Hyatt et al v. Mirza et al

Filing 11

ORDER signed by District Judge Kimberly J. Mueller on 4/10/18 ORDERING that All pleadings filed and orders issued in this action will be served on the US. The US retains the right to intervene, for good cause, at a later date; (2) The complaint, ECF No. 1 , the US' notice of Decline, ECF No. 10 , and the US' proposed order, ECF No. 10 -1 and this order are UNSEALED; (3) All other previous filings remain under TEMPORARY SEAL pending further order of this court; and Within fourteen days, any party may SHOW CAUSE why the previous filings in this action should remain under seal.(Mena-Sanchez, L) (Main Document 11 replaced on 4/13/2018) (Donati, J).

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA, ex rel.
CHERYL HYATT,
Plaintiffs,

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No. 2:17-cv-2125 KJM-KJN

ORDER

v.
NINOS MIRZA, individually and as trustee for
the NINOS AND JANET MIRZA TRUST,
JANET MIRZA aka JANET W MIRZA,
individually and as trustee for the NINOS AND
JANET MIRZA TRUST, and DOES 1 through
50, inclusive,
Defendants.

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On April 3, 2018, the United States gave notice that it declines to intervene in this

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qui tam action. ECF No. 10. The United States requests the court unseal the relator’s complaint

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and the United States’ notice declining to intervene, but requests that other previously filed

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documents remain under seal. Id. at 2. These documents include, for example, the United States’

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request for an extension of time to decide whether to intervene, and a declaration and other

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materials submitted in support of that request. See, e.g., ECF No. 7.

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The False Claims Act (FCA) provides that a qui tam action must be filed in camera
and remain under seal for at least 60 days while the United States decides whether to intervene,

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and permits extensions to maintain the seal beyond that period upon the United States’ showing

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of good cause. 31 U.S.C. § 3730(b)(2)-(3). But the FCA clearly contemplates that after the

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United States makes a decision, the seal will be lifted, see id. § 3730(b)(3); U.S. ex rel. Lee v.

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Horizon W., Inc., No. 00-2921, 2006 WL 305966, at *2 (N.D. Cal. Feb. 8, 2006). Generally, the

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seal will be lifted entirely “unless the Government shows that such disclosure would: (1) reveal

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confidential investigative methods or techniques; (2) jeopardize an ongoing investigation; or (3)

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harm non-parties.” Horizon W., Inc., 2006 WL 305966, at *2 (emphasis in original) (citations

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omitted). “[I]f the documents simply describe routine or general investigative procedures,

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without implicating specific people or providing substantive details, then the Government may

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not resist disclosure.” Id. (citing United States v. CACI Int’l. Inc., 885 F. Supp. 80, 83 (S.D.N.Y.

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1995)). “Congress did not intend that the government should be allowed to prolong the period in

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which the file is sealed indefinitely.” United States ex rel. Costa v. Baker & Taylor, Inc., 955 F.

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Supp. 1188, 1190 (N.D. Cal. 1997) (discussing government requests to extend the seal while

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deciding whether to intervene); U.S. ex rel. Mikes v. Straus, 846 F. Supp. 21, 23 (S.D.N.Y. 1994)

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(noting the FCA “evinces no specific intent to permit or deny disclosure of in camera material as

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a case proceeds”). Rather, the FCA “invests the court with authority to preserve secrecy of such

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items or make them available to the parties.” Straus, 846 F. Supp. at 23. Ultimately, the court’s

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decision must account for the fundamental principle that court records are generally open to the

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public. See Baker & Taylor, Inc., 955 F. Supp. at 1190.

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Here, the United States requests the court maintain the seal because

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“[c]onfidentiality is paramount to False Claims Act investigations,” noting investigation “often

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becomes more difficult when a defendant learns it is under investigation” and disclosure of “the

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government’s investigatory techniques and processes can provide violators with a roadmap to

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evade detection or to thwart the government’s enforcement efforts.” ECF No. 10 at 2 n.1 (citation

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omitted). That the defendant may learn it is under investigation is of no moment here, as the

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complaint will be unsealed with this order. See 31 U.S.C. § 3730(b)(3). Further, the United

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States does not concretely identify a single investigative technique at risk of exposure upon

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unsealing here. Rather, the United States relies on the general argument that “in discussing the
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content and extent of the federal investigation, such papers are provided by law to the Court alone

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for the sole purpose of evaluating whether the seal and time for making an election to intervene

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should be extended.” ECF No. 10 at 2. The United States’ explanation does not assure the court

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that a seal is necessary to maintain the confidentiality of investigative methods or techniques, to

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protect ongoing investigations, to protect others who are not a part of this litigation, or for another

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reason.

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Nonetheless, the court will provide the government the opportunity to justify the sealing it
requests in a further filing. The court therefore orders as follows:
(1) In the event the relator moves to voluntarily dismiss, settle or otherwise

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discontinue this action, the relator is ORDERED to solicit and submit the written

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consent of the United States before obtaining a ruling from the court. All

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pleadings filed and orders issued in this action will be served on the United States.

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The United States retains the right to intervene, for good cause, at a later date;

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(2) The complaint, ECF No. 1, the United States’ Notice of Election to Decline

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Intervention, ECF No. 10, the United States’ proposed order, ECF No. 10-1, and

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this order are UNSEALED;

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(3) All other previous filings remain under TEMPORARY SEAL pending further

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order of this court; and

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(4) Within fourteen days, any party may SHOW CAUSE why the previous filings

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in this action should remain under seal.

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IT IS SO ORDERED.

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DATED: April 11, 2018.

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UNITED STATES DISTRICT JUDGE

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