Monday, April 6, 2026
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Suit Saying City Was Bilked Out of $10 Million Reinstated
Court of Appeal Declares Judge Erred in Notion That Sealed Complaint Could Not Be Served by Qui Tam Plaintiff Until A.G.’s Office Decided Whether to Take Charge of Case; Says Time to Enter Litigation or Not Is Limited
By a MetNews Staff Writer
A judge erred in dismissing a qui tam action alleging that two companies obtained nearly $10 million from the City of Los Angeles’s Department of Airports and Department of Water & Power based on falsehoods as to extra work performed on a project, the Court of Appeal for this district has held, rejecting the view that the realtor was obliged to wait until the Office of Attorney General decided whether to intervene before serving the complaint.
The March 24 opinion by Justice Anne H. Egerton of Div. Three was certified for publication on Thursday.
Suit was brought by Jamal Albarghouti on May 27, 2022, against LA Gateway Partners, LLC and PCL Construction Services, Inc. in connection with a central car-rental project at the Los Angeles International Airport. Pursuant to requirements of the California False Claims Act (“CFCA”), he filed his Los Angeles Superior Court complaint under seal, sending a copy that day to the Office of Attorney General.
The act, at Government Code §12650 et seq., says in §12652 that a complaint in such an action must remain sealed “for up to 60 days,” although it provides that the Attorney General’s Office may “for good cause” seek an extension.
Before the 60 days are up, the office is to either “[n]otify the court that it intends to proceed with the action, in which case the action shall be conducted by the Attorney General and the seal shall be lifted” or “[n]otify the court that it declines to proceed with the action, in which case the seal shall be lifted and the qui tam plaintiff shall have the right to conduct the action.”
Attorney General Rob Bonta’s office did not seek an extension and, within the 60-day period, did not notify the court that it would or would not pursue the action. Two days after the 60-day period expired, service of process was effected.
On Aug. 21, 2023, Los Angeles Superior Court Judge Michael L. Stern sustained a demurrer without leave to amend to the second amended complaint, finding, in part, that Albarghouti had “prematurely unsealed the complaint before the Attorney General had an opportunity to make a decision on whether to intervene” and “proceeded to litigate the case” without any word from Bonta’s office as to its intent.
Argument on Appeal
Arguing for an affirmance, the defendants said in their brief on appeal:
“The qui tam complaint must remain under seal until the qui tam plaintiff receives notice from the AG or political subdivision that it elects not to proceed with a claim against the defendant, after which the qui tam plaintiff may obtain a court order for the lifting of the seal. Only then, and only if the State of California or the implicated political subdivision elect not to proceed with a claim against the named defendant, does the qui tam plaintiff obtain standing to conduct the action in the shoes of the AG or prosecuting authority….
“Here, Appellant unilaterally lifted the seal without a court order and without any statutorily required indication from the State that it declined to pursue the action.”
The comment was added:
“If the Court is wondering why the Appellant acted in this manner, it warrants observation that, under the FCA, a qui tam plaintiff stands to recover more if the AG or local prosecuting authority elect not to pursue the claim.”
Egerton’s Opinion
Rejecting the defendants’’ reasoning, Egerton wrote:
“Where, as here, the government neither gives notice nor moves for an extension, the default 60-day period applies. After 60 days, the seal is lifted automatically and the qui tam plaintiff may serve the defendant.”
She said the “[d]efendants’ interpretation…renders superfluous” the statutory “mandate that a qui tam complaint remain under seal ‘for up to 60 days,’ ” adding:
“Defendants do not even acknowledge that language, let alone explain what effect it has under their interpretation. Defendants’ interpretation also would undermine the provisions requiring the government to show ‘good cause’…to extend the seal….Under their interpretation, the seal would extend beyond 60 days automatically if the government simply remained silent. However, if the government requested an extension of the seal—as the statute expressly requires it to do—it would need to show good cause. We doubt the Legislature intended to create such incentives.”
Dictum Provided
Although Egerton found that Albarghouti did comply with the sealing-and-notice requirements of the CFCA. she said in dictum:
“Contrary to the trial court’s ruling, compliance with section 12652’s sealing and service requirements is not a prerequisite to bringing a qui tarn action alleging violations of the CFCA. Nor could it be, as most of the requirements concern actions a qui tarn plaintiff may take only after filing the complaint in the superior court. Therefore, a qui tarn plaintiff cannot truthfully allege compliance with section 12652’s sealing and service requirements, at least in the initial complaint. Nor is there anything in the CFCA to suggest a qui tarn plaintiff must allege compliance in amended complaints. Accordingly, Relator’s failure to allege compliance with section 12652’s sealing and service requirements did not provide grounds for sustaining a demurrer to his complaint, and the trial court erred to the extent it concluded otherwise.”
The case is Albarghouti v. LA Gateway Partners, LLC, 2026 S.O.S. 934.
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