United States ex rel. Littlewood v. King Pharms., Inc.

• Decision Date: 29 August 2011
• Docket Number: Civil Action No. ELH–10–973.
• Citation: 806 F.Supp.2d 833
• Parties: UNITED STATES, et al., Plaintiffs,ex rel. Lauri Littlewood, Relator, v. KING PHARMACEUTICALS, INC., et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

806 F.Supp.2d 833

UNITED STATES, et al., Plaintiffs,ex rel. Lauri Littlewood, Relator,

v.KING PHARMACEUTICALS, INC., et al., Defendants.

Civil Action No. ELH–10–973.

United States District Court, D. Maryland.

Aug. 29, 2011.

Alan Michael Freeman, Thomas J. Poulin, W. Scott Simmer, Blank Rome LLP, Washington, DC, Jamie M. Bennett, Thomas F. Corcoran, Office of the United States Attorney, Baltimore, MD, for Plaintiffs.

MEMORANDUM OPINION ¹

ELLEN LIPTON HOLLANDER, District Judge.

Lauri Littlewood, the relator, filed this qui tam action on April 16, 2010, on behalf of the United States and various states,² against King Pharmaceuticals, Inc. (“King”), Alpharma, Inc. (“Alpharma”), and IBSA Biochemique SA (“IBSA”), pursuant to the False Claims Act, 31 U.S.C. §§ 3729 et seq. Since 2007, Littlewood has been employed as a sales representative for Alpharma and then King, selling various pain management products. She has alleged that the defendants engaged in an illegal scheme to promote off-label uses of a non-steroidal, topical, anti-inflammatory drug, FLECTOR Patch.³ According to Littlewood, the defendants “knew (and intended) that their off-label promotion of FLECTOR Patch would (and did) cause false and fraudulent claims for reimbursement to be submitted to, and paid by, government health care programs.” (ECF 17–1 at 2).

On April 19, 2011, the United States and the qui tam states filed a Notice of Intent to Decline Intervention (ECF 16), which was amended on April 21, 2011. See ECF 18. Thereafter, on April 28, 2011, the relator filed a voluntary dismissal of the underlying suit, without prejudice, pursuant to Federal Rule of Civil Procedure 41(a) (ECF 19). On May 6, 2011, the United States and the qui tam states consented to the dismissal, without prejudice (ECF 21).

In the Government's Amended Notice of Election to Decline Intervention (“Amended Notice”) (ECF 18), the Government requested, inter alia, the unsealing of the relator's Amended Complaint, the Amended Notice, and its proposed Order. However, it asked the Court to maintain the seal for all other papers filed in the action, which include two motions filed by the Government for extension of the time to decide whether to intervene (ECF 9 & 13). It argued that “such papers [were] provided by law to the Court alone for the sole purpose of evaluating whether the seal and time for making an election to intervene should be extended.” Amended Notice at 2.

The Government's request to unseal generated an opposition from the relator. See Opposition of Plaintiff/Relator To the Request of the United States And Qui Tam States To Unseal This Case (“Opposition” or “Opp.”) (ECF 17). In her Opposition, the relator vigorously urges the Court to deny the Government's request to unseal, asserting: “(i) the presumption of public access to judicial documents does not apply in these circumstances; (ii) public interest and public policy support maintaining the seal; (iii) unsealing the case would cause significant harm to Relator Littlewood; and (iv) unsealing the case would cause significant harm to Defendants and other accused wrongdoers named in the First Amended Complaint.” Opp. at 1–2.

The United States filed a “Response to Relator's Request to Maintain This Matter Under Seal” (“Response”) (ECF 20), opposing the relator's opposition to lift the seal with respect to the Amended Complaint. According to the Government, maintaining the seal “would violate the strong presumption in favor of the public's right to examine and copy judicial records.” Response at 2. Moreover, it maintains that the relator “has failed to meet her burden to maintain her identity under seal.” Id. at 3. However, the Government renews its request to maintain the seal for its motions for extensions of time to elect to intervene. Id. at 2.

For the reasons that follow, the Court will deny the requests of both parties to maintain the seal as to any portion of the record, and will order that the case be unsealed in its entirety.

Statutory Background

The False Claims Act (“FCA”), 31 U.S.C. §§ 3729–3733, “prohibits submitting false or fraudulent claims for payment to the United States, § 3729(a), and authorizes qui tam suits, in which private parties bring civil actions in the Government's name, § 3730(b)(1).” Schindler Elevator Corporation v. United States ex rel. Kirk, ––– U.S. ––––, 131 S.Ct. 1885, 1889, 179 L.Ed.2d 825 (2011). Under 31 U.S.C. § 3730(b)(2), the qui tam relator must file the complaint under seal, and it must remain sealed for at least 60 days. “This initial seal provision and 60–day period are mandatory.” ACLU v. Holder, ––– F.3d ––––, ––––, No. 09–2086, 2011 WL 1108252, at *4 (4th Cir. Mar. 28, 2011). As the Fourth Circuit recently explained in Holder, “Congress adopted the 60–day period for numerous reasons,” including to permit the government “to investigate the allegations to decide whether to intervene.” Id. “The seal provisions provide time for ... investigation so that the United States may make an informed decision about whether to intervene in the qui tam action.” Id., at ––––, at *4. For good cause shown, the government may seek extensions of the time to investigate, during which the complaint remains under seal. 31 U.S.C. § 3730(b)(3).

If the United States decides to intervene in a qui tam action, it “takes over the litigation.” Holder, ––– F.3d at ––––, at *5. Upon intervention, “the complaint is unsealed, the docket is unsealed, and the United States serves the complaint on the defendant....” Id. However, the qui tam relator remains a party to the action. Id., at ––––, at *5. See 31 U.S.C. § 3730(c)(1).

The Holder Court also explained the process when, as here, the United States declines to intervene. Notably, the Court said: “The Complaint is then unsealed, the docket is unsealed, and the qui tam relator serves the complaint on the defendant ... [and] litigates the case against the defendant.” Holder, ––– F.3d at ––––, at *5.

Unlike several of the cases that I have reviewed with respect to the FCA's seal provisions, the case at bar does not involve a plaintiff or a defendant urging full disclosure. To the contrary, the relator here opposes all unsealing, the defendant is presumably unaware of the suit, and the Government urges an indefinite seal solely as to its extension requests. In analyzing the issue, the Court is mindful that, in general, the public enjoys the right of access to judicial documents, and there is a strong public interest in favor of disclosure. See Nixon v. Warner Communications, Inc., 435 U.S. 589, 597, 98 S.Ct. 1306, 55 L.Ed.2d 570 (1978) (“[C]ourts of this country recognize a general right to inspect ... judicial records and documents.”). Such access safeguards “the citizen's desire to keep a watchful eye on the workings of public agencies.” Id. at 598, 98 S.Ct. 1306.

I am satisfied that the proceedings with respect to this case, involving allegations of fraudulent claims for reimbursement submitted to federal health care programs, “fall well within the bounds of that which citizens may wish to observe.” United States ex rel. Costa v. Baker & Taylor, Inc., 955 F.Supp. 1188, 1190 (N.D.Cal.1997) (rejecting Government's motion to retain seal in qui tam case). I have also considered the harm that unsealing may impose upon the relator and upon the Government in light of the strong public interest in favor of disclosure. As I shall explain, neither with respect to Littlewood nor the Government does the balance tip in favor of maintaining the seal in any respect.

Littlewood's Request to Maintain the Seal

Littlewood argues that, because she has filed a Notice of Dismissal of her suit before serving it on defendants, this case should remain sealed indefinitely. According to Littlewood, unsealing the case would not serve the public interest, and would “undercut well-settled public policy and do serious harm to Relator Littlewood” and others. Opp. at 3. In this regard, Littlewood notes that she remains employed as a sales representative for King, and maintains that if “she were to lose her anonymity, the harm that would befall her would be swift and severe.” Opp. at 9. In her view, she “should not be penalized for having come forward, yet that is precisely what would occur if this case is unsealed.” Opp. at 11.

Further, Littlewood contends that “the presumption of public access [to judicial documents] does not apply because this lawsuit will be dismissed” before the suit is ever served. Opp. at 5. Moreover, she contends that “public policy” supports maintaining the seal to encourage other potential whistle-blowers to come forward. Opp. at 8.

In support of her Opposition to the request of the United States and the qui tam states to unseal the Amended Complaint, Littlewood submitted a Declaration (“Littlewood Decl.”) (ECF 17–4). There, Littlewood explains that she is the mother of two young children, and that her “family depends upon [her] employment income to meet [their] monthly expenses ...” Littlewood Decl. at 2. For this reason, she asks “for the Court's compassion” in retaining the seal. Id. at 3.

Although both the relator and the Government cite various cases regarding the presumption of public access to judicial documents, the parties have cited little appellate authority that directly applies to whether the seal in an FCA case may be maintained after the Government has decided whether to intervene. Noting the “relative absence of published cases in this Circuit on these issues,” the relator relies heavily upon an unreported decision, In re Policy Management Systems Corp., 67 F.3d 296, 1995 U.S.App. LEXIS 25900, 1995 WL 541623 (4th Cir. Sept. 13, 1995), discussed, infra.

The parties cite one reported appellate opinion that concerns maintenance of the seal in a qui tam case: Under Seal v. Under Seal, 326 F.3d 479 (4th Cir.2003). In Under Seal, the defendants in a qui tam case sought to maintain the seal after the Government decided to...