Albarghouti v. LA Gateway Partners, LLC

Filed 3/24/26; Certified for Publication 4/2/26 (order attached)




IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                    SECOND APPELLATE DISTRICT

                               DIVISION THREE

JAMAL ALBARGHOUTI,                                  B333058

        Plaintiff and Appellant,                    Los Angeles County
                                                    Super. Ct. No.
        v.                                          22STCV17774

LA GATEWAY PARTNERS, LLC,
et al.,

     Defendants and
Respondents.


      APPEAL from a judgment of the Superior Court of
Los Angeles County, Michael L. Stern, Judge. Reversed
and remanded with directions.

      Brower Law Group, Steven Brower and Tae J. Im
for Plaintiff and Appellant.

     Cozen O’Connor, Marion T. Hack, J. Michael Schiff
and Thomas Casparian for Defendants and Respondents.
                 _________________________
       Relator Jamal Albarghouti (Relator) filed a complaint
against defendants LA Gateway Partners, LLC and PCL
Construction Services, Inc. (Defendants) for violations of the
California False Claims Act (Gov. Code, § 12650 et seq., CFCA). 1
Relator filed the complaint under the CFCA’s qui tam provisions,
which allow private individuals to bring claims on the
government’s behalf.
       The CFCA requires a qui tam plaintiff to file the complaint
in camera and mail a copy to the Attorney General. If the
complaint involves political subdivision funds, the Attorney
General must forward the complaint to the relevant local
prosecuting authorities. The Attorney General and local
authorities must decide whether to intervene in the case and
notify the court of their decisions within 60 days. The court
may extend the seal and the deadline to intervene upon a
showing of good cause. The qui tam plaintiff may not serve
the defendant while the complaint is under seal.
       Relator filed his complaint in camera and mailed a copy
to the Attorney General the same day. Although the complaint
concerned political subdivision funds, the Attorney General
did not send it to the relevant prosecuting authorities. Neither
the Attorney General nor any local authorities gave notice to
the court or moved to extend the seal. More than 60 days after
filing the complaint, Relator served Defendants. Defendants
demurred on the grounds that Relator failed to comply with
the CFCA by lifting the seal and serving the complaint before
the Attorney General and local authorities notified the court


1       Undesignated statutory references are to the Government
Code.




                                 2
whether they would intervene. The trial court sustained the
demurrer without leave to amend and dismissed the complaint.
      On appeal, Relator contends the trial court erred in
sustaining the demurrer on the grounds that he failed to comply
with the CFCA’s sealing and service requirements. We agree.
A qui tam plaintiff is not required to allege compliance with
the requirements to state a cause of action, nor does a lack of
compliance require automatic dismissal of a CFCA complaint.
Therefore, a qui tam plaintiff’s failure to comply with the sealing
and service requirements does not provide grounds to sustain
a demurrer.
      We also agree with Relator that he complied with the
CFCA’s sealing and service requirements. The undisputed
evidence shows Relator filed the complaint in camera, mailed
a copy to the Attorney General, and served Defendants after
the seal had been lifted. In concluding otherwise, the trial court
seemed to believe a CFCA complaint must remain under seal
beyond 60 days when the government neither requests an
extension of the seal nor notifies the court of its decision
whether to intervene. We hold the CFCA creates a 60-day
default sealing period, after which the seal lifts automatically
absent the government’s request for an extension. Accordingly,
we reverse the judgment and remand the case with directions
to overrule the demurrer.
       FACTUAL AND PROCEDURAL BACKGROUND
      On May 27, 2022, Relator filed a complaint against
Defendants, alleging two causes of action for violations of the
CFCA. The complaint alleged Defendants submitted false claims
to the Los Angeles Department of Water and Power (LADWP)




                                 3
and Los Angeles World Airports (LAWA) in connection with
construction projects at the Los Angeles International Airport. 2
       Relator filed the complaint under seal by affixing to it
mandatory Judicial Council form CM-011, entitled “Confidential
Cover Sheet False Claims Action.” The form included a blank
field for Relator to write the date the seal would expire unless
a “[m]otion to extend time is pending” or the seal is “[e]xtended
by court order.” Relator wrote in the field that the seal would
expire on July 26, 2022―60 days after he filed the complaint.
       Relator attached to the complaint proof of service on
the Attorney General. A process server stated under penalty
of perjury that he sent the Attorney General the complaint
by “certified mail, return receipt requested.”
       On July 28, 2022—two days after the seal expired—the
clerk of the superior court issued a summons on the complaint.
About a month later, Relator publicly filed a case management
statement. According to the statement, “[a]ll parties named
in the complaint . . . have been served, have appeared, or have
been dismissed.” 3
       Defendants demurred to the complaint on the grounds
that Relator failed to meet the heightened pleading standard
for CFCA claims. While the demurrer was pending, Relator filed
a first amended complaint (FAC). Defendants filed a demurrer
to the FAC, arguing Relator improperly based the claim on public


2      The substance of Relator’s allegations are not relevant
to this appeal, so we do not discuss them.
3    It is not clear precisely when Relator served the complaint
on Defendants. However, the parties seem to agree it occurred
sometime after the clerk issued the summons.




                                 4
information, failed to allege the source of his insider knowledge,
failed to allege the existence of a false claim, and failed to identify
the specific CFCA provision at issue. Defendants separately
moved to strike a single paragraph from the FAC because
it lacked factual support.
       A few weeks after filing the demurrer and motion to strike,
Defendants filed a motion for judgment on the pleadings.
Defendants argued the court was required to dismiss the
complaint because Relator failed to comply with the sealing
and service requirements in section 12652 and rule 2.573 of
the California Rules of Court. According to Defendants, those
provisions “expressly condition[ ]” a qui tam plaintiff’s ability
to prosecute an action “on the Court receiving notice from the
Attorney General that it has declined to intervene.” (Italics
omitted.) They argued Relator “irredeemably defied the very
purpose of the CFCA” by “unilaterally” unsealing the complaint
before the Attorney General notified the court of his decision.
(Italics omitted.) Defendants also asserted “it appears Relator
never properly served his complaint on the Attorney General
in the first place.”
       Defendants argued Relator’s failure to comply with
the CFCA and Rules of Court “robbed [the Attorney General]
of the ability to intervene in this action” and deprived the trial
court of jurisdiction. Defendants asserted they suffered incurable
prejudice because, “[b]y circumventing the Attorney General,”
Relator prevented them from negotiating with the state and
political subdivisions directly. They asked the court to dismiss
the complaint for lack of jurisdiction and to impose monetary
sanctions on Relator. The court set the hearing on the motion
for January 2024.




                                  5
       In May 2023—while the motion for judgment on the
pleadings was pending—the trial court sustained the demurrer
to the FAC as to one cause of action “on grounds of insufficiency.”
The court overruled the demurrer as to the other cause of action
and denied the motion to strike. The court granted Relator
leave to file an amended complaint.
       Relator filed the operative second amended complaint
(SAC) in June 2023. Defendants demurred to the SAC, repeating
many of the arguments from their motion for judgment on the
pleadings. According to Defendants, Relator refused to give
them the return receipt showing he served the Attorney General.
They asserted the “conclusion is clear; there is no return receipt
and there was no proper service.” Defendants suggested Relator
did not serve the Attorney General because his share of the
proceeds from the case would be greater if the government
did not intervene.
       Relator opposed the demurrer. He argued Defendants
wrongly assumed he failed to serve the Attorney General.
Relator noted that he attached to his complaint a proof of service
signed under penalty of perjury. Relator suggested he refused
to show Defendants the return receipt because Defendants were
refusing to respond to his discovery requests while the demurrer
was pending.
       Relator urged the court to overrule the demurrer because
the CFCA does not require that a complaint remain under seal
until the Attorney General gives notice. He pointed to section
12652, subdivision (c)(2), which states the complaint “may remain
under seal for up to 60 days.” Relator also noted that the statute
requires the Attorney General to notify the court within 60 days,




                                6
and it does not state the seal must remain in place beyond
that time if the Attorney General does not give notice.
       The court considered the demurrer at a hearing on
August 21, 2023. After argument from the parties, the court
sustained the demurrer without leave to amend. The court gave
three reasons for sustaining the demurrer. First, Relator failed
properly to “comply with Government Code section 12652 in
various parts, including [subdivision (c)(2), (3), and (4)].” Second,
Relator “prematurely unsealed the complaint before the Attorney
General had an opportunity to make a decision on whether to
intervene.” Third, Relator “proceeded to litigate the case . . .
after being informed of noncompliance with the statute . . . .
[Relator] had the opportunity to either allege in the [SAC]
compliance or substantial compliance or attempted compliance or
make a motion [or] application to the court to secure compliance
before we got to the state of the [SAC].” After sustaining the
demurrer, the court entered an order of dismissal with prejudice.
       Relator filed a motion for reconsideration. He attached
to the motion a declaration from Frederick W. Acker, who is
a Supervising Deputy Attorney General in the False Claims
Unit of the California Attorney General’s Office (CAGO).
Acker asserted—based on his review of the CAGO’s records—
Relator properly served the complaint on the Attorney General.
The CAGO received the complaint on or about June 2, 2022.
According to Acker, the CAGO should have transmitted the
complaint to LADWP and LAWA within 15 days of receiving it.
However, “an error occurred,” and the CAGO did not send the
complaint to either. Acker noted that, because the complaint
did not involve State of California funds, in the “ordinary course
of business,” the CAGO would not have made any court filings




                                  7
related to the complaint. Acker asked the court to set aside
the order sustaining the demurrer and allow time for LADWP
and LAWA to review the SAC.
       Relator also filed a declaration from his counsel, Steven
Brower. Brower attached a proposed third amended complaint
purportedly addressing the issues the court raised in connection
with the demurrer to the SAC. Brower also attached a copy of
the certified mail return receipt he received from the United
States Postal Service. The receipt was signed “DOJ.”
       Relator filed a motion for new trial after he filed the motion
for reconsideration. The motion for new trial essentially repeated
the arguments Relator made in his motion for reconsideration.
       The trial court denied Relator’s motion for new trial,
reasoning “[t]here was no trial in this case.” A few months later,
the trial court entered judgment for Defendants awarding them
costs. Relator timely appealed.
                            DISCUSSION
       Relator contends the trial court erred by sustaining
Defendants’ demurrer on the grounds that he failed to comply
with the CFCA’s sealing and service requirements. According
to Relator, a qui tam plaintiff’s failure to comply with those
requirements neither provides grounds to sustain a demurrer
nor requires dismissal. Alternatively, he argues the court erred
because the undisputed evidence shows he complied with all
the statutory sealing and service requirements. We agree
with Relator on both issues.
1.     Standard of review
       We review a judgment after an order sustaining a
demurrer de novo, exercising our independent judgment about
whether the complaint states a cause of action as a matter of law.




                                 8
(Los Altos El Granada Investors v. City of Capitola (2006)
139 Cal.App.4th 629, 650.) In reviewing the sufficiency of a
complaint against a general demurrer, “we give the complaint
a reasonable interpretation, reading it as a whole and its parts
in their context.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
We “assume the truth of all facts properly pleaded by the
plaintiffs, as well as those that are judicially noticeable.”
(Howard Jarvis Taxpayers Assn. v. City of La Habra (2001)
25 Cal.4th 809, 814.)
2.    The California False Claims Act
      The CFCA went into effect in 1988. (Stats. 1987, ch. 1420,
§ 1.) The Legislature modeled it after then-recent amendments
to the federal False Claims Act (FFCA). (See Sen. Com. on
Judiciary, Rep. on Assem. Bill No. 1441 (1987–1988 Reg. Sess.)
July 14, 1987, p. 2.) A nonprofit organization, the Center for
Law in the Public Interest, drafted significant portions of both
the federal amendments and the CFCA. (Id. at p. 3.)
      The CFCA imposes treble damages and other penalties
on individuals who defraud the state and its political subdivisions
by submitting false claims for government funds. (State ex rel.
Edelweiss Fund, LLC v. JP Morgan Chase & Co. (2020) 58
Cal.App.5th 1113, 1117–1118.) It requires the Attorney
General and the prosecuting authorities of the state’s political
subdivisions “diligently” to investigate violations of the CFCA,
and it authorizes them to bring civil actions against violators. 4
(See § 12652, subds. (a), (b).) As relevant here, the CFCA also


4      We refer to the Attorney General and the various
political subdivisions and their prosecuting authorities as
“the government.”




                                 9
authorizes private individuals—referred to as “qui tam plaintiffs”
or “relators”—to bring civil actions against violators “for the
person and either for the State of California in the name of the
state, if any state funds are involved, or for a political subdivision
in the name of the political subdivision.” (Id., subd. (c)(1).)
         Qui tam plaintiffs must comply with procedural
requirements beyond those generally required of plaintiffs
in civil actions. A qui tam plaintiff must file the complaint
“in superior court in camera,” and it “may remain under seal
for up to 60 days.” (§ 12652, subd. (c)(2).) The qui tam plaintiff
may not serve the defendant “until after the complaint is
unsealed.” (Ibid.) “Once filed, the action may be dismissed
only with the written consent of the court and [the government],
 . . . taking into account the best interests of the parties involved
and the public purposes behind [the CFCA].” (Id., subd. (c)(1).)
         On the same date the qui tam plaintiff files the complaint,
he must “serve by mail with ‘return receipt requested’ the
Attorney General with a copy of the complaint and a written
disclosure of substantially all material evidence and information
the person possesses.” (§ 12652, subd. (c)(3).) Upon receiving
the complaint, the Attorney General must determine whether
the case involves state funds, political subdivision funds, or a
combination of the two. If the case involves political subdivision
funds, the Attorney General must forward the complaint within
15 days to the appropriate prosecuting authorities. (See id.,
subd. (c)(7)(A), (8)(A).) The Attorney General and the prosecuting
authorities may, “for good cause shown, move the court for
extensions of the time during which the complaint remains
under seal.” (Id., subd. (c)(8)(C).)




                                 10
         “Within 60 days after receiving a complaint,” the Attorney
General “may elect to intervene and proceed with the action.”
(§ 12652, subd. (c)(4), (8)(B).) The Attorney General must give
notice to the court of the decision “[b]efore the expiration of
the 60-day period or any extensions obtained.” (Id., subd. (c)(6),
(8)(D).) If the Attorney General notifies the court “that it intends
to proceed with the action, . . . the action shall be conducted by
the Attorney General and the seal shall be lifted.” (Id., subd.
(c)(6)(A), (8)(D)(i).) If the Attorney General notifies the court
“that it declines to proceed with the action, . . . the seal shall be
lifted and the qui tam plaintiff shall have the right to conduct
the action.” (Id., subd. (c)(6)(B), (8)(D)(iii).)
         In cases involving political subdivision funds, the relevant
prosecuting authority “may elect to intervene and proceed with
the action” within 45 days of receiving the complaint from the
Attorney General. (§ 12652, subd. (c)(7)(B).) The prosecuting
authority must give notice to the court “[b]efore the expiration
of the 45-day period or any extensions obtained.” (Id., subd.
(c)(7)(D).) If the prosecuting authority notifies the court “that
it intends to proceed with the action, . . . the action shall be
conducted by the prosecuting authority and the seal shall
be lifted.” (Id., subd. (c)(7)(D)(i).) If the prosecuting authority
notifies the court “that it declines to proceed with the action,
 . . . the seal shall be lifted and the qui tam plaintiff shall
have the right to conduct the action.” (Id., subd. (c)(7)(D)(ii).)
         If the government “proceeds with the action, it shall
have the primary responsibility for prosecuting the action.
The qui tam plaintiff shall have the right to continue as a full
party to the action.” (§ 12652, subd. (e)(1).) The government
may move for an order limiting the qui tam plaintiff’s




                                 11
participation by showing unrestricted participation “would
interfere with or unduly delay the Attorney General’s or local
prosecuting authority’s prosecution of the case.” (Id., subd. (i).)
The government may dismiss or settle the action over the qui tam
plaintiff’s objection, but the qui tam plaintiff first has the right
to present evidence at a hearing. (Id., subd. (e)(2).)
       If the government elects not to proceed with the action,
“the qui tam plaintiff shall have the same right to conduct the
action as the Attorney General or prosecuting authority would
have had if it had chosen to proceed.” (§ 12652, subd. (f)(1).)
“Upon timely application, the court shall permit the state or
political subdivision to intervene in an action with which it
had initially declined to proceed if the interest of the state or
political subdivision in recovery of the property or funds involved
is not being adequately represented by the qui tam plaintiff.”
(Id., subd. (f)(2)(A).)
       A qui tam plaintiff is entitled to a share of the proceeds
of the action. If the government timely intervenes, the qui tam
plaintiff shall receive between 15 and 33 percent of the proceeds,
“depending upon the extent to which the qui tam plaintiff
substantially contributed to the prosecution of the action.”
(§ 12652, subd. (g)(2).) If the government does not timely
intervene, the qui tam plaintiff shall receive between 25 and
50 percent of the proceeds, depending on the “amount that
the court decides is reasonable for collecting the civil penalty
and damages on behalf of the government.” (Id., subd. (g)(3).)




                                12
3.     The trial court erred in sustaining Defendants’
       demurrer and dismissing the complaint
       a.    Relator was not required to allege compliance with
             section 12652’s sealing and service requirements
       In sustaining Defendants’ demurrer to the SAC, the trial
court cited Relator’s failure to allege compliance with section
12652’s sealing and service requirements. The trial court did not
specifically explain why Relator’s lack of compliance provided
grounds to sustain a demurrer. Presumably, it concluded
compliance was necessary to state a cause of action under
the CFCA. (See Code Civ. Proc., § 430.10, subd. (e).)
       Contrary to the trial court’s ruling, compliance with section
12652’s sealing and service requirements is not a prerequisite
to bringing a qui tam action alleging violations of the CFCA.
Nor could it be, as most of the requirements concern actions a
qui tam plaintiff may take only after filing the complaint in the
superior court. Therefore, a qui tam 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 tam 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. 5


5     Even if a qui tam plaintiff were required to allege
compliance in an amended complaint, we still would reverse
the order sustaining the demurrer without leave to amend.
As we discuss below, the record contains undisputed evidence
showing Relator complied with section 12652’s sealing and




                                13
      Nor does a qui tam plaintiff’s lack of compliance with
the CFCA’s sealing and service requirements otherwise require
dismissal. The United States Supreme Court addressed a similar
issue with respect to the FFCA and concluded a violation of its
sealing requirements does not require automatic dismissal. 6
(See State Farm Fire and Cas. Co. v. U.S ex rel. Rigsby (2016)
580 U.S. 26.) The high court explained, although the FFCA
creates a mandatory sealing rule, its “structure is itself an
indication that violating the seal requirement does not mandate
dismissal. . . . [T]he [F]FCA has a number of provisions that
do require, in express terms, the dismissal of a relator’s action.
[Citations.] It is proper to infer that, had Congress intended
to require dismissal for a violation of the seal requirement, it
would have said so.” (Id. at pp. 33–34.) The court also reasoned
that requiring automatic dismissal would be inconsistent with
the general purpose of the FFCA. The court explained that the
“seal provision was enacted in the 1980’s as part of a set of


service requirements. Therefore, he has met his burden to
show a “reasonable possibility that the defect can be cured by
amendment.” (Koszdin v. State Comp. Ins. Fund (2010) 186
Cal.App.4th 480, 487; see City of Stockton v. Superior Court
(2007) 42 Cal.4th 730, 746–747 [a plaintiff may show a
reasonable possibility of amendment for the first time
on appeal].)
6     Because of the similarities between the CFCA and the
FFCA, California courts interpreting the CFCA may seek
guidance from federal cases interpreting the FFCA. (See Wells
v. One2One Learning Foundation (2006) 39 Cal.4th 1164, 1215
(Wells); City of Pomona v. Superior Court (2001) 89 Cal.App.4th
793, 802.)




                                14
reforms that were meant to ‘encourage more private enforcement
suits.’ [Citation.] At the time, ‘perhaps the most serious problem
plaguing effective enforcement’ of the [F]FCA was ‘a lack of
resources on the part of Federal enforcement agencies.’ . . .
Because the seal requirement was intended in main to protect
the Government’s interests, it would make little sense to adopt
a rigid interpretation of the seal provision that prejudices the
Government by depriving it of needed assistance from private
parties.” (Id. at pp. 34–35; see also U.S. ex rel. Lujan v. Hughes
Aircraft Co. (9th Cir. 1995) 67 F.3d 242, 245 (Lujan) [the FFCA’s
sealing requirements “are not jurisdictional, and violation of
those requirements does not per se require dismissal of the
qui tam complaint”].)
        The United States Supreme Court’s reasoning applies
equally to the CFCA’s sealing and service requirements. Like
the FFCA, the CFCA contains provisions expressly requiring
dismissal of a qui tam action for reasons other than compliance
with its sealing and service requirements. (See, e.g., § 12652,
subd. (d)(3)(A) [a trial court “shall dismiss” a qui tam action
if it arises out of facts publicly disclosed in other actions,
governmental reports, or the news media].) The CFCA also
contains provisions expressly conditioning a court’s jurisdiction
on a party’s timely compliance with certain service rules.
Specifically, section 12656 requires service on the Attorney
General within three days of any CFCA-related filing made
in an appellate court. (§ 12656, subd. (a).) The statute states
“[t]imely compliance with the three-day time period is a
jurisdictional prerequisite to the entry of judgment, order, or
decision.” (Id., subd. (b).) That the Legislature did not include
similar language regarding compliance with section 12652’s




                                15
sealing and service requirements is a strong indication that it
did not intend to create jurisdictional prerequisites or require
automatic dismissal for violations.
       b.     Relator had standing
       Defendants contend the trial court properly sustained the
demurrer because Relator’s failure to comply with section 12652’s
sealing and service requirements prevented him from obtaining
standing to litigate the case. According to Defendants, a qui tam
plaintiff’s standing “is conditioned on the [government] first
electing not to proceed with the case itself.” They assert the
government must “assign” its standing to the qui tam plaintiff,
which requires an “unequivocal manifestation” of the
government’s intent to effectuate the assignment. Defendants
suggest this occurs only when the government gives notice of
its intent not to proceed with the action. Defendants contend
that where the government either elects to proceed with the
action or remains silent—as it did here—the qui tam plaintiff
lacks standing.
       “The prerequisites for standing to assert statutorily[-]
based causes of action are determined from the statutory
language, as well as the underlying legislative intent and the
purpose of the statute.” (Boorstein v. CBS Interactive, Inc. (2013)
222 Cal.App.4th 456, 466.) Here, Relator had standing under
the plain language of section 12652, which expressly authorizes
a qui tam plaintiff to bring an action without any prior
governmental approval. (See § 12652, subd. (c)(1).) Moreover,
it authorizes the plaintiff to bring the action both “for the person”
and for the government. (Ibid.) Thus, a qui tam plaintiff has
“a personal stake in the action beyond her representative stake.”
(Armenta ex rel. City of Burbank v. Mueller Co. (2006) 142




                                 16
Cal.App.4th 636, 642.) These provisions directly contradict
Defendants’ assertion that Relator’s standing was conditioned
on the government electing not to proceed with the case.
       Defendants seem to suggest that, although Relator had
standing to bring the action, he lacked standing to pursue it.
Defendants cite no authority to support a distinction between
a plaintiff’s standing to bring an action and to pursue it. In any
event, Defendants overlook the fact that section 12652 allows a
qui tam plaintiff to continue as a “full party” with “unrestricted
participation” in the case, even if the government elects to
proceed with the action. (§ 12652, subds. (e)(1), (i).) The
government may move to limit the plaintiff’s participation
under certain circumstances, but it may not remove the plaintiff
as a party. (Id., subd. (i).) Accordingly, Relator’s standing—
either to bring the action or to pursue it—did not depend on the
government giving notice that it would not intervene in the case.
       c.     Relator complied with section 12652’s sealing
              and service requirements
       Defendants suggest the order dismissing the action was a
proper exercise of the trial court’s authority to sanction Relator
for violating section 12652’s sealing and service requirements.
Trial courts have inherent power to impose sanctions—including
terminating sanctions—on parties who fail to comply with section
12652’s requirements. (See Lujan, supra, 67 F.3d at p. 245;
Osborne v. Todd Farm Service (2016) 247 Cal.App.4th 43, 51
[California courts have “inherent power to issue a terminating
sanction for ‘pervasive misconduct’ ”].) Here, however, the
record is clear that the trial court did not dismiss the action as
a terminating sanction. Rather, it dismissed the action because




                               17
it sustained a demurrer without leave to amend, presumably
for failure to state a cause of action.
       Even if we were to construe the trial court’s order
sustaining the demurrer as a terminating sanction, we still
would reverse. We review a trial court’s imposition of
terminating sanctions for an abuse of discretion. (Reedy v.
Bussell (2007) 148 Cal.App.4th 1272, 1292.) Where “ ‘the
trial court’s decision to issue sanctions depends on factual
determinations, we review the record for substantial evidence
to support those determinations.’ ” (Tedesco v. White (2023)
96 Cal.App.5th 1090, 1097.)
       Federal courts balance three factors to determine
whether dismissal is warranted when a qui tam plaintiff
violates the FFCA’s sealing requirements: (1) actual harm to
the government; (2) severity of the violations; and (3) evidence
of bad faith. (See Lujan, supra, 67 F.3d at pp. 245–246.) Even
assuming those factors apply in state court cases involving the
CFCA, we need not consider them because the record shows
Relator complied with the CFCA’s requirements. Accordingly,
the trial court abused its discretion to the extent it dismissed
the action as a sanction. (See Conservatorship of Becerra (2009)
175 Cal.App.4th 1474, 1481–1482 [“Absent a proper basis for
[the court’s factual] findings, a sanctions award represents
a prejudicial abuse of discretion.”].)
       Defendants do not dispute that Relator filed the complaint
in camera, served the Attorney General by mail with return
receipt requested, and waited more than 60 days after filing
the complaint to serve them. 7 (See § 12652, subd. (c)(2), (3).)

7     In the trial court, Defendants speculated that Relator
did not actually serve the Attorney General. Defendants seem




                                18
Nor do they dispute that the government did not seek to extend
the seal beyond 60 days. Nevertheless, Defendants argue Relator
violated section 12652 by lifting the seal prematurely and
without authority. According to Defendants, a qui tam complaint
remains under seal—and a qui tam plaintiff may not serve
a defendant—until the government notifies the court of its
decision whether to intervene. They argue Relator violated
these requirements by serving them and litigating the case before
the government notified the court whether it would intervene.
       Section 12652, subdivision (c) contains three general
provisions governing the length of time a qui tam complaint
must remain under seal. First, paragraph (2) states a qui tam
complaint “may remain under seal for up to 60 days.” (See
§ 12652, subd. (c)(2).) Second, paragraphs (5), (7)(C), and (8)(C)
state the government “may, for good cause shown, move the court
for extensions of the time during which the complaint remains
under seal.” 8 (Id., subd. (c)(5), (7)(C), (8)(C).) Third, paragraphs
(6), (7)(D), and (8)(D) state the “seal shall be lifted” when the
government provides notice of its decision whether to intervene.
(Id., subd. (c)(6), (7)(D), (8)(D).)
       The parties disagree about how these provisions operate
where, as here, the government neither requests an extension

to have abandoned that contention on appeal and for good reason.
There is overwhelming evidence in the record that Relator served
the Attorney General by mail with “return receipt requested,”
as required under section 12652, subdivision (c)(3).
8     Many provisions appear in three separate paragraphs of
section 12652, subdivision (c). Which paragraph applies depends
on whether the complaint involves only state funds, only local
funds, or a combination of the two.




                                 19
of the seal nor provides notice of its decision to intervene or not.
Relator contends subdivision (c)(2) creates a default 60-day
sealing period, after which the seal lifts automatically unless
the government requests an extension. Defendants contend the
seal may be lifted only when the government gives notice under
paragraphs (6), (7)(D), or (8)(D). Therefore, they argue, the
seal remains in place unless and until the government notifies
the court of its decision whether to intervene, no matter when
the government gives that notice.
       Resolution of the parties’ dispute requires us to interpret
section 12652. “The rules governing statutory construction are
well settled. We begin with the fundamental premise that the
objective of statutory interpretation is to ascertain and effectuate
legislative intent. [Citations.] To determine legislative intent,
we turn first to the words of the statute, giving them their
usual and ordinary meaning. [Citations.] When the language
of a statute is clear, we need go no further. However, when
the language is susceptible of more than one reasonable
interpretation, we look to a variety of extrinsic aids, including
the ostensible objects to be achieved, the evils to be remedied, the
legislative history, public policy, contemporaneous administrative
construction, and the statutory scheme of which the statute is
a part.” (Nolan v. City of Anaheim (2004) 33 Cal.4th 335, 340.)
We presume the Legislature intended the entire statute to have
effect, and we aim to avoid interpretations that render any part
meaningless. (Even Zohar Construction & Remodeling, Inc.
v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 838;
People v. Arias (2008) 45 Cal.4th 169, 180.) Where reasonably
possible, we must harmonize statutes and reconcile seeming
inconsistencies within them. (Even, at p. 838.)




                                20
       Relator’s interpretation is consistent with subdivision
12652, subdivision (c)’s plain language and gives effect to
every relevant paragraph within it. Under his interpretation,
paragraph (2)—which states the qui tam complaint may remain
under seal for “up to 60 days” (§ 12652, subd. (c)(2))—creates a
60-day default period under which the complaint must remain
under seal. Paragraphs (6), (7)(D), and (8)(D) allow the seal to be
lifted before 60 days if the government gives notice of its decision
to intervene within that time. Paragraphs (5), (7)(C), and (8)(C)
allow the court to extend the seal beyond 60 days, but only if the
government shows good cause for the extension. 9 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.
       Defendants’ interpretation, in contrast, renders superfluous
subdivision (c)(2)’s mandate that a qui tam complaint remain
under seal “for up to 60 days.” (§ 12652, subd. (c)(2).)
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. (See
§ 12652, subd. (c)(5), (7)(C), (8)(C).) 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



9      Under the California Rules of Court, the default period
also is extended while the government’s motion is pending. (See
Cal. Rules of Court, rule 2.573(a)(2).)




                                21
requires it to do—it would need to show good cause. We doubt
the Legislature intended to create such incentives. 10
       Even assuming the statutory language were ambiguous—
and that both interpretations were viable—the relevant extrinsic
aides weigh in favor of Relator’s interpretation. The Legislature’s
overriding purpose for enacting the CFCA was “ ‘ “to prevent
fraud on the public treasury” ’ ” by supplementing
“ ‘governmental efforts to identify and prosecute fraudulent
claims made against state and local governmental entities.’ ”
(San Francisco Unified School Dist. ex rel. Contreras v. Laidlaw
Transit, Inc. (2010) 182 Cal.App.4th 438, 446.) It included
the qui tam provisions, in particular, to encourage private
enforcement of the CFCA. (See U.S. ex rel. Pilon v. Martin
Marietta Corp. (2d Cir. 1995) 60 F.3d 995, 998; Wells, supra,
39 Cal.4th at p. 1215 [looking to Pilon to determine the purpose
of the CFCA’s seal requirement].) The CFCA “ ‘ “should be given
the broadest possible construction consistent” ’ ” with its purpose.
(Contreras, at p. 446.)
       Relator’s interpretation promotes the CFCA’s purpose
by allowing private persons to enforce its provisions in the
face of governmental inaction. Indeed, it would seem private
enforcement of CFCA claims is particularly needed where—
as here—the government completely neglects its statutory

10     It is possible the government’s failure to respond within
60 days would prevent it from intervening and taking control
of the action. In that case, the government still would have an
incentive to move to extend the seal, rather than remain silent.
However, where the government does not intend to intervene,
Defendants’ interpretation would allow it to extend the seal
indefinitely without consequence.




                                22
obligations. Defendants’ interpretation, in contrast, would allow
governmental negligence to place an indefinite hold on the
enforcement of the CFCA, frustrating the goal of combating
fraud on the public treasury.
      Defendants suggest Relator’s interpretation undermines
the purpose of the seal requirement, which is to ensure a
“qui tam action does not alert wrongdoers, prior to intervention
by the government, that they are under investigation.” (Wells,
supra, 39 Cal.4th at p. 1215.) We disagree. The government’s
need for secrecy is in conflict with the Legislature’s goal of
encouraging private enforcement of the CFCA. The Legislature
balanced those competing interests by requiring qui tam
plaintiffs to file their complaints in camera, but limiting the
length of time the complaints may remain under seal absent
good cause. Relator’s interpretation respects that balance by
giving teeth to the CFCA’s statutory deadlines. Defendants’
interpretation undermines it by allowing a complaint to
remain under seal indefinitely without good cause.
      Moreover, a comparison with the FFCA suggests
the Legislature prioritized private enforcement above other
competing interests. The FFCA and CFCA both require a
qui tam plaintiff to file the complaint under seal. However,
they differ on the length of time the complaint must remain
under seal and the procedures to serve the defendant. The FFCA
states a qui tam complaint “shall remain under seal for at least
60 days, and shall not be served on the defendant until the court
so orders.” (31 U.S.C. § 3730(b)(2), italics added.) The CFCA,
in contrast, states the complaint may remain under seal for
“up to 60 days,” and it does not require a court order to serve
the defendant once the seal is lifted. (§ 12652, subd. (c)(2), italics




                                 23
added.) The Legislature also added to the original version of the
CFCA a mandate that, “in no event may the complaint remain
under seal for longer than 90 days,” even if the government has
good cause for an extension. (Stats. 1987, ch. 1420, § 1.) 11 Each
of these changes reflects a legislative intent to prioritize private
enforcement over the government’s need for secrecy. 12 Relator’s
interpretation is more consistent with that intent.
        There is no merit to Defendants’ contention that Relator’s
interpretation would undermine the government’s rights under
the CFCA. Under Relator’s interpretation, a qui tam plaintiff
still is required to serve the Attorney General, and the
government still has 60 days to intervene or request an
extension. If the government does not act in that time, it is
reasonable to infer it does not want to intervene and does not
have good cause to extend the seal. Moreover, even when
the government fails to act within 60 days, it is not completely
without recourse. Section 12652, subdivision (f) allows the
government to move to intervene “in an action with which it had
initially declined to proceed if the interest of the [government] in
recovery of the property or funds involved is not being adequately
represented by the qui tam plaintiff.” (§ 12652, subd. (f)(2)(A).)
        The trial court suggested Relator should have taken
steps to ensure the government complied with its statutory


11    The Legislature amended the CFCA in 1996 to remove
the 90-day limitation. (See Stats. 1996, ch. 700, § 1.)
12     The qui tam provisions of the Insurance Frauds Prevention
Act mirror those in the FFCA. (See Ins. Code, § 1871.7, subd.
(e)(2).) This suggests the deviations in the CFCA were
intentional.




                                24
obligations. 13 The CFCA’s legislative history, however, suggests
the Legislature sought to minimize the procedural burdens on
qui tam plaintiffs. For example, an early draft of the legislation
did not specify the means by which qui tam plaintiffs must serve
the Attorney General. A committee report noted the legislation
as written presumably would require personal service, which
it suggested would be “an unreasonable burden to impose on
a plaintiff, particularly in view of the fact that the [Attorney
General] is not a party to the action.” (Assem. Com. on Judiciary,
Rep. on Assem. Bill No. 1441 (1987–1988 Reg. Sess.) Apr. 29,
1987, p. 5.) The Senate subsequently amended the bill to
make clear that service need only be by mail with return
receipt requested.
       The Legislature’s intent to minimize the procedural hurdles
on qui tam plaintiffs also is reflected in its decision not to require
service on local prosecuting authorities, even if no state funds are
involved. (§ 12652, subd. (c)(3).) Instead, the Attorney General
must determine whether local prosecuting authorities have
an interest in the case and provide notice to them. (Id., subd.
(c)(7)(A), (8)(A).) This allocation of responsibility suggests
the Legislature wanted to minimize the burdens on qui tam
plaintiffs, presumably to encourage private enforcement.
Relator’s interpretation is consistent with that intent, as it
incentivizes the government to act diligently without placing any
additional burdens on qui tam plaintiffs.

13     It is not entirely clear what a qui tam plaintiff could do
to force the government to act, as the CFCA does not provide
qui tam plaintiffs any express enforcement mechanisms.
Perhaps a qui tam plaintiff could apply for an injunction
compelling the government to give notice of its decision.




                                 25
       Defendants suggest the seal must remain in place until
the government acts in order to prevent reputational damage to
defendants “should the allegations prove specious.” According to
Defendants, once the seal is lifted and the case becomes a matter
of public record, any reputational damage cannot be undone.
Defendants also suggest the seal must remain in place to
facilitate settlement or dismissal by the government. They assert
the “dynamics of such negotiations” are “dramatically altered”
once the seal is lifted.
       Defendants point to nothing in the CFCA’s text or its
legislative history even to suggest the Legislature imposed
the seal requirement to protect a defendant’s reputation.
Moreover, their arguments rely on the faulty assumption that
the government may unilaterally dismiss or settle a qui tam
action while the complaint remains under seal. To dismiss or
settle a case, the government first must elect to proceed with
the action by giving notice, at which point the “seal shall be
lifted.” (See § 12652, subds. (c)(6)(A), (7)(D)(i), (8)(D)(i), (e)(2).)
The qui tam plaintiff then has the right to object and present
evidence to the court before it may approve a settlement or
dismiss the case. (Id., subd. (e)(2).)
       Defendants contend the California Rules of Court support
their interpretation. Specifically, they point to rule 2.573(a)(1),
which states, “Records in a False Claims Act case to which public
access has been prohibited under Government Code section
12652(c) must remain under seal until the Attorney General
and all local prosecuting authorities involved in the action have
notified the court of their decision to intervene or not intervene.”
(Cal. Rules of Court, rule 2.573(a)(1).) According to Defendants,




                                  26
this rule requires that all records in a CFCA case remain sealed
indefinitely until the government gives notice.
       At the outset, where there is a conflict between a statute
and a rule of court, the statute controls. (See Trans-Action
Commercial Investors, Ltd. v. Firmaterr, Inc. (1997) 60
Cal.App.4th 352, 364 [“if a statute even implicitly or inferentially
reflects a legislative choice to require a particular procedure,
a rule of court may not deviate from that procedure”].)
Nevertheless, when possible, we must construe the Rules
of Court “in a manner that maintains their consistency with
statutory or constitutional requirements.” (Id. at p. 365.)
       Here, it is possible to construe California Rules of Court,
rule 2.573(a)(1) in a manner consistent with Relator’s
interpretation of section 12652. By its plain language, rule
2.573(a)(1) applies only to records “to which public access
has been prohibited under Government Code section 12652(c).”
(Ibid.) As we discussed above, section 12652, subdivision (c)
reflects a legislative choice that a CFCA complaint may remain
under seal for no more than 60 days absent a court order
extending that time. Indeed, any contrary interpretation would
render superfluous subdivision (c)(2)’s mandate that a complaint
“may remain under seal for up to 60 days.” (§ 12652, subd. (c)(2).)
Where, as here, 60 days have passed without an order extending
the seal, section 12652, subdivision (c) no longer prohibits public
access to the complaint. At that point, rule 2.573(a)(1) does not
apply.
       Defendants’ reliance on State of California ex rel. Sills
v. Gharib-Danesh (2023) 88 Cal.App.5th 824 is misplaced.
Defendants point to a passage in Sills stating, “Only when the
relevant government agency notifies the court of its decision




                                27
regarding whether it will intervene in the action can the seal
be lifted. And only when the court lifts the seal in connection
with this intervention decision can the summons and complaint
be served on the defendant(s) and litigation of the action begin.
Prior to that time, the qui tam plaintiff is not allowed to take any
steps to prosecute the case.” (Id. at pp. 832–833.) As Defendants
seem to acknowledge, the court’s assertion that the seal can
be lifted only when the government gives notice is dicta. The
government in Sills sought and obtained extensions of the seal
beyond 60 days. (See id. at pp. 837–838.) Therefore, the court
did not need to decide if a seal lifts automatically when the
government fails to request an extension within 60 days. It is
“axiomatic” that cases are not authority for propositions not
considered and decided. (Sandhu v. Board of Administration etc.
(2025) 108 Cal.App.5th 1048, 1068.)
       We also reject Defendants’ passing contention that a
court must order the seal lifted on a qui tam complaint. The
Legislature used the passive voice in each provision concerning
the lifting of the seal, suggesting it intended the seal would
lift automatically, without a court order. (See, e.g., § 12652,
subd. (c)(6), (7)(D), (8)(D) [stating “the seal shall be lifted”].)
Defendants point to nothing in the statutory text or the
legislative history to suggest otherwise. The Judicial Council
seems to agree with our interpretation, as they included on
form CM-011 a box requiring the filing party to write the date
on which the “seal [is] to expire” unless a “[m]otion to extend
time is pending” or the seal is “[e]xtended by court order.”
The inclusion of that box would not make sense if a court
must order the seal lifted, as Defendants contend.




                                 28
      Applying Relator’s interpretation to the record before us,
the only reasonable conclusion is that Relator complied with
section 12652’s sealing and service requirements. The
undisputed evidence shows he filed the complaint in camera,
set the seal to expire in 60 days, served the Attorney General
by mail, return receipt requested, and waited more than 60 days
to serve Defendants. Because the government did not move
to extend the seal, the seal lifted automatically after 60 days.
Therefore, by waiting more than 60 days to serve Defendants,
Relator complied with the requirement that “[n]o service shall
be made on the defendant until after the complaint is unsealed.”
(§ 12652, subd. (c)(2).) Accordingly, he complied with all the
requirements for sealing and service found in section 12652,
subdivision (c). The trial court erred to the extent it concluded
otherwise. 14




14   Because we conclude the trial court erred by sustaining the
demurrer, Relator’s arguments related to his motion for new trial
are moot. Accordingly, we need not consider them.




                                29
                        DISPOSITION
      We reverse the judgment, including the award of costs
to Defendants. On remand, the trial court shall vacate its
order sustaining the demurrer and enter an order overruling it.
Jamal Albarghouti shall recover his costs on appeal.




                                    EGERTON, J.

We concur:




             EDMON, P. J.




             HANASONO, J.




                               30
Filed 4/2/26
                     CERTIFIED FOR PUBLICATION

       IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                      SECOND APPELLATE DISTRICT

                              DIVISION THREE


JAMAL ALBARGHOUTI,                         B333058

       Plaintiff and Appellant,            Los Angeles County
                                           Super. Ct. No.
       v.                                  22STCV17774

LA GATEWAY PARTNERS, LLC,
et al.,

       Defendants and Respondents.


THE COURT:
      The opinion in the above-entitled matter, filed on March 24, 2026,
was not certified for publication in the Official Reports. For good cause,
it now appears that the opinion should be published in the Official Reports.
      There is no change in the judgment.




________________________________________________________________________
EGERTON, J.                   EDMON, P. J.              HANASONO, J.