In my experience defending qui tams suits in Florida's Middle District, courts routinely agreed with the government and relators to keep sealed those False Claims Act qui tams that were dismissed or settled while under seal. Relators were sacrosanct; I never heard of the government opposing a relator's request to keep a dismissed complaint under seal, let alone oppose the relator in instances where the relator claimed that they feared retaliation. Finally, in my experience, courts have most often deferred to the government when it sought to maintain the seal over its motions for extension of time to investigate qui tam complaints. (Is this your experience, readers? Please tell us about the experience in your districts.)
As shown by several recent opinions in the last several months, however, courts are taking an increasingly skeptical view of requests to continue the seal both of dismissed qui tam complaints and of the government's motions for extension to investigate. See US ex rel Danner v. Quality Health Care, Inc., (D. Kan. 10/18/11); US ex rel Durham v. Prospect Waterproofing, Inc., (D. D.C. 10/4/11); US ex rel Littlewood v. King Pharmaceuticals, Inc., (D. Md. 8/29/11), US ex re Rostholder v. Omnicare, (D. Md. 7/28/11). In these decisions, courts unsealed qui tam complaints in the face of claims by relators that they feared retaliation from employers. In turn, these opinions reflect an attitude that courts will no longer defer to claims by relators or the government that they will be prejudiced or harmed if qui tam pleadings are unsealed. See FCA Alert for a discussion of Danner and Durham.
The most thorough case addressing sealing and the request of a relator and the government to keep portions of the qui tam court file under seal is US ex rel Littlewood v. King Pharmaceuticals, Inc. which can also be found at 2011 WL 3805607.
In US ex rel Littlewood v. King Pharmaceuticals, Inc., the relator filed a qui tam under seal pursuant to the False Claims Act alleging that defendant was engaged in an illegal scheme to promote off label uses of a drug. The government declined to intervene, and the relator moved to dismiss the underling suit. Though consenting to dismissal, the government requested that the court unseal the relator’s amended complaint and the Court’s dismissal order on the grounds that continuing the seal over those records “would violate the strong presumption in favor of the public’s right to examine and copy judicial records.” At the same time, the government moved to continue the seal on all other papers in the action, including its two previously filed motions seeking extensions of time in which to decide to intervene.
The relator opposed the government’s request to unseal any portion of the file, claiming that unsealing would subject her to significant harm in part because she was still employed by the defendant. The relator argued further that she should not be “penalized for coming forward” and she asked for the court’s “compassion” in retaining the seal on the grounds that she was a mother to two young children.
The Court ruled against the relator and, ultimately the government as well, and ordered the entire court file unsealed. Regarding the relator, the Court began from the premise recently announced by the 4th Circuit in ACLU v. Holder, 2011 WL 1108252 (4th Cir. 3/28/11), that “no qui tam case is sealed indefinitely,” and that in “every FCA case, the qui tam complaint will be unsealed.” In addition, the Court closely examined two cases which had rejected similar requests by relators to maintain the seal on a dismissed qui tam: US ex rel. Herrera v. Bon Secours Cottage Health Services, 665 F.Supp.2d 782 (Ed. Mich 2008) and US ex rel. Permison v. Superlative Technologies, Inc. 492 F. Supp2d 561 (E.D. Va. 2007). Following these cases, the Court refused to continue the sealing based on the relator’s “hypothetical concerns about possible retaliation by her employer and damage to her career prospects.” With little sympathy, the Court observed further that the relator “concluded that these risks were worth taking if the Government would intervene. Having assumed the risk that the Government might not intervene, the relator cannot cherry pick the portions of the FCA that suit her.”
Additionally, the Court refused to continue to seal the government’s motions for extension of the seal in order to permit government to investigate. The Court analogized the motion to continue the seal to Rule 26(c), Fed. R. Civ. P., which requires courts to consider and balance the harm that might result from disclosure and determine whether the harm of unsealing will outweigh need for documents. Courts will usually decline to unseal if doing so results in the release of confidential investigative techniques, of information that could jeopardize an ongoing investigation, or of matters which could injure nonparties. Unsealing, the Court found, is appropriate if disclosure results in “routine investigative procedures" becoming known "which anyone with rudimentary knowledge of investigative processes would assume would be utilized in the regular course of business.” Finding that the government’s motions merely outlined “the kind of investigative procedures that anyone with rudimentary knowledge of investigative processes” would assume to be used, the Court denied the government’s motion.