Higgins v. Boston Scientific Corporation

Background

Steven Higgins brought the action for the United States and the State of California under the False Claims Act and the California False Claims Act. He alleged that Boston Scientific sought Food and Drug Administration approval and sold defective Cognis and Teligen cardiac defibrillator devices. The court was deciding Higgins’s motion for sanctions based on Boston Scientific’s discovery disclosures and conduct. The motion had previously been ruled on, but that ruling was vacated to allow oral argument and reconsideration. The case was then reassigned to Judge Tony N. Leung.

Boston Scientific served its initial disclosures in March 2018, identifying ten people likely to have discoverable information and describing the subjects of their information. On the final day of fact discovery, July 30, 2019, Boston Scientific amended those disclosures. It added seven people, including Brian Scovil, Tim Smith, Jim Gilkerson, Torsten Kayser, Sharon Zurn, David Breiter, and Erika Huffman. Higgins argued that the late disclosures prevented him from conducting adequate discovery, particularly concerning Boston Scientific’s communications with the Food and Drug Administration.

Legal standard

Federal Rule of Civil Procedure 26 requires parties to identify people likely to have discoverable information that they may use to support their claims or defenses. Parties must supplement or correct disclosures in a timely manner when they learn that the disclosures are materially incomplete or incorrect. Under Rule 37, a party that fails to provide required information generally may not use that information or witness unless the failure was substantially justified or harmless. The court may also order other sanctions, including payment of reasonable expenses, additional discovery, limits on evidence, or other remedies tailored to the circumstances.

Violations and prejudice

The court found that Erika Huffman should have been included in Boston Scientific’s initial disclosures. The court described Huffman as central to Boston Scientific’s communications with the Food and Drug Administration concerning the devices and to Boston Scientific’s defenses. Boston Scientific added her only on the final day of discovery, even though the company knew or should have known of her importance earlier.

The court also found a Rule 26 violation concerning David Breiter. The record did not show that Breiter had otherwise been made known to Higgins through discovery before the late disclosure. The court found no violation concerning Scovil and Gilkerson because they had been designated as electronic-discovery custodians and Higgins had the opportunity to depose them. The court likewise found that Smith and Kayser had been made known through discovery because Higgins had noticed, but later canceled, their depositions. Zurn presented a more difficult question because she had been made available as a corporate witness on certain subjects, but the court found no separate Rule 26 violation concerning her.

The court rejected Boston Scientific’s arguments that Higgins should have discovered Huffman’s importance from documents produced in discovery, that supplementation was unnecessary until discovery ended, and that Boston Scientific did not intend to use Huffman to support its defenses. The court concluded that Boston Scientific’s incomplete disclosures shaped the course of discovery, including the selection of electronic-discovery custodians, and that withholding Huffman and Breiter was harmful and prejudicial to Higgins. The court also found that Boston Scientific’s failure was not substantially justified.

Sanctions ordered

The court ordered Boston Scientific to produce every responsive document matching the parties’ agreed electronic-discovery search terms for Huffman, Breiter, and Zurn. That production was due within 14 days of the order. Higgins then had 14 days to review the production and decide whether depositions were necessary. If he chose to depose any of the three witnesses, the depositions could occur within 45 days of the order and could last up to eight hours per witness. Boston Scientific was required to make its counsel and Zurn available and to use its best efforts to produce former employees Huffman and Breiter for deposition.

The court declined to exclude the newly disclosed witnesses or their information. It also declined to impose an adverse inference at that time, meaning an instruction or assumption that missing or withheld evidence would have harmed Boston Scientific. The court stated that it could revisit the adverse-inference issue if later discovery or other developments made that necessary.

The court awarded Higgins all reasonable costs and attorney’s fees related to briefing and arguing the sanctions motion. It did not award costs and fees for past or future discovery. The parties were directed to try to resolve the payment; if they could not, Higgins could submit an affidavit itemizing the costs and fees.

Disposition

Judge Tony N. Leung ordered that Higgins’s motion for sanctions was granted in part and denied in part. The order concerned discovery sanctions and did not decide the underlying False Claims Act allegations.