Edelweiss Fund, LLC v. JP Morgan Chase & Co.Annotate this Case
In 2014, Edelweiss filed under seal its qui tam complaint, seeking to recover more than $700 million in false claims allegedly paid by the state and political subdivisions. The defendants were entities involved in the marketing of government-issued variable-rate bonds. The Attorney General reportedly received multiple extensions of the 60-day period for investigation and in October 2015, filed a notice declining to intervene. The next day, Edelweiss successfully moved to further extend the seal to January 2016. Edelweiss’s second motion to extend the seal, (to June) was also granted. Edelweiss filed no further motions to extend the seal but, for two years after the seal period expired, did not move to lift the seal despite two admonitions from the court. In June 2018, Edelweiss finally asked the court to unseal the case but did so incorrectly. Ultimately, the clerk of the court informed Edelweiss that it had unsealed the action around December 4, 2018. Weeks later, Edelweiss began serving the defendants.
The court of appeal affirmed the dismissal of the defendants. The time from October 2015 to December 2018 is included in the three-year period during which service must be accomplished because, even if Edelweiss was unable to serve the summons until the seal was lifted, the continuing of the seal after October 2015 was not a circumstance beyond Edelweiss’s control, Code of Civ. Proc. 583.240.