ANONYMOUS v. ANONYMOUS (2018)

On October 10, 2018, a conference was conducted in this qui tam action regarding a violation of the sealing order issued by this Court (Huff, J.) on November 21, 2012 pursuant to the New York False Claims Act (NY Fin. Law §§ 187 et seq.). The violation at issue consists of the purported disclosure of the identities of the parties in conjunction with the index number of this action in a foreign divorce proceeding. It has been represented to the Court that, as in New York, filings in divorce proceedings in the jurisdiction where the disclosure occurred are not a matter of public record and are therefore not accessible by the general public absent a court order.

In determining what sanction, if any, this Court should impose for violating the sealing order, it is helpful to recognize that the New York False Claims Act was designed to follow the federal False Claims Act, “[a]nd therefore it is appropriate to look toward federal law when interpreting the New York act.” State ex rel. Seiden v. Utica First Ins. Co., 96 A.D.3d 67, 71, 943 N.Y.S.2d 36 (1st Dep't 2012). Thus, to evaluate the appropriate remedy for a seal violation, in the absence of New York appellate authority to the contrary, this Court adopts the three-factor balancing test articulated by the United States Supreme Court: “(1) the actual harm to the Government, (2) the severity of the violations, and (3) the evidence of bad faith.” State Farm Fire & Cas. Co. v. U.S. ex rel. Rigsby, ––– U.S. ––––, 137 S.Ct. 436, 441, 196 L.Ed.2d 340 (2016). This includes an assessment of “whether the particular seal violation hampered the [ ] objectives” of the sealing requirement—to permit the qui tam relator to file a complaint, thereby preserving his litigative rights, while protecting his identity and to permit the government to study and evaluate the relator's claim for potential intervention in the qui tam action or for a related criminal investigation. U.S. ex rel. Bibby v. Wells Fargo Home Mort. Inc., 76 F.Supp.3d 1399, 1406-08 (N.D. Ga. 2015). Here, as neither the governmental agencies' investigations of the underlying conduct alleged herein nor the instant qui tam action appear to have been negatively impacted by the unauthorized disclosure, the Court declines to impose sanctions for the instant violation of the sealing order.

While this Court declines to impose sanctions at this juncture, it does direct the relator to notify the individual who made the unauthorized disclosure to refrain from further disclosure of information under seal. The Court notes that this directive should not impede the court handling the subject divorce proceedings in which the unauthorized disclosure was made from determining an appropriate equitable distribution of marital assets between the particular individual with an ownership interest in the relator and his spouse.

This constitutes the decision and order of this Court.

James E. d'Auguste, J.