United States of America et al v. Lee Memorial Health System
Filing
71
ORDER denying without prejudice 52 Defendant Lee Memorial Health System's Emergency Motion to Reseal Certain Exhibits. See Order for details. Signed by Magistrate Judge Carol Mirando on 9/19/2018. (APH)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
UNITED STATES OF AMERICA and
ANGELA D’ANNA, ex rel.,
Plaintiffs,
v.
Case No: 2:14-cv-437-FtM-38CM
LEE MEMORIAL HEALTH
SYSTEM,
Defendant.
ORDER
This matter comes before the Court upon review of Defendant Lee Memorial
Health System’s (“Lee Health”) Emergency Motion to Reseal Certain Exhibits filed
on September 10, 2018. Doc. 52. Relator-Plaintiff Angela D’Anna (“Relator”) filed
a response in opposition on September 13, 2018. Doc. 59. With leave of Court, Lee
Health filed a reply in support of its motion on September 14, 2018. Docs. 63, 64.
For the reasons stated below, the motion is denied without prejudice.
I.
Background
On August 8, 2014, Relator filed this case against Lee Health pursuant to the
qui tam provisions of the False Claims Act (“FCA”), 31 U.S.C. § 3729 et. seq., alleging
violations of the FCA and 42 U.S.C. § 1395nn (the “Stark Law”). Doc. 1. Relator
filed the Complaint under seal pursuant to 31 U.S.C. § 3730(b)(2). Id. On July 28,
2017, Relator filed an Amended Complaint under seal pursuant to the same
provisions, alleging that Lee Health violated the Stark Law by paying physicians
illegal referral fees and financial incentives under compensation arrangements that
exceeded fair market value and were “commercially unreasonable in the absence of
referrals.” Doc. 36 ¶¶ 1-3. Lee Health allegedly paid the excessive compensation
to certain physicians and then “knowingly submit[ted] false claims to government
payers [Medicare and Medicaid] related to referrals from such specialists in violation
of the FCA.” Id. ¶ 4. Relator claims Lee Health’s “fraudulent scheme” began on
October 1, 2005 and continued until at least June 26, 2014, and involved several
groups of physicians including neurosurgeons, cardiologists and pulmonologists. Id.
¶¶ 57-58, 83, 98. Relator seeks treble damages and other civil penalties from Lee
Health related to the Government’s calculated losses from the Medicare and Medicaid
programs based on Lee Health’s alleged fraudulent scheme. See id. at 42.
On August 15, 2018, the Government filed a Notice of Election to Decline
Intervention (“Notice”), pursuant to 31 U.S.C. § 3730(b)(4)(B), in which it requested
that the Complaint, the Amended Complaint, the Notice, and any order issued in
response to the Notice be unsealed. Doc. 48 at 1-2. On August 27, 2018, the Court
granted the Government’s request and unsealed the Notice (Doc. 48), the Complaint
(Doc. 1) and the Amended Complaint (Doc. 36), including all exhibits attached
thereto. Doc. 50 at 2. The Clerk made the filings publicly available on the docket
on September 6, 2018. See Docs. 1, 36, 48, 50; see also Doc. 55 at 2. Lee Health
then filed the present motion and an affidavit in support1 on September 10, 2018,
1
Lee Health filed the affidavit of its Chief Administrative Officer, Kristine M. Fay.
Doc. 53 at 4. In the affidavit, Ms. Fay described Lee Health’s challenges in recruiting
qualified physicians to the southwest Florida area and attached a study predicting that by
2025, the designated region that includes Lee County “will have a deficit of 107% for general
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requesting the Court to “permanently” re-seal certain exhibits attached to the
Complaint and Amended Complaint.
Doc. 52 at 1; Doc. 53.
Lee Health also
requests that portions of the Complaint and Amended Complaint that refer to
information contained in the exhibits be re-sealed and that the Court direct Relator
to re-file with appropriate redactions.2 Doc. 64 at 6.
The exhibits that Lee Health seeks to re-seal3 contain information including
details about compensation arrangements between Lee Health and physicians and
other medical providers, specific compensation amounts paid to certain providers,
and details regarding provider group compensation arrangements that are allegedly
unique to Lee Health. Doc. 52 at 1-2. Lee Health claims the exhibits (and certain
portions of the Complaint and Amended Complaint) contain “trade secrets” as defined
by federal and Florida law, and requests that the Court enter an Order sealing the
documents and requiring Relator to refile “in redacted form so that the trade secret
and confidential information remains protected.” Id.; see also Doc. 64 at 6. Lee
Health does not, however, identify or describe the precise information in each page of
each exhibit, the Complaint or the Amended Complaint it seeks redacted or why the
surgeons, 63% for pulmonologists, 34% for cardiologists, and 18% for neurologists.” Id. at 8
(citation omitted). Ms. Fay also explains Lee Health’s need to keep the information in
certain exhibits confidential. Id. at 10.
2
In two footnotes in its reply brief, Lee Health identified the pages of the Complaint
and Amended Complaint it seeks to re-seal: pages 18, 19, 23, 26, 31, 33, and 38 of the
Complaint; and pages 16, 28, 29 and 34 of the Amended Complaint. Doc. 64 at 6.
3
Lee Health is requesting to seal certain pages of the following exhibits attached to
the Complaint (Doc. 1): exhibits 1, 2, 3, 5, 6, 7-1, 10-1, 10-2, 10-3, 10-4, 11, 12-4, 15-1 and 152. See Doc. 52 at 7-8. Exhibits attached to the Amended Complaint (Doc. 36) Lee Health
seeks to re-seal include: exhibits 1, 7, 8, 17, 20, 21, 34, 35 and 36. See id. at 8.
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information in each document it seeks to seal qualifies for trade secret protection and
should be removed from public view indefinitely.
II.
Discussion
A.
Local Rule 1.09
Rule 1.09(a) of the Middle District of Florida Local Rules states, in relevant
part:
Unless filing under seal is authorized by statute, rule, or order, a party
seeking to file under seal any paper or other matter in any civil case
shall file and serve a motion, the title of which includes the words
“Motion to Seal” and which includes: (i) an identification and description
of each item proposed for sealing; (ii) the reason that filing each item is
necessary; (iii) the reason that sealing each item is necessary; (iv) the
reason that a means other than sealing is unavailable or unsatisfactory
to preserve the interest advanced by the movant in support of the seal;
(v) a statement of the proposed duration of the seal; and (vi) a
memorandum of legal authority supporting the seal . . . No settlement
agreement shall be sealed absent extraordinary circumstances, such as
the preservation of national security, protection of trade secrets or other
valuable proprietary information[.]
M.D. Fla. R. 1.09(a). Local Rule 1.09(b) states, in relevant part:
If filing under seal is authorized by statute, rule, or order (including an
order requiring or permitting a seal and obtained pursuant to (a) of this
rule), a party seeking to file under seal any paper or other matter in any
civil case shall file and serve a motion, the title of which includes the
words “Motion to Seal Pursuant to [Statute, Rule, or Order]” and which
includes (i) a citation to the statute, rule, or order authorizing the seal;
(ii) an identification and description of each item submitted for sealing;
(iii) a statement of the proposed duration of the seal; and (iv) a statement
establishing that the items submitted for sealing are within the
identified statute, rule, or order the movant cites as authorizing the seal.
M.D. Fla. R. 1.09(b). District courts have broad discretion in interpreting and
applying their local rules. See Reese v. Herbert, 527 F.3d 1253, 1267-68 (11th Cir.
2008); Johnson v. England, 350 F. App’x 314, 315-16 (11th Cir. 2009).
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Lee Health filed its emergency motion pursuant to Rule 5.2 of the Federal
Rules of Civil Procedure4 and a provision of the Florida Uniform Trade Secrets Act
(“FUTSA”), Fla. Stat. § 688.006, and included the words, “Motion to Reseal” in the
title of the motion. Doc. 52 at 1. Lee Health does not cite to Local Rule 1.09 in the
motion. Lee Health included a list of the exhibits sought to be re-sealed, along with
specific page numbers, and a general description of the items as a group,5 but not
individually. Id. at 1, 7-8. In its reply brief, Lee Health requests additional items
be re-sealed—certain pages of the Complaint and Amended Complaint—and again
provides only a general description of the items. Doc. 64 at 6. In terms of duration,
Lee Health requests that the information “be sealed permanently, and that Relator
be required to re-file the exhibits in question in redacted form[.]” Doc. 52 at 1.
Relator argues in her response that Lee Health failed to comply with Local
Rule 1.09 and failed to meet its burden to show that re-sealing the exhibits is
appropriate. Doc. 59 at 4. Specifically, Relator argues Lee Health failed to identify
and describe each item sought to be re-sealed, as required by Local Rule 1.09(a), and
instead identified the exhibits only by number. Id. at 4-5; see M.D. Fla. R. 1.09(a).
Next, Relator argues that Lee Health failed to demonstrate that an alternative means
of protecting its confidentiality interest is not available or not satisfactory, and
4
Rule 5.2 of the Federal Rules of Civil Procedure is not a “statute, rule, or order”
authorizing filing under seal for the purposes of Rule 1.09(b) of the Middle District of Florida
Local Rules. See Fed. R. Civ. P. 5.2; M.D. Fla. R. 1.09.
5
The motion describes the items to be re-sealed as pages of exhibits containing “trade
secrets in the form of physician and other health care provider compensation arrangements,
including specific provider compensation amounts as well as provider group compensation
arrangements unique to [Lee Health].” Doc. 52 at 1-2.
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asserts that re-sealing the exhibits “goes beyond [Lee Health’s] stated interest[.]”
Id. at 9-10; see M.D. Fla. R. 1.09(a). Finally, Relator notes that Lee Health did not
propose a duration of the seal of one year or less, as required by Local Rule 1.09(a),
and proposed an impermissible “permanent seal[.]”
Id. at 10; see M.D. Fla. R.
1.09(a).
Lee Health responds that it complied with Local Rule 1.09 and argues Relator
incorrectly stated the standard for Lee Health’s motion to be Local Rule 1.09(a),
instead of Local Rule 1.09(b). Doc. 64 at 1. Lee Health argues that it filed the
motion to re-seal under a statute authorizing filing under seal; thus it was only
required to provide (1) a citation to the statute; (2) an identification and description
of the items to be sealed; (3) a proposed duration of the seal; and (4) a statement
establishing the items to be sealed are covered under the purported authorizing
statute.
Id. at 2; see M.D. Fla. R. 1.09(b).
Lee Health argues it met these
requirements by citing to state and federal statutes defining a trade secret “and the
state statute identifying sealing court records as a means of protecting trade
secrets[.]” Id. (citations omitted). Lee Health claims it specified the items to be resealed and proposed a temporary duration by requesting that the items be sealed
permanently until Relator re-files with appropriate redactions. Id.
The Court finds Lee Health failed to comply with Local Rule 1.09 and failed to
provide sufficient detail for the Court to make the required findings of fact about the
appropriateness of sealing each item requested to be re-sealed. See Chicago Tribune
Co. v. Bridgestone/Firestone, Inc., 263 F.3d 1304, 1314-15 (11th Cir. 2001) (per
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curiam). First, Lee Health is incorrect that Local Rule 1.09(b) governs its motion to
re-seal. See Doc. 64 at 2. In support of this claim, Lee Health asserts it filed the
motion under a Florida statute authorizing filing under seal.
Id. The relevant
section of the FUTSA states:
In an action under ss. 688.001-688.009, a court shall preserve the
secrecy of an alleged trade secret by reasonable means, which may
include granting protective orders in connection with discovery
proceedings, holding in camera hearings, sealing the records of the
action, and ordering any person involved in the litigation not to disclose
an alleged trade secret without prior court approval.
§ 688.006, Fla. Stat. (emphasis added). This is not an action under any section of
the FUTSA; thus, that provision is inapplicable. Because Lee Health cited no other
statute authorizing filing under seal, its motion is governed by Rule 1.09(a).
Second, Lee Health did not identify and describe each item of the exhibits or
pleadings it seeks to re-seal and the reason that sealing each item is necessary, other
than a general statement that they contain trade secrets. See Doc. 52 at 1, 7-8. Lee
Health only cited to each exhibit and the entirety of the applicable pages allegedly
containing trade secrets and gave a general description of them as compensation
arrangements and amounts.6 See id. Lee Health failed to specifically demonstrate
why a less restrictive means is not available or not adequate to protect its interest
but did explain generally why it is necessary the items be sealed. See M.D. Fla. R.
1.09(a); Doc. 52 at 1-6. Finally, although Lee Health proposed Relator re-file the
relevant documents with redactions, it did not propose a length of time that the
The Court agrees with Relator that Lee Health’s efforts in this respect made this
expedited review “difficult at best.” See Doc. 59 at 5.
6
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original un-redacted documents would remain under seal. See Doc. 52 at 1. Thus,
the Court finds Lee Health failed to comply with Local Rule 1.09.
The Court,
however, will proceed to consider the merits of Lee Health’s motion despite the
deficiencies in Lee Health’s compliance with the Local Rules and provide direction for
re-filing the motion, if desired, in compliance with Local Rule 1.09. See Reese, 527
F.3d at 1267; Johnson, 350 F. App’x at 315-16.
B.
Whether sealing the documents is appropriate
The Eleventh Circuit recognizes a “presumptive common law right to inspect
and copy judicial records.” U.S. v. Rosenthal, 763 F.2d 1291, 1292-93 (11th Cir.
1985) (quoting Nixon v. Warner Communications, Inc., 435 U.S. 589, 597 (1978)).
“The common law right of access to judicial proceedings, an essential component of
our system of justice, is instrumental in securing the integrity of the process.”
Chicago Tribune Co., 263 F.3d at 1311 (citing Richmond Newspapers, 448 U.S. 555,
564-74 (1980)).
The public’s right of access to judicial proceedings and records applies when
the judicial records involve public pleadings filed on the docket such as the complaint.
See F.T.C. v. AbbVie Products LLC, 713 F.3d 54, 62 (11th Cir. 2013). “A complaint,
which initiates judicial proceedings, is the cornerstone of every case, the very
architecture of the lawsuit, and access to the complaint is almost always necessary if
the public is to understand a court’s decision.” Id.; see also IDT Corp. v. eBay, 709
F.3d 1220, 1223 (8th Cir. 2013) (internal citations omitted) (describing the “modern
trend in federal cases to treat pleadings in civil litigation (other than discovery
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motions and accompanying exhibits) as presumptively public, even when the case is
pending before judgment”). Exhibits attached to a complaint “must also be treated
as judicial records[.]”
Id. at 63 (“We even treat specific facts demonstrated by
exhibits as overriding more generalized or conclusory statements in the complaint
itself.”)
The public’s right of access is not absolute, however, and a judge’s decision
whether to seal court records “should be informed by a ‘sensitive appreciation of the
circumstances that led to . . . [the] production [of the particular document in
question].’” Chicago Tribune Co., 263 F.3d at 1311 (quoting Richmond Newspapers,
448 U.S. at 598); see also Romero v. Drummond Co., Inc., 480 F.3d 1234, 1246 (11th
Cir. 2007) (“The common law right of access may be overcome by a showing of good
cause[.]”) In determining whether to seal court filings and other materials, a district
court must balance competing interests—a party’s interest in keeping information
confidential and the public’s legitimate interest in the subject matter and conduct of
the proceedings.
See Chicago Tribune Co., 263 F.3d at 1315; see also Wilson v.
American Motors Corp., 759 F.2d 1568, 1571 (11th Cir. 1985) (quoting Newman v.
Graddick, 696 F.2d 796, 803 (11th Cir. 1983)) (“The district court must keep in mind
the rights of a third party—the public, ‘if the public is to appreciate fully the often
significant events at issue in public litigation and the workings of the legal system.”)
The court must balance these competing interests even when the material sought to
be sealed from public view is classified as trade secrets. See Chicago Tribune Co.,
263 F.3d at 1315 (“Should the district court determine that these documents do in
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fact contain trade secrets, the district court must balance [the] interest in keeping
the information confidential against [the] contention that disclosure serves the
public’s legitimate interest in health and safety.”)
i.
Whether the information in the documents qualifies for
trade secret protection or is otherwise proprietary in
nature
The federal Defend Trade Secrets Act of 2016 (“DTSA”) defines “trade secret”
as:7
all forms and types of financial, business, scientific, technical, economic,
or engineering information, including patterns, plans, compilations,
program devices, formulas, designs, prototypes, methods, techniques,
processes, procedures, programs, or codes, whether tangible or
intangible, and whether or how stored, compiled, or memorialized
physically, electronically, graphically, photographically, or in writing
if—
(A) the owner thereof has taken reasonable measures to keep such
information secret; and
(B) the information derives independent economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable through proper means by, another person who can obtain
economic value from the disclosure or use of the information[.]
18 U.S.C. § 1839(3). Lee Health argues the compensation data and arrangements
at issue derive independent economic value from not being generally known by others
“from the negotiating power that the information provides to [Lee Health’s]
competitors in terms of poaching physicians and mid-level providers such as
physician assistants and nurse practitioners.” Doc. 52 at 4. Lee Health claims the
7
Both parties cite to the DTSA definition as the correct definition to apply. Doc. 52
at 2; Doc. 59 at 5. The DTSA definition is similar to the definitions in the FUTSA and the
Restatement of Torts. See § 688.022(4), Fla. Stat.; Restatement (First) of Torts § 757.
Thus, for the purposes of the present motion the Court will apply the DTSA definition.
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exhibits “contain physician compensation information that is vital to Lee Health’s
competitive position in southwest Florida.” Id. (citing Doc. 53 at 6-10). Further,
Lee Health argues the compensation information is the subject of reasonable efforts
to maintain its secrecy. Id. at 6. Specifically, Lee Health claims it does not disclose
the amount of compensation paid to providers to those outside the organization
because such disclosure “would permit competitors of Lee Health to offer a
compensation package or other benefits that could be deemed more attractive,
thereby greatly disadvantaging Lee Health’s efforts to retain and recruit physicians.”
Id. at 4 (citing Doc. 53 at 9-10). Lee Health considers its compensation information
to be confidential and exempt from public disclosure laws—as a “political subdivision
of the State of Florida” and a public government entity, Lee Health is subject to
federal and state disclosure laws and it claims its policy is to “exempt [the]
compensation documents from disclosure under the trade secret exemption to the
statutes” in the case of a public records request. Id. at 5-6 (citing Doc. 53 at 9-10).
Relator responds that Lee Health’s compensation information does not qualify
for trade secret protection and should not be re-sealed.
Doc. 59 at 5.
Relator
argues that Lee Health “overbroadly categorizes all of the 4+ year old physician
compensation information contained in the Exhibits as ‘trade secrets[.]’” Id. (citing
Doc. 52 at 3).
Further, Relator asserts the information no longer has any
independent economic value since it is most recently from four years ago.
Id.
Relator also notes Lee Health seeks to re-seal “compensation and production
analyses” from 2013 for two neurosurgeons and two cardiologists that include
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information that is “publicly available, having been obtained from Medical Group
Management Association[.]” Id. at 5-6 (citing Doc. 36-7 at 3; Doc. 36-8 at 3; Doc. 3620 at 3; Doc. 36-21 at 3). Relator argues Lee Health cannot justify why this “fiveyear-old information that is publicly available should be resealed.” Id. at 6.
The information in the exhibits from the Amended Complaint can be generally
categorized as follows: 8 recommendations on specific changes to Lee Health’s
neurosurgery compensation model, dated March 2009 (Doc. 36-1 at 7, 9, 11, 13);
compensation and production analyses for four different providers, including specific
pay rates, from 2013 (Doc. 36-7 at 3-4, 6-12; Doc. 36-8 at 3-13; Doc. 36-20 at 2-3, 5-6,
8-9, 11-12; Doc. 36-21 at 2-3, 5-6, 8-9, 11-12); a group compensation pooling plan for
Lee Health cardiologists from 2013 (Doc. 36-17 at 2-4); and specific compensation
figures for three different Lee Health providers from 2013 (Doc. 36-34 at 2; Doc. 3635 at 2; Doc. 36-36 at 2). The exhibits in the Complaint Lee Health seeks to re-seal
include the following information: specific compensation figures and RVU
9
valuations for Emergency Department physicians from 2013 (Docs. 1-1, 1-2, 1-3, 1-4);
the full roster of Lee Health physicians and their respective compensation from 2013
8
Lee Health did not include categories in its motion; thus, the Court will attempt to
categorize the documents based on its review, but Lee Health may categorize them differently
if it re-files the motion to re-seal since it is in the best position to do so and has the burden of
showing the necessity of re-sealing each item. See Romero, 480 F.3d at 1246; M.D. Fla. R.
1.09(a).
9
Relative Value Units (“RVU”) are used to measure the worth of different physician
services performed when calculating the total Medicare compensation a provider is entitled
to for a particular service. See Doc. 36 ¶ 56. Relator claims that part of Lee Health’s fraud
scheme involved artificially inflating providers’ RVU valuations by, among other things,
crediting work done by non-physicians to physicians’ work time and submitting false
Medicare claims with the inflated RVU numbers. See Doc. 36 at ¶¶ 56, 58, 79-81.
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(Doc. 1-5 at 2-19); compensation and production analyses for multiple providers (Doc.
1-6 at 2-9; Doc. 1-26 at 2-3, 5-6, 8-9, 11-12; Doc. 1-29 at 2-3, 5-6, 8-9, 11-12; Doc. 1-30
at 2-3, 5-6); specific recommendations for changes to Lee Health’s compensation
structure (Doc. 1-8 at 3); specific compensation numbers for multiple providers and
groups (Docs. 1-9, 1-10, 1-11, 1-12, 1-13, 1-14, 1-18, 1-19, 1-20, 1-21); and a group
compensation pooling plan for Lee Health providers from 2013 (Doc. 1-22 at 2-3, 7).
Although Lee Health failed to sufficiently describe each item sought to be resealed in the motion, the Court has reviewed the information contained in the
exhibits and much if not all the information contained in the exhibits would appear
to qualify for trade secret protection. Lee Health takes reasonable precautions to
keep this information confidential through appropriate responses to public disclosure
requests and policies of non-disclosure of provider compensation data outside the
organization and inside the organization aside from certain individuals. Doc. 53 at
9-10; see 18 U.S.C. § 1839(3). Further, although certain information contained in
the exhibits may not have independent economic value individually and may be
readily obtained through proper means, for example, an individual provider’s
compensation numbers, it appears the extensive collection of data organized and
tracked by Lee Health has independent economic value. See DynCorp International
v. AAR Airlift Group, Inc., 664 F. App’x 844, 849 (11th Cir. 2016) (plaintiff sufficiently
identified alleged trade secrets as, inter alia, collections of compensation data
including salaries and pay differentials); Howard v. Hartford Life and Acc. Ins. Co.,
275 F.R.D. 649, 651 (M.D. Fla. 2011).
Further, Relator alleges the “fraudulent
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scheme” began in 2005 and continued until 2014. Doc. 36 ¶ 57. Thus, although
much of the information is historical compensation data, the extensive collection of
data covering provider compensation and methods of determining provider
compensation levels is unique to Lee Health and is proprietary in nature.
See
Howard, 275 F.R.D. at 651 (historical compensation data is proprietary in nature).
Without a more detailed identification and description of the items in each
cited page of each exhibit and each cited page of the Complaint and Amended
Complaint Lee Health asserts are trade secrets and why, however, the Court is
unable to make the factual findings required by the Eleventh Circuit as to each item
to support re-sealing. See Chicago Tribune Co., 263 F.3d at 1314-15. Thus, Lee
Health has not met its burden to show the necessity of sealing each item.
See
Romero, 480 F.3d at 1246; M.D. Fla. R. 1.09(a).
ii.
Lee Health’s confidentiality interest and the public’s
interest in the openness of the proceedings
In balancing a party’s interest in confidentiality and the public interest in
accessing court records, courts consider several factors: (1) whether allowing access
to the records would “impair court functions or harm legitimate privacy interests”;
(2) the reliability of the information; (3) whether the other party will have an
opportunity to respond to the information; (4) whether the information involves
public officials or matters of public concern; and (5) whether a less onerous alternative
to sealing court records is available.
Romero, 480 F.3d at 1246 (citing In re
Alexander Grant & Co. Litig., 820 F.2d 352, 356 (11th Cir. 1987)).
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Lee Health argues that the public interest is not implicated in the case of
sealing information that includes trade secrets. Doc. 64 at 3. Thus, Lee Health
asserts that no balancing test between the public’s interest in open judicial
proceedings and a party’s interest in confidentiality applies here.
Id. at 4. Lee
Health further argues that, even if a balancing test does apply, it favors Lee Health.
Id. at 3-4. Because it is a “public purpose health system devoted to the provision of
health care services to the community[,]” Lee Health argues, the public would be
“disserved” by allowing public access to the relevant information in the Complaint,
Amended Complaint, and attached exhibits. Id. at 4. Further, Lee Health argues
that the “loss of its ability to maintain confidentiality would negatively impact its
recruiting and retention of health care providers” and would “negatively affect the
public interest.” Id. Relator responds that Lee Health’s status as a public health
care entity increases the public’s legitimate interest in the conduct of the proceedings
and the fraud Relator alleges Lee Health committed. Doc. 59 at 9. Relator notes
also that Lee Health’s Board of Directors meets in public and is composed of elected
members and asserts that resealing the exhibits “is not warranted when the parties
benefitting from the resealing are a public health care system and its publicly elected
Board of Directors.” Id. (citing Pansy v. Borough of Stroudsburg, 23 F.3d 772, 788
(3d Cir. 1994)).
Contrary to Lee Health’s argument, even when trade secrets are involved, the
district court must balance the interest in keeping the trade secrets confidential
against the “contention that disclosure serves the public’s legitimate interest[.]”
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Chicago Tribune Co., 263 F.3d at 1315. First, this is a case brought under the FCA,
and, “[b]y definition, an FCA complaint alleges a fraud upon the public[.]” U.S. v.
King Pharmaceuticals, Inc., 806 F. Supp. 2d 833, 840 (D. Md. 2011). The exhibits
cited by Lee Health detail compensation arrangements and compensation figures for
physicians, and Relator’s FCA allegations accuse Lee Health of using illegal
compensation arrangements and paying physicians excessive compensation figures.
See Doc. 52 at 1; Doc. 59 at 2.
Thus, the Court agrees with Relator that the
information in the exhibits is “highly probative evidence” regarding Relator’s claims
that Lee Health paid physicians “under compensation arrangements that (i) exceeded
fair market value, and (ii) were commercially unreasonable in the absence of
referrals.” See Doc. 59 at 9 (citing 42 U.S.C. § 1395nn(e)(2)). As this information
is the “cornerstone” of the case against Lee Health, the public has a legitimate
interest in accessing the information. See F.T.C., 713 F.3d at 62.
Further, the public has a legitimate “health and safety” interest in the details
of alleged Medicare and Medicaid fraud, as in this case, because patients must be
confident that their physicians are making decisions regarding appropriate
treatment and referrals based on the patient’s health and not on improper financial
motives.
See Chicago Tribune Co., 263 F.3d at 1315; Doc. 36 ¶ 4.
As to Lee
Health’s argument that the disclosure of the information will negatively impact the
public interest by harming its ability to recruit providers, Lee Health has not met its
burden to show that the historical compensation data will impact its recruitment
significantly enough, or that the alleged trade secrets at issue are valuable enough,
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to outweigh the public’s interest in accessing the court records in this case. See Doc.
64 at 4; Chicago Tribune Co., 263 F.3d at 1315. The information contained in the
exhibits is from most recently four years ago, and although that does not render it
unworthy of any trade secret protection, it does reduce Lee Health’s interest in the
confidentiality of the information when weighed against the public’s common law
right of access. See Doc. 59 at 5; Chicago Tribune Co., 263 F.3d at 1315.
As to the other factors in Romero, there is no indication that allowing access to
the court records would impair court functions; however, there are legitimate privacy
interests at stake, including information in the exhibits related to physicians and
other providers who are not involved in the litigation. 480 F.3d at 1246; see, e.g.,
Doc. 1-5 at 2-19. Lee Health has made some showing that its recruiting efforts will
be harmed if the information at issue is not re-sealed but has not sufficiently shown
the “degree of and likelihood” of injury.
See 480 F.3d at 1246; Doc. 64 at 4.
Further, neither party argues that the information is unreliable, and the case is in
an early stage.
Lee Health will be given an opportunity to respond to the
information as the case progresses. See 480 F.3d at 1246. Finally, the information
concerns public officials and public concerns, as the public has a legitimate interest
in the operation of its health care facilities and Lee Health is a public entity governed
by an elected Board of Directors. See id. at 1246; Doc. 59 at 9.
In sum, Lee Health has not met its burden to show which information
contained in each cited page of each exhibit and the Complaint and Amended
Complaint contains trade secrets and why Lee Health’s confidentiality interest
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outweighs the public’s interest in access to court records; and has failed to provide a
sufficient showing for the Court to make the findings of fact required by the Eleventh
Circuit. See Romero, 480 F.3d at 1246; Chicago Tribune Co., 263 F.3d at 1314-15;
M.D. Fla. R. 1.09(a). Further, Lee Health failed to include a proposed duration of
the seal of less than one year and instead requested an impermissible “permanent”
sealing. See M.D. Fla. R. 1.09(a); Doc. 52 at 1. Therefore, the Court will deny the
motion without prejudice to Lee Health re-filing the motion, if desired, in compliance
with Local Rule 1.09(a) and addressing the issues explained in this Order. If Lee
Health re-files the motion, it is directed to (1) identify and describe each item in each
exhibit or pleading proposed for re-sealing, and each item requested to be redacted if
the Court orders Relator to re-file with redactions; (2) state the reason that re-sealing
each item is necessary; (3) state the reason that a means other than sealing is
unavailable or unsatisfactory to preserve its interest in confidentiality of the
information; (4) propose a duration of the seal; and (5) include a memorandum of law
in support. See M.D. Fla. R. 1.09(a).
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ACCORDINGLY, it is
ORDERED:
Defendant Lee Health’s Emergency Motion to Reseal Certain Exhibits (Doc.
52) is DENIED without prejudice.
DONE and ORDERED in Fort Myers, Florida on this 19th day of September,
2018.
Copies:
Counsel of record
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