The defendants’ motion for a protective order over documents requested by the plaintiff is granted, where the documents were protected either by the work product doctrine or attorney-client privilege. The plaintiff argued that certain work products were not prepared in anticipation of litigation and were therefore not protected, but the court found the defendants were put on notice of the potential lawsuit by the plaintiff’s own statements and had engaged counsel for advice almost immediately. Therefore, any notes about the internal investigation of the plaintiff’s allegations were protected. The court also found that any email communications between employees responsible for responding to the lawsuit and the company’s counsel were clearly privileged. The plaintiff argued that internal emails between employees that did not directly involve counsel should not be privileged, but the court agreed that the emails discussed the advice of counsel and were not shared with any employee who did not need to know their contents.
NAPA Management Services Corporation and North American Partners In Anesthesia moved for a protective order, arguing that good cause existed to preclude the discovery of certain communications and documents requested by plaintiff Michael Lord, as they are investigative materials protected as work product and by attorney-client privilege.
The relator, a certified registered nurse anesthesiologist formerly employed by NAPA-PA, allege that the defendants submitted false claims to Medicare for reimbursement of anesthesiology services. The plaintiff alleged the defendants engaged in a scheme to defraud Medicare in order to receive higher reimbursement by knowingly and falsely billing it for anesthesiology services provided at PMC as “medical direction” services when they should have properly been billed as “medical supervision” services. Specifically, the relator alleged that for some surgeries, the attending anesthesiologist doctor was not present in the operating room to place the patient under anesthesia, nor present when the patient was being extubated from anesthesia. The plaintiff also alleged employment retaliation.
The defendants filed a motion for a protective order for 31 documents which they asserted were protected by work product or attorney-client privilege.
The plaintiff sought documents the defendants asserted were privileged, including e-mail correspondence between non-attorney NAPA employees and officers that were based upon, and discussing, advice received from counsel; and e-mail correspondence with defendants’ former outside counsel. The plaintiff opposed the current motion for a protective order for these documents, arguing that some of the documents the defendants sought to protect were not prepared in anticipation of litigation. The plaintiff also argued that since the defendants produced similar and related documents to him, they waived their right to invoke the privileges. Further, Lord argued that to the extent the defendants are relying of the advice of counsel defense, they are improperly attempting to utilize the attorney-client privilege as both a sword and a shield.
First, the court considered the date by which the defendants were put on notice about the possibility of litigation. The court found this possibility was apparent on April 2, 2012, when the plaintiff contacted NAPA’s vice president for human resources and compliance to raise several complaints, including allegations of Medicare fraud. At that time, Lord indicated he had contacted an attorney. The defendants asserted that communications sought by Lord from this time period were prepared in anticipation of litigation, contrary to the plaintiff’s assertions.
Next, the court reviewed the defendants’ support for their assertion of work product and attorney-client privilege.
First, the defendants argued that any materials prepared by the human resources VP, including emails and interview notes, were protected under the work product doctrine. Lord argued these materials were prepared for another purpose, as no litigation was imminent when he made his initial contact, which prompted the investigation.
The court sided with the defendants, finding they reasonably interpreted Lord’s communications as threatening litigation. The court noted the serious nature of the allegations presented to HR and Lord’s indication that he had already contacted an attorney. The plaintiff’s refusal to provide his own written notes to HR transformed his communication for an ordinary request for an investigation to a potential lawsuit. Further, the HR vice president immediately contact counsel for advice. Based on the circumstances, the court found it objectively reasonable for the defendants to conclude that litigation was likely. Thus, the HR investigation was conducted in anticipation of litigation and was privileged as work product.
Further, documents containing opinion work product from defendants’ counsel was also protected by privilege. Therefore, the court found that all the documents flagged as investigation materials could reasonably be considered created because of the potential for litigation. However, the court directed the defendants to provide one document—a Power Point presentation on compliance issues—which was disclosed in a manner inconsistent with privilege.
Next, Lord argued that since the defendants provided him with some notes from the investigation, they cannot withhold the rest, as they had waived the work-product privilege. Lord also noted that the HR VP relied on those notes when she responded to his concerns, so in essence, privilege had been waived.
However, the court disagreed. The court found that the disclosure of some of the interview notes by the defendants, particularly the notes from an interview in which the plaintiff was involved, did not constitute a waiver of the work product protection for all of the interview notes, since their production did not substantially increase the possibility of plaintiff obtaining all of the information in the investigation materials.
The defendants also argued Lord failed to show a substantial need for the materials. The court found the documents relevant, but agreed the defendant failed to show that he could not obtain the information by other means, such as by deposing the individuals involved in the investigation.
Next, the defendants argued that emails and other documents sought by the plaintiff were protected by attorney-client privilege. First, the court agreed that emails between NAPA employees and the company’s outside counsel were clearly privileged communications. The court also agreed that communications to and from the company’s former in-house counsel were protected. Finally, the court considered emails that were not from nor to either attorney, but were exchanged internally among NAPA employees discussing the legal advice received from counsel. The plaintiff argued the emails were shared with employees who did not need to know the information, and therefore privilege was waived, but court agreed these were protected.
Next, the court considered whether privilege had been waived for any of these documents. Lord argued the defendants waived privilege with respect to their outside counsel based on the advice of counsel defense, i.e., when the advice of counsel is placed in issue where the client asserts a claim or defense, and attempts to prove that claim or defense by disclosing or describing an attorney client communication. Specifically, Lord suggested that the defendants put Vaughn’s advice at issue when they asserted reliance on his advice to show they were in compliance with applicable laws.
In response, the defendants argued they had not asserted any defense based on advice of counsel. The court sided with the defendants, but noted it would hold them to this representation.
The plaintiff also argued the defendants waived the attorney-client privilege with respect to communications with their outside counsel since they had provided him with a PowerPoint presentation on compliance issues prepared by the counsel. Since the documents addressed the same topics, Lord argued privilege was waived on all of the counsel’s communications. However, the court found that any waiver was limited to this presentation. The court noted the presentation provided defendants’ employees with updates on applicable CMS rules and regulations, and did not contain protected communications and was not related to the subject matter at issue.
Finally, Lord argued he was entitled to receive the facts underlying the attorney-client communications, even if the communications containing counsel’s advice remain protected. In response, the defendants argued Lord could seek discovery of this information, but was not entitled to their internal communications. The court found that the purely factual material could not be extracted from the privileged communications with counsel without divulging privileged communications, and therefore Lord was not entitled to any of the requested documents.
