Tran v. Detroit Land Bank Authority
2:16-cv-10291
| E.D. Mich. | Mar 12, 2018Background
- Relator Beverly Tran filed a qui tam complaint under the False Claims Act alleging defendants (Detroit Land Bank Authority, Detroit Land Bank CDC, City of Detroit, Mayor, Wayne County, and Title Source) fraudulently billed the federal Hardest Hit Fund (HHF/TARP) in connection with real estate transactions and related costs.
- Tran learned of the alleged scheme after purchasing property via DLBA’s public auction website and filed an amended complaint after her counsel withdrew; the United States declined to intervene but reserved rights to do so later.
- Defendants moved to dismiss, arguing the amended complaint fails to state a claim; related procedural motions (discovery stay, defaults, corporate disclosures) were pending.
- The magistrate judge reviewed the pleadings under Rule 12(b)(6), applying Twombly/Iqbal pleading standards and considering relevant public records.
- The court focused on whether Tran, proceeding pro se, may prosecute a qui tam action on behalf of the United States and whether her allegations sufficiently plead an FCA claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a relator may proceed pro se in a qui tam FCA action | Tran proceeded pro se and sought to prosecute the FCA claims herself | Defendants: a relator cannot appear pro se on behalf of the United States; only counsel may represent the Government’s interests | Court: Pro se relator may not prosecute a qui tam on behalf of the United States; dismissal required |
| Whether amended complaint meets Rule 12(b)(6) plausibility pleading standards | Tran alleges scheme to submit false HHF claims tied to DLBA activities | Defendants: allegations are conclusory and lack particularized factual basis to state an FCA claim | Court: Complaint fails to plead plausible FCA claim under Twombly/Iqbal; dismissal warranted |
| Whether pending procedural motions should proceed if complaint dismissed | Tran sought discovery, corporate disclosures, and entry of defaults | Defendants moved to stay discovery and opposed defaults/disclosures as premature | Court: Procedural motions denied as moot if dismissal affirmed |
| Whether United States’ status affects relator’s standing to litigate pro se | Tran contends she may pursue claims as relator despite U.S. declining intervention | Defendants: United States is real party in interest; relator lacks independent rights to represent U.S. absent counsel | Court: Reinforced that the U.S. is real party in interest and relator cannot represent it pro se |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, [citation="550 U.S. 544"] (plausibility pleading standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, [citation="556 U.S. 662"] (complaints must contain nonconclusory factual allegations to be plausible)
- Vermont Agency of Natural Resources v. United States ex rel. Stevens, [citation="529 U.S. 765"] (qui tam actions are brought in name of the United States)
- U.S. ex rel. Eisenstein v. City of New York, [citation="556 U.S. 928"] (the United States is a real party in interest in FCA suits)
- Winkelman ex rel. Winkelman v. Parma City Sch. Dist., [citation="550 U.S. 516"] (distinguishing when private parties have independent enforceable rights)
- Shepherd v. Wellman, [citation="313 F.3d 963"] (6th Cir.) (pro se litigant may not represent another’s interests)
- DirecTV, Inc. v. Treesh, [citation="487 F.3d 471"] (6th Cir.) (standard for construing complaints on motion to dismiss)
- Myers v. Loudoun County Pub. Sch., [citation="418 F.3d 395"] (4th Cir.) (policy against nonlawyer representation protects others’ rights)
- United States ex rel. Lu v. Ou, [citation="368 F.3d 773"] (7th Cir.) (a relator cannot proceed pro se in a qui tam action)