Thursday, August 26, 2010

No Pro Se Qui Tam

A person cannot and will not represent anyone but his/her self. A mother cannot represent her children in a court of law. That is why there are Guardian Ad Litum. A person shall not represent the United States in a court of law unless they are an officer of the court, meaning an attorney. You have to be an attorney to represent a party to an action, but first, the United States must agree to be a party.

There are SCOTUS decisions clarifying the pro se litigant in a qui tam action but I have better things to do than to teach law right now.

I would normally upload the filing but it contained so many procedural errors, I did not think it economical.

I highly respect the work of Jim Gottstein PsychRights, but sadly, must forecast the dismissal of the action.

Illinois Medicaid Fraud Case Using PsychRights’ Model Complaint Unsealed

The Law Project for Psychiatric Rights (PsychRights®) announces the unsealing of the first Medicaid Fraud case for prescribing psychiatric drugs to children and youth by someone other than PsychRights using PsychRights’ model Qui Tam Complaint.

United States ex rel Linda Nicholson v. Lilian Spigelman, M.D., Hephzibah Children’s Association, and Sears Pharmacy, was filed in Illinois by attorney S. Randolph Kretchmar as a result of PsychRights’ Medicaid Fraud Initiative Against Psychiatric Drugging of Children & Youth.

Here is a really nice article why qui tam relators cannot represent the United States.

2nd Circuit Addresses Limits on Qui Tam Actions Under False Claims Act

The 2nd U.S. Circuit Court of Appeals has issued two opinions clarifying the law on qui tam actions under the False Claims Act.

The Circuit first ruled that where the United States is not a party to the action, a notice of appeal must be filed within 30 days after the entry of judgment or it is untimely. That decision came in United States of America, ex rel. Irwin Eisenstein v. City of New York, 06-3329-cv.

Second, the court found in United States of America, ex rel. Mergent Services v. Flaherty, 06-3081-cv., that qui tam actions cannot be brought pro se.

Judges Ralph Winter, Roger Miner and Jose Cabranes decided both cases, with Judge Winter writing for the court.

The False Claims Act allows a private person, called a "relator," to bring an action on behalf of the government where the person has knowledge of false or fraudulent claims to the government. Under the act, relators can recover between 15 percent and 25 percent of any award or settlement amount.

In Eisenstein, Irwin Eisenstein and four other New York City employees brought an action as relators on behalf of the United States, claiming it was unlawful for the city to charge nonresident employees a fee equivalent to municipal income taxes paid by city employees who reside in the city.

They claimed a violation of the False Claims Act, 31 U.S.C. §§3729-3733, which imposes civil liability for anyone who "knowingly presents ... a false or fraudulent claim for payment or approval."

Their theory was that since non-resident employees are able to deduct this fee as an expense on their federal tax returns, their taxable income is lower than it would be otherwise and so the city is depriving the federal government of revenue.

Southern District of New York Judge Deborah A. Batts dismissed the action on March 31, 2006, and rendered final judgment on April 12, 2006. Eisenstein filed notice of appeal on June 5, 2006, 53 days later.

In a civil case, notice of appeal must be filed within 30 days under Federal Rule of Appelate Procedure 4(a)(1)(A). But when the United States is a party to the action, Rule 4(a)(1)(B) allows for any party in the action to take 60 days to file notice of appeal.

"The government played no role in this litigation until filing an amicus brief ordered by the court," Winter said at the Circuit. "Because we conclude that the United States is not a 'party' to this action for the purposes of Fed. R. App. P. 4(a)(1)(A) and (B), we further conclude that Eisenstein's notice of appeal was untimely," and the court was without jurisdiction.

Even though the action was ostensibly brought to vindicate the interests of the federal government, Winter said, "In our view, the United States is not a party for these purposes to a qui tam action when the government fails to intervene or to raise or resist any legal claim."

Eisenstein had argued that the 60-day period should apply because the United States was the "real party in interest" in the case. The court disagreed.

Winter said that, as used in Rule 4(a)(1), "the word 'party' refers to the person participating in the proceedings with control over the litigation."

The court then noted the "underlying intent" of the 60-day rule: to "account for the slow machinery of government when the United States is the party responsible for prosecuting the action."

The holding puts the court at odds with three other circuits: the 5th, 7th and 9th. Only the 10th Circuit views the issue the same way as the 2nd Circuit, describing the involvement of the United States as "tangential or nominal" in United States ex rel. Petrofsky v. Van Cott, 588 F.2d 1327 (1978).

Lewis D. Zirogiannis of Hughes Hubbard & Reed represented Eisenstein. Assistant Corporation Counsel Andrew G. Lipkin represented the city.


In the second opinion, John Bal and his company, Mergent Services, claimed Marie Flaherty failed to pay Bal for air-purifying equipment he provided her, but she nonetheless submitted a false receipt for reimbursement of $1,750 to New York state's Individual and Family Grant Program, which is funded in part by the Federal Emergency Management Agency to assist New Yorkers with disaster-related needs following the 9/11 terror attacks.

Southern District of New York Judge Harold Baer dismissed the case, concluding that Bal is not an attorney and was "not qualified to represent the interests of the United States.

The 2nd Circuit agreed, with Winter saying, "The circumstances under which civil litigants may appear without counsel are limited by statute," 28 U.S.C. §1654, which permits parties only to "plead and conduct their own cases personally."

In Machadio v. Apfel, 276 F.3d 103, (2002), the 2nd Circuit held that, under the statute, "an individual who is not licensed as an attorney 'may not appear on another person's behalf in the other's cause.'"

Examples of this rule "abound in our case law," Winter said, including that "a laymen cannot represent a corporation even if the sole shareholder"; a "non-lawyer general partner may not represent the partnership"; and "a layman may not appear pro se on behalf of his minor child."

"These rulings not only are called for by the text of 28 U.S.C. 1654," he said, " ... but also constitute good policy for both litigants and the courts."

The only place a pro se is found in a qui tam action is in the original latin text:

qui tam pro domino rege quam pro se ipso in hac parte sequitur

Sometimes I speculate that these "qui tam" templates is a marketing technique for PsychRights to generate publicity and fees. A person can file these template complaints and then he swoops in for the right amount of money to save the day. I do not know but I have to put it out there because the pro se qui tam template is only good for raising awareness to the fact that Medicaid fraud in child welfare is alive and thriving.

Better legal advice would be to refer an individual to their respective State Legislation and Attorney General Office to file under its False Claims Act. Illinois Whistleblower Reward and Protection Act III. Comp. Stat. $$175/1-178/8.

The mechanisms exist.  Let's use them.
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