Justices to Mine Slips of Sealed Whistleblower Suit

     WASHINGTON (CN) — The Supreme Court agreed Tuesday to decide whether courts must dismiss lawsuits that whistleblowers publicize despite filing under seal.
     Cori and Kerri Rigsby brought the case at hand in Mississippi a decade ago under the False Claims Act, claiming that State Farm Fire and Casualty submitted false claims to the U.S. government for payment on flood policies arising out of damage caused by Hurricane Katrina.
     Though the Rigsbys filed their April 2006 complaint under seal, and served a copy to the government, State Farm said that attorneys for the Rigsbys spread word of the lawsuit to the media.
     News outlets got hold of the evidentiary disclosures and engineering reports, sometimes including the case caption, and the Rigsbys sat for interviews that culminated in the publication of multiple news stories, State Farm said.
     Though the Rigsbys’ case remained fully sealed until early 2007, ABC’s program “20/20” publicized one such interview, and a Mississippi congressman also received notice of the FCA action.
     The Rigsbys ultimately prevailed at trial on a single bellweather false claim, but State Farm argued on appeal that the Rigsbys’ violations of the FCA’s seal requirement independently warrant dismissal.
     A three-judge panel of the Fifth Circuit disagreed last year.
     “Although they violated the seal requirement, the Rigsbys’ breaches do not merit dismissal,” that ruling said.
     In its petition to the Supreme Court, State Farm said the justice must resolve what “standard governs the decision whether to dismiss a relator’s claim for violation of the FCA’s seal requirement, 31 U.S.C. § 3730(b)(2).”
     “The FCA imposes liability only for knowing violations of the act, which the FCA defines as requiring that the defendant ‘with respect to information’ have ‘actual knowledge of the information’ or act in ‘deliberate ignorance’ or ‘reckless disregard’ of ‘the truth or falsity of the information,'” the petition states.
     State Farm’s attorneys at Quinn Emanuel Urquhart & Sullivan note that the D.C. and Fourth and Fifth Circuits are at odds on this question.
     As is its custom, the U.S. Supreme Court did not issue any comment Tuesday in taking up the case.

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