BOTTOM LINE: Plaintiffs who successfully obtained a declaratory judgment vindicating their rights under the Americans with Disabilities Act were entitled to attorneys’ fees related to their successful claims for declaratory relief, pursuant to the statute’s fee-shifting provision.
CASE: Feldman v. Pro Football, Inc., Civil Action No. 8:06-cv-2266, (filed Aug. 30, 2011) (Judge Williams). RecordFax No. 11-0830-40, 5 pages.
FACTS: Plaintiffs were three individuals who were deaf or hard of hearing and who regularly attended Redskins games at FedEx Field. Defendants Pro Football, Inc. and WFI Stadium, Inc., operated, respectively, the Washington Redskins football team and FedEx Field, where the Redskins played home games.
On Aug. 31, 2006, Plaintiffs filed suit against Defendants in district court, arguing that the Americans with Disabilities Act (“ADA”) obligated defendants to provide auxiliary access to the content of broadcasts from FedEx Field’s public address system. Soon after Plaintiffs filed their complaint, Defendants captioned most of the aural content to which Plaintiffs sought access. Defendants argued that the case was moot because they had already voluntarily provided accommodations to Plaintiffs, although Defendants maintained that they had no obligation under the ADA to do so.
The district court found that the case was not moot and granted summary judgment to Plaintiffs, declaring that Title III of the ADA requires defendants to provide deaf and hard of hearing fans equal access to the aural information broadcast over the stadium bowl public address system at FedEx Field. The court’s holding rested in part on the fact that Defendants were not providing plaintiffs with access to the lyrics to music played over the stadium’s public address system.
Defendants appealed the court’s summary judgment ruling to the United States Court of Appeals, 4th Circuit. The 4th Circuit affirmed the declaratory judgment requiring Defendants to provide auxiliary access to the aural content broadcast over FedEx Field’s public address system. Plaintiffs first moved for attorney’s fees on Dec. 15, 2008, prior to Defendants’ appeal to the 4th Circuit.
After the 4th Circuit entered its judgment affirming the district court’s decision, Plaintiffs again moved for attorney’s fees as authorized by the ADA, 42 U.S.C. §12205 and in accordance with Local Rule 109.2. Furthermore, Plaintiffs moved to strike settlement communications referenced by Defendants in Defendants’ response brief as privileged, or in the alternative, to supplement the record to provide a more balanced view of the conduct of the settlement negotiations.
The district court granted Plaintiffs’ motion for attorneys’ fees and accordingly denied Plaintiffs’ motion to strike as moot.
LAW: There was no dispute that Plaintiffs were the prevailing party within the meaning of 42 U.S.C. §12205. Defendants also did not contest that the hourly rates requested by Plaintiffs were reasonable and that the number of hours for which compensation was sought were appropriate.
However, Defendants argued that it was unreasonable for Plaintiffs to pursue this litigation for so long and at such a cost after Defendants had already agreed to and in fact did provide auxiliary services for all of the aural content that was expressly requested in Plaintiffs’ complaint. Defendants further contended that Plaintiffs had a very limited degree of success in the action because Defendants had already voluntarily provided the sought-after accommodations to Plaintiffs six weeks after the case was filed. For this reason, Defendants requested that the court award at most 25 percent of Plaintiffs’ attorneys’ fees. Plaintiffs, in turn, contended that their victory was significant and their case an important one that would provide guidance to other courts developing the law of the ADA. Plaintiffs argued that the public purpose served by their case made an award of attorneys’ fees reasonable.
The district court found that Plaintiffs had obtained the primary relief they sought: declaratory judgment vindicating their rights under the ADA. Plaintiffs sought only those attorneys’ fees related to their successful claims for declaratory relief. Defendants, on the other hand, merely restated the same mootness arguments that had been rejected in the district court’s summary judgment opinion. Because Defendants failed to provide most of the services sought by Plaintiffs until after suit was brought and were free to stop at any time absent a declaratory judgment, and because Defendants maintained throughout the suit that they were not required by Title III of the ADA to provide deaf and hard of hearing fans any auxiliary services to ensure equal access to the aural information at FedEx Field other than the assistive listening devices that did not help Plaintiffs, Defendants’ mootness argument remained unpersuasive.
The district court’s 2008 opinion in this matter was the first to declare that the ADA requires a sports venue to make aural information within the stadium bowl accessible to deaf and hard of hearing fans. Thus, the court’s ruling was an important rather than a de minimis victory for Plaintiffs.
Accordingly, Plaintiffs’ motion for attorneys’ fees and costs was granted.
COMMENTARY: Because the district court reached its decision regardless of the settlement disclosures made by Defendants in their response brief, the district court denied Plaintiffs’ motion to strike those disclosures or supplement the record as moot.
PRACTICE TIPS: A prevailing plaintiff in an ADA action is generally entitled to recover fees paid to an attorney unless special circumstances render such an award unjust. Thus, in an action seeking recovery of attorneys’ fees, the first determination to be made by the reviewing court is whether the plaintiff is a prevailing party. The second determination is whether an award of attorney’s fees should be granted to the prevailing party and what amount would be reasonable under the specific circumstances of the case; the district court has significant discretion in determining the amount of a statutory fee award.
False Claims Act
BOTTOM LINE: In qui tam action brought pursuant to the False Claims Act, district court refused to grant realtor’s request to maintain the seal with respect to the complaint because realtor failed to demonstrate good cause and failed to overcome the strong presumption in favor of public access to judicial records involving fraudulent claims against the government.
CASE: United States v. King Pharmaceuticals, Inc., Civil No. ELH-10-973, (filed Aug. 29, 2011) (Judge Hollander). RecordFax No. 11-0829-40, 20 pages.
FACTS: Lauri Littlewood, the realtor, filed this qui tam action on April 16, 2010, on behalf of the United States and various states, against King Pharmaceuticals, Inc., Alpharma, Inc., and IBSA Biochemique SA, pursuant to the False Claims Act. Since 2007, Littlewood had been employed as a sales representative for Alpharma and then King, selling various pain management products. She alleged that the defendants engaged in an illegal scheme to promote off-label uses of a non-steroidal, topical, anti-inflammatory drug, FLECTOR Patch. 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. The qui tam states included over a dozen states, as well as the District of Columbia.
In 2007, Alpharma purchased the exclusive rights from IBSA to market FLECTOR Patch in the United States. King acquired Alpharma’s assets and liabilities in December 2008. On April 19, 2011, the United States and the qui tam states filed a Notice of Intent to Decline Intervention, which was amended on April 21, 2011. On April 28, 2011, the realtor filed a voluntary dismissal of the underlying suit, without prejudice, pursuant to Federal Rule of Civil Procedure 41(a). The United States and the qui tam states consented to the dismissal without prejudice.
In the Government’s Amended Notice of Election to Decline Intervention, the Government requested the unsealing of the realtor’s Amended Complaint, the Amended Notice, and its proposed Order, but asked that the Court maintain the seal for all other papers filed in the action, which included two motions filed by the Government for extension of the time to decide whether to intervene. The realtor opposed the Government’s request to unseal and urged the Court to deny the Government’s request to unseal.
The district court denied the requests of both parties to maintain the seal as to any portion of the record, and ordered that the case be unsealed in its entirety.
LAW: 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, 131 S.Ct. 1885, 1889 (2011). Under 31 U.S.C. §3730(b)(2), the qui tam realtor 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, slip op. at 8 (4th Cir. Mar. 28, 2011). 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., slip op. at 9. 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, slip op. at 9. 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 realtor remains a party to the action. Id., slip op. at 10.
Unlike numerous other cases involving the FCA’s seal provisions, the case at bar did not involve a plaintiff or a defendant urging full disclosure. To the contrary, the realtor here opposed all unsealing, the defendant was presumably unaware of the suit, and the Government urged an indefinite seal solely as to its extension requests. The proceedings with respect to this case, involving allegations of fraudulent reimbursement claims submitted to federal health care programs, fell well within the bounds of that which citizens might wish to observe. United States ex rel. Costa v. Baker & Taylor, Inc., 955 F.Supp. 1188, 1190 (N.D.Cal.1997).
Littlewood argued that, because she filed a Notice of Dismissal of her suit before serving it on defendants, the 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 herself and others. In this regard, Littlewood noted that she remained employed as a sales representative for King, and argued that if she were to lose her anonymity, the harm that would befall her would be swift and severe. Littleton argued that she should not be penalized for having come forward, as she likely would be if the case were to be unsealed. Further, Littlewood contended that public policy supported maintaining the seal to encourage other potential whistle-blowers to come forward.
The 4th Circuit’s most recent pronouncement on the seal provisions of the FCA was ACLU v. Holder, ––– F.3d ––––, No. 09–2086, slip op. at 8 (4th Cir. Mar. 28, 2011). In Holder, the appellants challenged the 60–day mandatory seal provision under 31 U.S.C. §3730(b)(2), claiming that it facially violated the First Amendment and the Constitution’s separation of powers. Holder, slip op. at 11. In particular, they claimed that the seal provision violated the public’s First Amendment right of access to judicial proceedings. Id.The Holder Court assumed, without deciding, that the First Amendment right of access extends to a qui tam complaint sealed in accordance with 31 U.S.C. §3730. Id., slip op. at 13. Moreover, it recognized that the United States has a compelling interest in protecting the integrity of ongoing fraud investigations. Id., slip op. at 13. It further determined that the seal provisions are “narrowly tailored” to serve that compelling Government interest. Id., slip op. at 14.
The Holder decision reflects a fundamental distinction between FCA suits and ordinary civil disputes between private parties. Qui tam suits under the FCA are brought in the name of the United States. By definition, an FCA complaint alleges a fraud upon the public, and, as such, FCA cases inherently implicate the public interest.
Littlewood did not cite any case in which a court adopted arguments similar to hers for maintaining the seal on a voluntarily dismissed qui tam action, and the Court found none. However, the Court’s research did uncover strikingly similar cases in which district courts rejected arguments similar to those advanced by the realtor. In Herrera v. Bon Secours Cottage House Services, the realtor initiated a qui tam action under the FCA and Michigan’s Medicaid False Claims Act against her former employer, Bon Secours Cottage House Services, alleging that the defendant fraudulently submitted inflated and inaccurate bills to Medicare and Medicaid. United States ex rel. Herrera v. Bon Secours Cottage House Services, 665 F.Supp.2d 782, 782-83 (E.D.Mich.2008). As in this case, both the Government and the State of Michigan declined to intervene, and, thereafter, the realtor filed a motion to voluntarily dismiss the case, without prejudice, and to maintain the seal. Id.
Although the Government agreed to the voluntary dismissal, it objected to the realtor’s request for a permanent seal. Id. In urging the court to maintain the seal, the realtor explained that she remained actively employed in the health care community, and was in fear for her economic safety if she was exposed as a whistle-blower. Id. at 784. In analyzing the issue, the court looked to the statutory text of the FCA and the purpose of the seal provisions, noting that while the FCA clearly encourages private enforcement suits, there is nothing in the FCA evincing a congressional intent to impose a permanent seal over all qui tam suits where a realtor seeks to voluntarily dismiss the action after the Government declines to intervene. Rather, the text of the FCA provides that the complaint will remain sealed for at least 60 days while the Government conducts its investigation to determine whether it will intervene. Id. at 784.
The Bon Secours Court stated that the imposition of a 60–day time period for sealing qui tam complaints reflects the desire of Congress to have the seal lifted after the Government conducts its initial investigation and decides whether to intervene. The FCA allows the Government to seek an extension of the 60–day time period for maintaining the seal, suggesting that the seal was intended to allow the Government an opportunity to adequately investigate the defendant’s alleged fraud, not to protect the identity of realtors. Id.
The Bon Secours Court also recognized that the presumption in favor of public access to judicial records is particularly strong when the record pertains to matters of concern to the public, such as allegations of fraud against the Government. Id. Accordingly, the Court concluded that the realtor failed to demonstrate that the FCA authorizes the maintenance of a permanent seal with regard to qui tam complaints in which the Government decides not to intervene. Bon Secours, 665 F.Supp.2d at 786.
Similarly, in the case at bar, there was no basis to maintain the seal with respect to the Amended Complaint. At best, the realtor expressed hypothetical concerns about possible retaliation by her employer and damage to her career prospects.
Accordingly, the court denied Littlewood’s request to maintain the seal as to the entirety of this case.
COMMENTARY: Although the Government opposed Littlewood’s request to maintain the seal as to the Amended Complaint, it asked the Court to maintain the seal with respect to its two motions for extensions of time to investigate the allegations. However, while §3730(b)(3) of the FCA permits the Government to petition the Court for extensions of the evaluation period and the time for which the complaint remains under seal, those extensions are granted only upon the showing of good cause.
Here, the Government failed to present any reason to maintain the seal with respect to its motions for extension. As such, the Court denied the Government’s request to unseal only select documents in this case.
PRACTICE TIPS: The strong presumption in favor of public disclosure of court records can be overcome only by a significant countervailing interest. Courts have identified three exceptions to the presumption of public access: (1) where disclosure may be used to gratify private spite or promote public scandal; (2) where disclosed records may serve as reservoirs of libelous statements for press consumption; or (3) where disclosure might reveal trade secrets.