Seal of a False Claims Act Case

False Claims Act cases are unusual in their procedure because the real party of interest is the government, but a person is suing an individual. In addition to having the right to be able to sue on behalf of someone else, one of the most unusual aspects of False Claims Act cases is that a person is automatically required to file a case under seal of federal court if a person is going to initiate an action as a private party. It is unusual to seal the cases, people usually think of business being conducted in courts as being open and subject to public scrutiny. This idea also runs counter to the initial psychology of most whistleblowers.

Filing a Case Under Seal

Whistleblowers like to talk to as many people as possible about their allegations, but being a whistleblower on a False Claims Act case requires a whistleblower to file their case under seal at least initially. The case remains under seal for 60 days, and in practice, that time period is typically extended by the government with a showing of good cause. Of course, the case can stay under seal for quite some time, depending on what the court and the government decide to do with the investigation.

Even more unusual, once the government is done investigating the case, the government can decide to intervene and take over the case entirely. If they decline to do so, the plaintiff-relator has the right to pursue the action on their own. It is a rare occurrence for the plaintiff to proceed on their successfully, but it does happen.

Consequences of Violating the Seal of the Case

The seal of the case is required if an individual files a case or a group of people files a case under the Federal or a State False Claims Act. The seal is imposed by the statute, and the seal is not lifted until the government requests the court to lift it or the court decides to lift it. The seal stays in place and requires all the parties to keep confidential the existence of the Qui Tam actions.

The consequences of violating the seal are a little better understood now. Before, there was an important case heard in Supreme the Court, State Farm Fire & Casualty Co. v. ex rel Rigsby et al., The Rigsbys were plaintiffs suing State Farm and actions involving State Farm claims that were backed by the government. A lawyer for the plaintiff’s discussed some case information with the media and released it the story went public, and obviously, that was breaking the seal.

State Farm wanted the whole case thrown out and to force everybody to start all over again. The Supreme Court decided that the case could go forward. Of course, the lawyer who broke the seal was in a big trouble, but the case could go forward, and they left it up to the discretion of the district court as to what to do in these instances.

The plaintiffs themselves had not done anything to violate the seal. Despite this ruling which at least does not destroy the case for a seal violation, breaking the seal in federal court is not acceptable and can have serious implications on a whistleblower case.