of the May 7, 2024, Settlement Agreement entered into by the United States of America, Relator
- Date
- 2024-05-07
Summary
A Joint Stipulation of Partial Dismissal as to Kabbage, Inc., Only, Document 30, filed June 11, 2024 in United States of America ex rel. Paul Pietschner v. Kabbage, Inc., Kathryn Petralia, Robert Frohwein and Spencer Robinson, Civil Action No.: 4:21-cv-110-SDJ, in the U.S. District Court for the Eastern District of Texas. The United States and the relator submit it under Rule 41(a) and the False Claims Act, 31 U.S.C. §§ 3729–3733, following a May 7, 2024 Settlement Agreement. It asks for an order dismissing claims against Kabbage, Inc. only, with prejudice as to the Covered Conduct and the relator's claims and without prejudice as to other claims brought for the United States. The relator agrees not to challenge the settlement under 31 U.S.C. § 3730(c)(2)(B). The United States asks the court to unseal this stipulation and the proposed order while other papers stay sealed.
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Case 4:21-cv-00110-SDJ Document 30 Filed 06/11/24 Page 1 of 4 PageID #: 233
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
UNITED STATES OF AMERICA §
ex rel. PAUL PIETSCHNER, §
§
Plaintiff, §
§ Civil Action No.: 4:21-cv-110-SDJ
v. §
§ FILED UNDER SEAL
KABBAGE, INC.; KATHRYN PETRALIA; § (Pursuant to 31 U.S.C. § 3730(b))
ROBERT FROHWEIN and SPENCER §
ROBINSON, §
§
Defendants. §
JOINT STIPULATION OF PARTIAL DISMISSAL AS TO KABBAGE, INC., ONLY
Pursuant to Rule 41(a) of the Federal Rules of Civil Procedure and the qui tam provisions
of the False Claims Act, 31 U.S.C. §§ 3729–3733, and in accordance with the terms and conditions
of the May 7, 2024, Settlement Agreement entered into by the United States of America, Relator
Paul Pietschner (“Relator”), and KServicing Wind Down Corporation and the bankruptcy estates
of Defendant Kabbage, Inc. d/b/a Kservicing (“Defendant” or “Kabbage, Inc.”) (collectively
referred to as “the Parties”), the United States and Relator submit this Joint Stipulation of Partial
Dismissal as to Kabbage, Inc., Only.
I. Claims on behalf of the United States
1. On May 7, 2024, the United States of America (“United States”) filed its Notice of
Partial Intervention for Settlement Purposes in this action as to Kabbage, Inc. only. Docket #28.
2. Pursuant to a Settlement Agreement executed by and amongst the United States,
Relator, and Defendant on May 7, 2024 (“Settlement Agreement”), the United States and Relator,
by and through their respective attorneys, hereby jointly stipulate and agree, pursuant to Rule 41(a)
of the Federal Rules of Civil Procedure and the qui tam provisions of the False Claims Act, 31
JOINT STIPULATION OF DISMISSAL Page 1
Case 4:21-cv-00110-SDJ Document 30 Filed 06/11/24 Page 2 of 4 PageID #: 234
U.S.C. §§ 3729–3733, to entry of an Order: (1) as to the United States, dismissing with prejudice
all claims asserted in this action on behalf of the United States against Kabbage, Inc. concerning
the Covered Conduct as defined in Recital Paragraph L of the Settlement Agreement, to the extent
that the Complaint in this action contains such claims; (2) as to the United States, dismissing
without prejudice any other claims brought on its behalf by Relator which were asserted against
Kabbage, Inc. only; and (3) as to the Relator, dismissing with prejudice, the claims alleged against
Kabbage, Inc. only. The United States consents, under these terms, to the dismissal of the
Complaint against Kabbage, Inc. only.
II. Relator’s Claims
3. Relator stipulates that the Allowed Claim set forth in the Settlement Agreement
referenced herein and that the terms and conditions described therein are fair, adequate, and
reasonable under all the circumstances, that Relator will not challenge the Settlement Agreement
pursuant to 31 U.S.C. § 3730(c)(2)(B), and that Relator expressly waives the opportunity for a
hearing on any objection to the settlement under 31 U.S.C. § 3730(c)(2)(B) or applicable state law.
III. Request for Partial Lifting of the Seal
4. In light of the execution of the Settlement Agreement, the United States requests
that the Court unseal this Joint Stipulation of Partial Dismissal as to Kabbage, Inc., Only and the
proposed and signed Order of Dismissal as to Kabbage, Inc. only, so that the United States may
disclose these documents to Kabbage, Inc. only. The United States respectfully requests that all
other papers on file in this action remain under seal and not be made public (including, but not
limited to, any applications filed by the United States for extensions of the sixty-day investigative
period, any applications for partial lifting of the seal, and any orders previously entered in this
matter) because in discussing the content and extent of the United States’ investigation, such
JOINT STIPULATION OF DISMISSAL Page 2
Case 4:21-cv-00110-SDJ Document 30 Filed 06/11/24 Page 3 of 4 PageID #: 235
papers are provided by law to the Court alone for the sole purpose of evaluating whether the seal
and time for making an election to intervene should be extended.
5. The parties respectfully request that the Court enter the attached proposed Order.
Respectfully submitted,
DAMIEN M. DIGGS
United States Attorney
Eastern District of Texas
/s/ James Gillingham
JAMES G. GILLINGHAM
Texas Bar #24065295
James.Gillingham@usdoj.gov
BETTY S. YOUNG
Texas Bar # 24102498
Betty.Young@usdoj.gov
110 N. College Street; Suite 700
Tyler, Texas 75702
Phone: (903) 590-1400
Facsimile: (903) 590-1436
JAMIE ANN YAVELBERG
COLIN M. HUNTLEY
SARAH E. LOUCKS
Attorneys, Civil Division
United States Department of Justice
P.O. Box 261
Ben Franklin Station
Washington, D.C. 20044
Email: Sarah.E.Loucks@usdoj.gov
(202) 616-2921
ATTORNEYS FOR THE
UNITED STATES OF AMERICA
- AND -
/s/ Julie Bracker
JULIE BRACKER
Bracker & Marcus LLP
3225 Shallowford Road, Suite 1120
Marietta, Georgia 30062
E-Mail: Julie@fcacounsel.com
JOINT STIPULATION OF DISMISSAL Page 3
Case 4:21-cv-00110-SDJ Document 30 Filed 06/11/24 Page 4 of 4 PageID #: 236
Telephone: 770-988-5035
Facsimile: 678-648-5544
Sarah Frazier
Law Office of Sarah Frazier, PLLC
1919 Decatur Street
Houston, TX 77007
Telephone: (346) 283-9158
E-Mail: sarah@sarahfrazierlaw.com
ATTORNEYS FOR RELATOR
JOINT STIPULATION OF DISMISSAL Page 4
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