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United States ex rel. Grove v. Heartland Regional Medical Center Auxiliary, Inc.

United States District Court, W.D. Missouri.

September 7, 2017





         Before the Court is Plaintiff/Relator Kyle Grove (“Relator”)'s Motion to Dismiss and Maintain Seal, or, in the Alternative, Motion to File an Amended Complaint and Proceed Using a Pseudonym. (Doc. 17.) The Government has filed objections to the motion. (Doc. 19.)

         Upon review, the Court GRANTS in part and DENIES in part Relator's motion.

         I. Background

         Relator brought this qui tam action pursuant to the False Claims Act (“FCA”), 31 U.S.C. § 3730(b). FCA provisions permit a person to file an action on behalf of the Government against entities that the filer asserts have committed fraud on the Government. Relator's Complaint alleges that Defendants reported inaccurate and inflated information to Medicare and Medicaid programs, which resulted in the submission of fraudulent claims for payment. (Doc. 1 at ¶¶ 1, 2.) Pursuant to FCA provisions, Relator filed his Complaint under seal and served it on the United States, but not Defendants. See 31 U.S.C. § 3730(b)(2). The Government conducted an investigation and eventually declined to intervene. (Doc. 14.)

         Relator now moves to voluntarily dismiss the Complaint, but to maintain the seal over all filings. In the alternative, Relator seeks to file an amended complaint that substitutes a pseudonym for his real name while maintaining the seal over previously-filed documents containing his real name; therefore, the only documents available to the public refer to Relator as “Relator Doe.” The Government does not oppose Relator's request to dismiss, however, the Government opposes the requests to either maintain the seal or to file an amended complaint substituting a pseudonym.

         II. Discussion

         A. The Court Grants Relator's Request for Dismissal

         First, the Court considers Relator's request to voluntarily dismiss this case without prejudice. Pursuant to Rule 41(a)(1)(A) of the Federal Rules of Civil Procedure, a plaintiff may dismiss an action without a court order by filing a notice of dismissal before the opposing party serves an answer or a motion for summary judgment. No Defendant has been served with the Complaint and therefore no Defendant has been required to answer or otherwise respond to the Complaint. Additionally, “[a qui tam] action may be dismissed only if the court and the Attorney General give written consent to the dismissal and their reasons for consenting.” 31 U.S.C. § 3730(b)(2). The Government reports that it does not oppose Relator's request; that the Attorney General of the United States consents to dismissal; and that the reasons for dismissal are that the allegations in this matter were investigated, and found to lack significant merit. (Doc. 19 at 1.) Therefore, the Court consents to the dismissal for the reasons stated by the Government.

         B. The Court Denies Relator's Request to Maintain Seal Second, the Court considers Relator's request that this case be dismissed with the seal maintained. To begin, as recognized by both Relator and the Government, a strong presumption favors public access to judicial records. See Nixon v. Warner Communications, 435 U.S. 589, 597 (1978) (“The courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents.”). In the context of FCA actions, “[t]axpayers are ‘real parties in interest' . . . because they possess a strong interest in fraud committed against the United States that results in monetary loss to the Government.” United States ex rel. Durham v. Prospect Waterproofing, Inc., 818 F.Supp.2d 64, 67 (D.D.C. 2011) (citation omitted). In fact, “FCA cases are brought with the expectation that the pleadings will be eventually unsealed.” Id. (citing ACLU v. Holder, 673 F.3d 245, 257 (4th Cir. 2011)); see also U.S. ex rel Coughlin v. IBM Corp., 992 F.Supp. 137, 140 (S.D.N.Y. 1998) (the FCA “envisions the lifting of the seal as to certain documents, particularly the relator's complaint”).

         For these reasons, courts typically deny relator's requests to maintain a permanent seal in FCA actions. E.g., U.S. ex rel. Grover v. Related Cos., LP, 4 F.Supp.3d 21 (D.D.C. 2013); Durham, 818 F.Supp.2d at 67; U.S. ex rel. Herrera v. Bon Secours Cottage Health Servs., 665 F.Supp.2d 782, 785 (E.D. Mich. 2008) (“there is nothing in the FCA suggesting that the initial seal was imposed to protect the identity of the relator or that qui tam complaints in which the Government decides not to intervene should be permanently sealed”); U.S. ex rel. Permison v. Superlative Techs., Inc., 492 F.Supp.2d 561, 564 (E.D. Va. 2007) (“the presumption in favor of public access to court filings is especially strong where, as here, the filings involve matters of particular concern to the public, such as allegations of fraud against the government”); see also 6-26 Moore's Federal Practice - Civil § 26App.102 (2017).

         In support of maintaining a permanent seal over this action, Relator contends that he and his counsel have observed “in other, similar circumstances where a whistleblower or witness is threatened or retaliated against for their conduct.” (Doc. 17.) Relator maintains that “the health care industry in the Kansas City area is a small community” and that “disclosure of [his] identity as a qui tam plaintiff would create significant risk for [his] future employment.” (Doc. 17-3 at ¶ 13.) Plaintiff further states that “as someone who has worked in the health care field for almost ten years, ” he is aware of difficulties encountered by “‘whistleblowers' in obtaining and maintaining employment and in maintaining professional relationships necessary for succeeding in the health care industry.” (Id. at ¶ 14.) In response, the Government contends that Relator is unable to make the showing necessary to overcome the strong presumption of public access to judicial records, and maintains that courts repeatedly deny attempts to maintain the seal in FCA cases upon dismissal. (Doc. 19 at 2-3.)

         After review of the briefs and the applicable standard in determining whether to maintain a permanent seal, the Court concludes Relator has not demonstrated a countervailing privacy interest to rebut the strong presumption favoring openness. Significantly, Relator is no longer employed for the party affected by this action. (See Doc. 17-3 at ¶¶ 5-7.) Relator's general apprehension regarding retaliation by prospective employers and reputational harm are insufficient to override the public's presumptive right to access judicial records, which is especially strong here, where the action involves allegations of fraud on the Government. See Permison, 492 F.Supp.2d at 564 (concluding that the relator's “vague and hypothetical” fear “of future retaliation by his former employer falls far short of outweighing the public's strong interest in ...

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