When a whistleblower complaint gets filed under the False Claims Act, the United States Department of Justice needs time to investigate the allegations of fraud. The government’s interest in the secrecy of the complaints is so crucial that the defendants in these types of claims are not even served with the complaints until the cases are unsealed. For this reason, whistleblower complaints that are filed under the False Claims Act are filed under seal and must remain under seal for sixty or more days.
Sometimes, though, information gets out despite the sealed status of a case. In the highly publicized False Claims Act case against State Farm, the attorney who represented the homeowners sent documents from the case to journalists from a variety of high profile media outlets while the case was still under seal. The whistleblowers, in that case, the Rigsby sisters, did win a bellwether verdict in federal court in Mississippi when a jury found that State Farm had submitted a false flood claim to the United States government.
State Farm appealed the decision and presented an argument to the 5th U.S. Circuit Court of Appeals that the case should have been dismissed because the seal order on the case had been violated. The 5th Circuit denied the appeal and refused to set a standard that seal violations would automatically result in dismissal of the case. Instead of automatic dismissal, the 5th Circuit adopted a balancing test from a 1995 case in the 9th Circuit, U.S. v. Lujan. When the court applied the Lujan test to the State Farm case, they arrived at the result that the Rigsbys’ suit should not have been dismissed because the whistleblowers themselves did not violate the seal order in bad faith. The court said that it was their lawyer who violated the order, and it would be unfair to impute that mistake to them.
The case and the issue of seal violations are before the Supreme Court, and State Farm filed its merits brief on July 29. State Farm’s argument is that False Claims Act complaints are not supposed to serve as litigation bargaining chips, and they could become just that if there is not severe punishment for private whistleblowers who go public with their allegations. The case is still before the Court, and many different interest groups are interested in seeing what the Court will say about the matter in its decision.
Barrett Law PLLC: Protecting the Rights of Mississippi Whistleblowers
If you have witnessed violations of federal law by a business, the Mississippi Whistleblower Attorneys at Barrett Law PLLC are here to help you file a whistleblower lawsuit. Our experienced attorneys are skilled at navigating all of the complexities of whistleblower lawsuits, including the SEC whistleblower program. We can help you understand the whistleblower case process and pursue resolution of your whistleblower case. Call the dedicated and knowledgeable whistleblower attorneys at Barrett Law PLLC today at 1 (800) 707-9577 to schedule a free, initial consultation.