The district court granted the relators’ motion to clarify or amend a protective order to allow documents provided during discovery to be passed on to the United States. The defendants argued that the government had declined to intervene in the qui tam action and therefore was not a party in interest to the litigation, but the court disagreed, noting the government’s authority to dismiss litigation or approve or veto settlements, regardless of its choice to intervene. The court also noted that the civil complaint and the government’s criminal investigation into the alleged healthcare fraud arose from the same set of facts and therefore the government was entitled to any new documents produced during discovery.
Relators Albert Bruno and Alex Strahan filed a motion to clarify, or alternatively to modify, a protective order in their qui tam action alleging healthcare fraud.
After the United States declined to intervene in the action, the court entered a confidentiality and protective order. The relators asked the court’s permission to disseminate discovery documents marked confidential to counsel for or agents of the United States, either through clarification or modification of the existing order. The relators argued that the U.S. is a real party in interest to the litigation, and therefore is entitled tor receive documents obtained through discovery under the terms of the order. Alternatively, they asked that the order be modified to allow the transfer of the documents.
In response, the defendants argued that because the government declined to intervene, the United States is not a real party in interest entitled to civil discovery documents. They also argued that allowing the relators to provide discovery documents to the United States would deprive them of their Constitutional rights; that the relators failed to establish good cause for modifying the order; and that the relators should not be permitted to use the specter of a criminal proceeding as a litigation tactic in this civil litigation.
In response, the relators argued that by dint of its authority to approve or veto any settlement under the FCA, the government is necessarily a real party in interest entitled to discovery. They also argued that granting the government access to the documents would not erode the principle purpose of the order, which was to protect health information as required by HIPAA.
The court noted that the order as written did not define the United States’ rights or interests with respect to confidential information, nor include the United States as a party for the purposes of the order. However, the court also noted that it was not asked, and did not decide, whether the United States should be precluded from receiving such confidential information. Further, the order specifically provided that disclosures of confidential information may occur simply upon further order of the court.
The court concluded that the government was entitled to receive discovery documents from the relators for the express purpose of a related criminal investigation. The court cited prior cases in which the Fifth Circuit held that the United States is a real party in interest even if it did not control the FCA suit. Although the situations in those cases were not identical to the question at issue here, the court found them instructive in defining the role of the government in FCA litigation. Further, other courts have held that the U.S. is entitled to receive documents produced in discovery.
In this case, the parties agreed that the government’s criminal investigation arose out of the same allegations brought in this qui tam action. The allegations in this qui tam case and the parties’ representations as to the nature of the criminal investigation all implicate fraudulent activity against the United States. Therefore, the court held that the U.S. is a real party in interest and granted the relators’ motion.
