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Whistleblowers not permitted to litigate cases under False Claims Act without counsel

Although it is generally the case in federal court that a party can proceed pro se, that is, without counsel, courts have been fairly unanimous in holding that a private person cannot bring a qui tam case on behalf of the United States without being represented by counsel.  See United States ex rel. Mergent Servs. v. Flaherty, 540 F.3d 89 (2d Cir. 2008); Timson v. Sampson, 518 F.3d 870, 873-74 (11th Cir. 2008) (per curiam); Stoner v. Santa Clara County Office of Educ., 502 F.3d 1116, 1126-28 (9th Cir. 2007); United States ex rel. Lu v. Ou, 368 F.3d 773, 775-76 (7th Cir. 2004); United States v. Onan, 190 F.2d 1, 6-7 (8th Cir. 1951).  It appears that there are both statutory and public policy reasons for these rulings.

First, although the False Claims Act does not specifically address whether private parties may bring qui tam actions pro se, see 31 U.S.C. §§ 3729-33, the circumstances under which civil litigants may appear without counsel are limited by statute.  Pursuant to 28 U.S.C. § 1654,  "parties may plead and conduct their own cases personally or by counsel as, by the rules of such courts, respectively, are permitted to manage and conduct causes therein."  While not specific to the False Claims Act, the statutory right of a private person to proceed in federal court without an attorney is limited to conduct of "their own cases."  It is clear that "an individual who is not licensed as an attorney 'may not appear on another person's behalf in the other's cause.'" Machadio v. Apfel, 276 F.3d 103, 106 (2d Cir. 2002).

This concept has been applied in a variety of contexts, for example, in determining that a layperson cannot represent a corporation even if the layperson is the sole shareholder of the corporation.  See National Independent Theatre Exhibitors, Inc. v. Buena Vista Distribution Co., 748 F.2d 602, 609 (11th Cir. 1984); Cheung v. Youth Orchestra Foundation, Inc., 906 F.2d 59, 61 (2d Cir. 1990) (noting in dicta that "[s]ole shareholders of corporations are not allowed to represent such corporations pro se").  A non-lawyer general partner may not represent the partnership, see Eagle Assocs. v. Bank of Montreal, 926 F.2d 1305, 1310 (2d Cir. 1991), and a sole member of a solely-owned limited liability company may not represent it, see Lattanzio v. COMTA, 481 F.3d 137, 140 (2d Cir. 2007) (per curiam).  Courts have also held that a layman may not appear pro se on behalf of his minor child, see Cheung, 906 F.2d at 61.  Cf. Winkelman v. Parma City Sch. Dist., 550 U.S. 516, 127 S. Ct. 1994 (2007) (permitting parents to bring suit pro se under the IDEA because parents have rights under the IDEA distinct from those afforded their children).

As the Court of Appeals for the Second Circuit has explained, there are practical and policy reasons for limiting the appearance of laypersons in the federal courts:  "the conduct of litigation by a nonlawyer creates unusual burdens not only for the party he represents but as well for his adversaries and the court.  The lay litigant frequently brings pleadings that are awkwardly drafted, motions that are inarticulately presented, proceedings  that are needlessly multiplicative.  In addition to lacking the professional skills of a lawyer, the lay litigant lacks many of the attorney's ethical responsibilities, e.g., to avoid litigating unfounded or vexatious claims."  Jones v. Niagara Frontier Transp. Authority, 722 F.2d 20 at 22 (2d Cir. 1983).

In the False Claims Act context, there is the relatively unusual provision of the right of a private party to institute suit on behalf of the federal government.  Clearly, however, "All of the acts that make a person liable under [the False Claims Act] focus on the use of fraud to secure payment from the government.  It is the government that has been injured by the presentation of such claims; it is in the government's name that the action must be brought; it is the government's injury that provides the measure for the damages that are to be trebled; and it is the government that must receive the lion's share -- at least 70% -- of any recovery."  United States ex rel. Stevens v. Vermont Agency of Natural Resources, 162 F.3d 195, 202 (2d Cir. 1998), rev'd on other grounds, 529 U.S. 765, 120 S. Ct. 1858, 146 L. Ed. 2d 836 (2000).  While clearly recognizing that the qui tam relator has an interest in the litigation, the Supreme Court observed that the injury, and therefore, the right to bring the claim belongs to the United States.  See Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 774-75, 120 S. Ct. 1858, 146 L. Ed. 2d 836 (2000).  The FCA itself makes clear that notwithstanding the relator's statutory right to a share of the government's recovery, the underlying claim of fraud always belongs to the government.  See, e.g., 31 U.S.C. § 3730(c)(5) (providing that the Government may elect to pursue "its claim" through any alternate remedy.)  Accordingly, where the government chooses not to intervene, a relator bringing a qui tam action for a violation of § 3729 is representing the interests of the government and prosecuting the action on its behalf.  See generally United States v. Schimmels (In re Schimmels), 127 F.3d 875, 882 (9th Cir. 1997) ("[T]he 'United States is the real party in interest in any False Claims Act suit, even when it permits a qui tam relator to pursue the action on its behalf.'"); Kelly, 9 F.3d at 743 ("The express language of the FCA gives relators the right to bring suit on behalf of the government."); Stoner v. Santa Clara County Office of Educ., 502 F.3d 1116, 1126 (9th Cir. 2007).  In the complex procedural realm of the False Claims Act, the claim itself belongs to the United States, even while the qui tam plaintiff has very clearly been given a role to play in the initiation and litigation of the case.

In addition to the statutory restrictions discussed above, courts have expressed concerns that  United States might become bound by res judicata or collateral estoppel as a result of the actions of a pro se litigant in bringing and losing a qui tam action.  See Stoner, 502 F.3d at 1126-27.  "A rule that limits legal representation (except self-representation) to lawyers operates to filter out frivolous litigation that can redound to the harm of the represented party….  A party may be bound, or his rights waived, by his legal representative.  When that representative is a licensed attorney there are grounds for belief that the representative's character, knowledge and training are equal to the responsibility."  United States ex rel. Lu v. Ou, 368 F.3d 773, 775-776 (7th Cir. 2004) (internal citations and quotation omitted).  "A relator may make sweeping  allegations that, while true, he is unable effectively to litigate, but which nonetheless bind the government, via res judicata, and prevent it from suing over those concerns at a later date when more information is available."  Riley v. St. Luke's Episcopal Hospital, 252 F.3d 749, 763 (5th Cir. 2001).

From the relator's perspective, as well, it would seem foolhardy to attempt to pursue a qui tam case without experienced counsel.  In addition to the need to protect the government, relators themselves have important interests in terms of possible retaliation, fighting issues of public disclosure or "first-to-file" that only impact the relator and not the government, ensuring an adequate share of the government's recovery, and possible ancillary issues such as accusations of theft of company documents.  Although these are not legal considerations that led to the prevailing rule that a qui tam plaintiff cannot proceed pro se, they are practical concerns that happen to buttress the rule spelled out by the courts.

If you have discovered evidence of government fraud, contact an experienced False Claims Act attorney before blowing the whistle. You may be entitled to a substantial reward and the legal protections afforded to whistleblowers under state and federal laws. The attorneys of Berger & Montague are nationally recognized experts in Whistleblower/Qui Tam actions with over a decade of experience pursuing these complex fraud cases. For more information or to schedule your confidential consultation, use the form on this page or call us at 1-800-424-6690.

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