United States District Court, E.D. Michigan, Southern Division
UNITED STATES OF AMERICA ex rel. BEVERLY TRAN, Plaintiff,
DETROIT LAND BANK AUTHORITY, et al., Defendants.
Cohn District Judge
REPORT AND RECOMMENDATION
K. MAJZOUB UNITED STATES MAGISTRATE JUDGE
Tran (“Relator”) filed this qui tam
action alleging that Defendants Detroit Land Bank Authority
(“DLBA”), Detroit Land Bank Community Development
Corporation (“DLBCDC”), the City of Detroit,
Mayor Mike Duggan, Wayne County, and Title Source, Inc.
violated the False Claims Act, 31 U.S.C. §§
3729-3733. (Docket no. 30.) This matter is before the Court
on Wayne County's motion to dismiss (docket no. 38),
DLBA's and DLBCDC's motion to dismiss (docket no.
42), and Title Source's motion to dismiss (docket no.
44). Also before the Court are several procedural motions,
including Relator's motion to compel corporate
disclosures of DLBA and DLBCDC (docket no. 31), Relator's
motion for entry of default against DLBA (docket no. 39) and
DLBCDC (docket no. 37.), and Defendants' joint motion to
stay discovery (docket no. 48).
matter has been referred to the undersigned for all pretrial
proceedings, including a hearing and determination of all
non-dispositive matters pursuant to 28 U.S.C. §
636(b)(1)(A) and/or a report and recommendation on all
dispositive matters pursuant to 28 U.S.C. §
636(b)(1)(B). (Docket no. 47.) The Court has reviewed the
pleadings and determined that the motions will be resolved
without oral argument pursuant to Eastern District of
Michigan Local Rule 7.1(f)(2).
reasons that follow, the undersigned recommends that
Defendants' motions to dismiss (docket nos. 38, 42, 44)
be GRANTED, and that this matter be
dismissed in its entirety. Accordingly, the pending
procedural motions (docket nos. 31, 37, 39, 48) should be
DENIED as moot.
Beverly Tran filed this matter under the False Claims Act, 31
U.S.C. §§ 3729-3733 (“FCA”), alleging
that Defendants “through machination of fraudulent
acquisition, administration, demolition, legal fees, levying
of taxes, mortgages, all other real estate activities, and
manipulation of public records, billed to the federal program
of Hardest Hit Funds (HHF) of the Troubled Asset Relief
Program (TARP).” (Docket no. 30, p. 3.) Relator asserts
that she became aware of the alleged fraudulent scheme when
she purchased a property at 4239 Tyler Street in Detroit,
Michigan through DLBA's public auction website.
(Id. at 4.)
establishes a scheme that permits either the Attorney
General, § 3730(a), or a private party, § 3730(b),
to initiate a civil action alleging fraud on the Government.
A private enforcement action under the FCA is called a
qui tam action, with the private party referred to
as the “relator.” Vermont Agency of Natural
Resources v. United States ex rel. Stevens, 529 U.S.
765, 769, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). Such
actions are brought in the name of the Government. §
3730(b)(1). When a relator initiates such an action, the
United States is given 60 days to review the claim and decide
whether it will “elect to intervene and proceed with
the action, ” §§ 3730(b)(2), (b)(4); see also
§ 3730(c)(3) (permitting the United States to intervene
even after the expiration of the 60-day period “upon a
showing of good cause”). If the United States
intervenes, the relator has “the right to continue as a
party to the action, ” but the United States acquires
the “primary responsibility for prosecuting the
action.” § 3730(c)(1). If the United States
declines to intervene, the relator retains “the right
to conduct the action.” § 3730(c)(3).
April 14, 2017, the United States declined to intervene in
this action, but reserved the right to intervene in this
action for good cause at a later date, and to seek the
dismissal of the Relator's action or certain claims.
(Docket no. 10.)
15, 2017, Relator's attorney Crystal Hopkins filed a
motion to withdraw as counsel on the basis of a
“fundamental and irreparable breakdown in the
attorney-client relationship” with Relator. (Docket no.
20.) The Court granted the motion to withdraw, and directed
Relator to file an amended complaint “stat[ing], with
particularity, the nature of her claims and entitlement to
relief against each defendant.” (Docket no. 28.)
Relator elected to proceed pro se and filed an
amended complaint. (Docket no. 30.)
the Court are Wayne County's motion to dismiss (docket
no. 38), DLBA's and DLBCDC's motion to dismiss
(docket no. 42), and Title Source's motion to dismiss
(docket no. 44). Defendants contend that Relator's
amended complaint fails to state a claim on which relief may