Protecting Your Identity in Whistleblower Lawsuits
Protecting Your Identity in Whistleblower Lawsuits
False Claims Act cases are filed under seal, meaning that they are not available publicly. But eventually – usually when the government makes a decision on intervention – the case will be unsealed and available on the Court’s website. At that time, any interested person can learn who filed the lawsuit and the details of what were alleged. Knowing this, many whistleblowers ask about protecting their identity despite the eventual unsealing. Are there ways to ensure a whistleblower will remain anonymous after the case is unsealed?
It’s important to remember that there are no guarantees of permanent anonymity. But, there are steps you can take to try to shield or protect your identity, and those steps can be effective depending on the circumstances. The two most common ways are using pseudonyms (“John Doe”) or using an incorporated entity, meaning an entity the whistleblower creates for purposes of bringing the lawsuit.
Pseudonyms. A whistleblower can try file using a pseudonym, such as John Doe. That way, when the case is unsealed, the whistleblower’s real name won’t appear on the documents. And, if they are careful about what details they put in the complaint, that could make it even harder for others to infer their identity.
There are some challenges with this approach. Each court has its own rules about whether it is permissible to file a case with a pseudonym without first getting the court’s permission. If a court does want advance permission, the standard it will apply is a strict one: courts strongly prefer open and transparent proceedings, so a person filing a lawsuit will have to show real harm to overcome that. (For example, minors or victims of crimes can sometimes be granted anonymity.) For the most part, courts are not persuaded that reputational and employment harm[1] that whistleblowers may face is sufficient to meet that high standard.
If you’re in a court that doesn’t require advance permission, you should be okay to at least initially file your lawsuit under seal with a pseudonym. After that, a lot depends on which of three paths your case takes: there could be a settlement; you or the government could decide to litigate the case; or both you and the government can decide to dismiss. If there is a settlement, it is likely you’ll have to reveal your name to at least the defendant. After all, it’s difficult to settle a case without identifying the parties in the settlement documents. Whether those settlement documents become public is a separate question and difficult to predict, though there are always public records requests that the government would likely have to comply with.[2]
If either you or the government decide to litigate the case, it’s also likely that your name will be made public. As noted, court strongly prefer public and transparent proceedings, so they likely won’t approve of litigation with anonymous parties except in rare circumstances.
Finally, what if the government declines and you decide to dismiss the case rather than litigate it? It’s possible you could dismiss the case and never have your name revealed. But, it
is also possible that either the government or the court will ask you to substitute in your real name before dismissal, again, because of the strong preference for public and transparent proceedings. Whether or not they make that demand varies – it depends on the government lawyers investigating your case and the judge assigned to it.
Incorporated Entities. Another option is to create an incorporated entity, like a limited liability company (LLC) or partnership (LLP), of which you are the owner or member, and to file the lawsuit in the name of that entity rather than your real name. So when the case is eventually unsealed, the plaintiff will be the entity, not you. Because some states have strong confidentiality laws about entity details and membership, your identity would in effect be shielded.
By and large, there is no prohibition on using an entity like this. Once again, how well it works long term depends on what path your case takes. If you settle, you may have to sign the agreement on behalf of the entity, and more than that, the defendant may insist on knowing who it is actually settling the case with (and who it is getting a release from). If the case moves into litigation, the defendant will undoubtedly try to learn who is behind the entity, and a court will likely allow that discovery. Perhaps the most concrete benefit of using an entity is if you and the government both decide to dismiss the case: at that point, the case is unsealed, but your name won’t be on the documents. And as mentioned above, if you’re careful about other details in the complaint, it could be hard for anyone to figure out your identity.
If you do use an entity like this, be careful about ever changing the entity’s name, or one day substituting your own name for the entity as a plaintiff. Some courts have reacted negatively to that because of the False Claims Act’s “first to file” rule. The logic is complicated, but has to do with the fact that you and the entity are not the same “person” under the law, and once one person has filed a FCA lawsuit, another person cannot participate in it.
Other Whistleblower Programs. You may have heard about confidential whistleblower tips that can be provided to the Securities and Exchange Commission, the Internal Revenue Service, or the Commodity Futures Trading Commission, among others. These are distinct programs run by the respective agencies, so they have their own rules and procedures. At a high level, they tend to allow anonymous proceedings as long as the whistleblower is represented by counsel. Once again, the long term effectiveness of that protection depends on how the tip is handled and resolved, but it’s a helpful protection nonetheless, and something you should explore with counsel if you are considering these programs.
Concluding Thoughts. Most whistleblowers proceed with their own names. And some (though certainly not all or even most) lawyers are wary of whistleblowers who are not willing to identify themselves. But if you feel strongly about proceeding anonymously, you have options. Those options do not guarantee anonymity, but they can be quite effective. The key is that you talk through the options carefully with your lawyers, and recognize that the outcome depends a lot on what path your case takes.
[1] See e.g., Doe v. Megless, 654 F.3d 404 (3d Cir. 2011); Doe v. Frank, 951 F.2d 320 (11th Cir. 1992); Raiser v. Brigham Young Uni., 127 Fed. Appx. 409 (10th Cir. 2005).
[2] See e.g., Freedom of Information Act, 5 U.S.C. § 552.
This piece was written by Nimish Desai, a partner at Lieff Cabraser, and edited by Devan Eaton, The Anti-Fraud Advocacy Fellow
