Académique Documents
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PUBLISHED
2 ACLU v. HOLDER
Affirmed by published opinion. Judge Dever wrote the major-
ity opinion, in which Judge Keenan joined. Judge Gregory
wrote a dissenting opinion.
COUNSEL
OPINION
ACLU v. HOLDER 3
Act ("FCA"). When enacted, the Department of Justice did
not exist, and federal law enforcement fell to Attorney Gen-
eral Edward Bates and his staff in Washington, D.C., as well
as to the then-independent U.S. Attorneys in each federal
judicial district. In enacting the FCA, Congress included qui
tam provisions authorizing private citizens (known as qui tam
relators) to use the FCA to file suit on behalf of the United
States and to share in any recovery from the fraudsters.
4 ACLU v. HOLDER
Accordingly, when a qui tam relator files a qui tam action, the
Clerk of Court seals the qui tam complaint and the docket
sheet reflecting the sealed complaint. During this 60-day
period, the United States investigates the fraud allegations and
decides whether to intervene in the action. At the end of the
60-day period, the United States either intervenes, declines to
intervene, or seeks additional time from the federal court to
investigate the allegations. If it intervenes or declines to inter-
vene, the qui tam complaint and docket sheet are unsealed. If
the United States needs more time to investigate the allega-
tions to decide whether to intervene, the FCA permits the
United States to demonstrate good cause in camera to a fed-
eral court for continuing the seal beyond 60 days.
I.
ACLU v. HOLDER 5
Congress eventually split the legislation concerning false
claims into separate civil and criminal false claims statutes.
See United States v. Bornstein, 423 U.S. 303, 305 n.1 (1976).
From its inception, the FCA contained provisions permitting
a party known as a qui tam relator to bring suit in the name
of the United States. See United States ex rel. Marcus v. Hess,
317 U.S. 537, 540 (1943).1 If the qui tam relator prevailed in
the suit, the qui tam relator recovered a portion of the pro-
ceeds. See id. Statutory qui tam provisions create a financial
incentive for relators to protect the federal treasury from
fraud. See id. As Judge Hall once wrote for this court: such
provisions "let loose a posse of ad hoc deputies to uncover
and prosecute frauds against the government" and thereby
supplement the government’s "regular troops." United States
ex rel. Milam v. Univ. of Tex. M.D. Anderson Cancer Ctr.,
961 F.2d 46, 49 (4th Cir. 1992).
6 ACLU v. HOLDER
The FCA provides that any person who:
ACLU v. HOLDER 7
violates the FCA. 31 U.S.C. § 3729(a)(1); United States ex
rel. Vuyyuru v. Jadhav, 555 F.3d 337, 349 (4th Cir. 2009). In
order to recover under the FCA, the United States must prove
by a preponderance of the evidence that the person knowingly
violated the FCA. 31 U.S.C. § 3731(d). The FCA defines
knowingly and expressly rejects that a person have a specific
intent to defraud. Id. § 3729(b). A person who violates the
FCA is liable to the United States for a civil penalty of not
less than $5,000, but no more than $10,000 per false claim,
regardless of whether the United States sustained damages.
See id. § 3729(a)(1).2 If the United States can prove that the
false claim caused it damages, then it may recover between
double and treble damages. See id. § 3729(a). Additionally, if
it prevails, the United States may recover the costs of the civil
action brought to recover any penalty or damages. See id.
8 ACLU v. HOLDER
vene and proceed with the action within 60 days
after it receives both the complaint and the material
evidence and information.
ACLU v. HOLDER 9
of Justice and personnel within the federal agency that is the
alleged fraud victim. The seal provisions provide time for
such consultation and investigation so that the United States
may make an informed decision about whether to intervene in
the qui tam action. The seal provisions also allow the govern-
ment an opportunity to determine whether the qui tam action
implicates any ongoing civil or criminal fraud investigations
and to determine whether to request a stay of the action pursu-
ant to 31 U.S.C. § 3730(c)(4). See S. Rep. No. 99-345, at 24
(1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5289. Because
Congress recognized that some investigations might require
more than 60 days, the 1986 Amendments permit the United
States, "for good cause shown," to file a motion in camera
with affidavits or other submissions to extend the seal. See 31
U.S.C. § 3730(b)(3). The United States must file such a
motion before the 60-day period expires. Id. At that point, a
federal court must review the motion and determine whether
to extend the seal. See id. If the court decides to extend the
seal, the qui tam complaint, the docket sheet, the govern-
ment’s in camera submission, and the order extending the seal
all remain sealed. See generally United States ex rel. Siller v.
Becton Dickinson & Co., 21 F.3d 1339, 1341–42, 1345–46
(4th Cir. 1994). If the court declines to extend the seal, the
above-referenced items are unsealed. See, e.g., Under Seal,
326 F.3d at 486; United States ex rel. Doe v. X Corp., 862 F.
Supp. 1502, 1510–11 (E.D. Va. 1994).
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3730(c)(2)(A) (discussing dismissal); id. § 3730(c)(2)(B) (dis-
cussing settlement); id. § 3730(c)(5) (discussing alternative
administrative false claims remedies).
ACLU v. HOLDER 11
If the United States declines to intervene and the qui tam
relator recovers proceeds under the FCA, the qui tam relator’s
proceeds are larger than in a case where the United States
intervened. Specifically, if the relator litigates alone and
recovers proceeds under the FCA, the relator’s share must be
at least 25 percent, but no more than 30 percent of the pro-
ceeds, plus reasonable expenses, attorney’s fees, and costs.
See id. § 3730(d)(2).4
II.
12 ACLU v. HOLDER
A.
ACLU v. HOLDER 13
croft, 303 F.3d 681, 695 n.11 (6th Cir. 2002). However, most
circuit courts, including the Fourth Circuit, have recognized
that the First Amendment right of access extends to civil trials
and some civil filings. See, e.g., Va. Dep’t of State Police v.
Washington Post, 386 F.3d 567, 575–78 (4th Cir. 2004);
Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 91–92 (2d
Cir. 2004); Stone v. Univ. of Md. Med. Sys. Corp., 948 F.2d
128, 130–31 (4th Cir. 1991); Stone, 855 F.2d at 180–81;
Rushford v. New Yorker Magazine Inc., 846 F.2d 249, 253
(4th Cir. 1988).
14 ACLU v. HOLDER
5266, 5289; Pilon, 60 F.3d at 998-99. Thus, we turn to
whether the seal provisions are narrowly tailored to serve that
compelling government interest.
ACLU v. HOLDER 15
the suit is filed. Such a pre-suit investigation is particularly
critical before alleging fraud. See Fed. R. Civ. P. 9(b), 11.
However, in a qui tam action under the FCA, a person uncon-
nected to the Executive files a qui tam suit under the FCA on
behalf of the United States. Moreover, the qui tam relator files
such a suit with no notice or warning to the Executive, and the
Executive may already be conducting a civil or criminal fraud
investigation.
16 ACLU v. HOLDER
Federal Rules of Civil Procedure does not require heightened
First Amendment scrutiny).
Third, the seal provisions limit the relator only from pub-
licly discussing the filing of the qui tam complaint. Nothing
in the FCA prevents the qui tam relator from disclosing the
existence of the fraud. Therefore, even if there is a First
Amendment right of access to a qui tam complaint and docket
sheet sealed in accordance with 31 U.S.C. § 3730(b)(2)–(3),
the FCA’s seal provisions are narrowly tailored to serve a
compelling government interest.
ACLU v. HOLDER 17
facial challenge still fails. Accordingly, we affirm the district
court’s judgment dismissing that claim under Rule 12(b)(6).
B.
18 ACLU v. HOLDER
shown this direct connection with evidence that the identified
willing speakers would have spoken to her in the past but for
the speech restriction or would speak with her in the future
but for the speech restriction. Id. Because Mrs. Stephens
failed to show "that there exists a speaker willing to convey
the information to her," she lacked standing. Id.
C.
ACLU v. HOLDER 19
F.2d 557, 562-64 (3d Cir. 1985) (en banc); United States v.
Brainer, 691 F.2d 691, 695-96 (4th Cir. 1982). The first cate-
gory of inherent powers is the core Article III power. This
power is generally described as the ability of a lower federal
court to decide a case over which it has jurisdiction. See, e.g.,
United States v. Klein, 80 U.S. (13 Wall.) 128, 146–47
(1871); Brainer, 691 F.2d at 695. Essentially, once Congress
has established lower federal courts and provided jurisdiction
over a given case, Congress may not interfere with such
courts by dictating the result in a particular case. See, e.g.,
Brainer, 691 F.2d at 695. The second category of inherent
powers consists of those powers "necessary to the exercise of
all others." In re Stone, 986 F.2d at 902 (quotation omitted).
"For the most part, these powers are deemed necessary to pro-
tect the efficient and orderly administration of justice and
those necessary to command respect for the court’s orders,
judgments, procedures, and authority." See id. These powers
are subject to congressional regulation. See Brainer, 691 F.2d
at 695-97 (noting power of federal courts to make procedural
rules in the absence of congressional directive and describing
the contempt power as an example). The third category of
inherent powers "includes those reasonably useful to achieve
justice." In re Stone, 986 F.2d at 902. Examples of such pow-
ers include "the power of a district court to appoint an auditor
to aid in litigation involving a complex commercial matter."
Id. Such powers are subject to congressional regulation. Id.
20 ACLU v. HOLDER
functions." Id. at 698 (quotation omitted). Accordingly, we
affirm the district court’s judgment dismissing that claim
under Rule 12(b)(6).
D.
ACLU v. HOLDER 21
at 29. However, such an assessment is impossible until an as-
applied challenge is properly before us.
22 ACLU v. HOLDER
FCA’s "good cause" standard, "the courts seek to balance the
need for transparency in the judiciary with the effective pro-
tection of sensitive information." Id.
ACLU v. HOLDER 23
ity" may very well "deteriorat[e] the quality of our
democracy," Post at 32, Congress has determined temporary
confidentiality can assist the functioning of certain processes,
including certain processes involving the Executive and Judi-
ciary. Congress made one such constitutionally permissible
choice in adding the seal provisions to the FCA, and we
respectfully disagree that the dissent’s assessment of "open-
ness" and "sunlight" should trump Congress’s assessment.
III.
AFFIRMED
I.
24 ACLU v. HOLDER
(1986) (seal amendments). At oral argument, the Government
agreed that the law operated for more than 120 years without
mandatorily closing the record. Passed in response to "the
fraudulent use of government funds during the Civil War,"
United States v. Neifert-White Co., 390 U.S. 228, 232 (1968),
the original FCA legislation specified that "suit may be
brought and carried on by any person, as well for himself as
for the United States." 12 Stat. at 698 (emphasis added). This
clause is known as the qui tam provision. Senator Jacob How-
ard, the bill’s sponsor and floor manager, explained that the
provision was "based . . . upon the old-fashion idea of hold[-
ing] out a temptation, and ‘setting a rogue to catch a rogue,’
which is the safest and most expeditious way I have ever dis-
covered of bringing rogues to justice." 33 Cong. Globe 955-
56 (1863) (remarks of Sen. Howard) (emphasis added),
quoted in Charles Doyle, Congressional Research Service
Report for Congress, Qui Tam: The False Claims Act and
Related Federal Statutes 5 (2009). By utilizing members of
the public to identify fraud, the FCA’s qui tam provisions
have comprised 80% of FCA cases in 2010 and recovered
more than $18 billion in the last twenty-three years. Depart-
ment of Justice, False Claims Act Statistics 2 (Nov. 23, 2010),
quoted in slip op. 11 n.4.
ACLU v. HOLDER 25
II.
26 ACLU v. HOLDER
in a typical facial attack," litigants must "establish ‘that no set
of circumstances exists under which [the law] would be
valid.’" United States v. Stevens, 130 S. Ct. 1577, 1587 (2010)
(citations omitted). While relaxed standards apply to First
Amendment claims that a statue is overbroad, the majority
correctly notes that Appellant has made no such claim here.
Slip Op. 16 n.7; App. Br. 5.
III.
*Section 3730(b)(2)–(3) uses the phrases "in camera" and "under seal"
somewhat interchangeably. That section of the law is generally known as
the ‘seal provision’— ‘seal’ being the operative term. Compare Black’s
Law Dictionary 763 (7th ed., 1999) (defining "in camera" primarily as
"[i]n the judge’s private chambers.") with id. at 1350 (defining "seal" to
include "to prevent access to (a document, record, etc.)").
Case: 09-2086 Document: 53 Date Filed: 03/28/2011 Page: 27
ACLU v. HOLDER 27
violates the fundamentally "public character of the trial" as
well as our tenet "that historically both civil and criminal tri-
als have been presumptively open." Richmond Newspapers,
448 U.S. at 566, 580 n.17.
28 ACLU v. HOLDER
stances exists under which [the law] would be valid.’" Ste-
vens, 130 S. Ct. at 1587.
ACLU v. HOLDER 29
because they are unpopular, annoying or distasteful." Mur-
dock v. Pennsylvania, 319 U.S. 105, 116 (1943).
30 ACLU v. HOLDER
case. See, e.g., Yeager v. Drug Enforcement Admin., 678 F.2d
315, 324 (D.C. Cir. 1982) ("A district court has ‘inherent dis-
cretionary power’ to allow access to in camera submissions
where appropriate.") (citation omitted); United States v.
Hernandez-Escarsega, 886 F.2d 1560, 1581 (9th Cir. 1989)
("District courts have the inherent power to receive in camera
evidence and place it under seal in appropriate circum-
stances.") (citation omitted); Fed. R. Civ. P. 5.2(d)-(e) (estab-
lishing rules for filings made under seal and protective
orders). Additionally, even if we accept the Government’s
claim that the FCA allows speech about ‘underlying facts,’
that actually undermines the ‘compelling’ nature of their
stated interests. Allowing relators to publicize all of the
‘underlying facts,’ even without mentioning the complaint per
se, would surely alert many wrongdoers. That is too self-
defeating to be ‘compelling.’
ACLU v. HOLDER 31
basic facts of fraud, as Appellant alleges happened when it
disclosed fraud to a newspaper. App. Br. 12-13. The Govern-
ment could also move to dismiss the case altogether, as it reg-
ularly does. Boese at 4-216 to 4-217; 4-217 n.819 (collecting
cases from the Second, Third, Fourth, Fifth, Sixth, Seventh,
Ninth, Tenth, and Eleventh Circuits where "the relator’s fail-
ure to adhere to these [seal] provisions resulted in the dis-
missal of the qui tam action.").
32 ACLU v. HOLDER
Because I would hold that section 3730(b)(2)–(3) unconsti-
tutionally limits free speech, I would not reach Appellant’s
additional claims about ‘willing speakers’ or separation of
powers.