Detroit Defeats Bid to Reopen Transportation Funds Fraud Suit

Detroit stopped two whistleblowers from reinstating their False Claims Act suit alleging the city made false certifications to receive transportation funding from the US government.

A Michigan federal district court correctly held that Detroit’s certifications were forward-looking promises that aren’t subject to FCA liability, Judge Danny J. Boggs said Friday for the US Court of Appeals for the Sixth Circuit. The court’s nonprecedential opinion affirms a lower court grant of summary judgment for the city.

Future promises are contractual, and don’t constitute fraud, the appeals court said.

Whistleblowers Gregory Lynn and Paulette Hamilton, principals of paratransit services provider Enjoi Transportation, initially sued in 2017. Their operative complaint alleged that Detroit signed false certifications and assurances of compliance with federal rules to receive grant funds from the US Federal Transit Administration.

They said the FTA requires funding recipients to use 30-minute windows to schedule paratransit pickups, and Detroit only falsely promised to meet that requirement because one of its vendors used a 40-minute window.

The US District Court for the Eastern District of Michigan rejected the suit in 2024, and the whistleblowers appealed.

Not Promissory Fraud

The whistleblowers’ express false certification count failed, the appeals court said, because such cases involve allegations that a defendant promised to comply with a requirement on the face of a claim submitted to the government, as opposed to “future promises.”

Detroit’s certifications and assurances said it agreed to comply with requirements, which constitutes a promise, not a past or existing fact, the Sixth Circuit said.

The appeals court also rejected the whistleblowers’ promissory fraud argument. Some courts recognize a promissory fraud exception, under which an express false certification claim can proceed if a plaintiff establishes that a defendant had no intention of complying in the future at the time it made a certification, the opinion said.

The whistleblowers didn’t allege Detroit had no intention of complying with the law, the opinion said.

Judges Eugene E. Siler Jr. and Raymond M. Kethledge joined in the decision.

Stempien Law represented the whistleblowers.

The case is United States ex rel. Lynn v. City of Detroit, Mich., 6th Cir., No. 25-1537, unpublished 4/10/26.