False Claims Act lawsuits are initially filed “under seal” and the defendant is not notified that it has been sued. While the complaint remains confidential, the Department of Justice has the opportunity to investigate the claims of fraud. Because the company is not told about the lawsuit, there are special restrictions on what the relator can say about it. If the relator publicly reveals the filing or existence of the qui tam lawsuit, they can be sanctioned up to and including dismissal of their lawsuit.
The FCA prohibits public discussion of the filing of the qui tam complaint or the allegations within it. Technically, it does not cover discussions of the nature and existence of the fraud. However, separating one from the other can be difficult and best practice is to avoid it altogether. When the seal is violated, the relator can be sanctioned. See U.S. ex rel. Lujan v. Hughes Aircraft Co., 67 F.3d 242 (9th Cir.1995). This sanction can include dismissal of the relator from the lawsuit and exclusion from the possibility of an award.
A few years ago, several advocacy groups challenged the right of the government to prevent relators from discussing the lawsuits with them. The challenge on First Amendment and Separation of Powers grounds was rejected in Am. Civil Liberties Union v. Holder, 673 F.3d 245 (4th Cir. 2011). The Fourth Circuit held that the seal provisions of the False Claims Act were narrowly tailored to serve a compelling government interest. The seal allows the government to protect the integrity of its ongoing fraud investigation. Because the restrictions are limited to this purpose, it was a valid restriction on the public’s right to access the judicial proceedings.
In U.S. ex rel. Gale v. Omnicare, Inc., 2013 US DIST LEXIS 80436 (N.D. Ohio June 7, 2013), the relator mentioned to various people that he had to meet with his attorneys on different occasions. After examining the statements, there was no factual determination that the relator had discussed the lawsuit. His statements were vague and did not create an inference that he discussed the complaint, because the statements left open the possibility that he was meeting with attorneys for other reasons. It also took note of the fact that the comments did not tip off the defendant to the existence of the filing of the complaint.
Here are answers to a few questions about the seal imposed by the False Claims Act:
It is best to decline the interview and provide no comment. Revealing the lawsuit to the reporter would raise serious problems for your whistleblower claim.
Under no circumstances can you reveal the existence of the filing to your employer. The primary purpose of the seal is to prevent the defendant from learning that they are being investigated by the government.
In Gale, the relator also told his wife about the filing of the qui tam lawsuit. The court refused to consider this a public discussion that would violate the seal. It noted that this would be the case even if his wife worked for the target company. The extent to which this ruling would be applied by other courts or to other family members is unknown. It may be best to discuss the possibility of a qui tam lawsuit with them prior to the filing of the complaint and refrain from further discussions.
Issues can arise where the relator may need to make a limited disclosure to someone. This might be required in another lawsuit or judicial proceeding, such as a divorce or bankruptcy proceeding. There is a procedure for partially unsealing the case to permit the disclosure. It is best to discuss this situation with your attorney.
Although the law provides for a 60 day period under seal, it can be extended at the request of the Government. Extensions are typical. On average, cases remain under seal for 2-3 years while the investigation occurs. If the government is not interested in pursuing it, the seal may be lifted sooner. In particularly complex cases, it can take more time for the government to investigate.