4th Cir. upholds sealing of whistleblower court complaints

The public's First Amendment right to access court proceedings is not violated by the sealing provision of the False Claims Act, which seals whistleblower suits for a minimum of 60 days, according to the U.S. Court of Appeals in Richmond, Va. (4th Cir.). The divided decision by the three-judge panel came down on Monday, affirming a district court's judgment dismissing the suit.

The False Claims Act was enacted in 1863 by Congress as a means to recover funds that the government had lost due to federal contractors committing claims fraud. The False Claims Act includes a provision "authorizing private citizens (known as qui tam relators) to use the FCA [False Claims Act] to file suit on behalf of the United States and to share in any recovery from the fraudsters," the Fourth Circuit explained. A 1986 amendment to the False Claims Act requires that qui tam complaints must be filed under seal for 60 days. The government can request that a court extend the amount of time the case remains under seal.

The appellants, American Civil Liberties Union, OMB Watch and the Government Accountability Project, alleged that the seal provisions of the False Claims Act "violate the public's First Amendment right of access to judicial proceedings, violate the First Amendment by gagging qui tam relators from speaking about their qui tam complaints, and infringe on a court's inherent authority to decide on a case-by-case basis whether a particular qui tam complaint should be sealed and thereby violate the separation of powers," the Fourth Circuit opinion summarized.

The First Amendment right of access to court proceeding protects the public's ability to access criminal trials, the Fourth Circuit noted, but the Supreme Court has not addressed whether civil trials also fall under this right. District Judge James Dever, sitting by designation on the Fourth Circuit appeal, wrote for the panel majority that the court "assume[d] without deciding that the First Amendment right of access extends to a qui tam complaint and docket sheet sealed in accordance" with the False Claims Act provision.

However, that First Amendment right does not guarantee access. Dever's opinion said that the U.S. "has a compelling interest in protecting the integrity of ongoing fraud investigations." In order to determine if this interest outweighs the public's First Amendment right of access, the court considered "whether the seal provisions are narrowly tailored to serve" that interest. The court decided that the seal provisions are justified, noting that the provision Congress enacted allots for a 60 day seal for the U.S. government to investigate due to "the complex nature of modern fraud investigations, the government's limited resources, and the unique nature of qui tam action under the FCA."

On the argument that qui tam relators' right to free speech is being violated, the court found that "the seal provisions limit the relator only from publicly discussing the filing or the qui tam complaint," but not "from disclosing the existence of the fraud." The court further concluded that the appellants "failed to identify any particular qui tam relator who, but for the seal provisions . . . is a willing speaker who desires to speak with appellants."

Circuit Judge Roger Gregory dissented, arguing that, due to the majority's decision to uphold automatic sealing, "we may never know what wasteful spending and fraud against the public fisc persists because of government delay, inaction, or under-enforcement of the False Claims Act."

Gregory asserted that “transparency remains central to combating waste and fraud.” Gregory found no justification in the government's infringement of the First Amendment. "Filing an FCA complaint is a symbolic and significant action and the content of that complaint contains essential details about alleged fraud," Gregory said. He found that the public interest in False Claims Act complaints — the documents themselves and the whistleblowers' commentary — outweigh the need for a blanket seal of all False Claims Act complaints.

Patrick Burns, director of communications for Taxpayers Against Fraud, which filed a friend-of-the-court brief in the case supporting the defense, said that the Fourth Circuit made the correct decision in upholding the district court's decision to dismiss the case. He said that this is not a First Amendment issue because "the First Amendment is about free speech, not paid speech" and that a whistleblower is "essentially a paid witness" on behalf of the government.

The Associated Press reported that ACLU attorney Christopher A. Hansen was disappointed with the outcome and found the dissent's opinion "strong and persuasive." The ACLU has not decided whether to appeal, according to the AP.