California Legal Brief

The Rule of Albarghouti is that the California False Claims Act creates a 60-day default sealing period, after which the seal lifts automatically absent the government's request for an extension, under circumstances where a qui tam plaintiff files the complaint in camera, serves the Attorney General by certified mail, and the government neither requests a seal extension nor provides notice of its intervention decision within 60 days.

Appeal from judgment after order sustaining demurrer without leave to amend in Superior Court, Los Angeles County.

Plaintiff Appellant was Jamal Albarghouti — the qui tam relator who filed the False Claims Act complaint against defendants for allegedly submitting false claims to LADWP and LAWA.

Defendants Respondents were LA Gateway Partners, LLC and PCL Construction Services, Inc. — the construction companies accused of submitting false claims in connection with construction projects at Los Angeles International Airport.

The suit sounded in violations of the California False Claims Act. No cross-claims are described.

The key substantive facts leading to the suit were allegations that Defendants submitted false claims to the Los Angeles Department of Water and Power (LADWP) and Los Angeles World Airports (LAWA) in connection with construction projects at the Los Angeles International Airport.

The procedural result leading to the Appeal: The trial court sustained Defendants' demurrer without leave to amend and dismissed the complaint, ruling that Relator failed to comply with the CFCA's sealing and service requirements by lifting the seal and serving the complaint before the Attorney General and local authorities notified the court whether they would intervene.

The key question(s) on Appeal: 1) Whether a qui tam plaintiff's failure to comply with the CFCA's sealing and service requirements provides grounds to sustain a demurrer; 2) Whether the CFCA creates a 60-day default sealing period after which the seal lifts automatically absent government request for extension; 3) Whether Relator complied with the statutory sealing and service requirements.

The Appellate Court held that (1) compliance with the CFCA's sealing and service requirements is not a prerequisite to stating a cause of action and does not require automatic dismissal, (2) the CFCA creates a 60-day default sealing period after which the seal lifts automatically unless the government requests an extension, and (3) Relator complied with all statutory requirements by filing in camera, serving the Attorney General by certified mail, and waiting more than 60 days to serve defendants after the seal automatically lifted.

The case is inapplicable when the government timely requests an extension of the seal within 60 days, when the government provides notice of its intervention decision within 60 days, when state-only funds (rather than political subdivision funds) are involved, or when the qui tam plaintiff fails to properly serve the Attorney General or file the complaint in camera.

The case leaves open the question of what procedural steps a qui tam plaintiff could take to compel government compliance with statutory notice obligations, whether similar automatic seal-lifting rules apply when only state funds are involved, and the specific factors courts should consider when determining appropriate sanctions for actual CFCA procedural violations.