Jackson v. Paslidis et al

Filing 35

ORDER granting 27 Motion to Unseal the Record; granting 27 Motion for Extension of Time to File a Responsive Pleading to the Amended Complaint; defts must file their answer to the amended complaint within ten days from the entry of this Order; granting 34 Motion to Extend Time; Jackson has up to and including 1/19/12 to serve the individual defts. Signed by Chief Judge J. Leon Holmes on 11/14/11. (vjt)

IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

HELENA DIVISION

UNITED STATES OF AMERICA
ex reI. TOM JACKSON

v.

PLAINTIFF/RELATOR

NO. 4:09CV00812 JLH

NICK PASLIDIS; DONNA SOODALTER­
TOMAN; and ARKANSAS FOUNDATION
FOR MEDICAL CARE

DEFENDANTS

ORDER
This is an action brought pursuant to the False Claims Act, 31 U.S.c. § 3730, in which the
relator, Tom Jackson, alleges, among other things, that the defendants caused a false claim for
payment to be presented to the United States by certifying that the Arkansas Foundation for Medical
Care was in compliance with the Service Contract Act when the defendants knew that the
certification was false. As required by the act, the complaint was filed in camera and was placed
under seal for a period of at least 60 days, so that the government could decide whether to intervene
and proceed with the action. 31 U.S.c. § 3730(b). Pursuant to section 3730(b)(3), the government
filed three motions asking the Court to extend the time within which they must make an election to
intervene. Ultimately, the government elected not to intervene. The Court entered an order directing
that the complaint be unsealed and served upon the defendants. The Court also ordered that the other
contends of the Court's file remain under seal.
The defendants have now moved for an order unsealing the record. The relator and the
United States have responded and have objected. The United States contends that information
communicated to the Court in the motions for extensions of time reveal the government's
investigative steps and communicate information that otherwise would be protected by the work
product doctrine or the privilege for law enforcement investigation files. The Court adopts the

analysis by Judge Eisele in two unpublished opinions, copies of which are attached. See United
States ofAm. ex rei. Montgomery v. Sisters ofMercy Health Sys., E.D. Ark. No. 4:05CV00899-GTE

(June 21, 2006), and United States ofAm. ex rei. Montgomery v. Sisters ofMercy Health Sys., E.D.
Ark. No. 4:05CV00899-GTE (Dec. 15,2006).
The Court has reviewed the documents that were filed under seal and does not believe that
any of them contain infonnation that would be protected by the work product doctrine or the
privilege for law enforcement investigation files. Rather, the documents "merely describe routine
investigative procedures." U.S. ex rei. Erickson v. Univ. of Washington Physicians, 339 F. Supp.
2d 1124,1126 (W.D. Wash. 2004). See also U.S. ex rei. Rostholderv. Omnicare, Inc., _F. Supp.
2d _ , 2011 WL 3236016, *2 (D. Md. July 28, 2011).
Accordingly, the motion to unseal the record is granted. Document #27.
The defendants have also requested an extension of time to file a responsive pleading to the
amended complaint. That request is granted. Document #27. The defendants must file their answer
to the amended complaint within ten days from the entry of this order.
The relator, Tom Jackson, has filed a motion for extension of time to serve the individual
defendants. No objection has been filed. Therefore, the motion is granted. Document #34. The
time within which the relator must serve the defendants who have not yet been served is extended
up to and including January 19, 2012.
IT IS SO ORDERED this 14th day of November, 2011.

UNITED STATES DISTRICT JUDGE

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IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

WESTERN DIVISION

UNITED STATES OF AMERICA
ex reI. PAUL MONTGOMERY, et al.

v.

PLAINTIFFS

NO. 4:0S·CV-00899 GTE

SISTERS OF MERCY HEALTH SYSTEM,
et al.

DEFENDANTS

ORDER TO SHOW CAUSE REGARDING SEALED DOCUMENTS
The United States has responded to the Court's recent Order to Show Cause. l Therein,
the United States indicates that it has no additional showing to make and moves to decline
intervention pursuant to the False Claims Act, 31 U.S.C. § 3730(b)(4)(B). Accordingly, the
Government's Third Request for Extension will be denied. The United States having declined to
intervene, the Complaint will be unsealed so that it may served upon the Defendants by the
Relators, as contemplated by 31 U.S.c. § 3730(b)(3).
An additional issue exists with regard to whether all other documents filed in this case to

date should remain under seaL The Government has tendered a proposed Order, the terms of
which state that only the Complaint will be unsealed and specifically require that all other
documents filed in the case to date shall remain under seal. Such an approach appears to conflict
with this Court's customary practice, which requires a showing of good cause to justify the

1 The Order held in abeyance the Government's request for a third six-month extension
of the intervention and seal period, but permitted the Government to make a further showing in
support of its request.

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sealing of documents or materials filed in federal court. That cause was made for the United
States initially by operation of the False Claims Act. But, at the point at which the United States
declined to intervene, thereby triggering the unsealing of the Complaint and the prosecution of
the action by the Relators, the question arises as to whether good cause remains for continuing to
keep such documents under seal. Because this issue raises important policy concerns, the Court
raises the issue sua sponte.
While the False Claims Act makes explicit reference to the lifting of the seal on the
relator's complaint,2 it is silent on the issue of the unsealing of any other documents in the case.
Other courts to consider the issue have found that because the False Claims Act permits in

camera submissions, it necessarily invests a district court with authority to either maintain such
filings under seal or to make them available to the parties. U.S. ex rei. Erickson v. Univ. of

Washington Physicians, et ai., 339 F.Supp.2d 1124, 1126 (W.D. Wash. 2004)(hereinafter, "the
Erickson case")(citing cases). This Court agrees.
The Court also finds appropriate the approach utilized in the Erickson case for evaluating
the government's request to continue to maintain documents under seal after it declines to
intervene. By analogy to Fed. R. Civ. P. 26(c), which authorizes protective orders to protect
against the disclosure of "a trade secret or other confidential research, development, or
commercial information," the Erickson court described the appropriate analysis:
Resolution of disputes under Rule 26(c) is based on a pragmatic balancing of the
need for and harm risked by, disclosures sought.
Where disclosure of confidential investigative techniques, of information which
could jeopardize an ongoing investigation, or of matter which could injure non­

2 31 U.S.c. § 3730(b)(3)(B) excuses the defendants named in a False Claims Act
Complaint from responding to the complaint "until 20 days after the complaint is unsealed and
served upon the defendant pursuant to Rule 4 of the Federal Rules of Civil Procedure."

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parties is requested, courts have recognized the interest of the public in denying or
deferring disclosure.
Erickson, 339 F.Supp.2d at 1126.
The Erickson court suggested that documents merely describing the government's routine
investigative procedures should not remain under seal. In making the decision to unseal the
entire court file, the court concluded:
This court is satisfied that nothing in the documents in this court file would reveal
any sensitive information as to how an investigation works. The documents
contain no information that could compromise a future investigation, such as
explanations of specific techniques employed or specific references to ongoing
investigations.
Id.
Similarly, another district court, in rejecting the government's request to maintain
documents under seal, stated:
The contents ofthe court's files do not disclose any confidential investigative
techniques, information which could jeopardize an ongoing investigation, or of
matters which could injure non-parties. Indeed, ... the documents, save for the
complaint, described routine, general investigative procedures and do not
implicate specific people or provide any substantive details. As a result, the court
finds no ground for retaining the court's files under seal.
United States by Dept. ofDefense v. CACI Intern., Inc., 885 F.Supp. 80, 83 (S.D.N.Y. 1995).
Finally, the continued sealing of a document is unjustified if the document describes "routine
investigative procedures which anyone with rudimentary knowledge of investigative process
would assume would be utilized in the regular course ofbusiness." United States ex ref Mikes v.
Straus, 846 F.Supp. 21, 23 (S.D.N.Y. 1994).
Unlike the Erickson case, the Court does not have before it any interested party requesting

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that sealed documents be unsealed. 3 This raises a procedural issue. The United States' decision
not to intervene in a False Claims Act case triggers the unsealing of the Complaint and transfers
the responsibility for pursuing the case to the relator. Thereafter, all additional proceedings
should be filed in the normal course, that is, as publicly filed documents. From this point
forward, a party wishing to file documents or materials under seal would be required to first
obtain the Court's permission to file a document or materials under seal. Under the district
court's policy, that permission would be obtained by filing a motion with the Court
demonstrating good cause for the requested under seal filing. But, what of the documents filed
under seal during the interim period between the filing of the Complaint and the government's
decision not to intervene? Should a district court wait for a relator, a defendant (once served), or
another interested party to file a motion to unseal the sealed documents? Or, should the Court
make inquiry into whether such documents should remain under seal?
After careful consideration, this Court is convinced that the answer to the latter question
is clearly "yes." It must be remembered that the government is permitted to file such documents
under seal in the first instance not because good cause necessarily exists for doing so, but
because the False Claims Act provides for the automatic sealing of the case to permit the
government to exercise its statutory right of intervention. 31 U.S.c. 3730(b)(2). When that
right is declined, the statutory reason the documents were sealed expires. Absent an actual
showing of good cause, no reason remains for continuing to require such documents to remain
under seal. If inquiry is avoided or delayed, the parties and the public may be deprived of access
to documents to which they are entitled. Accordingly, a good cause determination should be

3 In its prior Order, the Court referenced the public's likely interest in this case and their
ability - if advised ofthe allegations to take steps for their own protection. To date, of course,
the public (and the media) have been unaware that this case even exists.

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made by the trial court as a matter of course in every False Claims Act case simultaneously with,
or shortly after, the unsealing of the Complaint. The government, if it wishes to maintain such
documents under seal, bears the burden of demonstrating good cause for doing so.
"[O]nce the government has decided it will not intervene, it should not be able to
handicap the relator's action by keeping materials under seal without some showing of good
cause or ample justification." U.S. by Dept. ofDefense v. CACI Inten. Inc., 885 F.Supp. 80, 82
(S.D.N.Y. 1995). Independently of whether a relator's action will be handicapped, courts have a
duty to ensure that all documents filed with the Court remain available and accessible to the
public unless good cause exists for restricting access. That duty arises from the "common-law
right of access to judicial records." Nixon v. Warner Communications, Inc., 435 U.S. 589, 597
(1978).
The strong presumption that court proceedings and court papers should remain open and
accessible to the public is justified by the premise that "justice cannot survive behind walls of
silence." Sheppard v. Maxwell, 384 U.S. 333,349 (1966). Judges are, after all, public servants.
As such, it is incumbent upon judges to ensure that any so-called wall of silence in the judiciary
system is in fact justified and warranted. This is yet another reason for requiring inquiry into the
necessity of maintaining sealed documents.
Here, the United States has failed to make any showing to justify the sealing of all
documents (other than the Complaint) filed in this case to date. In order to provide the United
States with an opportunity to make the required showing, the Court takes under advisement the
issue of whether said documents should remain under seal. For future reference, the United
States is hereby placed on notice that in each and every False Claims Act before the undersigned,
after the Complaint is unsealed for service by the Relator, a presumption arises that all

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documents previously filed in the case will be unsealed. This presumption may be overcome, of
course, by the United States, which bears the burden of identifying each and every document it
contends should remain under seal and showing good cause or ample justification therefore.
CONCLUSION
The United States having declined, pursuant to 31 U.S.C. § 3730(b)(4)(B), to intervene in
this action,
IT IS HEREBY ORDERED THAT:
1.

The United States' Ex Parte Application for Extension of Time (Docket # 16),
which the Court previously took under advisement, be, and it is hereby, DENIED.

2.

The Complaint is hereby unsealed. The Relators shall serve the Complaint upon
the Defendants pursuant to Rule 4 of the Federal Rules of Civil Procedure.

3.

This Order is not to be filed under seal. It shall be served upon all parties of
record to this action. The Government's Notice of Election to Decline
Intervention shall also be removed from under seal, and the Relators may serve a
copy thereof upon Defendants simultaneously with service of the Complaint.

4.

All other documents shall remain under seal to permit the United States to make a
showing of good cause or ample justification as to why such documents should
remain sealed. If the United States intends to challenge the presumption against
maintaining such documents under seal, then it shall file with the Court an
appropriate motion, therein identifying each and every document which it
contends should remain under seal and the cause or justification therefore. Said
motion may be filed under seal and is due for filing not later than July 14, 2006.

5.

The seal is hereby lifted as to all other documents filed in this case from the date

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of this Order forward.
6.

The parties shall serve all pleadings and motions filed in this action, including
supporting memoranda, upon the United States, pursuant to 31 U.S.c. §
3730(c)(3). If requested, the parties shall make available to the United States (at
its expense) copies of deposition transcripts obtained in this action. The Clerk of
the Court is directed to serve upon the United States copies of all Orders entered
by this Court.

7.

Pursuant to 31 U.S.c. § 3730(c)(3), the Government may be permitted to
intervene at a later date upon a showing of good cause. Should the Relator or the
Defendants propose that this action be dismissed, settled, or otherwise
discontinued, the Court will solicit the written consent of the United States before
ruling or granting its approvaL

IT IS SO ORDERED this 21st day of June, 2006 .

.Js! Garnett Thomas Eisele_ __
UNITED STATES DISTRICT JUDGE

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IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

WESTERN DIVISION

UNITED STATES OF AMERICA
ex reI. PAUL MONTGOMERY, et al.

v.

PLAINTIFFS

NO. 4:05-CV-00899 GTE

SISTERS OF MERCY HEALTH SYSTEM,

et al.

DEFENDANTS

ORDER UNSEALING DOCUMENTS
Before the Court is the Motion to Unseal filed by Defendant David Mark McCoy. The
United States has responded to the motion. For the reasons stated below, the Court grants the
motion to unseal the entire record in this case.
BACKGROUND
Following the United States' decision to decline intervention in this case, the Court
grappled with the issue of whether all documents filed in the case should remain under seal
automatically, as suggested by the United States, or whether inquiry should be made by the Court
into whether the judicial record to that point should remain sealed. (See Order of June 21, 2006,
Document No. 22). The Court concluded that a presumption exists against the documents
remaining under seal, but that the United States should be provided the opportunity to rebut the
presumption by showing good cause for maintaining the documents under seal. Id.
On June 30, 2006, the United States responded to the Court's invitation to show cause.
The response, filed under seal, made several points in opposing the procedure proposed by the
Court, the most persuasive of which was the suggestion that the Defendants might wish to
maintain certain documents under seal. After reconsidering the issue, the Court elected not to

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take any action with regard to unsealing the case file until the Defendants were at least provided
with an opportunity to first review the documents and to express their views on the issue.
Defendant David Mark McCoy has now moved to unseal the case.
DISCUSSION
The Government does not oppose the Defendant's request to view the documents in

camera. And, it further states that it will defer to the Court's "balancing test of need" to
determine whether the seal should remain in place.
A distinction should be made between the right of named defendants to review sealed
documents in the judicial record and the right of the public to access to these documents. The
presumption that Defendants St. Edward Mercy Medical Center and Dr. Mark McCoy shall have
the right to review the entire record in this case, including all sealed documents, is greater than
that of the general public. The United States has not demonstrated any cause for denying access
to sealed documents to these named Defendants and, in fact, appears to agree that such access is
warranted.
The Court recognizes that Defendants St. Edward Mercy Medical Center and Mr. Mark
McCoy should have an opportunity to review the sealed documents prior to unsealing the
documents for public view. To the extent that any judicial records should be redacted to protect
legitimate privacy interests or that other good cause exists for maintaining particular documents
under seal, the subjects of the investigation should be given the opportunity to raise those issues.
The broader issue is whether the sealed documents should remain hidden from the public.
The Court recognizes two opposing extremes on this broader issue: "confidentiality proponents"
and "public access advocates." See, e.g., Judge Joseph F. Anderson, Jr., Hidden from the Public

by Order of the Court: The Case Against Government-Enforced Secrecy, 55 S.Carolina Law

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Review 711 (Summer 2004)(discussing the judiciary's proper role in connection with "secrecy"
or "confidentiality" in court proceedings and records).
On this particular issue, the United States advocates a presumption of secrecy_ It takes
the position that the False Claims Act itself creates an inference supporting the presumption that
documents filed under seal should remain under seal, even after the government makes its
intervention decision. Such an approach would shift to the defendants (or third-parties) the
burden to show cause for the lifting of the seal in False Claims Act cases. The Court rejected this
approach in its prior Order, and it rejects it again now.
The United States further states that it defers to the Court's balancing "test of need" for
the seal to remain in place, relying on U.S. v. McDougal, 103 F.3d 651 (81h CiT. 1996). The Court
recognizes from the United States' previous argument on this issue that it takes the position,
again relying on the McDougal case, that the Eighth Circuit has rejected the "strong
presumption" in favor of the common law right of access.
The question facing the McDougal court was whether to allow the press and the public
access to President Clinton's videotaped deposition testimony used at trial in the underlying
criminal case. The public and press were present when an edited version of the videotape was
played for the jury_ After the trial presentation of the videotape, the district court permitted
public access to the deposition transcript, but it denied all requests to access to the videotape
itself. The request for access was premised on a common law right of access and the First
Amendment. The Eighth Circuit specifically found that the videotape itself was not a judicial
record to which any common law right of access attached. [d., at 656.
Alternatively, the court found that the district court did not abuse its discretion in denying
access even if the videotape was considered a judicial record. In the context of that discussion,

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the court rejected "the strong presumption standard adopted by some circuits." Id., at 657. The
Court acknowledges that the Eighth Circuit is one of the circuits that rejects the use of a "strong
presumption." This view was announced in United States v. Webbe, 791 F.2d 103, 106 (8 th Cir.
1986), where the court rejected a "'strong, indeed overwhelming, presumption in favor of
access,'" in favor of an "ad hoc" approach in which the district judge, "who is in the best position
to recognize and weigh the appropriate factors on both sides of the issue" is granted discretion to
resolve issues concerning access issues. Webbe, at 106-07 (omitting citation from quoted case at
p. 106). The Webbe court also held that the First Amendment right of access did not extend to
the videotapes, but noted that a compelling interest test applies when a First Amendment analysis
is required. [d., at 657-58, 659.
Here, there is no issue concerning whether a common law right of access applies. We are
not dealing with videotapes, but the very judicial record itself. The Court leaves for another day
the discussion of how strong the presumption is or is not in this context. A presumption ­
whether strong or not - is still a presumption. As such, the United States bears the burden to
make a showing adequate to overcome application of the presumption. As the Court noted in its
prior opinion, "once the government has decided it will not intervene, it should not be able to
handicap the relator's action by keeping materials under seal without some showing of good
cause or ample justification." U.S. by Dept. ofDefense v. CACIInten. Inc., 885 F.Supp. 80, 82
(S.D.N.Y. 1995). The United States has not met its burden here.
Additionally, the Court has reviewed the entire file in this case, including all sealed
documents, and finds nothing that would justify maintaining the sealed portions of the judicial
record secret from the general public. The Court therefore concludes that the entire seal on this
court file should be lifted. Out of an abundance of caution, the Court will give the Defendants a

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short period to view the documents prior to making the entire record public in order the provide
the Defendants with the opportunity to request and to demonstrate that particular documents
should remain under seal or portions of documents should be redacted. 1

CONCLUSION
IT IS HEREBY ORDERED THAT the Defendant David Mark McCoy's Motion to
Unseal Case (Docket No. 33) be, and it is hereby, GRANTED. The following procedure will be
used for the unsealing of all sealed documents in this case. The named Defendants in the
Amended Complaint shall be provided immediate access to all sealed documents. Said access
shall include, if requested, one free copy of the documents. Unless the Court otherwise directs,
on December 29, 2006, the Clerk of the Court is directed to unseal all sealed documents in this
case.
IT IS SO ORDERED this

15th

day of December, 2006.
Is/Garnett Thomas Eisele
UNITED STATES DISTRICT JUDGE

1

Having reviewed the file, the Court is doubtful that this will be necessary.
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