However, the FCA also requires a whistleblower to file her complaint under seal, where it must remain confidential for at least sixty days. And that, State Farm alleges, did not happen in the Rigsbys’ case: before the seal was lifted, it contends, the Rigsbys and their attorney at the time – Dickie Scruggs, a prominent Mississippi trial lawyer who would go on to serve six years in federal prison on bribery charges – intentionally told the news media and a member of Congress about the suit, hoping to pressure State Farm to settle.
State Farm asked the district court to dismiss the case, citing the sisters’ “repeated intentional violations of the FCA seal requirement.” But the district court allowed the case to go forward, and the Fifth Circuit affirmed.
State Farm then filed a petition for certiorari with the Supreme Court, asking the Justices to take the case and determine what standard should apply to determine whether to dismiss an FCA complaint after a violation of the seal requirement. It contended that the lower courts are divided on what standard should be used: one circuit has established a bright-line rule that mandates dismissal; others look at whether “the violation incurably frustrates the congressional goals served by the seal requirement”; and the Fifth Circuit in this case used a balancing test that focuses on whether the violation actually harms the government.