD and SHA. (Id.at 27).

• SHA had poor internal controls over the tenant collection process, and it

was not following its collection policy, leases, or HUD guidelines when

handling tenant collections. SHA used repayment agreements, instead of

late fees or eviction, to collect late rent over a period of months, resulting

in excessive tenant account receivable balances and potential loss of

tenant collections. Additionally, SHA may have charged tenants the

wrong rents, late fees, or repayment agreement payments, or SHA might

have missed certain tenant-related charges. (Id. at 28).

• SHA may have incurred unnecessary or unallowable costs. The audit

questioned $67,6443 in costs for a lack of supporting or procurement

documentation, missing evidence of proper approval and segregation of

duties for costs incurred, unallowable costs, and an inability to determine

whether the costs were necessary and reasonable. This appeared to be

caused by a lack of internal controls, including permitting the same

employee to purchase and procure contracts, enter the information into

the accounting system, and then prepare and sign the checks. (Id. at 29).

• The audit also questioned $44,516 in procurement costs.4 SHA had not

maintained sufficient internal controls to ensure it complied with 2 CFR

part 215.40 through 215.48, which requires procurement transactions to

be conducted in a manner to ensure open and free competition. The

questioned costs lacked supporting procurement documentation that

would have shown whether SHA procured goods and services through

3 The audit tested $251,343 in costs; this questioned amount constitutes 27% of the total costs

tested. (Doc. 56-4 at 29).

4 The audit tested $251,343 in costs; this questioned amount constitutes 18% of the total costs

tested. (Doc. 56-4 at 30).

free and open competition and which were reasonably priced, thus

preventing federal funding waste. (Id. at 30).

The plaintiffs also selected and hired Borland Benefield, P.C., to conduct a

forensic review of SHA for June 30, 2014-2018 to determine the legitimacy,

reasonableness, and necessity of its transactions. (Doc. 56-5). Borland Benefield

conducted the audit in November and December 2018, and the report was issued in

February 2019.5 (Id. at 5). Borland Benefield also reviewed a sample of tenant files

from recent years to evaluate documentation relating to eligibility, accuracy of rent

calculations, billing, and collections. (Id. at 4). Borland Benefield’s forensic review

considered SHA’s “compliance with HUD and other regulations that guide the

expenditure of federal award dollars” (id. at 2), and it found the following:

• Borland Benefield could not verify whether SHA adhered to its

procurement policy and procedures for some credit card expenses. It

identified some unallowed costs, including $1,414 in gift cards, an

Amazon Prime subscription, an Ancestry.com subscription, late fees, and

alcoholic beverages. There were also $971 in credit card charges that

lacked documentation. (Id. at 7).

• Borland Benefield identified other unallowable costs, including $513 for

door prizes at a conference, non-itemized meal receipts, medical

expenses for a maintenance employee, and reimbursement travel costs

paid to an employee who did not incur those costs. (Id. at 8).

• In many instances, tenant refunds were paid to an individual other than

the tenant listed on SHA’s rent register, and so it could not be determined

whether these costs were allowable and authorized. Borland Benefield

also could not verify whether SHA’s practice of paying tenant referral

5 The cover letter to the report is dated February 1, 2018, but given the dates the report was

conducted, this date appears to be an error.

stipends was legitimate, reasonable, and necessary because it did not

appear SHA struggled with occupancy issues. (Id. at 8-9).

• There were not sufficient records to verify whether SHA adhered to its

procurement policy and HUD regulations for contract and labor services

(other than SHA employees). SHA paid at least five vendors aggregate

payments of more than $25,000 each/year, but no contract information

was located for those vendors. Overall, the available information for

vendor contracts was minimal and limited to contracts during the fiscal

year ending June 30, 2018. (Id. at 9).

• There were also insufficient records to verify payroll disbursements were

processed consistently and accurately. SHA’s management could not

locate documentation reflecting budgeted and approved salaries for the

year ending June 30, 2018. Additionally, SHA lacked documentation

showing it had approved pay rates for selected employee personnel files.

(Id. at 10).

• A review of tenant files showed the files contained information necessary

for SHA to verify income eligibility, and all participants were recertified

at least once during the 12-month period. There were no instances in

which the rent calculation did not match the amount charged to the tenant

for the month of November 2018. (Id. at 11).

Both the audit and forensic review were addressed to the Board. (Doc. 56-4 at 7;

Doc. 56-5 at 3).

B. The Sylavon Properties

SHA manages residential units in three separate properties: Drew Court,

Sylavon Court, and Sylavon Towers. (Doc. 56-1 at 2). The Sylavon properties

were originally constructed and designated as housing for elderly and disabled

families,6 and Drew Court housed families. (Doc. 56-23 at 58; Doc. 56-13 at 4,

14).

In February 2019, someone associated with HUD7 told Mueller the Sylavon

properties were designated in HUD’s “PIC” system as general occupancy.8 (Doc.

56-2 at 55; 56-2 at 16). According to the plaintiffs, this was a problem because

SHA was only permitting disabled or elderly families to apply for housing at the

Sylavon properties, and it did not permit other families to seek housing in these

residences. (Doc. 56-13 at 14). None of the plaintiffs independently verified the

designation of the Sylavon properties. (Doc. 56-2 at 56; Doc. 56-13 at 16; Doc. 56-

11 at 20). According to SHA’s records, the Sylavon properties were originally

constructed and designated as housing for elderly and disabled families. (Doc. 56-

23 at 58). SHA provided this documentation to HUD, which approved the re-

designation of the Sylavon properties as elderly/disabled. (Id. at 58).

C. Head Start Childcare Program

SHA leased property to Talladega Clay Randolph Child Care Corporation,

which owned and managed a Head Start childcare program. (Doc. 56-6). In May

6 Per 24 C.F.R. § 5.403, the terms “family,” “disabled family,” and “elderly family” include a

single person.

7 The record indicates this individual may have been Vicki Gill or Staci Gilliam, the director of

HUD’s local field office. (Doc. 56-2 at 55; 56-16 at 72).

8 The Sylavon properties were designated as elderly/disabled housing from their inception. The

record is far from clear, but it appears HUD’s records about their designation were changed at

some point through software system upgrades, although the correct designation and use always

remained elderly/disabled.

2019, Threatt and the plaintiffs decided to terminate the lease because it had not

been properly procured and they were trying to bring all contracts into compliance

with procurement guidelines. (Doc. 56-3 at 24; Doc. 56-7). On July 16, 2019,

Threatt sent to Head Start a letter purporting to terminate the lease because of the

presence of lead-based paint. (Doc. 56-6). Threatt also closed the daycare until

further notice. (Id.).

The local community was displeased that the Head Start lease would be

terminated, and there was some sort of protest. (Doc. 56-2 at 24). Another lead-

based paint test was conducted, and Threatt instructed the daycare be reopened

with HUD’s approval on July 29, 2019. (Doc. 56-14).

D. The Plaintiffs’ August 2019 Letter

On August 8, 2019, the plaintiffs wrote the following to the Board:

This letter is to inform you that we, the SHA Executive Leadership

Team, have reported the findings of the forensic audit and fiscal audit

to HUD. Also, we have reported discrimination and segregation issues

to the Department of Justice and Fair Housing. There will be multiple

government agencies over the next several months investigating a

variety of issues that SHA Executive Leadership Team has uncovered.

(Doc. 56-10). The plaintiffs’ letter was addressed to Patrick Lozito, the Board’s

chairman, and Alma Jean Cook, the vice-chairman. (Id.) The record does not

reflect whether the reports to HUD and DOJ were made in writing or orally, nor

does it otherwise reflect the substance of these reports, the individuals to whom the

reports were made, or when the reports were made. A few days later, the plaintiffs

met with Lozito to discuss the letter. (Doc. 60-5 at 20). Lozito thought the issues

they reported were significant. (Id.at 24). He reached out to contacts at HUD, who

reported “it would be a while before they could get back to [Lozito].” (Id. at 20).

In the plaintiffs’ view, SHA mismanaged the funds it received from HUD,

and the issues they reported involved this alleged mismanagement of funds. (Doc.

56-3 at 12; Doc. 56-11 at 9; Doc. 56-12 at 45). According to Mueller, SHA was the

victim of fraud by third party vendors or employees, but SHA did not defraud

anyone. (Doc. 56-3 at 13, 14, 60). Mueller did not know whether SHA had

submitted any misleading reports to HUD, but she thought the “financials” may

have been incorrect before she was employed and that any reports SHA submitted

to HUD “could have been wrong.” (Id. at 60). Mueller’s employment was

terminated before she determined whether this was the case. (Id.).

Womack similarly testified that the “fraudulent billing practices” she

reported involved SHA’s failure to follow procurement practices. (Doc. 56-13 at

14). She did not complain that SHA submitted a fraudulent claim or invoice to

HUD but that SHA mismanaged the money it received from HUD. (Id. at 14-15).

Womack was not aware of any false or fraudulent invoice SHA submitted to HUD.

(Id. at 15). Likewise, Daniels testified the “fraud” involved mismanaging money

SHA received from HUD. (Doc. 56-12 at 45). She did not know whether SHA sent

any invoice to HUD. (Id.)

E. Sam Royster

In May 2018, Threatt hired Sam Royster as a part-time investigator. (Doc.

56-23 at 17). Royster worked about 16 hours a week for SHA. (Id. at 19). While he

was employed part-time for SHA, Royster was also employed full-time with

Alexander City Housing Authority as an investigator. (Id. at 14). As an

investigator, Royster screened tenant applications for criminal backgrounds,

patrolled SHA’s properties, followed up on police reports, and recommended lease

terminations when necessary. (Id. at 17). When he first started working for SHA,

his office was at SHA’s main offices, and he spent about half his working hours at

the main office. (Id. at 20). In early 2019, Royster’s office was moved to Drew

Court. (Id. at 20). Once his office was moved, Royster spent less time at the main

office, perhaps two to three hours a week. (Id. at 20).

Royster did not typically attend SHA’s Board meetings, but Womack called

him to come to the July 2019 meeting. (Doc. 56-23 at 20). Many people attended

that meeting, and once Royster arrived, Threatt instructed him to remove the city

council president if he said anything else. (Id.). SHA Commissioner Phillip Morris

told Royster that if he removed the city council president, Royster would also have

to remove Morris. (Id. at 30). After the meeting, Royster and Morris talked and

exchanged phone numbers. (Id.). In the following weeks, Morris called Royster

four or five times to obtain information in response to complaints from residents

about various issues, including poor property maintenance and the attempted

termination of the Head Start lease. (Id. at 31). Royster also told Morris there was a

lack of upkeep at SHA’s properties, he had a negative impression of the executive

team, and he did not approve of the way they operated SHA. (Id. at 31).

During their conversations, Morris asked Royster about his background

because Royster appeared “to be a little more educated in public housing than [he]

thought a security guard would actually be.” (Doc. 60-2 at 8). Royster told Morris

he had a master’s degree in public housing and had once applied for the SHA

executive director position. (Id. at 8, 12). After a few conversations, Morris

realized Royster might be able to help SHA until they could hire someone

permanently, so he recommended that Lozito speak with Royster. (Id. at 8).

On September 4, 2019, Lozito contacted Royster because Morris thought

Royster had experience with housing projects. (Doc. 60-6 at 24). Lozito wanted to

bring in someone as acting director who had previous knowledge of HUD. (Id. at

24). Royster and Lozito discussed the Board meeting scheduled for the following

day, and Lozito asked Royster if he would accept the position of acting executive

director. (Doc. 56-23 at 32). Royster said he would think about it, and Lozito asked

him to meet for lunch the next day. (Id.). Royster was not surprised the Board was

looking to replace Threatt because Threatt and the plaintiffs were rarely in the

office on the days Royster worked and other employees told him the executive

team was frequently absent. (Id. at 33).

When they met for lunch the next day, Royster told Lozito he would accept

the position. (Id.). Lozito did not ask Royster to do anything to be appointed as

acting director. (Id.) Royster testified it was possible Lozito recommended he take

certain actions once he was appointed, but Royster did not remember that. (Id.).

Lozito did not recommend or instruct Royster to terminate the plaintiffs:

Q. Did Patrick Lozito make a recommendation on that day or any

other day that you terminate members of the executive team?

A. I don’t think so. If there was any conversation about that, it was

probably me telling him that they needed to be terminated instead of

him telling me.

(Id. at 35). Ultimately, Threatt was placed on administrative leave, and Royster

was appointed as the acting director of SHA at the September 5 Board meeting.

(Id. at 36).

F. Plaintiffs’ Termination

When Royster and Lozito first discussed Royster becoming acting director

of SHA on September 4, Royster knew he would terminate the plaintiffs’

employment for several reasons because he believed things at SHA had started to

go downhill when the plaintiffs’ employment began and he had witnessed and

heard from other SHA employees that the plaintiffs were often absent from work.

(Id. at 34, 39). Also, based on his experience with other housing authorities,

Royster thought the plaintiffs’ positions and high salaries were unnecessary:

Q. So you didn’t know whether – you didn’t know whether [the

plaintiffs’] positions were necessary?

A. Oh, no, I did know their positions were not necessary.

Q. Based on what?

A. Because this Housing Authority had run very well for a lot of years

before they came along. And I knew there was personnel here that

was better than each of them that could do what they were doing

better than they could do it. So it was very obvious to anybody that

has been around a Housing Authority for any period of time that none

of their positions was necessary and certainly not worth the amount of

money they were getting paid. And it was highly, highly unusual for

any – for a Housing Authority this size to have that many people

making that much money.

(Id. at 44-45). He also believed many good employees were either fired or quit

because they were tired of the way the plaintiffs ran SHA. (Id. at 46). Royster also

offered more specific reasons for his decisions to terminate the plaintiffs.

• He decided to terminate Mueller because (1) he heard from the Comptroller

that Mueller was incompetent, she did not know anything about housing, and

she had attempted to hide an accounting error instead of addressing the

error; (2) Mueller spent $64,000 to change SHA’s housing software, but the

change was not well implemented and employees were not trained on the

new system; (3) Mueller moved SHA’s deposits from local accounts to ones

housed in Birmingham, costing $1,100 in monthly fees; and (4) on one

occasion, Mueller would not allow Lozito to enter SHA’s offices. (Id. at 39,

43).

• Royster decided to terminate Womack because (1) SHA’s properties were

not well-maintained, and residents and employees complained about

maintenance; and (2) she had problems with and had alienated the police

department. (Id. at 42, 72; Doc. 56-26).

• Royster decided to terminate Daniels because he thought she had been

“going along with” Womack and Mueller. (Doc. 56-23 at 44). Royster had

heard from other employees that they had been written up by the executive

team and Daniels had been a part of it. (Id.).

Although Royster had already decided to terminate the plaintiffs’ employment, he

instead placed the plaintiffs on administrative leave on September 5, 2019,

following a conversation with SHA’s attorney. (Id. at 40; Doc. 60-7).

Royster was not aware the plaintiffs had reported alleged fraudulent billing

practices or FHA violations to HUD or the DOJ. (Doc. 56-23 at 51). He did not

attend the August 8, 2019 Board meeting. (Id. at 20, 62). Before his appointment as

acting executive director, Royster only attended the July 2019 Board meeting. (Id.

at 20, 62). According to the minutes of that meeting, there was no discussion of the

plaintiffs’ concerns about SHA’s purportedly fraudulent billing practices or HUD

violations. (Doc. 56-24).

G. Procedural History

The plaintiffs filed this action in January 2020. (Doc. 1). They seek back

reinstatement or front pay, back pay and compensatory damages, punitive

damages, and attorneys’ fees, costs, and expenses. (Doc. 1 at 16).

SHA filed a counterclaim for breach of contract and conversion relating to

the plaintiffs’ alleged failure to return their SHA-issued electronic devices and

artwork belonging to SHA. (Doc. 33). It seeks a declaration that Daniels and

Womack’s retention of their electronic equipment violated the confidentiality

agreement, as well as an order for specific performance to return SHA’s devices

and an award of attorneys’ fees and costs. It also seeks to recover damages from

the plaintiffs for Daniels and Womack’s alleged conversion of the electronic

devices and Mueller’s alleged conversion of a pencil drawing signed by Jim

Nabors (Doc. 33 at 24-26).9

III. Analysis

The plaintiffs allege their termination violates the anti-retaliation provisions

of both the FCA (31 U.S.C. § 3730(h)(1)) and the FHA (42 U.S.C. § 3617). To

establish a prima facie case of retaliation under either the FCA or FHA, the

plaintiffs must show: (1) they engaged in statutorily protected conduct; (2) they

suffered an adverse event; and (3) the adverse event was causally related to the

protected conduct. See Simon ex rel. Fla. Rehab. Assocs., PLLC v. Healthsouth of

Sarasota Ltd. P’ship, No. 21-11618, 2022 WL 3910607, at *5 (11th Cir. Aug. 31,

2022) (FCA); Philippeaux v. Apartment Inv. & Mgmt. Co., 598 F. App’x 640, 645

(11th Cir. 2015) (FHA). This is the same framework as applied in Title VII cases.

See Simon, 2022 WL 3910607 at *5; Philippeaux, 598 F. App’x at 645.10

9 On October 13, 2021, the court entered an order denying Womack’s motion for a protective

order, granting SHA’s motion to compel, and granting in part SHA’s motion for sanctions. (Doc.

54). That order mistakenly referred to Federal Rule of Civil Procedure 34 as governing whether a

deposition can be conducted remotely; it instead should have referred to Rule 30. (Doc. 54 at 1).

10 See also Fox v. Gaines, 4 F.4th 1293, 1296 (11th Cir. 2021) (when interpreting the FHA,

Eleventh Circuit looks to cases interpreting Title VII).

If a plaintiff establishes a prima facie case of retaliation, the burden shifts to

the defendant to articulate a legitimate, non-retaliatory reason for the challenged

employment action. See Gogel v. Kia Motors Mfg. of Georgia, Inc., 967 F.3d 1121,

1135 (11th Cir. 2020). If the defendant does so, the burden shifts back to the

plaintiff to show the proffered reason is merely a pretext to mask retaliation. Id.

SHA argues it is entitled to summary judgment for three primary reasons.

First, the plaintiffs did not engage in protected activity because (1) the “fraudulent

billing practices” about which they complained did not implicate conduct

prohibited by the FCA and (2) the housing discrimination issues they reported to

the FHA were first identified by the FHA. Second, Royster decided to terminate

the plaintiffs’ employment but was unaware of their complaints about billing fraud

or housing discrimination, and so there is no causal connection between the

plaintiffs’ activity and their termination. Finally, Royster provided legitimate, non-

retaliatory reasons for the plaintiffs’ termination, and thus, the plaintiffs cannot

establish their complaints about the fraud were the but-for cause of their

termination.

In response, the plaintiffs contend (1) their report of SHA’s fraudulent

billing practices and housing discrimination was protected activity, (2) Royster’s

testimony he was unaware of their complaints is not plausible, and (3) even if

Royster was unaware of the plaintiffs’ activity, they can establish causation under

the cat’s paw theory. They also argue there is a genuine issue of material fact about

whether Royster’s articulated reasons for their termination are pretextual.11

A. FCA Retaliation

The FCA prohibits any person from “knowingly present[ing], or caus[ing] to

be presented, a false or fraudulent claim for payment or approval.” 31 U.S.C. §

3729(a)(1)(A). FCA liability “‘arises from the submission of a fraudulent claim to

the government, not the disregard of government regulations or failure to maintain

proper internal procedures.’” Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1045

(11th Cir. 2015) (quoting Corsello v. Lincare, Inc., 428 F.3d 1008, 1012 (11th Cir.

2005). The FCA’s anti-retaliation provision allows an employee to sue if she is

discharged or suspended “because of lawful acts done by the employee . . . in

furtherance of an action under this section or other efforts to stop 1 or more

violations of this subchapter.” See 31 U.S.C. § 3730(h)(1). Since the FCA’s

retaliation provision was broadened in 2009 and 2010, the Eleventh Circuit has not

yet decided whether a plaintiff must show she had a “reasonable belief” her

employer violated the FCA or that an FCA filing by either the employee or

Government was a “distinct possibility” when the employee acted. Hickman v.

Spirit of Athens, Alabama, Inc., 985 F.3d 1284, 1288-89 (11th Cir. 2021).

11 The parties offer no argument about whether the plaintiffs’ suspension with pay is an adverse

action. Because the plaintiffs were ultimately terminated, the court will assume their September

5, 2019 suspensions were an adverse employment action. See Hall v. Alabama State Univ., No.

2:16-CV-593-GMB, 2019 WL 137593, at *5 (M.D. Ala. Jan. 8, 2019) (finding suspension with

pay plus termination is an adverse employment action).

Citing Hickman, SHA argues the plaintiffs did not engage in protected

activity because the FCA does not prohibit the billing fraud they allegedly

reported. (Doc. 57 at 26). Hickman was the executive director of Spirit of Athens,

and in 2016, she sought to assist its accountant in filing tax forms for 2015.

Hickman, 985 F.3d at 1285–86. In the process of the tax form preparation,

Hickman learned about unspecified expenses and other financial discrepancies that

concerned her. Id. She tried to discuss these concerns with Spirit of Athens’s board

of directors, but no discussion occurred. Id. She hired a firm to audit Spirit of

Athens and informed the Board’s president. Id. The president quickly fired the

auditing firm, Hickman, and her assistant. Id. Hickman and her assistant sued,

alleging they were fired in retaliation for attempting to combat the misuse of

federal funds, which violated the FCA. Id. The district court entered summary

judgment for Spirit of Athens, ruling the plaintiffs did not demonstrate they

engaged in protected conduct because they did not show the “fraud” involved

making false claims to the federal government. Id. at 1287.

The Eleventh Circuit affirmed, holding that under either a “distinct

possibility” or the lower “reasonable belief” standard, the plaintiffs were, “at a

minimum, required to show that the activity they were fired over had something to

do with the False Claims Act—or at least that a reasonable person might have

thought so. And the False Claims Act requires a false claim; general allegations of

fraud are not enough.” Id. at 1289. This is because liability under the FCA requires

the submission of a fraudulent claim to the government, not noncompliance with

government regulations or improper internal procedures. Id. The court noted the

FCA requires more than a suspicion of fraud or misuse of federal funds: “In order

to file [a retaliation action] under the False Claims Act, an employee must suspect

that her employer has made a false claim to the federal government.” Id.

SHA argues, like in Hickman, the conduct the plaintiffs reported does not

implicate the FCA. (Doc. 57 at 26). The plaintiffs reported SHA was mismanaging

federal funds, had not followed proper procurement policies, and did not maintain

sufficient checks and balances. But they also believed SHA may have been the

victim of fraud by its employees and vendors.

The plaintiffs give this argument short attention, merely claiming they

reported “fraudulent billing practices concerning the money HUD provided to

SHA.” They attempt to distinguish Hickman by suggesting SHA must provide

HUD with yearly budgets and financials, which include SHA expenditures about

which the plaintiffs complained. (Doc. 59 at 24). This is a fair point. In Hickman,

Spirit of Athens received the federal funds without a claim to, or limits imposed

by, the government. If the court were analyzing this argument in a motion to

dismiss, it would likely win the day. However, the summary judgment standard

requires the plaintiffs to come forward with evidence of a genuine issue of material

fact. And the plaintiffs do not direct the court to any documents or other evidence

showing SHA made a false statement—or even a potentially false statement—to

HUD. Instead, the only evidence in the record about the plaintiffs’ FCA

“complaint” is their August 8, 2019 letter, which states only that they “reported the

findings of the forensic audit and fiscal audit to HUD.” (Doc. 56-10). Because the

plaintiffs do not cite the portions of either audit showing a potential false

statement, the court must analyze the contents of those audits.

Henderson & Dejohn’s audit revealed issues about a lack of controls and

documentation for SHA’s expenses, but it also concluded SHA’s financial

statements fairly presented, in all material respects, SHA’s financial position.

(Doc. 56-4 at 7). It did not address any statements SHA made to HUD or another

governmental agency. Likewise, the forensic review revealed potential problems

with procurement policies, but it did not raise concerns about any misstatements

made by SHA to HUD or any other governmental agency. (Doc. 56-5). The audit

and review reflect serious questions about lack of controls, procurement policies,

documentation, and proper use of funds. But they simply do not imply SHA made

any false claim to HUD or any other governmental agency. Consequently, the

plaintiffs’ report of the results of the audit and forensic review to HUD does not

demonstrate they reported SHA submitted false or misleading budgets or

financials, or any other false claim, to HUD.

Moreover, the plaintiffs describe their alleged protected activity as reporting

“fraudulent billing practices,” but the following exchange highlights that their

complaint truly involved, at most, a potential misuse of federal funds:

Q. In what context? Are you talking about fraud in connection with

receiving funds from HUD or fraud in mismanaging the money –

A. Mismanaging the money.

Q. So mismanaging money SHA already had received from HUD.

A. Correct.

Q. So was there any fraud in connection with claiming money from

HUD?

Mr. Michel: Object to the form.

A. I don’t understand your question.

Q. Was there a fraudulent bill sent to HUD?

A. Like a payable? Like we are paying HUD, SHA?

Q. No, no, no. You are asking for money from HUD. Was there any

fraud in connection with a request for money from HUD?

Mr. Michel: Object to the form.

A. No.

(Doc. 56-3 at 11).12 The plaintiffs may have sincerely believed SHA violated the

FCA by mismanaging funds it received from HUD; however, as in Hickman, “a

sincere belief is not the same thing as a reasonable one.” Hickman, 985 F.3d at

1289. Again, liability under the FCA requires more than a misuse of federal funds

12 A similar exchange occurred with Womack. (Doc. 56-13 at 15).

or poor internal controls—it requires the submission of a fraudulent claim to the

federal government. See id.

The plaintiffs have not demonstrated a genuine issue of material fact about

whether the reports described in their August 8, 2019 letter related to a potential

false claim for payment to the federal government. Therefore, they have not

established the “protected conduct” element of their prima facie case of retaliation

under the FCA, and SHA is entitled to summary judgment on the plaintiffs’ FCA

retaliation claim.

B. FHA Retaliation

The FHA protects people from discrimination when they are renting or

buying a home, seeking housing assistance, or engaging in other housing-related

activities. 42 U.S.C. §§ 3601 et seq. Under the FHA, it is “unlawful to coerce,

intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or

on account of his having aided or encouraged any other person in the exercise or

enjoyment of, any right granted or protected by section 3603, 3604, 3605, or 3606

of this title.” 42 U.S.C. § 3617. The plaintiffs assert they were fired for reporting

discrimination and segregation issues to HUD. (Doc. 1 at 6). They claim SHA

sought to prevent families and African Americans from residing at the Sylavon

properties because they were designated as elderly and disabled housing, despite

HUD’s records showing the properties were designated as family housing. (Doc. 1

at 7). Neither party analyzes the statutory requirements of FHA retaliation, leaving

the court to discern the precise basis for the plaintiffs’ claims.

Because the plaintiffs allege they were fired for reporting SHA’s purportedly

discriminatory conduct in providing housing to others, rather than to the plaintiffs,

it appears their retaliation claim is based in the second part of § 3617—in other

words, they claim they were fired because they aided or encouraged some other

person in the exercise or enjoyment of the rights granted by §§ 3603 through 3606.

Of those sections, it appears the conduct they reported—that SHA was improperly

using the Sylavon properties as disabled and elderly, instead of general occupancy,

housing to discriminate against African Americans—is addressed only in § 3604.13

Section 3604(b) prohibits discrimination based on, among other things, race or

family status in the terms, conditions, or privileges of the rental of a dwelling.

Section 3604(d) prohibits representing to any person because of, among other

things, race, handicap, or family status, that a dwelling is not available for rent

when it is available.

1. Protected Activity

The parties offer no authority detailing what activity qualifies as aiding or

encouraging others under § 3617. As noted earlier, the only record evidence of the

13 Section 3603 sets forth the effective date of §3604 and provides definitions and exemptions.

Section 3605 prohibits certain discrimination for residential real estate-related transactions, such

as loans, brokering, and appraisals. Section 3606 prohibits discrimination in the provision of

brokerage services. The plaintiffs’ reports to HUD about the misuse of the Sylavon properties do

not relate to any of these sections of the FHA.

purported protected activity is the plaintiffs’ August 2019 letter stating they

reported discrimination and segregation issues to the DOJ and HUD. Without the

underlying complaints, or even testimony describing the basic details of the

substance and circumstances of the plaintiffs’ alleged complaints, this vague

description is difficult to analyze.

SHA argues the plaintiffs did not engage in protected activity because HUD

informed the plaintiffs of the Sylavon properties’ designation, not the reverse; the

plaintiffs simply relayed this information to the Board. The plaintiffs do not

address this argument, other than to make the conclusory assertion their August

2019 letter and reports to Lozito are protected activity. SHA’s argument has logical

appeal, but it cites no authority holding this fact pattern prevents a finding of

protected activity. Additionally, SHA does not address the plaintiffs’ contention,

although apparently unsubstantiated in the record, that they reported these issues to

the DOJ. For purposes of resolving this motion, the court will assume the plaintiffs

have met this prong of their prima facie case.14

14 The plaintiffs do not cite evidence supporting their allegation that SHA used the Sylavon

properties to exclude tenants based on family status or race. Even if the properties were

improperly designated—and the undisputed evidence shows they were designated as disabled

and elderly housing from their inception—the court doubts a mistake in designation equates to

discrimination.

2. Causation

a. Standard of Proof

Before proceeding to the parties’ arguments about causation, the court must

address the proper standard of proof for causation under the FHA retaliation

statute.15 The parties offer no authority or argument about whether the plaintiffs

must prove their FHA-related reports were a motivating factor in their termination

or whether they must satisfy the higher burden of but-for causation. The relevant

statutory text provides: “It shall be unlawful to coerce, intimidate, threaten, or

interfere with any person . . . on account of his having aided or encouraged any

other person in the exercise or enjoyment of, any right granted or protected by

section 3603, 3604, 3605, or 3606 of this title.” 42 U.S.C. § 3617. It appears the

Eleventh Circuit has not yet addressed this issue.

In 2009, the Supreme Court held the phrase “because of . . . age” in the Age

Discrimination in Employment Act (“ADEA”) requires an ADEA plaintiff to

prove but-for causation. Gross v. FBL Fin. Servs., Inc., 557 U.S. 167 (2009). In

analyzing the statutory text, the Court explained the ordinary meaning of “because

of” “ is “by reason of” or “on account of.” Id. at 176 (citing 1 Webster’s Third

New International Dictionary 194 (1966); 1 Oxford English Dictionary 746 (1933);

15 Like retaliation in Title VII cases, the plaintiffs must establish a causal connection between the

retaliation and their FCA-protected activity by showing it was the “but for” cause of the

retaliation. See Nesbitt v. Candler Cnty., 945 F.3d 1355, 1359 (11th Cir. 2020).

The Random House Dictionary of the English Language 132 (1966)). In 2013, the

Court considered the differences in Title VII’s prohibitions on discrimination and

retaliation. Univ. of Texas Sw. Med. Ctr. v. Nassar, 570 U.S. 338 (2013). Title

VII’s nondiscrimination language makes an employment practice unlawful if

membership in a protected class “was a motivating factor for any employment

practice, even though other factors also motivated the practice.” 42 U.S.C. §

2000e-2(m). The anti-retaliation provision’s “because” language, however,

indicates a different, higher standard of causation:

It shall be an unlawful employment practice for an employer to

discriminate against any of his employees . . . because he has opposed

any practice made an unlawful employment practice by this

subchapter, or because he has made a charge, testified, assisted, or

participated in any manner in an investigation, proceeding, or hearing

under this subchapter.

42 U.S.C. § 2000e-3(a) (emphasis added). Like Gross, Nasser concluded the use of

“because” in the statute’s language required Title VII retaliation claims to be

proved through but-for causation. 570 U.S. at 360. The Court cited with approval

its prior explanation that “the ordinary meaning of ‘because of’ is ‘by reason of’ or

‘on account of.’” Id. at 350 (internal citations omitted).

The FHA prohibits retaliation “on account of” an individual having aided or

encouraged any other person in the exercise of a right granted by the FHA. 42

U.S.C. 2317. As the Supreme Court has observed, “on account of” has the same

textual meaning as “because of.” Gross, 557 U.S. at 176. Therefore, the court

concludes the FHA’s retaliation provision requires the plaintiffs to prove their

protected activity was the but-for cause of their termination.16

b. Royster’s Lack of Knowledge and Cat’s Paw Theory

SHA argues the plaintiffs cannot establish a causal connection between their

complaints and their termination because they were terminated by Royster, who

was not aware they had reported any issues to HUD. (Doc. 57 at 26). The plaintiffs

counter that (1) the temporal proximity of their protected activity and termination

demonstrates causation, and (2) Royster’s testimony he was unaware of their

complaints is not plausible. (Doc. 59 at 27). The plaintiffs allege (1) Royster

impermissibly communicated with Board members about them and other SHA

matters;17 (2) they raised their complaints during several public Board meetings;

(3) and Royster’s reasons for terminating them are baseless.

The close temporal proximity of the August 8, 2019 letter to the Board and

the plaintiffs’ September 5, 2019 termination could demonstrate a causal

connection. However, as SHA notes, unrebutted evidence that the decision maker

was unaware of the employee’s protected conduct means that temporal proximity

16 Other courts to consider this question recently have reached the same conclusion. See Kris v.

Dusseault Fam. Revocable Tr., No. 18-CV-566-LM, 2022 WL 867990, at *5 (D.N.H. Mar. 23,

2022) (holding FHA retaliation is subject to but-for causation); Taylor v. Nat’l Invs., Ltd., No.

CV 17-117 WES, 2022 WL 306367, at *7 (D.R.I. Feb. 2, 2022) (same); Campos v. HMK Mortg.,

LLC, 458 F. Supp. 3d 517, 532 (N.D. Tex. 2020) (same).

17 Per SHA’s bylaws, it is not the Board’s responsibility to make day-to-day-management

decisions, and the Board’s sole connection to the operations of SHA is through the chief

executive officer. (Doc. 56-8 at 1). The Board is not involved in personnel actions other than the

chief executive officer. (Id.).

alone does not create a genuine issue of material fact—a decision maker cannot

have been motivated to retaliate by something unknown to him, even where the

two events happened close in time. See Martin v. Fin. Asset Mgmt. Sys., Inc., 959

F.3d 1048, 1054 (11th Cir. 2020).

The plaintiffs attempt to rebut Royster’s testimony by challenging his

credibility, but a credibility challenge alone does not create a genuine issue of

material fact. See Crawford-El v. Britton, 523 U.S. 574, 600 (1998) (Once a

defendant has moved for summary judgment, “the plaintiff may not respond

simply with general attacks upon the defendant’s credibility, but rather must

identify affirmative evidence from which a jury could find that the plaintiff has

carried his or her burden . . ..”). The plaintiffs’ arguments for rejecting Royster’s

testimony are unpersuasive. First, they do not explain why Royster’s

“impermissible” communication with Board members shows, or even implies, he

knew of the plaintiffs’ complaints. Royster, Lozito, and Morris all testified they did

not discuss the plaintiffs’ complaints before Royster decided to fire them on

September 5, 2019. There is also no evidence that Royster had any knowledge of

the bylaws before his appointment as acting executive director. Second, the

plaintiffs neither identify the Board meetings at which they raised their complaints

nor submit evidence showing Royster attended those meetings. Royster testified

that the only board meeting he attended before his appointment as executive

director was the July 2019 meeting, and the plaintiffs do not offer evidence to rebut

this testimony. Finally, as discussed below in addressing the arguments regarding

pretext, the plaintiffs do not submit evidence that shows a genuine dispute about

whether they engaged in the conduct that caused Royster to terminate them.

The plaintiffs next attempt to establish causation under a “cat’s paw” theory.

They contend Lozito wanted to fire them so he could impermissibly direct SHA

funds to his friends and business partners:

Notably, before Royster’s appointment to [] acting executive director,

Lozito did [not] hire any friends or business partners to work for

SHA. However, while Royster was acting executive director, Lozito,

in violation of HUD regulations and the SHA By-Laws, 1) hired a part

time assistant; 2) hired a handyman that Lozito used personally; 3)

Contracted with an IT Company owned by Lozito’s business partner,

and the list goes on. Plaintiffs spent their tenure with SHA attempting

to rid it of improper procurements, which was extremely problematic

for Lozito. So, Lozito replaced Threatt and made sure his

replacement, Royster, owed Lozito for the appointment. Which

opened the door for Lozito to obtain pecuniary and non-pecuniary

benefits for his friends and business partners.

(Doc. 59 at 28).

The cat’s paw theory allows a plaintiff to establish causation by showing the

decisionmaker followed a biased recommendation without independently

investigating the complaint against the plaintiff. See Reynolds v. Winn-Dixie

Raleigh Inc., 620 F. App’x 785, 792 (11th Cir. 2015). The employee must show

“(1) a supervisor performed an act motivated by animus that was intended to cause

an adverse employment action; and (2) the act was a proximate cause of the

adverse employment action.” Id. (citing Staub v. Proctor Hosp., 562 U.S. 411, 422

(2011)). However, the Eleventh Circuit has “indicated that, while the cat’s paw

theory may be appropriate in cases in which the plaintiff is required to prove only

that the protected characteristic was a motivating factor, such as in Title VII

disparate treatment claims, the theory is inappropriate when the statute requires

but-for causation.” Duncan v. Alabama, 734 F. App’x 637, 640 (11th Cir. 2018)

(citing Sims v. MVM, Inc., 704 F.3d 1327, 1335–36 (11th Cir. 2013)). As set forth

above, the plaintiffs must show their FHA activity was the but-for cause of their

termination, and so it appears a cat’s paw theory will not satisfy this standard.18, 19

Even assuming the cat’s paw theory applies to the plaintiffs’ FHA retaliation

claims, the plaintiffs have not presented evidence to support their theory. Their

argument that Lozito influenced Royster to fire them so he could use SHA’s funds

to enrich his friends and business partners in no way demonstrates he harbored any

retaliatory animus because of their reports about the Sylavon properties. Further,

18 As discussed above, the plaintiffs did not engage in activity protected by the FCA; however,

even if they had, they must show their protected FCA activity is the but-for cause of the alleged

retaliatory act. Nesbitt, 945 F.3d at 1359. Consequently, they may not proceed under a cat’s paw

theory for their FCA retaliation claim. See also Reynolds v. Winn-Dixie Raleigh Inc., 620 F.

App’x 785, 792 (11th Cir. 2015) (noting the Eleventh Circuit has not applied the cat’s paw

theory in an FCA retaliation case).

19 The court also questions whether a cat’s paw theory—premised on an employer’s vicarious

liability for the acts of its agents (see Sims, 704 F.3d at 1336)—can be applied to this particular

fact pattern, where a plaintiff claims an employer’s board member, rather than one of its

employees, sought to improperly influence an employment decision.

the record does not suggest Lozito made any recommendation to Royster about

their employment; it reflects the reverse:

Q. Did Patrick Lozito make a recommendation [on September 5,

2019] or any other day that you terminate members of the executive

team?

A. [Royster] I don’t think so. If there was any conversation about that,

it was probably me telling him that they needed to be terminated

instead of him telling me.

(Doc. 56-23 at 35). The plaintiffs speculate that Lozito and Royster may have

secretly discussed their termination, but they cite no evidence that would permit

such an inference. Neither do they provide authority where a court rejected

evidence in favor of a party’s conjecture. Absent evidence that might show Lozito

had any retaliatory animus and influenced Royster’s decision to terminate the

plaintiffs’ employment, the plaintiffs cannot proceed under a cat’s paw theory.

SHA has established there is no genuine issue of material fact about whether

Royster was aware of the plaintiffs’ report of potential HUD issues, and the

plaintiffs have not brought forth evidence that either rebuts Royster’s testimony or

shows a cat’s paw theory might apply. Because the plaintiffs cannot demonstrate a

causal connection between their reports of FHA discrimination and their

termination, they cannot establish a prima facie case of FHA retaliation, and SHA

is entitled to summary judgment on this claim.

3. Pretext

Assuming the plaintiffs could demonstrate a prima facie case of retaliation,

the burden would then shift to SHA to articulate a legitimate, nondiscriminatory

reason for their termination. SHA’s burden at this stage can involve no credibility

determination and is “exceedingly light.” See St. Mary’s Honor Ctr. v. Hicks, 509

U.S. 502, 509 (1993); Perryman v. Johnson Prod. Co., 698 F.2d 1138, 1142 (11th

Cir. 1983). SHA must only articulate a “clear and reasonably specific” non-

discriminatory basis for its actions. See Texas Dep’t of Cmty. Affs. v. Burdine, 450

U.S. 248, 258 (1981). The burden at this stage is one of production, rather than of

proof. Perryman, 698 F.2d at 1142.

Royster offered many reasons for his decision to fire the plaintiffs. Based on

his experience with other housing authorities, he thought the plaintiffs’ positions

and high salaries were unnecessary. Employees had reported to him that the

plaintiffs were often absent from work. He believed many good employees were

either fired or quit because they were tired of the way the plaintiffs ran SHA. And,

as detailed above in Section II.F, he offered more specific issues he had with each

of the plaintiffs. These reasons for termination are clear and specific, they are non-

retaliatory, and they are well within SHA’s business judgement. SHA has therefore

established legitimate, non-discriminatory reasons for the plaintiffs’ termination.

If an employer articulates one or more legitimate, non-discriminatory

reasons for the employment action, the plaintiff must show the proffered reason

was pretext for retaliation. See Chapman v. AI Transp., 229 F.3d 1012, 1024–25

(11th Cir. 2000). Where, as here, the proffered reason is one that might motivate a

reasonable employer, the plaintiffs cannot quarrel with the wisdom of the reason or

substitute her business judgment for that of SHA; they must instead “meet that

reason head on and rebut it.” See id. at 1030. To demonstrate pretext, the plaintiffs

must show both (1) Royster’s proffered reasons were false and (2) retaliation was

the real reason for their termination. See Brooks v. Cnty. Comm’n of Jefferson

Cnty., Ala., 446 F.3d 1160, 1163 (11th Cir. 2006). The pretext inquiry centers on

the employer’s belief, not the employee’s belief. See Alvarez v. Royal Atl. Devs.,

Inc., 610 F.3d 1253, 1266 (11th Cir. 2010).

The plaintiffs do not meet this burden. They claim they did not undertake

the conduct cited by Royster, but even if they did, their conduct did not violate any

written SHA policy. The plaintiffs do not offer any testimony or evidence

disputing each of the reasons Royster gave for their termination, and so this bare

assertion, which wholly lacks factual support, fails to meet Royster’s termination

reasons “head on and rebut [them.]” See Chapman, 229 F.3d at 1025. The plaintiffs

also complain they were not afforded progressive discipline before their

termination and the investigation conducted while they were on administrative

leave is a sham. Again, the plaintiffs do not present any evidence showing SHA

had a progressive discipline policy or that they were otherwise entitled to

progressive discipline. Nor is there any evidence about the substance of the

investigation during their administrative leave. As noted above, the court assumes

their September 5 suspension is the relevant adverse event, and so the investigation

following that date would not be relevant.

Even if the plaintiffs showed some real dispute about Royster’s proffered

reasons for their termination, they do not meet their burden to demonstrate pretext

unless they show both that the reasons were false and that retaliation was the real

reason. See Gogel, 967 F.3d at 1136. The plaintiffs’ arguments focus only on

challenging Royster’s reasons for their termination; they wholly ignore the

requirement to come forth with evidence demonstrating retaliation was the true

reason for their termination. As best the court can tell, the only evidence of

Royster’s (or even Lozito’s) retaliatory animus is the temporal proximity between

their August 2019 letter and their suspension/termination. The Eleventh Circuit has

held “while close temporal proximity between the protected conduct and the

adverse employment action can establish pretext when coupled with other

evidence, temporal proximity alone is insufficient.” Id. at 1138, n.14. (citing

Johnson v. Miami-Dade Cty., 948 F.3d 1318, 1328 (11th Cir. 2020) (temporal

proximity of less than two months was insufficient by itself to establish pretext);

Hurlbert v. St. Mary's Health Care Sys., Inc., 439 F.3d 1286, 1298 (11th Cir. 2006)

(the close temporal proximity of two weeks was evidence of pretext but “probably

insufficient to establish pretext by itself”); Wascura v. City of South Miami, 257

F.3d 1238, 1244–45 (11th Cir. 2001) (a three and one-half month period between

the employee's protected conduct and her termination was, standing alone,

insufficient to demonstrate pretext)).

The plaintiffs have not offered evidence to show a genuine issue of material

fact both that Royster’s legitimate, non-discriminatory reasons for their termination

were false and that retaliation was the true cause of their termination. Accordingly,

SHA is entitled to summary judgment on the plaintiffs’ FHA retaliation claim.

C. SHA’s Counterclaim

SHA’s counterclaim invokes this court’s supplemental jurisdiction under 28

U.S.C. § 1367. (Doc. 33 at 20). A federal district court may exercise supplemental

jurisdiction over state law claims that are so related to claims in an action over

which it has original jurisdiction as to “form part of the same case or controversy

under Article III of the United States Constitution.” § 1367(a). However, federal

law permits a district court to decline to exercise supplemental jurisdiction over a

claim if it “has dismissed all claims over which it has original jurisdiction.” §

1367(c)(3). When determining whether to decline the exercise of supplemental

jurisdiction under § 1367(c)(3), a court should consider judicial economy,

convenience, fairness to litigants, and comity. Carnegie-Mellon Univ. v. Cohill,

484 U.S. 343, 349–50 (1988).

The court had original jurisdiction over the plaintiffs’ claims for FCA and

FHA retaliation; however, SHA’s claims are based on state law. SHA’s motion for

summary judgment does not address its counterclaims. The plaintiffs have not

moved for summary judgment on the claims against them, and the deadline to do

so has long since passed. (Doc. 44). The parties will be directed to submit

arguments to the court addressing whether it should continue to exercise

supplemental jurisdiction over SHA’s counterclaim.

IV. Conclusion

For all the foregoing reasons, viewing the facts in the light most favorable to

the plaintiffs, there are no genuine issues of material fact, and SHA is entitled to

judgment as a matter of law. Accordingly, SHA’s motion for summary judgment

will be GRANTED in its entirety and all the plaintiffs’ claims are DISMISSED

WITH PREJUDICE. (Doc. 55).

The parties are ORDERED to submit, within twenty-one (21) days of the

date of entry of this order, arguments and authority regarding whether this court

should exercise supplemental jurisdiction over the plaintiffs’ counterclaims.

DONE this 28th day of September, 2022.

STACI G. CORNELIUS

U.S. MAGISTRATE JUDGE

38