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United States, Ex Rel. Thomas Durham v. Prospect Waterproofing

October 4, 2011


The opinion of the court was delivered by: James E. Boasberg United States District Judge


This case presents the question of how much of a dismissed False Claims Act suit should remain under seal. Relator Thomas Durham and the United States have different opinions. Under the applicable six-factor analysis the caselaw prescribes, the Court believes the Government has the better argument.


Relator Thomas Durham filed this action on November 15, 2010, under the False Claims Act, 31 U.S.C. § 3729, et seq., alleging that his employer, Prospect Waterproofing Company, had falsely certified its payrolls, which resulted in the submission of fraudulent claims for payment. Compl., ¶¶ 18, 20. Pursuant to the qui tam provisions of the FCA, Relator filed this matter under seal so the United States could investigate these allegations. After the Government completed its investigation, it declined to intervene, and on August 17, 2011, Relator filed a Notice of Entry of Voluntary Dismissal Without Prejudice. ECF No. 9. He also requested that the Court allow the case to remain under seal permanently. See id. The United States consented to the voluntary dismissal but objected to Relator's request to keep the case under seal. ECF No. 10. The Government instead asked that the pleadings that do not reflect its investigative efforts -- i.e., the Complaint, Relator's Voluntary Dismissal, and the United States' Consent to Entry of Voluntary Dismissal -- be unsealed. See id. This Court ordered on August 23, 2011, that the parties submit supplemental briefings on the sealing issue, which has now been completed.


In this Circuit, when evaluating whether to seal case pleadings, "the starting point . . . is a 'strong presumption in favor of public access to judicial proceedings.'" EEOC v. Nat'l Children's Ctr., 98 F.3d 1406, 1409 (D.C. Cir. 1996) (quoting Johnson v. Greater Southeast Cmty. Hosp. Corp., 951 F.2d 1268, 1277 (D.C. Cir. 1991)). The D.C. Circuit has articulated "'six factors that might act to overcome this presumption of public access.'" United States ex rel. Schweizer v. Oce, N.V., 577 F. Supp. 2d 169, 171 (D.D.C. 2008) (quoting EEOC, 98 F.3d at 1409). These six factors are:

(1) the need for public access to the documents at issue; (2) the extent of previous public access to the documents; (3) the fact that someone has objected to disclosure, and the identity of that person; (4) the strength of any property or privacy interests asserted; (5) the possibility of prejudice to those opposing disclosure; and (6) the purposes for which the documents were introduced during the judicial proceedings.

EEOC, 98 F.3d at 1409 (citing United States v. Hubbard, 650 F.2d 293, 317-22 (D.C. Cir. 1980)). The Court will examine them in turn.

A. Need For Public Access

As mentioned, there is a strong presumption that the public should have access to court proceedings to "ensur[e] the integrity of judicial proceedings in particular and of the law enforcement process more generally." Hubbard, 650 F.2d at 315. Public access may be denied, however, "to protect trade secrets, or the privacy and reputation of victims of crimes, as well as to guard against risks to national security interests, and to minimize the danger of an unfair trial by adverse publicity." Id. at 315-16 (internal citations omitted).

Cases brought under the False Claims Act receive special consideration by the courts because they "inherently implicate the public interest." United States ex rel.Littlewood v. King Pharmaceuticals, Inc., 2011 WL 3805607, at *6 (D. Md. Aug. 29, 2011) (unsealing all documents in dismissed FCA case). Taxpayers are "real parties in interest" in FCA cases because they possess a strong interest in fraud committed against the United States that results in monetary loss to the Government. Schweizer, 577 F. Supp. 2d at 172. In addition, FCA cases are brought with the expectation that the pleadings will eventually be unsealed. See ACLU v. Holder, 2011 WL 1108252, at *12 (4th Cir. Mar. 28, 2011) ("We agree that 'sunlight' and 'openness' are important values that further the functioning of this republic and note that in every FCA case, the qui tam complaint will be unsealed."). In fact, the rationale behind sealing FCA cases is to allow the United States ample time to investigate the allegations, and the FCA does not contain any language that suggests the purpose of sealing a case is to protect the relator's identity. See United States ex rel. Herrera v. Bon Secours Cottage House Services, 665 F. Supp. 2d 782, 784-85 (E.D. Mich. 2008); see also 31 U.S.C. § 3730(b)(2).

Relator's argument that the case should remain under seal, even in light of the strong presumption of public access, is based on two faulty premises. First, Relator contends that because the case was dismissed voluntarily, the American public is no longer a party in interest as the claims will not be litigated. Relator's Memo. at 3. Additionally, Relator argues that because Defendant no longer requires access to the sealed pleadings for litigation purposes, this undercuts the presumption of public access. Id. These arguments, however, miss the mark. The court in Schweizer explained that in FCA cases, there are "generalized needs for public access."

577 F. Supp. 2d at 173. Voluntary dismissals of FCA actions do not render the allegations any less relevant to the taxpaying public. Although the court in Schweizer did acknowledge that the defendant's "pragmatic individualized need for access" to the sealed pleadings helped the court resolve this factor in favor of unsealing the record, the court considered this fact "in light of the more generalized need for public access." Id. While Defendant does not need to access the sealed filings for ...

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