In a recent decision, the Third Circuit held that a New Jersey federal district court wrongly sealed a profit-sharing settlement agreement between qui tam litigants.  The plaintiffs, Fair Laboratory Practices Associates (FLPA) and NPT Associates, had alleged that they had a profit sharing deal with defendants, Hunter Laboratories LLC and Chris Riedel, in which they all agreed to share the proceeds from several qui tam lawsuits against third party clinical laboratory companies, including Quest  Laboratories.  After a dispute among the parties regarding profit sharing, the district court ordered Hunter to pay FLPA its share of the proceeds from a settlement in a qui tam lawsuit.  Two months later, the parties filed a joint stipulation announcing they had reached a settlement in the amount of damages the court had already awarded, and asked the district court to put their settlement agreement under seal, where the public could not see it.  Quest intervened and asked the court to reject the request to seal the settlement agreement.
 
After the district court decided against Quest, Quest successfully appealed to the Third Circuit.  The Third Circuit held that the public’s interest in the contents of the settlement between the parties in a Medicare and Medicaid billing False Claims Act lawsuit carried the day, particularly where the public had an interest in understanding why a judge would vacate a final judgement in favor of a settlement that allegedly did nothing more than confirm the judgement.  The Court instructed that on remand, the district court should consider whether a less restrictive option than sealing the entire agreement is feasible.