United States of America, ex rel. v. Sightpath Medical, Inc.

Background

This was a discovery order in a whistleblower case under the False Claims Act. Cameron-Ehlen Group, doing business as Precision Lens, and Paul Ehlen moved to compel the United States Government to provide fuller responses to three interrogatories and one document request.

The case began when Relator Kipp Fesenmaier filed a sealed action in November 2013. After seeking and receiving eleven extensions over approximately four years, the Government intervened against selected defendants, including Precision Lens and Paul Ehlen, and filed the operative complaint in February 2018. The Federal Bureau of Investigation began investigating the defendants’ business activities nearly a year before the sealed action was filed. The FBI interviewed Precision Lens employees in 2013, and attorneys in the civil division of the United States Attorney’s Office were regularly coordinating with the FBI by 2014.

Discovery Requests

The defendants sought four categories of information:

Fair-Market-Value Allegations

The Government’s complaint alleged specific instances in which physicians received trips or other benefits for less than fair-market value. The Government objected to providing its estimates and their factual bases, arguing in part that the defendants bore the burden on fair-market value and knew more about some details.

The court rejected those arguments for purposes of the discovery dispute. Because the Government had made specific allegations in the complaint, the factual basis for those allegations was presumptively discoverable. The court ordered the Government to state its fair-market-value estimate for the specific allegations and the basis for each estimate. If the Government had no estimate, it still had to state the basis for the allegations.

Identification of False Claims

The defendants also sought identification of each allegedly false claim, including information such as the date, amount, submitting entity, billing codes, facility, physician, and fee breakdown. The Government had objected that the request was overly broad, burdensome, and premature because discovery was ongoing.

The court held that the Government had to respond based on its current knowledge. It ordered the Government to identify the specific claims it currently contended supported its damages calculation, as well as known physicians, alleged benefits or payments, and the duration of any alleged effect on claims. The Government could supplement its response as discovery continued, and all supplementation had to be completed no later than 45 days before the close of discovery.

Privilege Log

The court found the Government’s one-page privilege log inadequate because it grouped documents into nine broad categories and merely checked boxes for asserted privileges. Federal Rule of Civil Procedure 26(b)(5) requires enough information about withheld documents to allow the opposing party to assess the privilege claim without disclosing the protected information itself.

The court ordered the Government to provide a supplemental log for every document it continued to withhold. The log had to identify each document’s date, author, all recipients, a brief description of its contents, and the privilege asserted. The order also required a fuller log within two weeks of the order’s date, and the final order required the same document-specific information for materials still claimed to be privileged.

Investigation Interviews and Work Product

The Government had refused to identify interviewees or produce interview reports and notes, citing the work product doctrine, the informant’s privilege, the investigatory-files privilege, and apparently the deliberative-process privilege. The court said the Government had not adequately supported the latter three privileges. It also held that the work product doctrine did not protect the identities of people interviewed because that information was not itself a document or tangible thing and did not inherently reveal an attorney’s mental impressions.

The court could not determine from the record whether the doctrine protected every interview report or note. It distinguished between opinion work product, which reflects an attorney’s mental impressions or legal analysis, and fact work product, which contains factual information and may be discoverable upon a showing of substantial need and inability to obtain the equivalent elsewhere without undue hardship.

The court concluded that the defendants had made that showing for materials properly treated as fact work product. It reasoned that the passage of time, the Government’s parallel investigation, and the likely importance of contemporaneous interview materials made it difficult for the defendants to obtain equivalent information through current interviews. The court also stated that early FBI interview materials created before the United States Attorney’s Office became meaningfully involved were not protected by the work product doctrine on the record presented.

Disposition

Judge David T. Schultz granted the defendants’ Motion to Compel Discovery. The Government was ordered to supplement its responses about fair-market value and specific claims, answer the request identifying interviewees, produce responsive interview documents subject to submitting claimed privileges or proposed redactions for in-camera review, and provide a supplemental privilege log identifying each withheld document and the required details.