How Long Under Seal is Too Long?

On October 16, a Philadelphia federal district court rejected the government’s eleventh request for an extension of the seal so that it could continue to investigate five-year-old allegations brought under the False Claims Act qui tam provisions.  See United States ex rel. Brasher v. Pentec Health, Inc., No. 13-05745, 2018 U.S. Dist. LEXIS 177118 (E.D. Pa. Oct. 16, 2018).  The suit, first filed by relator in 2013, alleges that Pentec Health defrauded Medicare when it submitted fraudulent bills to the government health insurance program.  In denying the request, U.S. Judge Eduardo C. Robreno of the Eastern District of Pennsylvania determined the government had failed to show good cause for an eleventh extension of the seal period and ordered it to decide within 30 days if it will intervene in the suit.

The government’s request was based on two arguments:  (1) that the extension would facilitate settlement negotiations; and (2) that it would protect Pentec from harm caused by potentially untruthful allegations being made public.  Notably, Defendant Pentec joined in the government’s argument to extend the seal on the basis of the second argument.  Additionally, the government cited the need to complete its intervention evaluation, protect relator’s anonymity, the policy behind sealing extension requests and past practices as support for its eleventh extension request.  In evaluating the request, the Court first noted that it had previously expressed concerns over the government’s rationale for repeated extensions of the seal during a March 2018 hearing on the tenth request.   The Court concluded that the government’s arguments failed to establish the necessary good cause for continued extension of the seal, and held that the need for transparency and government accountability to deadlines outweighed the concerns expressed by the government.  This ruling thus is a further signal that courts’ patience with serial government requests to extend False Claims Act seals on qui tam matters – even when a defendant agrees – is not without limit.