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Federal appeals court upholds secrecy provision of whistleblower law

By Zach Zagger

[JURIST] The US Court of Appeals for the Fourth Circuit [official website] dismissed [opinion, PDF] a claim led by the American Civil Liberties Union (ACLU) [advocacy website] upholding secrecy provisions of a federal whistleblower law. The case involved the Civil War-era False Claims Act (FCA) [text], which includes provisions authorizing private citizens, dubbed qui tam relators, to sue on behalf of the US accusing federal contractors of fraudulent claims against the government. The ACLU, together with the Government Accountability Project (GAP) and OMB Watch [advocacy websites], brought a facial constitutional challenge against the secrecy provisions of the the FCA that require the complaint to be sealed for up to 60 days so the government can decide whether to intervene and allow the government to move the court for extensions. The groups argued the provisions violate the First Amendment by infringing on the public's right of access to judicial proceedings and the qui tam relators' right to speak about their complaint, and that mandatory sealing strips the courts' inherent ability to decide whether to seal on a case-by-case basis. The appeals court, in a 2-1 decision, held that, even assuming the First Amendment right of access applies to qui tam actions, the sealing provisions address a compelling government interest of protecting the integrity of such proceedings and that the provisions were narrowly tailored to address issues in modern fraud allegation claims. The court further held the FCA provisions do not intrude on judicial self-administration. One judge dissented, arguing "transparency remains central to combating waste and fraud..." and "the Government fails to justify its First Amendment infringement with compelling interests and narrow tailoring." According to the opinion, since 1986, qui tam relators have filed helped the Department of Justice return over $27 billion to the US under the FCA.

Last year, the US Supreme Court [official website] ruled [JURIST report] 7-2 in Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson [Cornell LII backgrounder; JURIST report] that whistleblowers cannot bring suit under the FCA to recover misspent government funds if the information used in the lawsuits came from state or local agencies' reports or audits. The suit arose out of public record documents that detailed a failure to obtain bids for the clean-up and reconstruction of storm-damaged portions of North Carolina. The ruling could potentially bar thousands of lawsuits by whistleblowers. However, Congress recently changed the language of the statute [SCOTUSblog report] as part of the health care reform bill [HR 3590 materials] signed into law [JURIST report] in March 2010.

Full post as published by JURIST - The Paper Chase on March 29, 2011 (boomark / email).