Washington Court Seals Parts of Complaint in Whistleblower FCA Customs Case

The U.S. District Court for the District of Washington on Jan. 30 granted in part and denied in part importer Yakima Products' bid to seal parts of the complaint in a False Claims Act whistleblower suit against the company's alleged failure to pay import duties and false identification of the country of origin (United States v. Yakima Products Inc., D. Wash. # 21-0524).

Judge Kymberly Evanson said that six paragraphs in the complaint included "attorney-client privileged information" but that seven other paragraphs didn't have such information. As a result, the judge sealed the paragraphs with the privileged information after also finding that Yakima did not waive its attorney-client privilege and that the crime-fraud exception does not apply.

The suit was brought by Brent Stone, former Yakima employee, who is seeking a cut of any penalty resulting from the FCA case alleging customs duties violations. The U.S. intervened in part, only advancing Stone's claim regarding certain "Covered Conduct," and the complaint in the case was filed under seal. The government moved to lift the seal, prompting a challenge from Yakima.

Evanson held that the privileged paragraphs laid out legal advice given to Yakima but that paragraphs detailing conversations between Yakima and its lawyer not regarding legal advice aren't "attorney-client privileged."