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Purcell v. Gilead Sciences, Inc.

United States District Court, E.D. Pennsylvania

November 15, 2019

CHRIS PURCELL, et al.
v.
GILEAD SCIENCES, INC.

          MEMORANDUM

          KEARNEY, J.

         As our Court of Appeals recently reminded us, we presume the public may access court filings. Requests to preclude public access must satisfy our rigorous analysis of the alleged basis. We may seal portions of public filings when, for example, the public filing contains investigative strategies employed by the United States or the disclosure would harm non-parties not involved with our deliberations. We apply this same principle of public access to filings under the False Claims Act where former employees allege their former employer defrauded the United States and after the United States declined to intervene. We today continue the seal on portions of the United States' four motions which detail prospective investigative strategies and on portions of former employees' earlier amended complaint identifying persons no longer in the case.

         I. Background

         In this qui tarn action brought under the False Claims Act[1] (the "Act") and the qui tarn laws of twenty-eight states and the District of Columbia, relators Chris Purcell and Kimberly Groome allege their former employer Gilead Sciences, Inc. committed fraud by marketing for "off-label" use certain drugs used in the treatment of Hepatitis B, Hepatitis C, and HIV causing the submission of false claims to federal healthcare programs.

         The Act imposes liability on any person who, inter alia, "knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;" "knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;" or "conspires to commit a violation" of the Act.[2] Under the Act, private persons may bring a civil action for a violation of Section 3729 for themselves and for the United States, brought in the name of the United States.[3] A complaint must be filed "in camera, and shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders."[4] The United States may elect to intervene in the action and "may, for good cause shown, move the court for extensions of time during which the complaint remains under seal ... ."[5]

         Relators filed their initial complaint under seal on August 7, 2017.[6] They sued Gilead only. The case remained under seal until the United States decided whether to intervene. Over an approximately eighteen-month period, we granted four motions filed by the United States to extend its time to intervene while it investigated the claim.[7] The motions described, in part, prospective investigative steps. The seal remained in place. During this investigation period, Relators filed an amended complaint naming seventeen physicians along with Gilead.[8]

         Our April 24, 2019 Order granting a fourth extension allowed the United States until October 7, 2019 to determine whether to intervene.[9] On September 13, 2019, Relators' new counsel moved for leave to file a second amended complaint.[10] The Relators decided to drop claims against the seventeen physicians identified in the amended Complaint. We granted Relators' motion for leave to file a second amended Complaint under seal pending the United States' decision on whether to intervene.[11]

         On October 7, 2019, the United States declined to intervene and requested we unseal the Complaint.[12] Although it takes no position on the Relators' motion to keep the amended Complaint naming seventeen physicians under seal, the United States requested "all other papers on file in this action remain under seal because in discussing the content and extent of the United States' investigation, such papers are provided by law to the Court alone for the sole purpose of evaluating whether the seal and time for making an election to intervene should be extended."[13]

         We ordered, inter alia, the second amended Complaint with exhibits unsealed and Relators effect service on Gilead.[14] We also ordered the United States' Notice of Election to decline intervention and all subsequent filings "shall not be filed under seal absent pre-filing approval from this Court upon a showing of good cause."[15] Our Order allowed any party to show cause why filed documents should remain under seal; absent good cause we would lift the seal on all filed documents.

         In response, Relators moved to unseal the original and second amended Complaint but to continue the seal on the amended Complaint.[16] Alternatively, Relators seek permission to redact the names of the seventeen individual physicians named in the amended Complaint but who are no longer defendants in the second amended Complaint. Relators additionally request we redact the names of the individual physicians from the docket.

         The United States, in response to our show cause order, requests its motions for extension of the seal and investigatory period remain under seal to protect its investigative process.[17]

         II. Analysis

         The issue is what earlier-filed pleadings can remain under seal after the United States declined to intervene. Whether to keep a seal on certain filings after lifting the seal "is a matter for the court's exercise of discretion."[18] The Act's language speaks only to the complaint: "[t]he complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders" but the United States, "for good cause shown, move the court for extensions of the time during which the complaint remains under seal ...."[19]The Act "is simply silent on this issue, providing no indication that Congress intended to modify the default rule that 'the 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."[20]

         Our Court of Appeals recently outlined "three distinct standards when considering various challenges to the confidentiality of documents": (1) we apply the factors in Pansy v. Borough of Stroudsburg [21] to confidentiality of discovery materials under Federal Rule of Civil Procedure 26; (2) we apply a "more rigorous common law right of access to discovery materials filed as court documents" and "begin[ ] with a presumption in favor of public access";[22] and (3) "the First Amendment right to public access attaches to, inter alia, civil trials."[23]

         We are asked to continue the seal on two categories of documents: (1) the amended Complaint naming seventeen physicians no longer named in the case (along with the docket), and (2) the United States' four motions for an extension of the intervention deadline and seal. We apply the "more rigorous common law right to access" and its presumption attaching to "judicial proceedings and records."[24] If we find a common law right of access to the documents at issue here, we need not reach the First Amendment question.[25]

         The United States does not argue, or even mention, Avandia's standards. Relators recognize Avandia's presumption of right of access, but argue they have "compelling, countervailing interests to be protected."

         Common law presumes the public has a right of access to judicial materials.[26] The common law right to access attached "to judicial proceedings and records."[27] Whether the right to access "applies to a particular document or record 'turns on whether that item is considered to be a 'judicial record.'"[28] A "judicial record" is a document "filed with the court ... or otherwise somehow incorporated or integrated into a district court's adjudicatory proceedings."[29]

         The presumption of access to judicial proceedings and records is not absolute and may be rebutted.[30] "The party seeking to overcome the presumption of access bears the burden of showing 'that the interest in secrecy outweighs the presumption.'"[31] Here, Relators and the United States each must show "that the material is the kind of information that courts will protect and that disclosure will work a clearly defined and serious injury to the party seeking closure."[32] To overcome the strong presumption of access, we must articulate '"the compelling, countervailing interests to be protected,' make 'specific findings on the record concerning the effects of disclosure,' and 'provide[ ] an opportunity for interested third parties to be heard.'"[33] We must conduct a "document-by-document review" of the challenged documents, provide "specific examples of harm or articulated reasoning," and balance the competing interests between the public's right to access and a "clearly defined and serious injury to the party seeking closure."[34] When considering requests to keep documents sealed, courts generally "lift[ ] the seal on the entire record except for specific documents that: '(1) reveal confidential investigative methods or techniques; (2) jeopardize an ongoing investigation; or (3) harm non-parties.'"[35]

         A. Relators may timely file a notice attaching the amended complaint redacting the names of the seventeen physicians.

         Relators, former employees of Gilead, request we continue to seal the amended complaint or, alternatively, redact the names of the seventeen physicians named as defendants in the amended Complaint. Relators also request we redact the names of the seventeen physicians from the docket.

         Relators make three arguments why their interests justify keeping the amended Complaint under seal: (1) fear of retaliation in the pharmaceutical industry for naming seventeen physicians as defendants in this qui tarn case; (2) embarrassment to the seventeen defendants who are no longer named defendants in this action; and (3) the common law right to access only extends to material on which a judicial decision is based, and because the amended Complaint is no longer operative, we will not make any decisions on it going forward in this litigation.

         Relators explain they "continue to work in the same field and rely on" the seventeen physicians as customers and fear "the stigma our society attaches to whistleblowers will have a negative impact on their continued livelihood and may prevent them from obtaining future employment opportunities in the industry."[36] Although they characterize naming seventeen physicians as an "extraordinary step," Relators do not explain why they did so knowing their identities as Relators will eventually become public. They explain only their "new lead counsel" filed the second amended Complaint naming Gilead as the sole defendant. Relators argue the amended Complaint naming seventeen physicians "make this situation unique and gives rise to a reasonable and heightened fear by Relators of severe economic harm and loss of likely employment in the pharmaceutical industry."[37]

         Relators argue Congress intended to protect whistleblowers from retaliation for reporting fraud. Relators concede they "accepted the possibility of retaliation when they decided to go forward" with a qui tarn case against their former employer Gilead, but they argue the amended Complaint should be sealed because the second amended Complaint will be made public; there is no need to reveal the amended Complaint; there is a "greatly increased ... possibility of retaliation"; and there is no public benefit to be gained by unsealing the amended Complaint.

         Relators next argue publicly identifying the seventeen physicians who were never served with the amended Complaint, who are no longer defendants, and who are "not relevant to the litigation at hand ... could result in embarrassment" to the physicians.[38]

         Finally, Relators argue the purpose of the common law right of access is "to check judicial abuses ... [and] that right should only extend to materials upon which a judicial decision is based" and does not extend to "documents that do not form the basis of a judicial ruling on substantive issues."[39] For these reasons, Relators argue sealing the amended Complaint only-not the original Complaint or the now operative second amended Complaint and the remainder of the docket- effectively balances the public's right to access against the Relators' interests.

         Relators do not provide us with authority continuing the seal on an amended complaint after unsealing a later amended complaint. Relators cite two cases-Wilk v. American Medical Association and FTC v. Standard Financial Management-to support their argument the amended Complaint is not a judicial record to which the common law right of access applies. Wilk is distinguishable and Standard Financial Management does not support Relators' argument.

         In Wilk, the United States Court of Appeals for the Seventh Circuit reviewed a protective order governing discovery under Rule 26. In a footnote, the court distinguished cases protecting discovery from disclosure under Rule 26 and cases "dealing with the power of courts to limit access to documents and information in their possession."[40] Distinguishing discovery materials, the court explained "unless and until introduced into evidence, the raw fruits of discovery are not in possession of a court" and "[i]f the purpose of the common law right to access is to check judicial abuses ... then that right should only extend to materials upon which a judicial decision is based."[41] In Standard Financial Management, the United States Court of Appeals for the First Circuit held the common law presumption of public access attached to financial statements submitted to the Federal Trade Commission on which it relied to reach a consent decree and submitted to the court for its assessment of the reasonableness of the consent decree.[42] Wilk is limited to discovery material and Standard Financial Management held financial statements assessed by the court constituted documents to which the right of access attached and does not support Relators' argument their amended Complaint is not a "judicial record."

         Relators' reliance on Doe v. Megless does not support their position.[43] In Doe, a plaintiff suing a school district sought to proceed anonymously. Plaintiff appealed when the district court denied his motion to proceed anonymously and then dismissed his claims with prejudice when he failed to proceed using his real name. Our Court of Appeals affirmed the district court, noting the balancing test district courts apply where a litigant sufficiently alleges he "has a reasonable fear of severe harm from litigation without a pseudonym against the public's strong interest in an open litigation process."[44] In concluding the district court did not abuse its discretion in denying ...


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