06-3081-cv

United States v. Flaherty

1 UNITED STATES COURT OF APPEALS

2 FOR THE SECOND CIRCUIT

3 August Term, 2007

4 (Argued: June 24, 2008 Decided: August 19, 2008) 

5 

6 Docket No. 06-3081-cv

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8 UNITED STATES OF AMERICA, ex rel. MERGENT SERVICES and JOHN BAL,

9

10 Plaintiff-Appellants,

11

12 - v. -

13

14 MARIE FLAHERTY,

15

16 Defendant-Appellee.

17

18

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20

21 B e f o r e: WINTER, MINER, and CABRANES, Circuit Judges.

22

23 Appeal from a dismissal of a complaint in the United States

24 District Court for the Southern District of New York (Harold

25 Baer, Jr., Judge). The pro se appellant brought a False Claims

26 Act qui tam action. Concluding that qui tam actions cannot be

27 brought pro se, the district court dismissed the complaint. We

28 affirm.

29

30

31 JOHN BAL, pro se.

32

33 Marie Flaherty, pro se.

34
2

1 WINTER, Circuit Judge:

2 John Bal appeals from Judge Baer’s dismissal of his

3 complaint. The principal issue is whether private persons

4 proceeding pro se may bring False Claims Act qui tam actions as

5 relators for the United States. Because False Claims Act causes

6 of action are not personal to relators, they are statutorily

7 barred from bringing such actions pro se. Accordingly, we

8 affirm.

9 BACKGROUND

10 We briefly summarize the relevant facts as they pertain to

11 this appeal. On May 23, 2005, Bal, proceeding pro se, filed this

12 action against Marie Flaherty on behalf of the United States,

13 himself, and his company, Mergent Services. The amended

14 complaint alleges that Flaherty failed to pay Bal for air

15 purifying equipment that he provided to her. Flaherty then

16 allegedly submitted a false receipt to New York State’s

17 Individual and Family Grant Program (Grant Program) in an effort

18 to be reimbursed for costs she never incurred. The Grant

19 Program, funded in part by the Federal Emergency Management

20 Agency (FEMA), assisted New York residents with disaster-related

21 needs following the attack on New York City on September 11,

22 2001. The complaint alleges that FEMA provided a $1,750

23 reimbursement to Flaherty as a result of her fraudulent scheme. 
The False Claims Act imposes civil liability upon “any 1

person” who, inter alia, “knowingly presents, or causes to be

presented, to an officer or employee of the United States

Government . . . a false or fraudulent claim for payment or

approval.” 31 U.S.C. § 3729 (a). A suit brought under the Act

may be commenced by either the federal government or by a private

person, or “relator,” who sues for the United States in a qui tam

action. 31 U.S.C. § 3730(a), (b)(1).

3

1 Alleging that Flaherty’s conduct defrauded the federal

2 government in violation of the False Claims Act, 31 U.S.C. § 3729

3 et seq., Bal brought this qui tam action as relator for the

4 United States. His complaint also asserts other claims, 1

5 including defamation, unlawful retaliation, and deceit. The

6 United States elected not to intervene. See 31 U.S.C. § 3730.

7 Flaherty filed a motion to dismiss all counts, which the

8 district court granted. With respect to Bal’s False Claims

9 count, the court concluded that because Bal “is not an attorney 

10 . . . [he] is not qualified to represent the interests of the

11 United States.” Accordingly, the court dismissed Bal’s claim

12 without prejudice. 

13 On appeal, Bal initially sought review of the dismissal of

14 all of the claims he asserted in the district court. He has

15 since consented to the dismissal of all claims except the one

16 asserted under False Claims Act. Thus, the propriety of the

17 dismissal of his qui tam claim is the sole issue on appeal.

18 DISCUSSION
4

1 “We review a district court’s grant of a motion to dismiss 

2 . . . de novo . . . .” Tindall v. Poultney High Sch. Dist., 414

3 F.3d 281, 283 (2d Cir. 2005) (reviewing dismissal of a claim for

4 failure to retain counsel); see Jones v. Niagara Frontier Transp.

5 Auth., 722 F.2d 20, 22 (2d Cir. 1983) (affording no deference to

6 the district court’s dismissal of an action for a litigant’s

7 failure to retain counsel).

8 Bal first argues that the district court erred because it

9 dismissed his complaint without the consent of the Attorney

10 General. Bal relies upon the provision of the False Claims Act

11 that provides that qui tam actions “may be dismissed only if the

12 court and the Attorney General give written consent to the

13 dismissal and their reasons for consenting.” 31 U.S.C. §

14 3730(b)(1). Similarly, Bal contends that the dismissal violated

15 a district court order that noted that the court would solicit

16 the consent of the United States before approving the dismissal,

17 settlement, or discontinuation of the case. Bal argues that by

18 dismissing the complaint, the district court “violated the United

19 States’ notice” of election not to intervene, which also

20 requested that the action be dismissed only with the approval of

21 the court and the Attorney General. 

22 Bal’s arguments are without merit. While the False Claims

23 Act appears to bar dismissal of qui tam actions absent the

24 Attorney General’s consent, see 31 U.S.C. § 3730(b)(1), we have

25 previously construed this provision to apply “only in cases where
5

1 a plaintiff seeks voluntary dismissal of a claim or action

2 brought under the False Claims Act, and not where the court

3 orders dismissal.” Minotti v. Lensink, 895 F.2d 100, 103 (2d

4 Cir. 1990). Because the dismissal in this case came not as a

5 result of a settlement, the district court did not err by

6 neglecting to secure the Attorney General’s consent. See id. at

7 104. 

8 As to the claimed violations of the district court’s June 22

9 order and the United States’ notice of election not to intervene,

10 Bal would have us read these literally as prohibiting any

11 dismissal without the Attorney General’s consent. To the

12 contrary, the district court and the United States were

13 contemplating the necessity of obtaining consent for a voluntary

14 dismissal executed as part of settlement, and not for a contested

15 dismissal. Even if the district court and the United States

16 intended to prohibit any dismissal in the absence of the Attorney

17 General’s consent, the district court was free to modify this

18 requirement because there is no such limitation required by law. 

19 See id.

20 Bal next argues that the district court erroneously

21 concluded that pro se litigants cannot bring False Claim Act qui

22 tam actions on behalf of the United States. Specifically, Bal

23 suggests that courts should consider on a case-by-case basis

24 whether a given layman is capable of pursuing a claim without

25 counsel, taking into account developments in legal research

26 technology that are now available to the general public. 
6

1 Although the False Claims Act does not specifically address

2 whether private parties may bring qui tam actions pro se, see 31

3 U.S.C. §§ 3729-33, we have previously suggested that they cannot,

4 albeit in dicta. See Safir v. Blackwell, 579 F.2d 742, 745 n.4

5 (2d Cir. 1978) (positing that “a litigant cannot prosecute a qui

6 tam action under [the Act] pro se”). Nevertheless, the

7 proposition is a sound one. See also Phillips v. Tobin, 548 F.2d

8 408, 412 (2d Cir. 1976) (citing with approval cases in which

9 other courts of appeals have concluded that a pro se plaintiff

10 who is not a lawyer cannot bring a qui tam action under the Act).

11 The circumstances under which civil litigants may appear

12 without counsel are limited by statute. Specifically, 28 U.S.C.

13 § 1654 provides that in federal court, “parties may plead and

14 conduct their own cases personally or by counsel as, by the rules

15 of such courts, respectively, are permitted to manage and conduct

16 causes therein.” Because the statute permits parties only to

17 “plead and conduct their own cases personally,” id. (emphasis

18 added), we have held that “an individual who is not licensed as

19 an attorney ‘may not appear on another person’s behalf in the

20 other’s cause.’” Machadio v. Apfel, 276 F.3d 103, 106 (2d Cir.

21 2002) (quoting Iannaccone v. Law, 142 F.3d 553, 558 (2d Cir.

22 1998)). That is, in order to proceed pro se, “[a] person must be

23 litigating an interest personal to him.” Iannaccone, 142 F.3d at

24 558 (citing Pridgen v. Andresen, 113 F.3d 391, 393 (2d Cir.

25 1997)).
7

1 Decisions adhering to this principle abound in our case law. 

2 It is well established that a layman may not represent a

3 corporation even if the sole shareholder. See Nat’l Indep.

4 Theatre Exhibitors, Inc. v. Buena Vista Distribution Co., 748

5 F.2d 602, 609 (11th Cir. 1984); Cheung v. Youth Orchestra Found.

6 of Buffalo, Inc., 906 F.2d 59, 61 (2d Cir. 1990) (noting in dicta

7 that “[s]ole shareholders of corporations are not allowed to

8 represent such corporations pro se”). A non-lawyer general

9 partner may not represent the partnership, see Eagle Assocs. v.

10 Bank of Montreal, 926 F.2d 1305, 1310 (2d Cir. 1991), and a sole

11 member of a solely-owned limited liability company may not

12 represent it, see Lattanzio v. COMTA, 481 F.3d 137, 140 (2d Cir.

13 2007) (per curiam). Similarly, we have held that a litigant may

14 not appear pro se to pursue a claim that a corporation has

15 assigned to him, see Niagara Frontier Transp. Auth., 722 F.2d at

16 23, or to bring a shareholder’s derivative suit, see Phillips v.

17 Tobin, 548 F.2d 408, 411-12 (2d Cir. 1976). Finally, we have

18 held that a layman may not appear pro se on behalf of his minor

19 child, see Cheung, 906 F.2d at 61.

20 These rulings not only are called for by the text of 28

21 U.S.C. § 1654, but also constitute good policy for both litigants

22 and the courts. As we have noted,

23 the conduct of litigation by a nonlawyer

24 creates unusual burdens not only for the

25 party he represents but as well for his

26 adversaries and the court. The lay litigant

27 frequently brings pleadings that are
8

1 awkwardly drafted, motions that are

2 inarticulately presented, proceedings that

3 are needlessly multiplicative. In addition to

4 lacking the professional skills of a lawyer,

5 the lay litigant lacks many of the attorney’s

6 ethical responsibilities, e.g., to avoid

7 litigating unfounded or vexatious claims.

8

9 Niagara Frontier Transp. Auth., 722 F.2d at 22.

10 Turning to the present case, “the threshold question” is

11 whether the False Claims Act action is Bal’s “own case or one

12 that belongs to another.” Iannaccone, 142 F.3d at 558 (citing

13 Phillips, 548 F.2d at 411 (“The basic question raised by [28

14 U.S.C. § 1654] is whether this stockholder’s derivative suit is

15 the plaintiff’s ‘own case’ or is a suit belonging to the

16 corporation.”)). An action brought under the False Claims Act

17 may be commenced in one of two ways. First, the federal

18 government itself may bring a civil action against a defendant. 

19 31 U.S.C. § 3730(a). Second, as is the case here, a private

20 person, or “relator” may bring a qui tam action “for the person

21 and for the United States Government,” against the defendant, “in

22 the name of the Government.” Id. § 3730(b)(1). Under such

23 circumstances, the government may elect to intervene, and if it

24 recovers a judgment, the relator receives a percentage of the

25 award. See id. § 3730(d)(1). If the government declines to

26 intervene, the relator may pursue the action and may receive as

27 much as 30 percent of any judgment rendered. See id. §

28 3730(d)(2).

29
9

1 While relators indisputably have a stake in the outcome of

2 False Claims Act qui tam cases that they initiate, “the

3 Government remains the real party in interest in any such

4 action.” Minotti, 895 F.2d at 104; see United States ex rel.

5 Kreindler & Kreindler v. United Techs. Corp., 985 F.2d 1148, 1154

6 (2d Cir. 1993). As we have explained:

7 All of the acts that make a person liable

8 under [the False Claims Act] focus on the use

9 of fraud to secure payment from the

10 government. It is the government that has

11 been injured by the presentation of such

12 claims; it is in the government’s name that

13 the action must be brought; it is the

14 government’s injury that provides the measure

15 for the damages that are to be trebled; and

16 it is the government that must receive the

17 lion’s share –- at least 70% –- of any

18 recovery. 

19

20 United States ex rel. Stevens v. Vt. Agency of Natural Res., 162

21 F.3d 195, 202 (2d Cir. 1998), rev’d on other grounds, 529 U.S.

22 765 (2000). In considering the issue of relator standing, the

23 Supreme Court determined that a relator’s interest in a qui tam

24 suit is one as the “partial assignee” of the claims of the United

25 States but observed that the injury, and therefore, the right to

26 bring the claim belongs to the United States. See Vermont Agency

27 of Natural Res. v. U.S. ex rel. Stevens, 529 U.S. 765, 774-75

28 (2000). In short, while the False Claims Act permits relators to

29 control the False Claims Act litigation, the claim itself belongs

30 to the United States. See id; cf. 31 U.S.C. § 3730(c)(5)

31 (providing that as an alternative to bringing a civil suit, “the
The Supreme Court’s recent decision in Winkelman v. Parm 2

City School District, 127 S.Ct. 1994 (2007) (permitting parents

to bring suit pro se under the IDEA) is not to the contrary. 

Winkelman reaffirmed the rights of parents, who have rights under

the IDEA distinct from those afforded their children, to assert

their own interest pro se. See Stoner, 502 F.3d at 1127

(rejecting the application of Winkelman to the FCA’s qui tam

provision). As we noted above, Bal does not have a personal

interest in this suit.

10

1 Government may elect to pursue its claim through any alternate

2 remedy available to the Government”) (emphasis added). 

3 Accordingly, as the United States “remains the real party in

4 interest” in qui tam actions, Minotti, 895 F.2d at 104, the case,

5 albeit controlled and litigated by the relator, is not the

6 relator’s “own case” as required by 28 U.S.C. § 1654, nor one in

7 which he has “an interest personal to him.” Iannaccone, 142 F.3d

8 at 558. Because relators lack a personal interest in False

9 Claims Act qui tam actions, we conclude that they are not

10 entitled to proceed pro se. See id.; 28 U.S.C. § 1654.

11 Our holding is in accord with all of the circuits that have

12 considered the issue. See Timson v. Sampson, 518 F.3d 870, 873-

13 74 (11th Cir. 2008) (per curiam); Stoner v. Santa Clara County

14 Office of Educ., 502 F.3d 1116, 1126-28 (9th Cir. 2007); United

15 States ex rel. Lu v. Ou, 368 F.3d 773, 775-76 (7th Cir. 2004);

16 United States v. Onan, 190 F.2d 1, 6-7 (8th Cir. 1951). While 2

17 we reach this conclusion as a matter of statutory construction,

18 we are also sympathetic to some of the other concerns voiced by

19 these courts, in particular that the United States might become
Bal also argues that because the Government failed to 3

object to Bal’s bringing this case and has explicitly stated that

it “is not a party” to this action, the United States has

constructively consented to Bal prosecuting this claim pro se. 

We fail to see how either the United States’ consent or its

status as a non-party is material. The general rule of 28 U.S.C.

§ 1654 is that pro se litigants can only bring claims personal to

them. See Iannaccone, 142 F.3d at 558. The statute contains no

exception for instances in which a real party in interest either

consents to representation by a layman or fails to join an action

as a party. See 28 U.S.C. § 1654. Bal’s argument is therefore

without merit.

11

1 bound by res judicata or collateral estoppel as a result of the

2 actions of a pro se in bringing and losing a qui tam action. See

3 Stoner, 502 F.3d at 1126-27. This concern serves only to bolster

4 our belief that “Congress could [not] have intended to authorize

5 a layman to carry on such suit as attorney for the United States

6 but must have had in mind that such a suit would be carried on in

7 accordance with the established procedure which requires that

8 only one licensed to practice law may conduct proceedings in

9 court for anyone other than himself.” Onan, 190 F.2d at 6.3

10 CONCLUSION

11 For the reasons discussed above, we affirm.

12