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What Does “Under Seal” Really Mean?

by Dave Scher | May 19, 2021 | Whistleblowers

Jesse Hoyer

The Federal False Claims Act provides specific rules to keep the case confidential when a whistleblower files a new lawsuit. The rules prevent the defendant from finding out that the government is conducting an investigation. The procedure, known as “filing under seal,” requires that a complaint “shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders.” 31 U.S.C. § 3730(b)(2). This part of the False Claims Act seems to be a mostly procedural rule for lawyers to follow, but in reality, it puts significant obligations on the relator too.

So what does “under seal” really mean to a relator?

Relator’s Obligations

The False Claims Act’s filing-under-seal requirement exists to give the government time to investigate the alleged fraud, determine whether it is already investigating the alleged fraud, and decide whether it will prosecute the suit itself before tipping off the target. Various court interpretations make clear that the seal requirement does not impart a condition of absolute silence about the alleged fraudulent conduct. Such a requirement would place a burden on the relator that exceeds the language or purpose of the False Claims Act.

As a practical matter, however, prudent practice is to exercise an abundance of caution when discussing any aspect of a False Claims Act case or the underlying allegations with anyone other than the relator’s counsel and the government agents assigned to the case. Most importantly, a Relator should never disclose the actual filing of a qui tam case without speaking with their attorney first. Although a qui tam case is only under seal by statute for the first sixty days, the cases often remain under seal for months or even years while the government investigates, so a relator needs to know the exact status of a qui tam case at all times. During the period that a case is under seal, a relator must be prepared to exercise a level of discretion that may be difficult to maintain but is of utmost importance to the success of a case.

Case Law

An excellent example of a relator’s seal obligation is U.S. ex rel. Gale v. Omnicare out of the Northern District of Ohio, Case No. 1:10-cv-127 (June 7, 2013). In Gale, the defendant argued that the relator had violated the seal requirement by disclosing the lawsuit to his wife in private, and by making vague statements about lawyers or a lawsuit to two former Omnicare colleagues. Omnicare argued that if the relator so much as mentions any aspect of a qui tam case – even just that he has lawyers or is involved in a lawsuit with the defendants – then the claim must be dismissed. Omnicare relied mainly on United States ex rel. Summers v. LHC Group, Inc., a 2010 Sixth Circuit case, to make this argument. But in Gale, the court ruled that Omnicare’s interpretation of the law went too far.

In Summers, the plaintiff brought a qui tam action for Medicare fraud but did not file her complaint under seal. Because of this error, the defendants found out about the case and filed a Motion to Dismiss twenty-five days after Summers’s filing, well within the minimum sixty-day seal period. The district court dismissed the case, and the Sixth Circuit affirmed. The Sixth Circuit held that “violations of the procedural requirements imposed on qui tam plaintiffs under the False Claims Act preclude such plaintiffs from asserting qui tam status.” In simple terms, that means that if a relator does not follow the filing procedures, he cannot bring the qui tam case.

But, the Summers court did not go so far as to consider precisely how limiting the seal may or may not be. Two other courts have considered the issue, however. The Fourth Circuit has found that “the seal provisions limit the relator only from publicly discussing the filing of the qui tam complaint. Nothing in the FCA prevents the qui tam relator from disclosing the existence of the fraud.” Am. Civil Liberties Union v. Holder, 673 F.3d 245, 254 (4th Cir. 2011). Years before that, the Ninth Circuit determined that the seal did forbid a relator from “making statements to the Los Angeles Times about the existence and nature of her qui tam suit.” U.S. ex rel. Lujan v. Hughes Aircraft Co., 67 F.3d 242, 244 (9th Cir.1995). The legislative history of the modern False Claims Act also reflects that Congress adopted the seal provision “in response to Justice Department concerns that qui tam complaints filed in open court might tip off targets of ongoing criminal investigations.” S.Rep. No. 99-345, at 16 (1986).

After a detailed discussion, the Gale court determined that Gale’s comments to his wife do not constitute public statements, even if his wife happened to also work for Omnicare. Likewise, a vague reference to meeting with attorneys – regardless of what the listener thought the statement meant – was not a disclosure of the filing of the qui tam suit. Ultimately, the court reached the most recent state of the law on the seal requirements, finding that all of the previous case law is consistent with one overarching principle: “[T]he False Claims Act’s seal requirements prevent the relator from publicly discussing the filing of the qui tam complaint, but not the nature and existence of the fraud.”

Our experienced whistleblower attorneys can help you determine if you have a False Claims Act case, guide you through blowing the whistle in a manner calculated to protect your career, and fight for your rights if your employer retaliates.

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