Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_00-cv-02921/USCOURTS-cand-4_00-cv-02921-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 31:3729 False Claims Act

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, ex

rel. JULIA LEE, 

Plaintiffs,

 v.

HORIZON WEST, INC., et al.,

Defendants. /

No. C 00-2921 SBA

ORDER

[Docket No. 66]

This matter comes before the Court on Defendants Horizon West, Inc. and Horizon West

Healthcare, Inc. (collectively referred to as "Defendants") Motion to Lift Seal from Contents of File

[Docket No. 66]. Having read and considered the papers submitted by Defendants and the Government,

and being fully informed, the Court finds this matter appropriate for resolution without a hearing. The

Court hereby GRANTS Defendants' Motion to Lift Seal from Contents of File [Docket No. 66].

BACKGROUND

On August 14, 2000, Plaintiff-Relator Julia Lee ("Relator") filed a qui tam complaint pursuant

to the False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq., against defendants Horizon West, Inc.,

Burger Physical Therapy & Rehabilitation Agency, and Pegasus Airwave, Inc. The complaint was filed

under seal, pursuant to 31 U.S.C. § 3730(b). In general, the FCA allows private citizens, known as

"relators," to initiate lawsuits alleging that the United States has been defrauded in connection with

certain federal activities and programs. Under the provisions of the FCA, the relator files a complaint

in camera and under seal, and the lawsuit remains unknown to the defendant for a period of sixty days.

Case 4:00-cv-02921-SBA Document 74 Filed 02/08/06 Page 1 of 6
United States District Court

For the Northern District of California

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The FCA expressly allows extensions upon the Government's showing of "good cause," and

provides that a motion for such an extension may be supported by in camera submissions. 31 U.S.C.

§ 3730(b)(3). Accordingly, each of the Government's requests for an enlargement of time was filed

under seal pursuant to 31 U.S.C. § 3730(b)(3).

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31 U.S.C. § 3730(b)(2). The statute contemplates that, during this sixty-day period, the United States

will commence and, if possible, complete, an investigation into the allegations of the complaint, with

the goal of deciding whether to intervene and prosecute the action. 31 U.S.C. §§ 3730(b)(2) and (b)(4).

In this case, Relator's complaint alleged that Horizon West, Inc., Burger Physical Therapy &

Rehabilitation Agency, and Pegasus Airwave, Inc. had, over a substantial period of time, engaged in

various schemes to defraud the federal Medicare program. After the filing of the initial complaint, the

United States began a broad investigation into Relator's claims, during the course of which it repeatedly

applied to this Court to extend the period of time for intervention.1

The Government's lengthy investigation ultimately resulted in its decision, on July 11, 2005, to

intervene. On that date, and upon the Government's request, the Court issued an order unsealing: (1)

the Relator's Complaint and First Amended Complaint; (2) the Notice of Election to Intervene and the

July 11, 2005 Order; and (3) all other matters occurring in the action after July 11, 2005. The remainder

of the pre-intervention filings remained under seal. 

On October 21, 2005, the Government filed its Complaint upon Intervention, naming as

defendants Horizon West, Inc. and Horizon West Healthcare, Inc.

On December 29, 2005, Defendants filed the instant Motion to Lift Seal from Contents of File.

Defendants request that the Court order the Clerk to unseal all of the documents in this Court's file that

remain under seal pursuant to the Court's July 11, 2005 Order.

ANALYSIS

As a preliminary matter, the Court notes that the Government does not oppose the unsealing of

twenty-five of the forty-four documents Defendants move to unseal. Specifically, the Government does

not oppose the unsealing of the following documents: Docket Numbers 2, 3, 4, 6, 8, 9, 10, 11, 12, 13,

17, 18, 19, 23, 24, 26, 27, 29, 32, 36, 38, 40, 42, 44, and 46. These documents consist of the following:

Case 4:00-cv-02921-SBA Document 74 Filed 02/08/06 Page 2 of 6
United States District Court

For the Northern District of California

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(1) Proofs of service (Docket Numbers 2, 8, 18, 24, 26, 32, 36, 38, 40, 42, 44); 

(2) Clerk's notices and minutes (Docket Numbers 4, 9, 29); 

(3) Court orders that are separate from the other filings that the Government seeks

to maintain under seal (Docket Numbers 3, 6, 11, 12, 13, 17, 46); 

(4) Attorney substitutions and a change of address notice (Docket Numbers 19, 23);

and 

(5) Two non-substantive filings by the Government (Docket Numbers 10, 27). 

Since neither party disputes that the seal should be lifted from these documents, the Court hereby

GRANTS Defendants' Motion with respect to the aforementioned documents as a matter of course. 

With respect to the remaining nineteen documents, which consist of the Government's numerous

requests for extensions of time and the supporting declarations, the Court notes that the Government

opposes Defendants' request that the seal be lifted. Accordingly, the merits of Defendants' Motion, and

the Government's Opposition, are addressed below. 

The parties agree that the FCA clearly contemplates the lifting of the seal on relator complaints

once the Government has elected to intervene. See 31 U.S.C. § 3730(b)(3). However, the parties

disagree as to whether the statute provides for the mandatory disclosure of all other documents filed with

the Court prior to the Government's intervention. The Government's opposition to the unsealing of the

record is premised on two arguments: (1) that details relating to the Government's underlying

investigation should be left under seal as privileged, attorney work-product; and (2) that the documents

in question should be left under seal because they contain information protected by the government's

law enforcement/investigatory files privilege. 

In general, other courts faced with this issue have considered lifting the seal on the entire record

to be appropriate unless the Government shows that such disclosure would: (1) reveal confidential

investigative methods or techniques; (2) jeopardize an ongoing investigation; or (3) harm non-parties.

See, e.g., United States ex rel. Mikes v. Straus, 846 F. Supp. 21, 23 (S.D.N.Y. 1994); see United States

ex rel. Erickson v. University of Washington Physicians, 339 F.Supp.2d 1124, 1126-27 (W.D. Wash.

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United States District Court

For the Northern District of California

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2004); United States ex rel. Costa v. Baker & Taylor, Inc., 955 F. Supp. 1188, 1191 (N.D. Cal. 1997);

U.S. ex rel McCoy v. Cal. Medical Review, 715 F.Supp. 967 (N.D. Cal. 1989). However, if the

documents simply describe routine or general investigative procedures, without implicating specific

people or providing substantive details, then the Government may not resist disclosure. See United

States v. CACI Int'l. Inc., 885 F.Supp. 80, 83 (S.D.N.Y. 1995). When evaluating a motion to lift the

seal, courts are also to consider the interests of the public, since court records are typically expected to

be open to the public. Costa, 955 F.Supp. at 1190; see also Nixon v. Warner Communications, 435 U.S.

589, 597 (1978); Valley Broadcasting Co. v. U.S. Dist. Court, 798 F.2d 1289, 1293 (9th Cir. 1986).

Thus, under the applicable standard, neither the assertion of the attorney-work product privilege

nor the assertion of the litigation/investigative privilege is an absolute bar to the disclosure of documents

relating to past or current Government investigations. Accordingly, the remaining nineteen documents

must be unsealed unless the Government can make a compelling showing that the documents contain

highly specific information, which, if disclosed, would reveal confidential investigative methods,

jeopardize an ongoing investigation, or pose a threat of harm to certain non-parties. 

Here, the Government's bare assertion that the disclosure of its extension requests would "reveal

pieces of the government's investigatory techniques, decision-making processes, research, and reasoning

that apply in hundreds of similar cases" is not sufficient to meet the relevant standard. Further, the

Government's argument that the disclosure of its extension requests would unfairly reveal information

pertaining to "a related criminal investigation" is also unavailing. Having reviewed the documents in

question, it is clear to the Court that the documents very generally "describe routine or general

investigative procedures," such as the examination of Defendants' financial affairs, settlement

discussions, the issuance of subpoenas, and the compilation of witness lists. The documents do not

implicate specific people, provide substantive details of the investigation, or reveal any of the attorneys'

thought processes. In light of the highly general nature of these documents, the Government's

contention that the unsealing of these documents would "have a chilling effect on the future content of

such requests" is not persuasive. 

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United States District Court

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Further, in addition to the fact that the Government has not effectively shown a compelling

reason for the Court to continue to keep the aforementioned documents under seal, the Court notes that

the Defendants have identified their own reason why disclosure of the documents is important and

necessary. In particular, the documents in question are critical to Defendant Horizon West Healthcare,

Inc.'s determination of whether it has a viable statute of limitations defense. 

Since it was not named as a party to this action until the Complaint upon Intervention was filed

in 2005, Horizon West Healthcare, Inc. argues that the Government's numerous requests for extensions

may directly bear on the issue of whether the allegations currently asserted against it are timely.

Specifically, Horizon West Healthcare, Inc. contends that the documents in question may shed light on

the Government's knowledge of Horizon West Healthcare, Inc.'s alleged wrongdoing and whether the

Government was justified in delaying its prosecution of Horizon West Healthcare, Inc. for nearly five

years. The Government provides no meaningful response to this argument. Instead, the Government

merely asserts that the FCA statute of limitations was tolled when Relator filed her complaint against

different defendants on August 14, 2000. However, this argument fails to address the authorities

Defendants have cited, all of which support Horizon West Healthcare, Inc.'s assertion that it is at least

entitled to the disclosure of all pertinent facts relating to the Government's investigation and the reasons

for the Government's delay. 

Since the Government has not shown a valid and supportable reason why its extension requests

should remain under seal, and since Defendants have presented an important reason why disclosure of

the aforementioned documents is reasonable and appropriate, the Court hereby GRANTS Defendants'

Motion in its entirety. 

CONCLUSION

IT IS HEREBY ORDERED THAT Defendants' Motion to Lift Seal from Contents of File 

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United States District Court

For the Northern District of California

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[Docket No. 66] is GRANTED. The record in the above-captioned action shall be UNSEALED IN ITS

ENTIRETY.

IT IS SO ORDERED.

 Dated: 2/6/06 SAUNDRA BROWN ARMSTRONG

United States District Judge

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