Opinion
EP-04-CA-452-DB.
January 6, 2006
MEMORANDUM OPINION AND ORDER
On this day, the Court considered Defendant The Apollo Group, Inc. ("Apollo Group") and Defendant Snell Wilmer L.L.P.'s ("Snell Wilmer") (collectively, "Defendants") "Joint Motion To Dismiss," filed in the above-captioned cause on August 17, 2005. Therein, Defendants pray the Court dismiss Relator's Complaint for failure to state a claim upon which relief may be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6). On August 25, 2005, Relator Leeland O. White filed a "Response By Relator And The United States To Illegal Motion To Dismiss Pursuant to Rule 9 Fed.R.Civ.P Based On Averment Of Fraud And Title 31 USC § 3730(b)(1) By Not Proposing A Motion To Dismiss With The US Attorney — Winstanley Luke, And Defendants Having No Counsel [ sic]," which Relator amended on September 6, 2005. On September 19, 2005, Defendants filed a Reply. After due consideration, the Court is of the opinion that Defendants' Motion should be granted, and that Relator's Complaint should be dismissed with prejudice, as to Relator, and without prejudice as to the United States.
BACKGROUND
Because the Court presently considers Defendants' Joint Motion to Dismiss, it takes the factual allegations of Relator's Complaint as true and resolves any ambiguities or doubts regarding the sufficiency of the claim in favor of Relator. See Fernandez-Montes v. Allied Pilots Ass'n., 987 F.2d 278, 284 (5th Cir. 1993). Further, the Court elects to consider matters of which it may take judicial notice, Lovelace v. Software Spectrum, Inc., 78 F3d 1015, 1017-18 (5th Cir. 1996), and matters of public record. Cinel v. Connick, 15 F.3d 1338, 1343 n. 6 (5th Cir. 2004); 5B CHARLES A. WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357 (3d ed. 2004).This is the second law suit instituted by Relator against Defendant Apollo Group. See White v. Apollo Group, 241 F. Supp. 2d 710 (W.D. Tex. 2003) ("first case"). Relator initiated the first case on June 7, 2002. Through that Complaint, Relator claimed that Defendant Apollo Group violated several statutes, including the False Claims Act, 31 U.S.C.A. §§ 3729, et seq., by "grossly overcharging the Federal Student loan program." There, Relator also complained that Defendant Apollo Group "trumped up harassment charges against [him] . . . after suspension in retaliation" for reporting its illegal activities. All of Relator's claims contained in this first case were dismissed by the Court on January 30, 2003. The Court dismissed Relator's False Claims Act claim because it found that Relator had failed to comply with the Act's procedural requirements. On January 30, 2003, the Court also entered Final Judgment in favor of Defendant Apollo Group.
The instant cause is a qui tam case brought under the False Claims Act. 31 U.S.C.A. §§ 3729, et seq. On December 9, 2004, Relator filed pro se a "Petition And Affidavit For Leave To Proceed In Forma Pauperis," which the Court granted by Order entered January 7, 2005. The January 7 Order also instructed the Clerk of the Court to file Relator's " Qui Tam Federal False Claims Act Complaint Pursuant To Title 31 USC § 3729/3730/3731 [ sic]." Therein, Relator asserts that the "Nature of the Suit is RICO and Overpayments [ sic]." Relator charges Defendant Apollo Group with providing 20 hours of instruction, while charging the United States for 45 hours of instruction. Relator further complains of being expelled from the University of Phoenix, being "demeaned as to his sexuality," and as a "result of this clearly proven tort [seeks] 4.2 million dollars." Finally, Relator seeks redress against Defendant Snell Wilmer because it "does the consulting for [Defendant] Apollo Group, Inc.; [ sic] and it is aware that allowing [Defendant] Apollo Group to provide 20 hours of instruction and charge the United States for 45 is racketeering and is not only liable with the Apollo Group, but is part of a RICO complaint under seal attached." The instant Motion followed.
STANDARD
Rule 12(b)(6) allows dismissal of a case when the plaintiff fails to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). Under Rule 12(b)(6), a court must decide whether the facts alleged, if true, would entitle the plaintiff to some legal remedy. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957). Dismissal for failure to state a claim is highly disfavored and is not granted routinely because of the liberal "notice pleading" requirements of the Federal Rules. FED. R. CIV. P. 8(a); Shipp v. McMahon, 199 F.3d 256, 260 (5th Cir. 2000). In short, a court should not dismiss a claim under Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley, 355 U.S. at 45-46, 78 S. Ct. at 102.
DISCUSSION
Defendants' instant Motion requests that the Court dismiss Relator's Complaint in its entirety. Relator's Complaint, liberally construed, asserts three causes of action: (1) a claim against Defendants under the False Claims Act; (2) a claim that Defendants violated the Racketeering Influenced and Corrupt Organizations ("RICO") Act, 18 U.S.C.A. § 1961, et seq.; and (3) a claim for a "tort" suffered at the hands of Defendant Apollo Group when Relator was expelled from the University of Phoenix for sexual harassment. Neither in his Response nor Amended Response does Relator address Defendants' arguments. Rather, Relator stresses that Defendants "failed to submit a proposed Motion to Dismiss to the US Attorney Winstanley Luke." Thus, as an initial matter, the Court briefly addresses Relator's argument that the Court cannot consider the instant Motion because Defendants filed it without first receiving consent from the United States.
While Relator also raised two other arguments, the Court has addressed those arguments in other Orders, and will not rehash a discussion of those arguments here.
A False Claims Act ("FCA") action may be dismissed "only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting." 31 U.S.C.A. § 3730(b)(1). However, the Attorney General's consent is required only where the relator seeks a voluntary dismissal, not where the district court grants a defendant's motion to dismiss for failure to state a claim. United States ex rel. Shaver v. Lucas Western Corp., 237 F.3d 932, 934 (8th Cir. 2001). Here, as in Shaver, the Court considers Defendants' Motion to dismiss for failure to state a claim. Accordingly, the United States's consent to dismissal is unnecessary, and Relator's assertion fails. See Shaver, 237 F.3d at 934.
Having dealt with Relator's contention, the Court turns its attention to each of Relator's claims and Defendants' attendant arguments.
I. False Claims Act Claim
At the heart of Relator's Complaint is his contention that the Apollo Group has violated the FCA by charging the federal government for forty-five (45) hours of instruction, while only providing its students with 20 hours of instruction. As amended, the FCA imposes civil liability upon any person who "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.A. § 3729(a). The FCA authorizes the United States to institute a civil action against an alleged false claimant, 31 U.S.C.A. § 3730(a), as well as granting individuals a private attorney general to bring a civil action in the United States's name as a relator. 31 U.S.C.A. § 3730(b)(1).
Pursuant to the FCA, a putative relator files her complaint in camera, and serves the United States with a copy of the complaint and written disclosure of substantially all material evidence and information she possesses. Id. The complaint stays under seal for at least 60 days, during which time the United States may intervene and proceed with the action, and is served on the defendant only after the court so orders. Id. at § 3730(b)(2). "If the action brought by the relator is successful, the relator obtains a reward of 25 to 30 percent of the judgment or settlement. The Government gets the rest. . . . [T]he Government . . . has the primary stake in the suit . . . [.]" United States ex rel. Lu v. Ou, 368 F.3d 773, 774 (7th Cir. 2004).
Through the instant Motion, Defendants argue that Relator White is unable to sustain his FCA claim against them because he is pro se. The Court agrees with Defendants. A pro se relator cannot prosecute a qui tam action because policy considerations forbid litigants to be represented by non-lawyers. Lu, 368 F.3d at 775-776. Here, as in Lu, a non-attorney relator seeks to represent the United States. Yet, it is clear that Relator White cannot serve as the United States's attorney. See id. Because Relator can prove no set of facts in support of his claim which would entitle him to relief, Relator White's FCA claim must be dismissed with prejudice, see Conley, 355 U.S. at 45-46, 78 S. Ct. at 102. Nonetheless, because dismissal against one relator may not necessarily preclude another relator from bringing the same suit on behalf of the United States, United States ex rel. Laird v. Lockheed Martin Eng'g, 336 F.3d 346, 358 (5th Cir. 2003), the Court dismisses Relator White's FCA claim without prejudice as to the United States.
II. RICO Claim
Relator asserts that the "Nature of the Suit is RICO and Overpayments [ sic]." Through the instant Motion, Defendants request that the Court also dismiss Relator's RICO Claim. Defendants insist that Relator possesses no standing to bring a civil RICO claim on behalf of the United States. The Court agrees with Defendants. Any standing Relator possess to prosecute this action on behalf of the United States derives from the FCA. The FCA only permits a person to bring a civil action for violations of 31 U.S.C. § 3729. 31 U.S.C.A. § 3730(b)(1). Section 3729 creates civil liability for certain enumerated acts. Id. at § 3729. RICO violations are not among the list. Id. As such, Relator lacks standing to bring a RICO claim on behalf of the United States, and has failed to state a claim upon which relief may be granted. Thus, Relator's RICO claim should be dismissed with prejudice. See FED. R. CIV. P. 12(b)(6).
III. "Tort" Claims
Lastly, through his Complaint, Relator White vaguely alleges "retaliation," "slander and libel," and a "clearly proven tort," relating to his expulsion form the University of Phoenix in early 2002. As discussed above, the FCA only permits a person to bring a civil action for violations of 31 U.S.C. § 3729. 31 U.S.C.A. § 3730(b)(1). Section 3729 creates civil liability for certain enumerated acts. Id. at § 3729. Thus, Relator cannot bring these "tort" claims on behalf of the United States'. Rather, he may only assert them in his individual capacity. Accordingly, Relator's "tort" claims fail to state a claim upon which relief may be granted, and should be dismissed.
Moreover, even if Relator had brought suit in his individual capacity, his allegations against Defendant Apollo Group would be subject to dismissal because they are the same claims raised by Relator in the first case he litigated against Defendant Apollo Group. Res judicata, or claim preclusion, bars a subsequent action when "a prior action involving the same parties and the same cause of action reached final judgment in a court of competent jurisdiction." Agrilectic Power Partners, Ltd. v. General Electric Co., 20 F.3d 663, 664-65 (5th Cir. 1994). Res judicata applies when: (1) there was a previous final judgment on the merits; (2) the prior judgment was between identical parties or those in privity with them; and (3) there is a second action based on the same claims as were raised in the first action. Smith v. Waste Mangement, 407 F.3d 381, 386 (5th Cir. 2005). To determine whether two complaints involve the same cause of action, the critical issue is whether the plaintiff bases the two actions on the same nucleus of operative facts. Agrilectic, 20 F.3d at 655. Here, the first case was brought by the Relator, in his individual capacity, against Defendant Apollo Group for the circumstances surrounding his expulsion from the University of Phoenix. Further, the Court entered a final judgment in favor of Defendant Apollo Group in the first case on January 30, 2003. As such, there exists a prior judgment on the merits, between the same parties, and the instant "tort" claim is based on the same nucleus of operative facts. Consequently, Relator's instant claim against the Apollo Group would fail had Relator asserted it in his individual capacity. See Smith, 407 F.3d at 386.
Similarly, had Relator avered his "tort" claim against Defendant Snell Wilmer in his individual capacity, it too would be subject to dismissal because Relator fails to state a claim upon which relief may be granted. Through his Complaint, Relator alleges that "[t]here is a lot on [Defendant] Snell Wilmer," but provides the Court with no specific allegations regarding its involvement in Relator's expulsion from the University of Phoenix. Rather, the only apparent basis for Relator's "tort" claim against Defendant Snell Wilmer is that they serve as legal counsel for Defendant Apollo Group. Accordingly, Relator's pleading indicates that he can prove no set of facts in support of his claim which would entitle him to relief, and his claim against Defendant Snell Wilmer should be dismissed. See Conley, 355 U.S. at 45-46, 78 S. Ct. at 102.
CONCLUSION
In light of the foregoing, the Court finds that Relator has failed to state a claim upon which relief may be granted. Relator is unable to prosecute a FCA claim pro se. Further, the FCA does not grant him standing to bring a RICO claim on behalf of the United States. Similarly, Relator lacks standing to raise a tort claim on behalf of the United States. Moreover, to the extent that Relator asserts his tort claim individually, he is precluded from relitigating his "tort" claim against Defendant Apollo Group and has inadequately pled his "tort" claim against Defendant Snell Wilmer.
Accordingly, IT IS HEREBY ORDERED that Defendant The Apollo Group, Inc. and Defendant Snell Wilmer L.L.P.'s "Joint Motion To Dismiss" is GRANTED, as outlined above.
IT IS FURTHER ORDERED that Relator Leland O. White's claims against Defendant The Apollo Group, Inc. and Snell Wilmer L.L.P. are DISMISSED WITH PREJUDICE. IT IS FURTHER ORDERED that the United States' claims against Defendants The Apollo Group, Inc. and Snell Wilmer L.L.P. are DISMISSED WITHOUT PREJUDICE. IT IS FINALLY ORDERED that all other pending motions, if any, are DENIED AS MOOT.