RICHMOND, VA. (CN) - A divided appeals court upheld the secrecy provision of a federal whistleblower law holding that it serves the compelling government interest of protecting the integrity of investigations.
The 2-1 ruling a three-judge panel of the 4th U.S. Circuit Court of Appeals rejected the American Civil Liberty Union's claim that the secrecy mandate undermines the nation's open court system and violates the right to free speech.
The decision affirmed a lower court's decision to dismiss the lawsuit.
At issue was the False Claims Act (FCA), originally enacted during the Civil War, which allows citizens to collect damages for reporting contract fraud against the U.S. government. The law was amended in 1986 to require that such complaints remain under seal for at least 60 days while the government investigates.
But the sealing order can be extended if the U.S. Justice Department demonstrates it needs more time to complete an investigation. The ACL claimed the government has used these extensions to block public access to judicial proceedings and also to prohibit whistleblowers from speaking out about misconduct.
Along with fellow plaintiffs OMB Watch and the Government Accountability Project,, said the law violated the separation of powers doctrine by baring judges from deciding on a case-by-case basis whether a particular complaint should be filed under seal.
Two of those on the panel, Circuit Judge Barbara Milano Keenan and James Dever III, a North Carolina federal district judge who was sitting by designation of the appeals court, ruled against the plaintiffs.
Writing for the majority, Dever said, the "United States has a compelling interest in protecting the integrity of ongoing fraud investigations."
The majority said the law only blocks whistleblowers from disclosing the existence of a qui tam complaint. But nothing in the law stops a whistleblower from talking about the fraud that's at the center of the suit, the court said.
The majority also found that the plaintiffs - none of whom were whistleblowers themselves - lacked standing to argue that the law unfairly gags whistleblowers.
But key to Dever's reasoning was his assessment that in every Fair Claims Act case, the qui tam complaint eventually becomes unsealed.
"We agree that 'sunlight' and 'openness' are important values that further the functioning of this republic and note that in every FCA case, the qui tam complaint will be unsealed," Dever wrote. "Thus, in every FCA case, the people will be able to see how the Executive and the Judiciary have fulfilled their constitutional and statutory roles."
In a dissenting opinion, Circuit Judge Roger Gregory wrote that such blanket secrecy is unconstitutional, and that judges should decide whether to seal complaints on a case-by-case basis.
"Ultimately, opacity limits causalities in the darkened corners of our government, deteriorating the quality of our democracy subtly but surely," Gregory wrote. "That the seal provision often lasts for years only worsens matters."
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