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Contract – False Claims Act – Sealed Complaint – First Amendment

An Alexandria U.S. District Court says the requirement under the False Claims Act that a qui tam relator’s complaint be temporarily sealed at the initial filing does not violated plaintiff public-interest groups’ First Amendment rights, and plaintiffs lack standing to assert relators’ First Amendment rights.

This case is a tripartite attack on the constitutionality of the seal provisions of the False Claims Act, 31 U.S.C. § 3729, et seq., brought by plaintiff American Civil Liberties Union, plaintiff OMB Watch and plaintiff Government Accountability Project (GAP).

Plaintiffs argue first that the seal provisions, §§ 3730(b)(2) and (b)(3), are facially unconstitutional because they deny access to information of paramount public interest and thus violate the First Amendment right of access to information. Second, plaintiffs argue that the provisions are “content-based” restrictions that gag the relator from speaking about the case, in violation of the relator’s First Amendment rights. Finally, they argue that the seal provisions infringe on a court’s inherent authority to decide on a case-by-case basis whether a particular FCA action should be hidden from public scrutiny and thus violates the separation of powers. Plaintiffs seek declaratory relief under 28 U.S.C. § 2201, as well as injunctive relief.

It appears the 4th Circuit holds that the public has a First Amendment right of access to the documents filed with a summary judgment motion because such documents are used to adjudicate the parties’ substantive rights. However, the court here finds that neither “experience” nor “logic” justifies creating a First Amendment right of access to sealed qui tam complaints. For the 23 years since creation of a procedure for qui tam complaints to be filed in camera and under seal, no court has found a First Amendment right of access to sealed qui tam complaints.

In analogous circumstances where secrecy is prescribed by statute – such as grand jury proceedings – there is no historical tradition of access to sealed records. It is highly unlikely that public access to sealed qui tam complaints would enhance the efficient and just resolution of cases. To the contrary, if a qui tam complaint entered the public domain during an ongoing government fraud investigation it could tip off the perpetrators and hamper the investigation. The initial 60-day seal contemplated by the FCA is necessary lest the subject of the investigation be tipped off and destroy or remove evidence. Prematurely unsealed complaints could hamper the government’s efforts in combating fraud and undermine the FCA. The court finds that public access to sealed qui tam complaints would not play a significant positive role in the process.

Also, the seal provisions are narrowly tailored to serve a compelling government interest in maintaining the integrity of ongoing criminal investigations, assuming there is a First Amendment right of access.
And there is no common law right of access to a sealed qui tam complaint.

The court holds that plaintiffs lack standing to assert the rights of relators. Further, the FCA’s seal provisions are neither a content-based restriction on speech, nor a prior restraint.

Complaint dismissed.

ACLU v. Holder (O’Grady, J.) No. 1:09cv042, Aug. 21, 2009; USDC at Alexandria, Va. VLW 009-3-483, 23 pp.

VLW 009-3-483

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