FCA’s Seal Provisions Withstand Constitutional Challenge

By: Joel Androphy, Rachel Grier, and Stephanie Gutheinz

The FCA provides that all qui tam complaints must be filed under seal and must remain under seal for 60 days after filing.  During the 60-day period after filing, the government investigates the allegations and determines whether to intervene in the action.  In American Civil Liberties Union v. Holder, three non-profit organizations challenged the FCA’s seal provisions, arguing that the provisions amount to unconstitutional content-based restrictions and unconstitutionally deny access to information regarding important public interests.  The district court dismissed the challenge, holding that the seal provisions do not offend any constitutional protections. 

The court noted that the FCA is not an access statute because its seal provisions do not regulate access to information possessed by law enforcement; rather, the provisions temporarily limit public access to the qui tam relator’s allegations of fraud.  In holding that the seal provisions are narrowly tailored to serve the government’s compelling interest in investigating allegations of fraud, the court acknowledged that public access to qui tam complaints would not enhance the efficient and just resolution of cases, but would actually hamper the government’s investigation by tipping off wrongdoers.  Based on these consequences, the court held that no right of access to a sealed qui tam complaint exists, specifically noting the strong possibility that public access could lead to the destruction of evidence. 

The court further held that the seal provisions do not constitute a prior restraint on speech because the seal merely prevents the disclosure of the existence of the qui tam suit, rather than the facts upon which the suit is based.  Finally, the court rejected the argument that the mandatory seal provisions violate the separation of powers because courts are not permitted to determine the necessity of a seal on a case-by-case basis.  The court reasoned that the mandatory seal is nothing more than a ministerial act and does not require judges to enter an order without considering the merits.  Furthermore, judges eventually have the opportunity to consider the necessity of a seal on a case-by-case basis when the seal is going to expire and the judge must determine whether there is good cause to extend the seal.  American Civil Liberties Union v. Holder, 2009 WL 2596641 (E.D. Va. Aug. 21, 2009).

Posted in Federal False Claims ActNo Comments

Leave a Reply

This blog is designed to provide general information only. This information is not and should not be construed to be legal advice. The transmission of the information found on this blog also does not result in the formation of a lawyer-client relationship.

Copyright 2014 Berg & Androphy.