United States of America Ex Rel Sanjay Grover v. Related Companies, L.P. , 4 F. Supp. 3d 21 ( 2013 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, ex rel.
SANJAY GROVER
Plaintiff,
Civil Acti0n No. 11-1861 (CKK)
v.
RELATED COl\/IPANIES, LP, et al..
Defendants.
MEMORANDUM OPINION
(November l4, 2013)
Presently before the Court is the Relator’s [l l] Motion to Maintain Seal on this Case or,
in the Alternative, for Leave to File a Redacted Amended Complaint. The Government opposes
the Relator’s motion to maintain the case under seal to the extent the Relator seeks to keep the
complaint, the Relator’s request for dismissal, and the Government’s consent to dismissal under
seal. Upon consideration of the pleadings,l the relevant legal authorities, and the record as a
whole, the Court DENlES the Relator’s Motion for the reasons set forth below.
I. BACKGR()UND
Relator Sanjay Groover ("Relator") filed this action on October 2l, 201 l, under the False
Claims Act, 31 U.S.C. § 3729, et seq., alleging that his coworkers, employees of Fannie Mae,
had conspired to purposefully undervalue property assets, transfer the property to private
ownership, and then personally profit from reselling the properties, at the expense of the United
States Treasury. Compl. 111 l-4, ECF No. [l]. Pursuant to the qui ram provisions of the FCA,
Relator filed this matter under seal so the United States could investigate these allegations On
l Relator’s Mot. to Maintain Seal, ECF No. [l l]; Government’s Opp’n., ECF No. [14]; Relator’s
Reply, ECF No. [15].
June 27, 2013, prior to the United States informing the Court of its decision whether or not to
intervene in the case, Relator filed a Request for Voluntary Dismissal Without Prejudice. See
ECF No. [lO]. The Relator also moved the Court to allow the case to remain under seal
permanently or, in the alternative, to allow Relator to file a redacted Amended Complaint. See
Rel.’s Mot. to Maintain Seal or, in the Alternative, for Leave to File a Redacted Amended
Complaint, ECF No. [l l] ("Rel.’s Mot."). The United States consented to the voluntary
dismissal but objected to Relator’s request to keep the case under seal. See Govt.’s Notice of
Consent to Dismissal and Motion to Temporarily Maintain the Seal, ECF No. [12]. The
Government instead asked that the pleadings that do not reflect its investigative efforts_i.e., the
Complaint, Relator’s Voluntary Dismissal, and the United States’ Consent to Entry of Voluntary
Dismissal-be unsealed, but that all other filings remain sealed. See z'a’. at 2. On July l, 2013,
the Court dismissed this case without prejudice and ordered that the parties fully brief the sealing
issue, which is now complete. 7/1/2013 Order, ECF No. [13].
II. DISCUSSION
"[T]he decision as to access (to judicial records) is one best left to the sound discretion of the
trial court, a discretion to be exercised in light of the relevant facts and circumstances of the
particular case." United States v. Hubbara’, 650 F.Zd 293, 316-17 (D.C. Cir. l980) (quoting
Nixon v. Warner Commc ’ns., ]nc., 435 U.S. 589, 599 (1978)). ln this Circuit, "the starting point
in considering a motion to seal court records is a ‘strong presumption in favor of public access to
judicial proceedings."’ EEOC v. Nat’l Children’s Cir. Inc., 98 F.3d l406, 1409 (D.C. Cir.l996)
(quoting Johnson v. Greater Se. Cmly. Hosp. Corp., 951 F.Zd 1268, 1277 (D.C. Cir. l99l)). ln
Hubbara', the D.C. Circuit identified six factors that might act to overcome this presumption:
(l) the need for public access to the documents at issue; (2) the extent of previous
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public access to the documents at issue; (3) the fact that someone has objected to
disclosure, and the identity of that person; (4) the strength of any property and
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.
Nat’l Chz'ldren’s Ctr., 98 F.3d at l409 (citing Hubbara’, 650 F.2d at 317-22). The Court will
examine each factor in turn.
A. Application of the Hubbard Factors
i. Need for Public Access
Public access to judicial records is "fundamental to a democratic state" and "serves the
important functions of ensuring the integrity of judicial proceedings in particular and of the law
enforcement process more generally." Hul)bard, 650 F.2d at 315 & n. 79; see also Nz`xon, 435
U.S. at 597 (recognizing a common law right to view court documents). Public access may be
denied, however, "to protect trade secrets, or the privacy and reputation of victims of crimes, as
well as to guard against risks to national security interests, and to minimize the danger of an
unfair trial by adverse publicity." Hubbard, 650 F.2d at 315-16 (internal citations omitted).
"The presumption in favor of public access to judicial records is strongest when ‘the documents
at issue [are] . . . specifically referred to in a trial judge’s public decision."’ Nat’l Chz`la’ren’s
Ctr., 98 F.3d at l409 (_quoting Hubbarcz', 650 F.2d at 318). However, "[c]ases brought under the
False Claims Act [also] receive special consideration by the courts because they ‘inherently
777
implicate the public interest. United States ex rel. Durham v. Prospect Waterproofing, Inc.,
818 F. Supp. 2d 64, 67 (D.D.C. 2011) (quoting United States ex rel. Littlewooa’ v, King
Pharmaceuticals, Inc., 806 F. Supp. 2d 833, 840 (D.Md. 201 l)). In FCA cases, taxpayers are, in
effect, "real parties in interest" because they have a strong interest in fraud perpetrated against
the United States that results in monetary loss to the Government. United States ex rel Schweizer
3
v. OCE, N. V., 577 F. Supp. 2d 169, 172 (D.C. Cir. 2008).
The Relator contends that the presumption of public access to judicial proceedings is not
implicated in the present case because this case has not been litigated-only the Complaint has
been filed, but not served_and thus there has been no judicial decision-making that the public
need understand. Rel.’s Mot. at 8. 1n making this argument, however, the Relator ignores the
inherent public interest in being able to access records in FCA cases. See Durham, 818 F. Supp.
2d at 67,' Schwez'zer, 577 F. Supp. 2d. at 172. lndeed, the public’s interest in the disclosure of
documents in this case is particularly strong given that the case implicates improprieties with
taxpayer money by one of the largest entities in the mortgage and financial services industry in
the wake of the 2008 housing crisis. By filing a qui ram action, the Relator purported to be
bringing a claim on behalf of and in the interest of the public; the fact that the Relator, himself, is
abandoning the litigation does not lessen or change the public’s interest in hearing allegations
that the Government was defrauded of millions of dollars. See Durham, 818 F. Supp. 2d at 67
("Voluntary Dismissals of FCA actions do not render the allegations any less relevant to the
taxpaying public."). Accordingly, given the "generalized needs for public access" in FCA cases,
the Court finds that this factor weighs in favor of lifting the seal. Schweizer, 577 F. Supp. 2d at
173.
ii. Extent of Previous Public Access
Previous public access to the sealed filings "is a factor which may weigh in favor of
subsequent [public] access." Hubbara’, 650 F.2d at 318. In the instant case, the public did not
have prior access to the pleadings because the Complaint was filed under seal in accordance with
the procedures set forth in the FCA. See 31 U.S.C. § 3730(b)(2). Accordingly, this factor is
neutral, neither favoring nor disfavoring lifting the seal. See Durham, 818 F.Supp.2d at 68.
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iii. Objection to Disclosure
"[T]he fact that a party moves to seal the record weighs in favor of the party’s motion."
Zapp v. Zhenli Ye Gon, 746 F. Supp. 2d 145, 149 (D.D.C. 2010). Thus, as the Relator objects to
the disclosure of the pleadings, the Court finds that this factor weighs in favor of maintaining the
seal.
iv. Strength of Interests Asserted
The fourth Hubbara' factor requires the Court to "assess the strength of any property or
privacy interests voiced by the moving party." Durham, 818 F.Supp.2d at 68. in Hubbara', the
D.C. Circuit considered "the objecting party’s privacy interest iri the particular documents . . .
rather than the effect that unsealing the documents would have on the party’s property and
privacy interests generally . . . ." Frieclmarz v. Sebelius, 672 F. Supp. 2d 54, 60 (D.D.C. 2009)
(emphasis added). The Relator contends that two interests would be harmed by unsealing the
pleadings. First, the Relator argues that his future career and reputation, as well as the reputation
of the Defendants,z would be harmed by unsealing the case, See Rel.’s Mot. at 6. Harm to
reputation and career as a result of filing a lawsuit is not the sort of property or privacy interest
that courts have found compelling when analyzing this Hul)l)arcl factor. See Durham, 818
F.Supp.2d at 68 (f`inding that relator’s description of a "general privacy interest in keeping his
2 The Relator argues that the seal on this case should be maintained in part because the
Defendants would be subject to negative publicity if the Relator’s allegations were made public. The
Court accords no weight to this objection because the Relator has no standing to raise them. See In re
F0rt Totten Metrorail Cases, --- F. Supp. 2d ---, 2013 WL 4026840, * 4 (D.D.C. Aug. 8, 2013) ("[A]
party ‘ generally must assert his own legal rights and interests, and cannot rest his claim to relief on the
legal rights or interests of third parties."’ (quoting Kowalski v. Tesmer, 543 U.S. 125, 129 (2004))). In
any event, the Court finds the Relator’s concern about the risk of reputational harm to the Defendants
disingenuous. The Relator filed this action and made the allegations in the Complaint with the
expectation of proceeding towards trial and the pleadings eventually being unsealed. See Durham, 818 F.
Supp. 2d at 67 (FCA cases "are brought with the expectation that the pleadings will eventually be
unsealed.").
identity secret from his employer to avoid any potential retaliation should disclosure occur . . . is
not sufficient to tip this factor towards Relator."); United States ex rel. Permison v. Superlative
Techrzologies, Inc., 492 F. Supp. 2d 561, 564 (E.D.Va. 2007) (finding that relator’s "vague and
hypothetical" "general apprehension that his former employer might somehow interfere with his
career prospects" "falls far short of outweighing the public’s strong interest in having access to
court filings . . . ."). A relator’s concerns about career and reputation become even less
convincing when, as here, the relator no longer works for the party affected by the litigation. See
Schweizer, 577 F. Supp. 2d at 177.
The Relator attempts to distinguish the instant case on the premise that unlike other qui
tam cases involving fear of retaliation from employers, Fannie Mae is so large and influential
within the financial services and real estate industries that it has the actual power to blacklist the
Relator from the entire industry. See Rel.’s Reply at 7. The Relator contends that "a prospective
employer who learns that the Relator has cooperated with the government in a civil or criminal
investigation into such an influential company would almost invariably decide to reject a job
application submitted by the Relator." Id. at 6. The Court finds that the Relator’s argument, like
those rejected in prior cases, remains too speculative and vague. l\/Ioreover, the potential
prejudice the Relator identifies has "less to do with the contents of the documents themselves
than the fact that Plaintiff commenced suit in the first place." Upshaw v. United States, 754 F.
Supp. 2d 24, 29 (D.D.C. 2010) (emphasis in original). However, FCA cases "are brought with
the expectation that the pleadings will eventually be unsealed." Durharn, 818 F. Supp. 2d at 67.
lndeed, FCA cases are sealed to allow the United States time to investigate the allegations; "[t]he
FCA does not contain any language that suggests the purpose of sealing a case is to protect the
relator’s identity." Ia’. In bringing the present case, the Relator clearly concluded that these risks
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to his reputation and career were worth taking. See ia'. at 68. Consequently, the Court "is neither
empowered nor inclined to delete the fact of this litigation from the pages of history just because
Relator now has concerns about the effects his filing will have on his reputation." Upshaw, 754
F. Supp. 2d at 29.
In the same vein, the Relator argues that by not allowing a case to remain sealed in a
situation like the present, individuals will be less likely to bring qui tam claims because "they
know they face stigmatization and retaliation regardless of whether their complaints are ever
served." Rel.’s Mot. at 7. However, the Relator’s concerns are no different from those of the
many employees who bring suits against their employers or former employers for various
reasons. These employees continue to bring suits without the protection of sealing the case.
There is no reason that retaliation concerns should merit special protection in qui tam actions.
Durham, 818 F. Supp. 2d at 68 (citing Littlewooa’, 806 F. Supp. 2d at 841-41).
The second interest the Relator identifies-protecting the confidentiality of private
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For all these reasons, the Court concludes that the fourth Hul)l)ara’ factor does not weigh
in favor of maintaining the seal on the case,
v. Possibility of Prejudice in Future Litigation
The possibility of prejudice refers to "whether disclosure of the documents will lead to
prejudice in future litigation to the party seeking the seal." Friea’man, 672 F.Supp.2d at 60. The
Relator has not pointed the Court towards any possible prejudice he may suffer in future
litigation, stating instead that he "believes this factor is neutral." Rel.’s Mot. at 9-10. This is not
surprising given that the Relator is no longer employed by the Defendant. See Schweizer, 577 F.
Supp. 2d at 177 (finding that the fact that the relators were no longer employees of the defendant
minimized the risk of workplace discrimination and harassment following the unsealing of the
pleadings and thus the possibility of prejudice in future litigation). Accordingly, this factor
weighs in favor of lifting the seal. See Durham, 818 F. Supp. 2d at 69.
vi. Purposes For Which Documents Were Introduced
Finally, the Court must consider the purpose for which the documents in question were
introduced. The more relevant a pleading is to the central claims of the litigation, the stronger
the presumption of unsealing the pleading becomes. See Durham, 818 F. Supp. 2d at 69
(explaining that "there is less of a pressing concern to unseal pleadings if they are not relevant to
the claims," for example, they were not used at trial or relied upon by the trial judge in his
decision). This factor "focuses on the [Relator’s] purpose of filing his pleadings and nothing
further." Id. The documents the Relator wants to maintain sealed_the Complaint, his Motion
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for Voluntary Dismissal, and the Government’s Consent to Voluntary Dismissal-are central to
the litigation of the Relator’s FCA claims. The Relator’s Complaint was intended to be the basis
of a potential trial. Moreover, although the Relator’s Voluntary Dismissal and the United States’
Consent will not constitute the basis of an imminent trial, the Relator’s allegations may
potentially be revived in future litigation because the case was dismissed without prejudice. See
ia’. Accordingly, this factor weighs in favor of lifting the seal.
vii. Conclusi0n
After weighing the six Hul)bara' factors, the Court concludes that only the fact that the
Relator filed the Motion weighs in favor of sealing the Documents, while three factors weigh in
favor of unsealing the case-the need for public access, the lack of prejudice to future litigation,
and the purpose for which the documents were introduced.
B. Redacting the Identities of the Parties from the Complaint as an Alternative
In the alternative, the Relator proposes that instead of keeping the entire case under seal,
the Court allow the Relator to redact the names of both himself and the Defendants along with
any other identifying information from the Complaint and order the unsealing of only the
redacted Complaint. See Rel.’s Mot. at 10-11. The Government opposes this alternative request
for the same reasons that it opposed sealing the case generally. See Govt.’s Opp’n at 14.
The Court agrees with the Government that the Relator’s request to redact the pleadings
is inappropriate for many of the reasons discussed above. Most importantly, redacting the
Complaint before it is unsealed would permit relators to assume all of the advantages of bringing
an FCA claim without bearing any of the risks. lt is the Relator himself who decided to file the
Complaint and he was "willing to disclose his identity to the public when he stood to gain
financially; it is only now that his claim is being dismissed that he seeks anonymity. [The
9
Relator] took a calculated risk and this Court will not shield him from the consequences."
United States ex rel. Wenzel v. Pfz`zer, Inc., 881 F. Supp. 2d 217, 223 (D. Mass. 2012). In other
words, the Relator cannot now "cherry pick the portions of the FCA that suit him." Littlewooa’,
806 F. Supp. 2d at 842. As previously mentioned, the Relator’s retaliation concerns are "‘similar
to those of the many other employees who bring suits against their employers or former
employers for various reasons’ and therefore should not merit special protection in qui tam
actions."’ Durham, 818 F. Supp. 2d at 68 (quoting Littlewooa', 806 F. Supp. 2d at 841-42).
Moreover, redacting the names of the Defendants would have the practical effect of
sealing the entire case. See e.g. United States v. Bon Secours Cottage Health Servs., 665 F.
Supp. 2d 782, 786 (E.D. Mich. 2008) ("Plaintiff-Relator’s request for a wholesale redaction of
all identifying information is tantamount to maintaining a permanent seal over all of the
documents filed in this action."). As discussed above, the public has an interest in accessing
allegations of fraud by officers of Fannie Mae, especially given that the allegations are so closely
related to the 2008 housing crisis and subsequent taxpayer funded bailout. Redacting the names
of the Defendants would essentially be denying the public access to these important allegations.
The Relator’s comparisons to suits filed under pseudonym are unavailing. The Relator
cites to United States ex rel. D0e v. Boston Scientifl`c Corp., 2009 U.S. Dist. LEXIS 59390, *13
(S.D. Tex. July 2, 2009), to support the proposition that he should be able to redact his name
because the public interest in the identity of the relator is "relatively weak." See Rel.’s Mot. at
ll. However, in Bostorz Scienti]’ic, the court only allowed the identity of the Relator to remain
anonymous "until the cases are resolved or the court orders disclosure at an earlier time." Boston
Scier)tifc, 2009 U.S. Dist. LEXIS 59390, at *13. Thus, the case does not stand for the
proposition that the Relator’s name can be sealed in perpetuity, as Relator here requests the
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Court to do. The Relator’s citations to qui tam cases in this district that are proceeding under
pseudonym are equally unhelpful. Two of the cited cases provide no analysis for why the court
permitted the Relator to proceed anonymously. 1n the third case, the court allowed the Relator’s
name, and the Relator’s name alone, to be redacted from the Complaint for a period of one
year-not an indefinite period as requested by Relator in the present case. ln general, courts
refuse to allow a party to proceed anonymously simply because of "fears of embarrassment or
vague, unsubstantiated fears of retaliatory actions by higher-ups." Qualls v. Rumsfela’, 228
F.R.D. 8, 12 (D.D.C. 2005). Accordingly, this Court is not inclined to allow Relator to redact his
identifying information.
III. CONCLUSION
ln light of the strong presumption of public access and having weighed the relevant
factors, the Court therefore ORDERS that:
1. Relator’s [1] COMPLAINT and [10] VOLUNTARY DISMISSAL and the United
States’ [20] NOTICE OF CONSENT TO DISMISSAL shall be UNSEALED; and
2. All other filings shall remain under seal.
SO ORDERED.
/s/
COLLEEN KOLLAR-KOTELLY
UNITED STATES DISTRICT JUDGE
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