The United States District Court of the Eastern District of Pennsylvania recently issued a decision unsealing a False Claims Act case over the objections of the government, the relator and the defendant.[1] In United States ex. Rel. Brasher v. Pentec Health, Inc. No. 13-05745, 2018 WL 5003474 (E.D.P.A. Oct. 16, 2018), a case initially filed five years ago, the government filed a motion to continue the seal – which happened to be its eleventh such motion – arguing that additional time was necessary, in part, to finalize its decision whether to intervene in the action, as well as to pursue settlement options. The Court disagreed.

In initially denying the government’s request to extend the seal – an extension also supported by the relator and the Defendant – the Court expressed concerns “about the secrecy and pendency of the case, including concerns about the lack of meaningful deadlines, and that the need for transparency and accountability were not being met” by what, at the time, already amounted to just over five years of extensions.

In response, the Government filed a motion for reconsideration in October 2018, in another attempt to continue the seal on the case. This motion too was denied. In its decision, the Court stressed the importance of the FCA’s requirement that there be “good cause” shown in order to extend the period the case is under seal, rejecting the government’s general argument that it was the practice among some courts to routinely grant unlimited extensions. Indeed, the Court recognized that “courts have grown increasingly impatient with the Government’s repeated requests for extension of the seal in qui tam actions.” The decision pointed to the fact that none of the parties in this case were able to identify any specific, concrete harm that would occur as a direct result to the seal expiring, and made clear that the effect on settlement negotiations was irrelevant, as “the sealing provision is not intended to allow the Government to negotiate a settlement under the cloak of secrecy but rather to investigate the allegations and then to determine whether it is electing to intervene.”

This case is another instance of a trend of courts being less willing to grant multiple extensions keeping qui tam actions under seal. Especially of note here is that in this case all three parties, the government, the relator, as well as the defendant government contractor, expressed support for the extension, an extension the Court was not persuaded to grant despite the lack of party opposition. Continued judicial impatience with keeping similar cases under seal for extended periods of time may have significant consequences for FCA defendants, including government contractors, as this could result in the government attempting to investigate at an increased pace, forcing defendants to produce documents, witnesses, and other information on a shortened timeline. At the same time, shorter investigations could result in lower costs for FCA defendants as it may force the government to limit the scope of its inquiries to the relator’s central allegations, rather than spending time on peripheral issues and/or broadening the scope of its investigation. As this issue is likely to continue evolving, we will continue to monitor developments as they occur.

[1] False Claims Act cases are filed under seal to give the government time to investigate and determine whether or not to intervene.