Last week, the Supreme Court granted certiorari to resolve an important issue for government contractors that has split the lower courts: what standard governs whether a court should dismiss a False Claims Act (“FCA”) lawsuit
brought against a government contractor by a private qui tam relator because the relator violated the FCA seal requirement.
The FCA sets forth a number of procedural requirements for a qui tam action, including that a relator’s complaint “shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders.” 31 U.S.C. § 3730(b)(2). This seal requirement gives the Government a chance to investigate the claim and determine whether to intervene in the qui tam action and/or bring criminal charges against the defendant, and prevents reputational harm to the defendant while the investigation takes place. Although the statute provides that the complaint shall remain under seal for at least 60 days, the time may be extended, and the complaint often remains under seal for months or even years. During this potentially lengthy sealing period, relators sometimes intentionally or inadvertently violate the seal and disclose the lawsuit. When this happens, defendants invariably move for dismissal of the qui tam action for violation of this statutory requirement. Continue reading “Supreme Court to Hear Important False Claims Act Case”