by the defendants was insufficient to overcome the presumption of public access, but maintained the seal as to the government’s filings that contained details of the government’s investigative process. Similarly, the relator in U.S. ex rel. Doe v. Horizon Therapeutics PLC sought to maintain the seal after the government declined to intervene. 173 Again, the relator pointed to risks to “professional reputation and blackballing that could occur should Defendants, Relator’s current employer, or any other entities or persons become aware of Relator’s whistleblowing activities.” Citing that a “strong presumption of public access attaches to judicial documents,” and that the complaint and amended complaint are judicial documents, the district court denied the relator’s motion to extend the seal. The district court further highlighted that “[c]ourts generally do not find that the risk of employer retaliation outweighs the presumption of public access to documents filed in FCA actions.” By contrast, in U.S. ex rel. Smith v. Carolina Comprehensive Health Network, PA , the government sought a permanent seal as to several of its filings on the docket after declining intervention. 174 Finding that the government’s extension memoranda disclosed “non-public procedures and strategies that reveal, to some extent, how the United States handles fraud investigations,” the district court granted the government’s motion. In doing so, the district court permitted the government to permanently redact information in its memoranda before those filings were unsealed. While the bulk of litigation pertaining to the FCA seal provisions addresses parties’ requests to maintain the seal, the seal provisions can implicate other matters as well. For instance, in U.S. ex rel. Raffington v. Bon Secours Health System, Inc. , the relator sought leave to file a seventh amended complaint after the government had declined to intervene and discovery had concluded. 175 In addressing the defendants’ statute of limitations argument, the district court found that claims in the proposed seventh amended complaint could not relate back to the original complaint. Specifically, the district court ruled that there was no relation back under Federal Rule of Civil Procedure 15(c) because no notice was given of the complaint due to the FCA’s seal requirement. Accordingly, the relator’s new allegations could only relate back to the date that the case was unsealed rather than the date it was filed. EXCESSIVE FINES CLAIMS In U.S. ex rel. Yates v. Pinellas Hematology & Oncology, P.A. , the Eleventh Circuit became the first federal court of appeals to directly address whether the Eighth Amendment’s Excessive Fines Clause applies to the monetary award in a declined FCA case. 176 The defendant was a clinical laboratory with multiple locations, some of which had Clinical Laboratory Improvement Amendments (CLIA) certificates required to conduct lab tests, and others of which did not. The jury found that the defendant submitted 214 claims to Medicare in which it falsely represented that tests were performed at locations with CLIA certificates, when in fact they had been performed at locations without CLIA certificates.
The jury found that the United States had sustained $755.54 in actual damages. The district court trebled the government’s actual damages and imposed $5,000, the lowest per claim civil penalty, for each of the 214 violations, resulting in a total judgment of $1.179 million. The defendant challenged this award on appeal under the Excessive Fines Clause.
The Eleventh Circuit held that “the damages and statutory penalties awarded in a non-intervened FCA qui tam action are subject to the Eighth Amendment’s prohibition on excessive fines.” The Eleventh Circuit reached this conclusion by joining the Fourth, Eighth and Ninth Circuits in accepting “that FCA monetary awards are fines for the purposes of the Excessive Fines Clause, precisely because they are at least in part punitive.” The Eleventh Circuit also held that monetary awards in declined cases are “imposed by the United States” – such that they fall under the federal constitution – because
The FCA protects whistleblowers from adverse employment actions related to their whistleblowing activities.
they are required by a federal statute and arise in cases brought on behalf of the United States in which the United States exercises significant control over the ultimate disposition of the action. Turning to the judgment against the defendant, the Eleventh Circuit found that the total award of $1.179 million passed constitutional muster, noting that the defendant engaged in repeated fraud, that it acted with the requisite scienter, that fraud imposed considerable harm on the United States and that the district court imposed the lowest per claim civil penalty. The Eleventh Circuit also gave deference to Congress’s imposition of treble damages and significant per claim civil penalties, noting that defendants who submit false claims to Medicare are “squarely in the FCA’s crosshairs.” On this point, two judges issued a concurring opinion, cautioning that giving “great deference to Congress’s judgment about the excessiveness of the fine” “seems a bit like letting the driver set the speed limit.” RETALIATION The FCA protects whistleblowers from adverse employment actions related to their whistleblowing activities. 177 To establish a prima facie claim under the statute’s anti- retaliation provision, an employee must show that: (1) the employee engaged in protected activity; (2) the employer knew that the employee engaged in protected activity; and (3) the employer took an adverse employment action against the employee as a result. Once this is done, the burden shifts to the employer to give a legitimate, non-retaliatory reason for the termination, which the employee can rebut by showing it was pre-textual. 178
173 2021 WL 3500911 (S.D.N.Y. Aug. 9, 2021). 174 2021 WL 325705 (M.D.N.C. Feb. 1, 2021). 175 2021 WL 4762054 (S.D.N.Y. Oct. 13, 2021). 176 2021 WL 6133175 (11th Cir. Dec. 29, 2021).
177 31 U.S.C. § 3730(h). 178 See, e.g. , Toledo v. HCA Healthcare, Inc. , 2021 WL 4990821 (S.D. Tex. Oct. 27, 2021).
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