Supreme Court holds: False Claims Act seal violation does not require dismissal

Let's not spend a lot of time on this simple case, State Farm v. United States ex rel Rigsby (US Supreme Court 12/06/2016) [Opinion text].  After Hurricane Katrina, a couple of claims adjusters filed a qui tam complaint against State Farm alleging that State Farm instructed them and other adjusters to misclassify wind damage as flood damage in order to shift State Farm's insurance liability to the Government.

The False Claims Act requires complaints to be under seal:

“The 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.” §3730(b)(2).

State Farm moved to dismiss the case, alleging that the relators' (a/k/a plaintiffs') former attorney had disclosed the complaint’s existence to several news outlets, which issued stories about the fraud allegations, but did not mention the existence of the FCA complaint; and they had met with a Congressman who later spoke out against the purported fraud.

The district court declined to dismiss the case; the 5th Circuit affirmed; and the US Supreme Court unanimously affirmed, saying:

[State Farm's] primary contention is that a violation of the seal provision necessarily requires a relator’s complaint to be dismissed. The FCA does not enact so harsh a rule.

[For recent decisions and pending employment law cases, see US Supreme Court Watch.]