United States District Court, E.D. California
UNITED STATES OF AMERICA and STATE OF CALIFORNIA, ex rel. BEVERLY MCCAFFERY, Plaintiffs,
ALTERNATIVE LEARNING CENTER, et al., Defendants.
October 18, 2016, the United States and the State of
California (the Government Parties) filed a joint notice of
election to intervene for settlement purposes in this qui
tam action brought under the False Claims Act (FCA), 31
U.S.C. §§ 3729 et seq., and the California
False Claims Act, Cal. Gov't Code § 12652(c)(6)(B).
Notice, ECF No. 46.
notice, the Government Parties requested the seal be lifted
from certain documents in this case, namely the notice of
election and order on intervention, and the complaint, and
all future filings, but not from other filings. Id.
at 2. The other filings include the United States'
requests for extensions of time to decide whether to
intervene and the declarations and other materials submitted
in support of those requests. Id.
April 11, 2017, this court, in reviewing the joint notice,
ordered several documents on the docket be unsealed: (1) the
original complaint, ECF No. 1; (2) the joint notice; (3) the
order unsealing the documents on the docket; and (4) all
future filings maintained in this action. Order 1-2, ECF No.
54. The court then ordered the Government Parties to show
cause why the balance of the docket should remain under seal.
Id. at 2-3. The Government Parties responded on
April 12, 2017. ECF No. 55. The Government Parties requested
the remaining documents remain under seal, or in the
alternative be redacted. Id. at 2.
reasons explained below, this court DENIES the Government
Parties' request to retain the seal over the remaining
documents. As these Parties requested, the court provides a
brief period of additional time for the Government Parties to
SHOW CAUSE under Local Rules 140 and 141 why remaining
documents should be redacted.
the False Claims Act contemplates lifting the seal on the
relator's complaint, nowhere does the statute reference
the unsealing of any other documents filed with the court.
U.S. ex rel. Erickson v. Univ. of Wash. Physicians,
339 F.Supp.2d 1124, 1126 (W.D. Wash. 2004). The FCA,
therefore, provides no explicit authority for the court to
permit or deny disclosure of material filed in
camera other than the complaint. See Id. But in
permitting in camera submissions, the statute
necessarily invests the court with authority to either
maintain the filings under seal, or to make them available to
the parties. Id. It is with this authority that the
court can determine if “lifting the seal on the entire
record is appropriate.” U.S. ex rel. Lee v. Horizon
Wests, Inc., No. 00-2921 SBA, 2006 WL 305966, at *2
(N.D. Cal. Feb. 8, 2006). Several courts, including this one,
consider lifting the seal to be appropriate unless the
government shows that such disclosure would: (1) reveal
confidential investigative methods or techniques; (2)
jeopardize an ongoing investigation; or (3) harm non-parties.
Id. “[I]f the documents simply describe
routine or general investigative procedures, without
implicating specific people or providing substantive details,
then the Government may not resist disclosure.”
Id.; see also United States v. Ctr. for Emp't
Training, No. 13-01697, 2016 WL 561774, at *2 (E.D. Cal.
Feb. 12, 2016) (internal citations omitted). Courts also
consider the public's interest in light of the
fundamental principle that court records are generally open
to the public. United States ex rel. Costa v. Baker &
Taylor, Inc., 955 F.Supp. 1188, 1191 (N.D. Cal. 1997).
the Government Parties identify several reasons to retain the
seal over their seal extension requests.
First, under the federal False Claims Act, the
government's decision regarding intervention triggers the
unsealing only of the relator's complaint, not the entire
docket preceding intervention. Second, revealing the contents
of the government's requests to extend the seal and the
intervention deadline would give present and future
defendants a window into confidential government fraud
investigations. Third, unsealing such requests would cause
harm by weakening the government's antifraud efforts.
Fourth, unsealing such requests in qui tam cases
creates a catch-22 for the government: it can either support
its requests for extensions of the seal and intervention
deadline by publicly divulging the details of a confidential
investigation or omit such details and risk the court denying
ECF No. 55 at 2.
the first reason, while the FCA does not explicitly reference
the unsealing of any documents filed with the court except
the complaint, the FCA also does not explicitly preclude the
court from determining the propriety of lifting the seal on
other documents. U.S. ex rel. Erickson, 339
F.Supp.2d at 1126. It is within the court's authority to
determine if the seal should be lifted in part or in whole.
See Horizon Wests, Inc., 2006 WL 305966, at *2.
the second and third reasons, the court is similarly
unpersuaded. The Government Parties argue the requests for
extension reveal “the actions taken in furtherance of
the investigations, the progress made, the government
agencies and personnel involved, and the government's
view of what additional investigation is necessary and
appropriate.” ECF No. 55 at 4. But a careful in
camera examination of the case file shows that the
documents at issue, including those cited as containing
particularly sensitive information, merely describe routine
investigative procedures. In providing reasons for an
extension, the Government Parties described only in general
terms the investigation into the FCA claims. Id.
example, the requests describe the investigations soliciting
“monthly and yearly summaries” of payments made
to each defendant, ECF No. 14-1 at 3, analyzing
“voluminous documents in response to Civil
Investigative Demands (“CIDs”) issued on both
defendants, ” ECF No. 17-1 at 2, and interviewing
“former employees of both defendants, ”
id. In these requests, the Government Parties did
not disclose any confidential information or investigative
techniques. See id.; see also ECF No. 14-1.
The instant situation is similar to the one described in
Ctr. for Emp't Training, where the court found
the documents at issue did not disclose any confidential
investigative techniques, information that could jeopardize
an ongoing investigation, or matters that could injure
nonparties. 2016 WL 561774, at *3. Additionally, other than
describing or speculating that general harm that may occur,
such as the weakening of government anti-fraud efforts, the
Government Parties do not detail the actual harm that will
follow an unsealing of court documents. Nor do they point to
harm that has occurred from unsealing of documents in
another, separate case. Speculative and general harms,
without more, do not amount to harm to an “ongoing
investigation, ” “harm to non-parties, ” or
“reveal confidential investigative methods or
techniques.” Horizon Wests, Inc., 2006 WL
305966, at *2.
Government Parties' “catch-22” argument is
similarly unavailing. Had the Government Parties actually
divulged confidential details in its extension requests, this
court could have reviewed such details in camera and
then might have determined that the seal on such documents
should be maintained. Here, where the Government Parties
apparently have opted for the more ...