First, the government asserts that it has not had a sufficient opportunity, after nearly eighteen months, to make its decision regarding intervention. This is not a legitimate reason to maintain the seal. The above-quoted portion of the Senate report on this amendment states unambiguously that Congress viewed sixty days as sufficient time to make the intervention decision. Given nine times that long, the Justice Department ought to have been able to make up its mind. The court notes that the State of California, while maintaining the same untenable position as the government, demonstrated greater candor by admitting in its memorandum that it determined long ago that the accusations had merit and is now seeking information only about the scope of the damage. This practice of conducting one-sided discovery for months or years while the case is under seal was not contemplated by Congress and is not authorized by the statute.
The government next claims that lifting the seal might interfere with the related criminal investigation. Again, the Senate report quoted above indicates that Congress did not intend for the mere presence of an on-going investigation to forestall the termination of the seal. If the government could plausibly argue that some aspect of its criminal investigation would be jeopardized by prematurely "tipping-off" the defendant, perhaps the seal would be justified. See id at 16, reprinted at 5281 (seal established in response to Justice Department concerns that civil complaints might "tip off" subjects of criminal investigations). Such a circumstance does not exist here. The government has issued subpoenas to each of the defendants and has interviewed numerous current and former employees of B & T. The proposition that defendants are currently unaware of the investigation or its general nature, therefore, defies reason. The government suggests that discovery by defendants in the civil case might hamper the criminal investigation. The statute, however, provides that the court may stay discovery in the civil case if the government can establish that such discovery would interfere with its investigation. 31 USC § 3730(c)(4). Because the statute provides this alternative means of protecting the criminal investigation from the prying eyes of defendants, the government's concern about discovery in the civil case provides no basis to maintain the seal.
It may be that the pendency of the criminal investigation will interfere with the progress of the civil case. Clearly, the defendants will be disinclined to settle the civil matter without addressing the potential for criminal liability. Moreover, if the government seeks to limit discovery by means of 31 USC § 3730(c)(4), the civil case will proceed more slowly than normal. Neither of these possibilities, however, justifies maintaining the seal in this case. Congress anticipated the difficulties resulting from simultaneous civil and criminal actions and made the accommodations it deemed appropriate. Those accommodations did not include an indefinite period during which the case would remain under seal.
Finally, the government argues that lifting the seal would interfere with settlement negotiations. In short, the government suggests that the settlement value of the case will decline if the government cannot offer defendant the benefit of never making these charges public. First, one cannot help wondering whether the fact that the defendants must guess about the case filed against them is not the more significant settlement advantage currently enjoyed by the government. Even if the advantages to defendants of maintaining the veil of secrecy were the more important issue, such a concern clearly falls outside of the rationale for the statutory seal provision. Congress enacted the seal provision to facilitate law enforcement, not to provide an extra bargaining chip in settlement negotiations. Moreover, a settlement guaranteeing that the allegations of the complaint would never come to light would utterly frustrate the public's interest in monitoring the workings of government.
Given the government's failure to provide a single cogent reason to maintain the seal in this case, good cause to do so clearly does not exist. The court notes with regret that when the earlier extensions were granted in this case, the effects of inertia and the lack of an opposing party may have resulted in a less searching inquiry regarding good cause than is appropriate. Unfortunately, the relative ease of granting, rather than denying, these extensions may too often lead courts to prolong unnecessarily the period of the seal. Were it not for the unusual circumstance presented by Costa's difficulties with his employer, this case may have continued on that track even longer. As it happens, the case did come to the court's attention and the proper inquiry has now been made and the government's arguments have been found inadequate.
For the foregoing reasons, the government is directed to make its election regarding intervention not later than January 31, 1997. Without regard to whether the government or the state decide to proceed with the case, the party prosecuting the case is directed to serve the defendants with the summons and complaint not later than January 31, 1997. The clerk is directed to unseal the file on that date. Relator Costa may divulge information related to this case to the City of Richmond as of the date of this order.
IT IS SO ORDERED.
VAUGHN R. WALKER
United States District Judge
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