Documents Provided to Government by Qui Tam Defendant Not Protected by Privilege; United States District Court for the District of Minnesota No. 11-cv-2453, United States and the State of California ex rel. Steven Higgins v. Boston Scientific Corp.

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The defendant’s request to quash an order compelling it to produce documents and presentations it provided to the Department of Justice to convince the government not to join a qui tam case is denied, where neither the False Claims Act nor Federal Rules of Evidence restricted discovery of these materials, and where the defendant waived any claims to work-product or attorney-client privilege when it intentionally disclosed the documents to the government, a potential adversary in the litigation. Though the government declined to intervene, the court explained that the action was brought on the government’s behalf, and therefore it retained its adversarial relationship with the defendant.

Boston Scientific Corporation objected to the magistrate judge’s order compelling discovery of a presentation BSC made to government officials amid an investigation into allegations of False Claims Act violations.

In his complaint, Steven Higgins alleged BSC violated the federal and state of California False Claims Acts by causing physicians to make false claims for reimbursement to federal healthcare programs. Specifically, Higgins alleged the firm coerced physicians into certifying that certain defibrillators were reasonable and necessary for the medical procedures during which the devices were implanted.

After the action was filed, the government opened an investigation into the allegations. The Department of Justice issued a civil investigative demand to BSC, in response to which BSC produced documents and made presentations. The government later declined to intervene.

Proceeding with the case, the relator requested that BSC produce all the presentations and documents it had provided the government, and a motion to compel was granted. The magistrate judge held that neither the False Claims Act nor the Federal Rules of Evidence restricted discovery of the materials requested by the relator. Additionally, he held that BSC waived any claims to work-product or attorney-client privilege by intentionally disclosing the requested materials to an adversary, that the work-product doctrine does not protect materials used in litigation, and that the materials contain relevant information.

BSC objected, arguing that the materials are privileged and protected for public policy reasons. First, the defendant argued that settlement negotiations are subject to a heightened relevance standard in discovery, but the court explained that the Rules of Evidence do not govern discovery. In discovery, parties may obtain any nonprivileged matter that is relevant to any party’s claim or defense and information within this scope of discovery need not be admissible in evidence to be discoverable. The court held the magistrate judge properly found that the materials were discoverable because they were related to his claims about the medical devices at issue.

Second, BSC argued that public policy requires the court to protect communications between defendants and the government in qui tam cases. According to BSC, the government would not be able to settle False Claims Act cases if a defendant’s presentations to the government could later be revealed to relators. However, the court explained that the CID provisions of the False Claims Act, not DOJ’s policy concerns, govern the custody of documents shared with the government in this case. The court noted the statute prohibits the government from disclosing materials “while in the possession” of the government. While this provision prevents the government from disclosing materials, nothing in the statute prohibits the defendant from later disclosing those materials in discovery. Because the materials were being requested from BSC, not the government, the court held the magistrate judge properly determined that their disclosure was not prohibited by the False Claims Act.

Third, BSC argued that the Eighth Circuit created an expectation of confidentiality for material provided to the government during an investigation and therefore its materials are protected from disclosure. However, the court found the case cited by the defendant was specific to attorney-client privilege and that the Eighth Circuit has not extended this limited waiver doctrine beyond this type of privilege. In fact, it has held that intentional disclosure to an adversary waives the work-product privilege, the court noted.

Finally, BSC argued that the presentations to the government are privileged under the work-product doctrine, which protects materials prepared in anticipation of litigation but is waived by intentional disclosure to an adversary. However, the court held the magistrate judge correctly found that a waiver occurred because BSC’s disclosure was intentional and made to an adversary in the same litigation. Although a relator is prosecuting this case on the government’s behalf, the government remains BSC’s adversary and BSC voluntarily disclosed the requested materials to it. That voluntary disclosure waived any claim to work-product privilege.

The plaintiff is represented Daniel R. Miller, E. Michelle Drake, Jonathan Z. DeSantis, Joy P. Clairmont, Shoshana Savett, Susan Schneider Thomas, and William Haselden Ellerbe of Berger Montague PC. The federal government is represented by Chad A. Blumenfield , United States Attorney’s Office. The state plaintiffs are represented by Erika Hiramatsu, California Attorney General’s Office and Kristi A. Nielsen, Minnesota Attorney General’s Office.

Boston Scientific Corporation is represented by Allison M. Lange Garrison, Margaret Rudolph, and Spencer Persson of Norton Rose Fulbright US LLP. And by Brian Patrick Cadigan, Caitlin Anne Chambers, Eric Sussman, Frederick Robinson, Lesley Carol Reynolds, Mark W. Fidanza, and Stephen Scheve, Reed Smith LLP.

FCA Higgins v Boston Scientific