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What is the requirement to file a False Claims Act qui tam action under seal?

Filing a False Claims Act Qui Tam Case Under Seal

The False Claims Act requires that a qui tam action must be filed under seal and remain seal for at least 60 days. This procedure enables the government to investigate the matter, so that it may decide whether to take over the relator’s action or to instead allow the relator to litigate the action in the government’s place.  The purpose of the seal provision is to avoid alerting defendants to a pending federal criminal investigation.  State Farm Fire and Cas. Co. v. US, 137 S. Ct. 436 (2016).

The “sealing period, in conjunction with the requirement that the government, but not the defendants, be served, was ‘intended to allow the Government an adequate opportunity to fully evaluate the private enforcement suit and determine both if that suit involves matters the Government is already investigating and whether it is in the Government’s interest to intervene and take over the civil action.”  United States ex rel. Pilon v. Martin Marietta Corporation, 60 F.3d 995, 998-99 (quoting S. Rep. No. 345, 99th Cong., 2d Sess. 24, reprinted in 1986 U.S.C.C.A.N. 5266, 5289).

Failure to file under seal could potentially jeopardize a relator’s ability recover a whistleblower bounty, but the False Claims Act does not require automatic dismissal for a seal violation.

A False Claims Act retaliation claim can also be filed under seal (in conjunction with a qui tam action).

To initiate a False Claims Act qui tam action, the relator (whistleblower) must serve a copy of the qui tam complaint along with a “written disclosure of substantially all material evidence and information the [relator] possesses” on the Government. 31 U.S.C. § 3730(b)(2).  The complaint remains under seal for at least 60 days, and shall not be served on the defendant.  During this 60-day period, the Government is charged with investigating the allegations and “may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal.” 31 U.S.C. §§ 3730(b)(2), (3).

Before the 60-day period (or any extensions obtained) expire, the Government shall either “(A) proceed with the action, in which case the action shall be conducted by the Government; or (B) notify the court that it declines to take over the action, in which case the person bringing the action shall have the right to conduct the action.” 31 U.S.C. § 3730(b)(4).

Experienced False Claims Act Qui Tam Whistleblower Attorneys

The experienced whistleblower attorneys at leading whistleblower law firm Zuckerman Law have substantial experience representing whistleblowers disclosing fraud and other wrongdoing at government contractors and grantees.  To schedule a free preliminary consultation, click here or call us at 202-262-8959.

Our experience includes:

  • Representing qui tam relators in False Claims Act actions concerning off-label marketing, false billing, and education loan fraud (inflating entitlement to interest rate subsidies).
  • Representing whistleblowers in NDAA retaliation claims before the Department of Defense, and Department of Homeland Security, Department of Justice Offices of Inspectors General.
  • Litigating False Claims Act retaliation cases.
  • Representing whistleblowers disclosing fraud on the government in Congressional investigations.
  • Training judges, senior Office of Inspector General officials, and federal law enforcement about whistleblower protections.

In addition, we have substantial experience representing whistleblowers under the Whistleblower Protection Act (WPA) and enforcing the WPA, the law that the NDAA whistleblower provisions are based upon.  Firm Principal Jason Zuckerman served in a senior position at the U.S. Office of Special Counsel overseeing investigations of whistleblower retaliation claims and whistleblower disclosures.

Zuckerman Law has written extensively about whistleblower protections for employees of government contractors and grantees, including the following articles and blog posts:

SEC whistleblower rules

Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.