U.S. ex rel. Schweizer v. Oce, N.V.

• Decision Date: 12 September 2008
• Docket Number: Civil Action No. 06-648 (RCL).
• Citation: 577 F.Supp.2d 169
• Parties: UNITED STATES of America ex rel. Stephanie SCHWEIZER, Plaintiff, v. OCE, N.V., Oce North America, Oce Imagistics, and Oce-USA Holding, Inc., Defendants.
• Court: U.S. District Court — District of Columbia

577 F.Supp.2d 169

UNITED STATES of America ex rel. Stephanie SCHWEIZER, Plaintiff, v. OCE, N.V., Oce North America, Oce Imagistics, and Oce-USA Holding, Inc., Defendants.

Civil Action No. 06-648 (RCL).

United States District Court, District of Columbia.

September 12, 2008.

COPYRIGHT MATERIAL OMITTED

David W. Sanford, Sanford, Wittels & Heisler, LLP, Washington, DC, H. Vincent McKnight, Jr., Altomease Rucker Kennedy, Ashcraft & Gerel, Washington, DC, for Plaintiff.

Kathleen H. McGuan, Steven David Tibbets, Reed Smith, LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION & ORDER

ROYCE C. LAMBERTH, Chief Judge.

Defendants ("Oce") have moved [39] to unseal all records filed by relators in this False Claims Act ("FCA") suit, in which the United States has declined to intervene. Relators oppose [41] this motion. The Court has considered the parties' various filings, the applicable law, and the entire record herein. For the reasons explained below, Oce's motion shall be GRANTED.

On April 7, 2006, relators filed their original complaint under seal. They alleged that Oce had run afoul of the FCA in two ways: first, it had knowingly sold noncompliant products to the federal government in violation of the Trade Agreements Act; and second, it had breached a contract clause guaranteeing the government a price equal to or less than the lowest price paid by non-government customers for the same product. (See Redacted Am. Compl. [30] ¶¶ 20, 32.) On June 2, 2008, after the United States notified the Court that it would not intervene, this Court unsealed relators' amended complaint and the government's notice of non-intervention. Various other, previously-filed documents remain under seal. Oce seeks to unseal all relators' filings, but its motion appears aimed at several exhibits to relators' original complaint, including their confidential disclosure statement. Relators' opposition likewise focuses on these documents.

In this Circuit, "the starting point in considering a motion to [un]seal court records is a `strong presumption in favor of public access to judicial proceedings.'" EEOC v. Nat'l Children's Ctr., 98 F.3d 1406, 1409 (D.C.Cir.1996) (quoting Johnson v. Greater Southeast Cmty. Hosp. Corp., 951 F.2d 1268, 1277 (D.C.Cir.1991)). This presumption is inherent in "[our] country's common law tradition." United States v. Hubbard, 650 F.2d 293, 314 (D.C.Cir.1980). In Hubbard, the Court of Appeals "identified six factors that might act to overcome this presumption" of public access. EEOC, 98 F.3d at 1409. These six factors, which guide this Court's analysis of the present motion,¹ are:

(1) the need for public access to the documents at issue; (2) the extent of previous public access to the documents; (3) the fact that someone has objected to disclosure, and the identity of that person; (4) the strength of any property or privacy interests asserted; (5) the possibility of prejudice to those opposing, disclosure; and (6) the purposes for which the documents were introduced during the judicial proceedings.

Id. The Court will examine each factor in turn, considering Oce's asserted need for the sealed materials as one facet of the need for public access.

(1) Need for public access

Oce acknowledges the absence of any specific public interest in this case. (Defs.' Mot. at 7.) Further, this matter has not yet reached the adjudication stage, at which the generalized need for public access reaches its apex. See Joy v. North, 692 F.2d 880, 893 (2d Cir.1982) ("An adjudication is a formal act of government, the basis of which should, absent exceptional circumstances, be subject to public scrutiny."). Nonetheless, because this case involves the FCA, the taxpaying public are, in effect, real parties in interest: the FCA exists "to enhance the Government's ability to recover [pecuniary] losses sustained as a result of fraud." S.Rep. No. 99-345, at 1 (1986), as reprinted in 1986 U.S.C.C.A.N. 5266, 5266. Moreover, our Court of Appeals has characterized public access to judicial records as "fundamental to a democratic state," in that such access "serves the important functions of ensuring the integrity of judicial proceedings in particular and of the law enforcement process more generally." Hubbard, 650 F.2d at 315 & n. 79.

These generalized needs for public access are somewhat abstract, but Oce has also asserted a concrete, particularized need to view the sealed documents. (See Defs.' Mot. at 8-11.) Now that relators' amended complaint has been unsealed, the Federal Rules of Civil Procedure oblige Oce to file a responsive pleading. See FED.R.CIV.P. 12(a). The Rules provide Oce the option of filing a pre-answer motion to dismiss the complaint based on, inter alia, lack of subject matter jurisdiction. See FED.R.CIV.P. 12(a)(4), (b)(1). Barring success on such a pre-answer dispositive motion, Oce must ultimately file an answer, in which it must state any defenses it has or reasonably believes it may have to relators' allegations, and must further admit or deny each allegation, "fairly respond[ing] to the substance of [each]." FED.R.CIV.P. 8(b). Oce argues that in either case, it needs access to the sealed exhibits to respond to relators' complaint.

To illustrate this asserted need, Oce offers two examples. First, due to a clerical error, Oce obtained an exhibits list that relators appended to their original complaint. Based on the titles included in that list, Oce observes that "several of the Exhibits appear to be published articles." (Defs.' Mot. at 8-9.) If relators have relied on publicly available information, they may not be "original sources" with standing to bring this FCA action, and Oce could properly move to dismiss for lack of subject matter jurisdiction. See, e.g., Rockwell Int'l Corp. v. United States, 549 U.S. 457, ___ _ ___, 127 S.Ct. 1397, 1405-09, 167 L.Ed.2d 190 (2007) (discussing original source limitation on jurisdiction in qui tam actions). Unless the exhibits are unsealed, however, Oce cannot evaluate this potential defense.²

Second, Oce notes that relators' complaint repeatedly refers to and incorporates certain attached exhibits which apparently contain information gleaned from Oce's own files. (Defs.' Mot. at 8; see also Redacted Am. Compl. ¶ 49.) For instance, several paragraphs discuss exhibit 1, which purports to "show[ ] the disparity between prices paid by non-government customers and the GSA price for the same product." (See Redacted Am. Compl. ¶¶ 39-45.) According to the complaint, this exhibit catalogues details of transactions between Oce and non-government customers. (See id. ¶¶ 40-41, 43-44.) Yet without viewing exhibit 1, Oce can neither admit nor deny that it contains the information relators allege it contains. Similarly, relators declare that exhibit 3, which purportedly "summariz[es] records from the Oce office in Florida," also documents "gap[s] between prices offered by Oce to non-government customers compared to the higher GSA schedule price." (Id. ¶ 47.) Again, without access to this exhibit, Oce cannot ascertain whether its records in fact reflect what relators allege they reflect. Thus, to craft a meaningful answer to relators' complaint, Oce needs access to—at least— those exhibits directly referenced in the complaint.

Because Oce has asserted a pragmatic, individualized need for access to the sealed documents, and in light of the more generalized need for public access to court records discussed above, the Court concludes this factor favors lifting the seal.

(2) Extent of previous public access

As noted above, Oce contends some of the sealed materials are publicly available, (Defs.' Mot. at 8-9), and in their opposition to Oce's motion, relators implicitly acknowledge as much, (see Opp'n at 7-8.) As they point out, however, "public availability of a few documents" does not necessarily warrant "unsealing [ ] the entire record." (Id.) Hence, to the extent certain sealed materials are already in the public domain, this factor favors unsealing those materials.

(3) Objections to unsealing

Relators object broadly to unsealing, but their arguments pertain only to their confidential disclosure statement and the exhibits to their original complaint. Specifically, they claim that the attorney-client and/or work product privileges protect the confidential disclosure statement and exhibits. (See Opp'n at 4-9.) Oce, however, argues that by filing these materials as attachments to their complaint, relators waived any privileges that might otherwise have protected them from disclosure.³ (See Reply at 3.)

"The attorney-client privilege protects confidential communications made between clients and their attorneys when the communications are for the purpose of securing legal advice or services." In re Lindsey, 148 F.3d 1100, 1103 (D.C.Cir. 1998). The work product doctrine complements the privilege, protecting documents and tangible things prepared in anticipation of litigation by or for a party's attorney. See FED.R.CIV.P. 26(b)(3); see also Hickman v. Taylor, 329 U.S. 495, 511, 67 S.Ct. 385, 91 L.Ed. 451 (1947). A party may forfeit either privilege, however, by voluntarily disclosing protected materials to a third party who lacks a common interest with the privilege holder. Permian Corp. v. United States, 665 F.2d 1214, 1219 (D.C.Cir.1981); United States v. Am. Tel. & Tel. Co., 642 F.2d 1285, 1299-1300 (D.C.Cir.1980).

Thus, for purposes of this Court's Hubbard analysis, relators' objection is cognizable only if: (1) the attorney client and/or work product privileges apply to the contested documents; and (2) relators have not waived those privileges by filing the documents along with their complaint. The Court need not examine the first issue because it concludes relators have voluntarily waived any privilege that might have applied.

Stated succinctly, the question before the Court is whether filing documents under seal along with one's complaint waives the attorney-client and work...