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

Background

This discovery order concerns communications between relator Kipp Fesenmaier, his counsel, and Government agents in a False Claims Act case. The Government and Fesenmaier asserted a common-interest privilege, which can protect communications shared by parties pursuing a shared legal strategy. Defendants moved to compel materials and testimony that plaintiffs had withheld under that privilege.

In an earlier order, the court required production of materials that were not independently protected by the attorney-client privilege or the work-product doctrine, while asking the parties to provide more information about whether the common-interest privilege applied before September 2013. Defendants also questioned whether Fesenmaier had standing to bring the action because his interest might have belonged to his bankruptcy estate. The court deferred that broader issue because related dispositive issues were before District Judge Wright on defendants’ motion for summary judgment against Fesenmaier.

Privilege analysis

The court ruled that plaintiffs had the burden to establish that the common-interest privilege applied to the specific communications at issue. It found that September 20, 2013—the date of Fesenmaier’s pre-filing disclosure to the Government—was the appropriate dividing point. The court concluded that the Government’s later involvement in evaluating intervention and case strategy supported finding a sufficient unity of interests by that date. Therefore, plaintiffs did not waive otherwise applicable privileges by sharing documents and communications with one another on or after September 20, 2013.

The court reached a different conclusion concerning the earlier period. On April 24, 2013, Fesenmaier told an FBI case agent that he had hired a law firm for a potential False Claims Act lawsuit. The court held that this statement alone did not establish a common legal strategy or unity of interests between Fesenmaier and the Government. At that time, the FBI investigation was apparently criminal, and the civil division of the U.S. Attorney’s Office did not participate in witness interviews until 2014. Fesenmaier’s communications could therefore have been made as a cooperating witness rather than in pursuit of a shared legal strategy.

Ruling

The court held that the common-interest privilege did not apply to otherwise privileged materials shared before September 20, 2013. It ordered that any responsive communications previously withheld under that privilege must be produced if they occurred before that date. The order states that defendants’ Motion to Compel Withheld Materials and Testimony was GRANTED. The court did not resolve Fesenmaier’s standing or the other issues pending before District Judge Wright.

The order was signed by United States Magistrate Judge David T. Schultz.