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Record No. 09-2086

____________________

In the United States Court of Appeals for the Fourth Circuit

_________________

AMERICAN CIVIL LIBERTIES UNION; OMB WATCH; and

GOVERNMENT ACCOUNTABILITY PROJECT,

Plaintiff-Appellants,
v.

ERIC HOLDER, in his official capacity as Attorney General of the United

States; and FERNANDO GALINDO, in his official capacity as Clerk of the
Court in the United States District Court, Eastern District of Virginia,

Defendant-Appellees.
______________________

On Appeal from the United States District Court

For the Eastern District of Virginia
____________________

APPELLANTS’ PETITION FOR REHEARING AND

REHEARING EN BANC

Christopher A. Hansen Rebecca K. Glenberg (VSB No.

Jameel Jaffer 44099)
Benjamin Wizner American Civil Liberties Union of
American Civil Liberties Union Foundation Virginia Foundation, Inc.
125 Broad Street, 18th FL 530 E. Main Street, Suite 310
New York, New York 10004-2400 Richmond, Virginia 23219
(212) 549-2500 (804) 644-8080
(212) 549-2651 (FAX) (804) 649-2733 (FAX)
chansen@aclu.org rglenberg@acluva.org
jjaffer@aclu.org
bwizner@aclu.org
Counsel for Appellants
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TABLE OF CONTENTS

TABLE OF AUTHORITIES ....................................................................... ii

INTRODUCTION ........................................................................................ 1

ARGUMENT................................................................................................. 3

I. The Panel Should Clarify Its Opinion on the Scope of the

Sealing Provision............................................................................. 3

II. The Panel’s Decision is Contrary to This Court’s Decision in

Washington Post.............................................................................. 4

III. The Panel’s Decision is Contrary to the Supreme Court’s

Decision in Seattle Times and is Internally Inconsistent................. 6

CONCLUSION ............................................................................................. 9

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TABLE OF AUTHORITIES

Cases
Columbus-Am. Discovery Grp. v. Atl. Mut. Ins. Co.,
203 F.3d 291 (4th Cir. 2000) ....................................................................... 2

Elrod v. Burns,
427 U.S. 347 (1976)..................................................................................... 6

Rushford v. New Yorker Magazine, Inc.,

846 F.2d 249 (4th Cir. 1988) ....................................................................... 1

Seattle Times Co. v. Rhinehart,

467 U.S. 20 (1984)................................................................................... 7, 8

Stone v. Univ. of Md. Med. Sys. Corp.,

855 F.2d 178 (4th Cir. 1988) ....................................................................... 1

Va. Dept. of State Police v. Wash. Post,

386 F.3d 567 (4th Cir. 2004) .............................................................. passim

Vt. Agency of Natural Res. v. U.S. ex rel. Stevens,

529 U.S. 765 (2000)..................................................................................... 1

Statutes
31 U.S.C. § 3730..................................................................................... 1, 3, 7

Rules
Fed. R. Civ. P. 26(c) ....................................................................................... 7

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INTRODUCTION

The federal court system is home to a secret docket of cases,

inaccessible to the public and the press, in which each complaint alleges

fraud upon the public fisc—and some allege ongoing fraud or risk to the

public. Compl. at 12 (A-17). The docket consists of cases filed under the

False Claims Act, 31 U.S.C. § 3730(b)(2), which allows qui tam cases in

which relators who allege fraud committed against the government can, if

the case is successful, receive a portion of any recovery. Vt. Agency of

Natural Res. v. U.S. ex rel. Stevens, 529 U.S. 765 (2000). According to the

government, approximately 1,000 FCA qui tam complaints are under seal,

completely hidden from the public eye. Compl. at 2 (A-7).

A panel of this Court upheld this secrecy regime, one judge

dissenting, against a challenge under both the First Amendment and the

common law. ACLU v. Holder, No. 09-2086 (4th Cir. Mar. 28, 2011). Until

this decision, this Court had been in the forefront of assuring that

proceedings of the nation’s courts be open and transparent. Va. Dept. of

State Police v. Wash. Post, 386 F.3d 567, 575 (4th Cir. 2004) (hereinafter

Washington Post); Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 181

(4th Cir. 1988); Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 253

(4th Cir. 1988); Columbus-Am. Discovery Grp. v. Atl. Mut. Ins. Co., 203

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F.3d 291, 303 (4th Cir. 2000). In the opinion of counsel for plaintiffs-

appellants, the majority opinion represents a departure from these holdings

of this Court and holdings of the Supreme Court and represents a question of

exceptional importance. More specifically, plaintiffs believe the majority

erred in at least 1 two respects:

(1) The majority adopted a view of the First Amendment that is

directly contrary to this Court’s holdings in Washington Post. The majority

justified the sealing provisions by asserting that they are necessary to assure

that a government investigation is not impeded. Slip op. at 12-17. But the

majority nowhere explained how a government investigation would be

impaired by a relator’s disclosure that he had filed an FCA complaint (which

the statute prohibits), but would not be impaired by a relator’s disclosure of

the underlying fraud allegations (which the statute permits). Moreover, the

majority held that a blanket secrecy, applied even in cases where everyone

concedes it is unnecessary, is narrowly tailored in part because it lasts for

only 60 days. Slip op. at 14.

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The majority also erred in finding that plaintiffs did not have standing to
raise the constitutionality of the gag on relators. Slip op. at 18. If the Court
grants en banc review of the case, plaintiffs would seek to persuade the en
banc court of that error as well.

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(2) The majority correctly required a compelling state interest and

narrow tailoring to justify sealing the initial filing of a complaint and docket

sheet, but again, directly contradicting Washington Post, it inexplicably and

contradictorily required only a far lesser “good cause” standard for

continuing the seal beyond 60 days. Slip op. at 15-16.

For those reasons plaintiffs respectfully request rehearing and

rehearing en banc.

ARGUMENT

I. The Panel Should Clarify Its Opinion on the Scope of the Sealing

Provision.

Before addressing the panel’s errors of law, Plaintiffs-Appellants

respectfully direct this Court’s attention to a potential ambiguity in the

panel’s opinion on a matter of critical importance, and request that either the

panel or the en banc court provide simple clarification. The FCA provides

that the “complaint shall be filed in camera, shall remain under seal for at

least 60 days, and shall not be served on the defendant until the court so

orders.” 31 U.S.C. § 3730(b)(2). The government has in the past interpreted

this provision to prevent relators from disclosing not only that a complaint

has been filed, but also the underlying facts of the fraud, and has even

threatened criminal prosecution for such disclosures. Compl. at 11-12 (A-

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16-17). The government has since changed its view and now asserts that a

relator may discuss the underlying facts and may still recover under the

FCA, so long as he does not disclose the existence of the complaint. Slip op.

at 30 (Gregory, J., dissenting). In plaintiffs’ view, the majority correctly

holds that the government’s current interpretation is the correct one. Slip op.

at 16, 20. However, the majority leaves open the question of whether a

relator who does disclose the underlying facts -- but does not disclose that an

FCA complaint has been filed -- waives any right to recover under the FCA.

Plaintiffs respectfully ask the Court to fully adopt the government’s current

interpretation and clarify that a relator who does disclose the underlying

facts may still recover under the FCA.

II. The Panel’s Decision is Contrary to This Court’s Decision in

Washington Post.

In Washington Post, this Court held that (1) a conclusory assertion

that secrecy is needed to avoid impeding a government investigation is

insufficient under the First Amendment, 386 F.3d at 573 (“General concerns

stated in a conclusory fashion are not sufficient to constitute a compelling

government interest, and do not grant the Court a sufficient basis [to] deny

public access to documents filed in this action.”), and (2) sealing of court

records can be done only after first notifying the public of an intention to

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seal the records and then making an individualized determination of the

propriety of the seal. Id. at 576. The majority decision contravenes both of

these holdings.

The majority found that the compelling governmental interest that

justified the sealing of the docket sheet and complaint in FCA cases was

“protecting the integrity of ongoing fraud investigations.” Slip op. at 13.

But the opinion does not explain how the FCA’s categorical seal

accomplishes the government’s interest in protecting fraud investigations.

That omission is particularly glaring in light of the majority’s correct

holding that the FCA does not prohibit a relator from discussing with the

press that fraud has occurred and even providing documentation -- so long as

he does not divulge that a complaint has been filed. Congress was

concerned that the target not be tipped off (slip op. at 8), but if the relator

does provide evidence of the fraud and the name of the alleged target to the

public, the target will undoubtedly be tipped off. The majority offers no

further explanation, expressly violating this Court’s holding in Washington

Post.

In Washington Post, this Court also held that each time a court

considers the sealing of court documents it must follow certain procedures,

including notice to the public and individualized determinations. 386 F.3d at

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576. The majority in this case upholds a system that provides neither. It

does so largely on a basis that is inconsistent with well established First

Amendment law: that the seal remains in place for only 60 days. See Elrod

v. Burns, 427 U.S. 347, 373-374 (1976) (“The loss of First Amendment

freedoms, for even minimal periods of time, unquestionably constitutes

irreparable injury.”)

Plaintiffs have never suggested that all sealing of court records

violates the First Amendment. Plaintiffs offered several alternatives that

could be adopted by Congress that would preserve the interests of both the

United States and relators and still ensure the individualized determinations

correctly required by this Court in Washington Post. Because the majority’s

holdings directly contradict this Court’s holdings in that case, en banc

review is warranted.

III. The Panel’s Decision is Contrary to the Supreme Court’s Decision

in Seattle Times and is Internally Inconsistent.

The majority correctly holds that the initial gag provision must be

subjected to compelling interest/narrow tailoring, and that it is

unconstitutional unless it can be justified by a compelling state interest and

is narrowly tailored. Slip op. at 13. However, that initial gag applies only

for the first 60 days. After that, the statute provides that “The Government

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may, for good cause shown, move the court for extensions of the time during

which the complaint remains under seal… .” 31 U.S.C. § 3730(b)(3)

(emphasis added). Plaintiffs challenged this “good cause” provision, insofar

as it permits the government to keep entire cases under seal without

satisfying strict scrutiny. Compl. at 7 (A-12) The majority finds this

provision constitutional, holding that “the ‘good cause’ standard in section

3730(b)(3) is the same standard contained in Rule 26 of the Federal Rules of

Civil Procedure, which permits a federal court to require that certain matters

be sealed. See, Fed. R. Civ. P. 26(c); Seattle Times Co. v. Rhinehart, 467

U.S. 20, 36-37 (1984). . . .” Slip op. at 15.

The majority does not even attempt to explain why “compelling

interest/narrowly tailoring” is the First Amendment test for sealing a docket

sheet and complaint for an initial 60 days but a lesser standard of “good

cause” is the First Amendment test for sealing a docket sheet and complaint

indefinitely thereafter. Slip op. at 12, 15-16. (Many FCA complaints

remain sealed for years. Compl. At 8 (A-13)) Indeed, the majority justifies

the initial sealing as narrowly tailored in part on the basis that it is for only

60 days, impliedly suggesting that if the compelling interest/narrow tailoring

standard applied to the extensions of section 3730(b)(3), that section would

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be unconstitutional, as indeed it is. To avoid that conclusion, the court

inexplicably changes the standard, purporting to rely on Seattle Times.

But Seattle Times in no way supports the majority’s contention. In

Seattle Times, the Supreme Court carefully defined the question presented to

apply solely to discovery material. “This case presents the issue whether

parties to civil litigation have a First Amendment right to disseminate, in

advance of trial, information gained through the pretrial discovery process.”

467 U.S. at 22. The Court repeatedly distinguished discovery material from

other court documents on the grounds that discovery documents are uniquely

obtained solely as a matter of court processes, id. at 32, and “are not public

components of a civil trial.” Id. at 33. The Court concluded that “our

consideration of the provision for protective orders contained in the

Washington Civil Rules takes into account the unique position that such

orders occupy in relation to the First Amendment.” Id. at 34.

In holding that Seattle Times permits a court to seal a docket sheet and

complaint on the same basis as a discovery document, the majority ignores

the holdings and the rationales of Seattle Times. This Court has recognized

that the First Amendment does not permit sealing of at least some court

documents upon this lessened justification. Washington Post, 386 F.3d at

575-76 (documents attached to summary judgment can be sealed only upon

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compelling state interest, narrowly tailored). The majority’s holding is in

direct conflict with prior decisions of this Court and the Supreme Court and

merits en banc review.

CONCLUSION

For the foregoing reasons, plaintiffs respectfully ask that (1) the panel

clarify its opinion, and (2) the court grant en banc review.

Respectfully submitted this 10th day of May, 2011.

/s/ Rebecca K. Glenberg

Rebecca K. Glenberg (VSB No. 44099)
American Civil Liberties Union of Virginia
Foundation, Inc.
530 E. Main Street, Suite 310
Richmond, Virginia 23219
(804) 644-8080
(804) 649-2733 (Fax)
rglenberg@acluva.org

Christopher A. Hansen
Jameel Jaffer
Ben Wizner
American Civil Liberties Union
Foundation
125 Broad Street, 18th FL
New York, New York 10004-2400
(212) 549-2606
(212) 549-2651 (FAX)
chansen@aclu.org
jjaffer@aclu.org
bwizner@aclu.org

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CERTIFICATE OF SERVICE

I hereby certify on this 10th day of May, 2011, that I electronically filed the
foregoing Appellants’ Petition for Rehearing and Rehearing En Banc with
the Court using the CM/ECF system, which caused notice to be served on
the following parties:

Tony West Richard W. Sponseller

Neil H. MacBride U.S. Attorney’s Office
Douglas Neal Letter 2100 Jamieson Ave.
Civil Division, Room 7214 Alexandria, Virginia 22314
U.S. Department of Justice (703) 299-3700
950 Pennsylvania Ave., NW
Washington, DC 20530
(202) 514-4815

Counsel for Defendant-Appellees

/s/ Rebecca K. Glenberg

Rebecca K. Glenberg
American Civil Liberties Union of Virginia
Foundation, Inc.
530 E. Main Street, Suite 310
Richmond, Virginia 23219
(804) 644-8080
(804) 649-2733 (Fax)
rglenberg@acluva.org