On May 31, 2016, the Supreme Court of the United States granted certiorari in the False Claims Act (FCA) case of State Farm Fire and Casualty Co. v. United States ex rel. Cori Rigsby and Kerri Rigsby.  At issue is whether a qui tam relator’s violation of the seal requirement, 31 U.S.C. § 3730(b)(2), requires a court to dismiss the suit.

Section 3730(b)(2) requires qui tam complaints to be filed under seal for at least 60 days and provides that they shall not be served on the defendants until the court so orders.  The purpose of the seal is to give the government time to investigate.  In practice, the government often seeks numerous extensions while it investigates the conduct alleged in the relator’s complaint.  This investigatory period can, on occasion, extend for years.

According to State Farm’s petition for certiorari, the relators in this case intentionally violated the seal by alerting the media to the FCA allegations in their complaint.  State Farm argued that relators did so in order to “to fuel a media campaign designed to demonize and put pressure on State Farm to settle,” hiring “one of the nation’s most prominent public relations firms to assist them with this all-out campaign, which featured the Rigsbys in media interviews, filming, and photo shoots.”  The US District Court for the Southern District of Mississippi declined to dismiss relators’ complaint on the basis of the seal violations, and the US Court of Appeals for the Fifth Circuit affirmed that decision, holding that the seal violations did not warrant dismissal.  The Fifth Circuit, however, acknowledged a three-way circuit split on this issue. (more…)