Schreck Discusses Challenges to Seal Extensions in False Claims Act Cases

White Collar Defense & Investigations partner Debra Schreck was quoted in the Bloomberg Law article, “Extending Secrecy in Whistleblower Probes Divides DOJ, Judges.” The article discusses conflicting views on the practice of the U.S. Department of Justice (DOJ) to seek repeated extensions of the seal applicable to False Claims Act (FCA) cases.

The FCA itself provides that complaints filed under the act are to remain under seal for 60 days while the government investigates. The government may, for good cause shown, ask the court for an extension of the time during which the complaint remains under seal. Those requests by the government for extensions are quite common, often prolonging investigations for months, if not years. Recent decisions have challenged the government practice of seeking multiple seal extensions, highlighting the often competing interests of parties (and courts) on the matter. Schreck told Bloomberg Law that she expects to see “more challenges to government requests for seemingly indefinite seal extensions—likely more in connection with summary judgment decisions or decisions challenging trial verdicts,” along the lines of a recent Fifth Circuit decision which reduced a company’s fraud penalty by more than half on the grounds that DOJ took too long before joining the lawsuit.

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