UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES, ex rel. THOMAS DURHAM,
Plaintiff, v. Civil Action No. 10-1946 (JEB) PROSPECT WATERPROOFING, INC.,
Defendant.
MEMORANDUM OPINION AND ORDER
This case presents the question of how much of a dismissed False Claims Act suit should
remain under seal. Relator Thomas Durham and the United States have different opinions.
Under the applicable six-factor analysis the caselaw prescribes, the Court believes the
Government has the better argument.
I. Background
Relator Thomas Durham filed this action on November 15, 2010, under the False Claims
Act, 31 U.S.C. § 3729, et seq., alleging that his employer, Prospect Waterproofing Company,
had falsely certified its payrolls, which resulted in the submission of fraudulent claims for
payment. Compl., ¶¶ 18, 20. Pursuant to the qui tam provisions of the FCA, Relator filed this
matter under seal so the United States could investigate these allegations. After the Government
completed its investigation, it declined to intervene, and on August 17, 2011, Relator filed a
Notice of Entry of Voluntary Dismissal Without Prejudice. ECF No. 9. He also requested that
the Court allow the case to remain under seal permanently. See id. The United States consented
to the voluntary dismissal but objected to Relator’s request to keep the case under seal. ECF No. 1 10. The Government instead asked that the pleadings that do not reflect its investigative efforts -
- i.e., the Complaint, Relator’s Voluntary Dismissal, and the United States’ Consent to Entry of
Voluntary Dismissal -- be unsealed. See id. This Court ordered on August 23, 2011, that the
parties submit supplemental briefings on the sealing issue, which has now been completed.
II. Analysis
In this Circuit, when evaluating whether to seal case pleadings, “the starting point . . . is a
‘strong presumption in favor of public access to judicial proceedings.’” EEOC v. Nat’l
Children’s Ctr., 98 F.3d 1406, 1409 (D.C. Cir. 1996) (quoting Johnson v. Greater Southeast
Cmty. Hosp. Corp., 951 F.2d 1268, 1277 (D.C. Cir. 1991)). The D.C. Circuit has articulated
“‘six factors that might act to overcome this presumption of public access.’” United States ex rel.
Schweizer v. Oce, N.V., 577 F. Supp. 2d 169, 171 (D.D.C. 2008) (quoting EEOC, 98 F.3d at
1409). These six factors are:
(1) the need for public access to the documents at issue; (2) the extent of previous public access to the documents; (3) the fact that someone has objected to disclosure, and the identity of that person; (4) the strength of any property or privacy interests asserted; (5) the possibility of prejudice to those opposing disclosure; and (6) the purposes for which the documents were introduced during the judicial proceedings.
EEOC, 98 F.3d at 1409 (citing United States v. Hubbard, 650 F.2d 293, 317-22 (D.C. Cir.
1980)). The Court will examine them in turn.
A. Need For Public Access As mentioned, there is a strong presumption that the public should have access to court
proceedings to “ensur[e] the integrity of judicial proceedings in particular and of the law
enforcement process more generally.” Hubbard, 650 F.2d at 315. Public access may be denied,
however, “to protect trade secrets, or the privacy and reputation of victims of crimes, as well as
2 to guard against risks to national security interests, and to minimize the danger of an unfair trial
by adverse publicity.” Id. at 315-16 (internal citations omitted).
Cases brought under the False Claims Act receive special consideration by the courts
because they “inherently implicate the public interest.” United States ex rel. Littlewood v. King
Pharmaceuticals, Inc., 2011 WL 3805607, at *6 (D. Md. Aug. 29, 2011) (unsealing all
documents in dismissed FCA case). Taxpayers are “real parties in interest” in FCA cases
because they possess a strong interest in fraud committed against the United States that results in
monetary loss to the Government. Schweizer, 577 F. Supp. 2d at 172. In addition, FCA cases
are brought with the expectation that the pleadings will eventually be unsealed. See ACLU v.
Holder, 2011 WL 1108252, at *12 (4th Cir. Mar. 28, 2011) (“We agree that ‘sunlight’ and
‘openness’ are important values that further the functioning of this republic and note that in
every FCA case, the qui tam complaint will be unsealed.”). In fact, the rationale behind sealing
FCA cases is to allow the United States ample time to investigate the allegations, and the FCA
does not contain any language that suggests the purpose of sealing a case is to protect the
relator’s identity. See United States ex rel. Herrera v. Bon Secours Cottage House Services, 665
F. Supp. 2d 782, 784-85 (E.D. Mich. 2008); see also 31 U.S.C. § 3730(b)(2).
Relator’s argument that the case should remain under seal, even in light of the strong
presumption of public access, is based on two faulty premises. First, Relator contends that
because the case was dismissed voluntarily, the American public is no longer a party in interest
as the claims will not be litigated. Relator’s Memo. at 3. Additionally, Relator argues that
because Defendant no longer requires access to the sealed pleadings for litigation purposes, this
undercuts the presumption of public access. Id. These arguments, however, miss the mark. The
court in Schweizer explained that in FCA cases, there are “generalized needs for public access.”
3 577 F. Supp. 2d at 173. Voluntary dismissals of FCA actions do not render the allegations any
less relevant to the taxpaying public. Although the court in Schweizer did acknowledge that the
defendant’s “pragmatic individualized need for access” to the sealed pleadings helped the court
resolve this factor in favor of unsealing the record, the court considered this fact “in light of the
more generalized need for public access.” Id. While Defendant does not need to access the
sealed filings for litigation purposes, the “generalized needs for public access” still remain. This
critical factor thus weighs in favor of unsealing.
B. Extent Of Previous Public Access
Previous public access to the sealed filings “is a factor which may weigh in favor of
subsequent [public] access.” Hubbard, 650 F.2d at 318. Of course, “[d]etermining whether . . .
the public has already had access to court records in a given case cannot . . . guide [a] decision
concerning whether . . . the public should have access as an original matter.” Id. The public did
not have prior access to the pleadings in the present case because this case was under seal
pursuant to procedures provided in the FCA. See 31 U.S.C. § 3730(b)(2). This factor is thus
neutral.
C.
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
UNITED STATES, ex rel. THOMAS DURHAM,
Plaintiff, v. Civil Action No. 10-1946 (JEB) PROSPECT WATERPROOFING, INC.,
Defendant.
MEMORANDUM OPINION AND ORDER
This case presents the question of how much of a dismissed False Claims Act suit should
remain under seal. Relator Thomas Durham and the United States have different opinions.
Under the applicable six-factor analysis the caselaw prescribes, the Court believes the
Government has the better argument.
I. Background
Relator Thomas Durham filed this action on November 15, 2010, under the False Claims
Act, 31 U.S.C. § 3729, et seq., alleging that his employer, Prospect Waterproofing Company,
had falsely certified its payrolls, which resulted in the submission of fraudulent claims for
payment. Compl., ¶¶ 18, 20. Pursuant to the qui tam provisions of the FCA, Relator filed this
matter under seal so the United States could investigate these allegations. After the Government
completed its investigation, it declined to intervene, and on August 17, 2011, Relator filed a
Notice of Entry of Voluntary Dismissal Without Prejudice. ECF No. 9. He also requested that
the Court allow the case to remain under seal permanently. See id. The United States consented
to the voluntary dismissal but objected to Relator’s request to keep the case under seal. ECF No. 1 10. The Government instead asked that the pleadings that do not reflect its investigative efforts -
- i.e., the Complaint, Relator’s Voluntary Dismissal, and the United States’ Consent to Entry of
Voluntary Dismissal -- be unsealed. See id. This Court ordered on August 23, 2011, that the
parties submit supplemental briefings on the sealing issue, which has now been completed.
II. Analysis
In this Circuit, when evaluating whether to seal case pleadings, “the starting point . . . is a
‘strong presumption in favor of public access to judicial proceedings.’” EEOC v. Nat’l
Children’s Ctr., 98 F.3d 1406, 1409 (D.C. Cir. 1996) (quoting Johnson v. Greater Southeast
Cmty. Hosp. Corp., 951 F.2d 1268, 1277 (D.C. Cir. 1991)). The D.C. Circuit has articulated
“‘six factors that might act to overcome this presumption of public access.’” United States ex rel.
Schweizer v. Oce, N.V., 577 F. Supp. 2d 169, 171 (D.D.C. 2008) (quoting EEOC, 98 F.3d at
1409). These six factors are:
(1) the need for public access to the documents at issue; (2) the extent of previous public access to the documents; (3) the fact that someone has objected to disclosure, and the identity of that person; (4) the strength of any property or privacy interests asserted; (5) the possibility of prejudice to those opposing disclosure; and (6) the purposes for which the documents were introduced during the judicial proceedings.
EEOC, 98 F.3d at 1409 (citing United States v. Hubbard, 650 F.2d 293, 317-22 (D.C. Cir.
1980)). The Court will examine them in turn.
A. Need For Public Access As mentioned, there is a strong presumption that the public should have access to court
proceedings to “ensur[e] the integrity of judicial proceedings in particular and of the law
enforcement process more generally.” Hubbard, 650 F.2d at 315. Public access may be denied,
however, “to protect trade secrets, or the privacy and reputation of victims of crimes, as well as
2 to guard against risks to national security interests, and to minimize the danger of an unfair trial
by adverse publicity.” Id. at 315-16 (internal citations omitted).
Cases brought under the False Claims Act receive special consideration by the courts
because they “inherently implicate the public interest.” United States ex rel. Littlewood v. King
Pharmaceuticals, Inc., 2011 WL 3805607, at *6 (D. Md. Aug. 29, 2011) (unsealing all
documents in dismissed FCA case). Taxpayers are “real parties in interest” in FCA cases
because they possess a strong interest in fraud committed against the United States that results in
monetary loss to the Government. Schweizer, 577 F. Supp. 2d at 172. In addition, FCA cases
are brought with the expectation that the pleadings will eventually be unsealed. See ACLU v.
Holder, 2011 WL 1108252, at *12 (4th Cir. Mar. 28, 2011) (“We agree that ‘sunlight’ and
‘openness’ are important values that further the functioning of this republic and note that in
every FCA case, the qui tam complaint will be unsealed.”). In fact, the rationale behind sealing
FCA cases is to allow the United States ample time to investigate the allegations, and the FCA
does not contain any language that suggests the purpose of sealing a case is to protect the
relator’s identity. See United States ex rel. Herrera v. Bon Secours Cottage House Services, 665
F. Supp. 2d 782, 784-85 (E.D. Mich. 2008); see also 31 U.S.C. § 3730(b)(2).
Relator’s argument that the case should remain under seal, even in light of the strong
presumption of public access, is based on two faulty premises. First, Relator contends that
because the case was dismissed voluntarily, the American public is no longer a party in interest
as the claims will not be litigated. Relator’s Memo. at 3. Additionally, Relator argues that
because Defendant no longer requires access to the sealed pleadings for litigation purposes, this
undercuts the presumption of public access. Id. These arguments, however, miss the mark. The
court in Schweizer explained that in FCA cases, there are “generalized needs for public access.”
3 577 F. Supp. 2d at 173. Voluntary dismissals of FCA actions do not render the allegations any
less relevant to the taxpaying public. Although the court in Schweizer did acknowledge that the
defendant’s “pragmatic individualized need for access” to the sealed pleadings helped the court
resolve this factor in favor of unsealing the record, the court considered this fact “in light of the
more generalized need for public access.” Id. While Defendant does not need to access the
sealed filings for litigation purposes, the “generalized needs for public access” still remain. This
critical factor thus weighs in favor of unsealing.
B. Extent Of Previous Public Access
Previous public access to the sealed filings “is a factor which may weigh in favor of
subsequent [public] access.” Hubbard, 650 F.2d at 318. Of course, “[d]etermining whether . . .
the public has already had access to court records in a given case cannot . . . guide [a] decision
concerning whether . . . the public should have access as an original matter.” Id. The public did
not have prior access to the pleadings in the present case because this case was under seal
pursuant to procedures provided in the FCA. See 31 U.S.C. § 3730(b)(2). This factor is thus
neutral.
C. Objection to Disclosure
“[T]he fact that a party moves to seal the record weighs in favor of the party's motion.”
Zapp v. Zhenli Ye Gon, 746 F. Supp. 2d 145, 149 (D.D.C. 2010). As Relator has so moved, this
factor favors sealing.
D. Strength Of Interests Asserted
When deciding whether to seal or unseal a record, courts assess the strength of any
property or privacy interests voiced by the moving party. In Hubbard, the D.C. Circuit
considered “the objecting party’s privacy interest in the particular documents, . . . rather than the
effect that unsealing the documents would have on the party’s property and privacy interests
4 generally.” Friedman v. Sebelius, 672 F. Supp. 2d 54, 60 (D.D.C. 2009) (emphasis added). In
his Memorandum, Relator only describes a general privacy interest in keeping his identity secret
from his employer to avoid any potential retaliation should disclosure occur. Id. at 5. He does
not articulate any privacy interests in the specific pleadings themselves. This generalized interest
is not sufficient to tip this factor toward Relator. See United States ex rel. Permison v.
Superlative Technologies, Inc., 492 F. Supp. 2d 561 (E.D. Va. 2007) (unsealing dismissed FCA
claim and pointing out that “[w]hile [the Relator’s] fear of retaliation is not entirely implausible,
it is certainly vague and hypothetical at best; he merely expresses a general apprehension that his
former employer might somehow interfere with his career prospects. . . . In sum, [the Relator’s]
vague concern of future retaliation by his former employer falls far short of outweighing the
public's strong interest in having access to court filings . . . .”).
E. Possibility of Prejudice
The possibility of prejudice refers to “whether disclosure of the documents will lead to
prejudice in future litigation to the party seeking the seal.” Friedman, 672 F. Supp. 2d at 60
(citing Hubbard, 650 F.2d at 320-21); see id. (“The plaintiffs have not claimed that unsealing
this matter would affect them in any future litigation; rather, they refer only to generalized
reputational harm.”). Relator points out that in evaluating prejudice, the court in Schweizer
considered the fact that the relators were no longer employees of the defendant, which
minimized the risk of “workplace discrimination and harassment” following the unsealing of the
pleadings. Relator’s Memo. at 6 (quoting 577 F. Supp. 2d at 177). Relator, therefore, argues
that, because he remains an employee of Defendant, the possibility of retaliation would be great
if the Court unseals the record. Id. A closer examination of Schweizer reveals that the fact the
relator was no longer employed by the defendant is one of several elements the court considered
5 when examining prejudice. See 577 F. Supp. 2d at 177. In any event, Relator does not explain
how unsealing would lead to prejudice in future litigation.
There are, moreover, potential policy concerns if relators are allowed to keep FCA cases
permanently under seal due to fear of employer retaliation. First, these retaliation concerns are
“similar to those of the many other employees who bring suits against their employers or former
employers for various reasons” and therefore should not merit special protection in qui tam
actions. Littlewood, 2011 WL 3805607, at *8. In addition, when bringing suit under the FCA,
Relator “concluded that these risks were worth taking if the Government would intervene.
Having assumed the risk that the Government might not intervene, [R]elator cannot cherry pick
the portions of the FCA that suit [him].” Id. at 9.
The Court thus resolves this factor in favor of lifting the seal.
F. Purposes For Which Documents Were Introduced
There is a strong presumption against sealing court pleadings that are relevant to the
litigation of FCA claims because the public has a right to access the filings. See Friedman, 672
F. Supp. 2d at 61 (“if the documents sought to be sealed are entered as evidence during a trial,
there is a strong presumption against sealing”). In contrast, there is less of a pressing concern to
unseal pleadings if they are not relevant to the claims. See Hubbard, 650 F.2d at 321 (“[T]he
[sealed] documents . . . were not determined by the trial judge to be relevant to the crimes
charged; they were not used in the subsequent ‘trial’; nor were they described or even expressly
relied upon by the trial judge in his decision on the suppression motion.”).
Relator contends that because he voluntarily dismissed this case, it no longer matters that
the documents were filed while litigating his claims. Relator’s Memo. at 7. This argument,
however, ignores that this factor focuses on the purpose of filing his pleadings and nothing
6 further. When Relator filed his Complaint, his purpose was for his allegations to be the basis of
a potential trial. Therefore, there is a strong presumption for public access weighing in favor of
unsealing the Complaint. While Relator’s Voluntary Dismissal and the United States’ Consent
will not constitute the basis of an imminent trial, Relator’s allegations may potentially be revived
in future litigation because the case was dismissed without prejudice. Therefore, this factor
weighs in favor of lifting the seal.
Having applied the six-factor analysis of United States v. Hubbard, the Court finds that
the majority weigh in favor of unsealing the pleadings. In addition, the most significant factors
concerning the need for public access, the strength of the interests involved, and the comparative
prejudice all militate against sealing.
III. Conclusion
In light of the strong presumption of public access and having weighed the relevant
factors, the Court therefore ORDERS that:
1. Relator’s Complaint and Voluntary Dismissal and the United States’ Consent
shall be unsealed; and
2. All other filings shall remain under seal.
SO ORDERED.
/s/ James E. Boasberg JAMES E. BOASBERG United States District Judge
Date: October 4, 2011