District Court Finds no Seal Breach if Relator Didn’t Reference “Qui Tam” Filing
In U.S. ex rel. Gale v. Omnicare, Inc. , 2013 US DIST LEXIS 80436 (N.D. Ohio June 7, 2013), the district court denied a motion by defendant to disqualify the relator, a former Omnicare employee, for breaches of the seal during the government’s investigation, including, in particular, alleged discussions about his qui tam action with his spouse and communications with work colleagues referencing a “whistle” and visits to a lawyer’s office.
The Court opined that “the False Claims Act’s seal requirements prevent the relator from publicly discussing the filing of the qui tam complaint, but not the nature and existence of the fraud.” Id. at *7 (emphasis added). Turning to the specific allegations at hand, the court ruled simply that “Gale’s comments to his wife do not qualify as public,” without further explanation. Id. at 10. With regard to Gale’s comments to fellow Omnicare employees, the court ruled that these comments did not breach the seal because there was no reference to his filing a qui tam complaint; references to meeting with lawyers concerning, or even filing a lawsuit against Omnicare fell short of such a disclosure. Id. at *10-*13. The court rejected defendant’s interpretation of the seal requirement to require dismissal of the relator if he or she “so much as mentions attorneys or a lawsuit with the defendant to anyone except the government.” Id. at *7. In sum, the court concluded that, even if Omnicare’s allegations about Gale’s disclosures were true, there was no breach of the seal because Gale “filed his complaint in camera and did not disclose the material evidence or allegations contained therein.” Id. at * 6.
Apparently key to the court’s holding was its conclusion that “Gale’s comments did not tip off Omnicare.” Id. at * 14. The court noted that the FCA’s legislative history revealed that the purpose of the seal is to permit the government to conduct a covert investigation without the defendant being tipped up, and advised that it “declines Omnicare’s invitation to expand ‘the procedural requirements of the act’ to include absolute silence as to the nature of the fraud or the existence any lawsuit—a silence that would go well beyond the act’s text and the purposes that guide both the act and [the controlling 6th Circuit case law].” Id.