Whistleblower Secrecy Remains Safe…For Now

In a split 2-1 decision March 28th, the 4th Circuit U.S. Court of Appeals upheld the automatic 60 day sealing provision of the False Claims Act. The suit, brought by the American Civil Liberties Union, the Government Accountability Project and OMB Watch, alleges the secrecy unlawfully blocks the public’s access to judicial proceedings and violates the whistleblower’s right to freedom of speech by forbidding them to discuss the misconduct. They also argue it violates the separation of powers doctrine by not allowing judges to decide on case by case basis whether the matter should be sealed. The ACLU alleged specifically that the sealing of Qui Tam lawsuits was hiding Iraq war costs as well as the possibility of war profiteering. Judge James Dever, III states in the majority decision that the sealing provision protects the integrity of ongoing fraud investigations. In response to the plaintiffs’ claim that sealing Qui Tam complaints violates the separation of powers doctrine, Dever wrote that the complaints are subject to judicial review after 60 days and ultimately, all cases will be unsealed for public review. Additionally, the majority opinion states that whistleblowers are not forbidden from discussing the underlying misconduct that caused them to bring the complaint, rather they are only prohibited from discussing the existence of the complaint. They also ruled the plaintiffs had no standing to make the argument, since they could not produce a whistleblower who wanted to talk about the fraud and abuse but was prohibited from doing so. In a dissenting opinion, Judge Roger Gregory stated transparency was key to the fight against fraud and abuse. Additionally, he stated the seal provision should be decided by judges on a case by case basis, allowing for more public review. Additionally, he stated whistleblowers should be more free to discuss their allegations of abuse and fraud in public, thereby reducing the risk that the government will under-enforce the FCA for “political reasons.”

For more information see: http://www.washingtonpost.com/national/divided-appeals-court-in-virginia-affirms-the-secrecy-provision-of-federal-whistleblower-law/2011/03/28/AFOxujqB_story.html

http://legaltimes.typepad.com/blt/2011/03/divided-appeals-court-upholds-secrecy-of-whistleblower-suits.html