FEMA Cannot Hide Behind Touhy Regulations to Avoid FCA Deposition

Posted by Gordon Todd and Marisa West

In a recent decision, the Eastern District of Louisiana compelled the Federal Emergency Management Agency (“FEMA”) to produce a witness for deposition in a qui tam False Claims Act suit despite the agency’s Touhy regulations. Williams v. C. Martin Company Inc., et al., No. 07-6592, 2014 U.S. Dist. LEXIS 91802 (E.D. La. July 7, 2014). The Williams decision may have broad implications for Defendants seeking to discover evidence from Federal agencies in defending against FCA claims.

Robyn Williams filed an FCA suit against Medley Jarvis Defendants (“MJI”) and C. Martin Defendants (“CMC”), relating to contracts FEMA had awarded to CMC. The Supreme Court has held that government agencies may establish regulations to regulate the disclosure of documents and testimony during litigation. U.S. ex rel. Touhy v. Ragen, 340 U.S. 462, 468 (1951). On December 4, 2012, MJI filed a Touhy request with FEMA seeking documents related to the contracts. Over one year later and following litigation over the paucity of FEMA’s initial document production, FEMA produced 26,000 pages of documents responsive to MJI’s request on April 21, 2014. The documents were produced pursuant to a protective order filed with the district court.

On May 22, 2014, CMC noticed a Rule 30(b)(6) deposition of FEMA to discuss topics pertaining to FEMA’s production. FEMA invoked its Touhy regulations to avoid the deposition and CMC moved to compel. FEMA argued that sovereign immunity requires litigants to follow Administrative Procedures Act (“APA”) procedures to challenge its decision to withhold a witness for deposition. The district court found first that it had jurisdiction to review the agency’s decision because “sovereign immunity does not insulate a federal agency from complying with a Rule 45 subpoena.” Id. at *12 (quoting In re Vioxx Products Liability Litigation, 235 F.R.D. 334, 343 (E.D. La. 2006) (internal quotation marks omitted)). The court then held that FEMA’s refusal to comply with the subpoena had been arbitrary and capricious because it failed to set forth a satisfactory explanation for its refusal to comply with the deposition subpoena. Id. at *16. The district court granted the motion to compel and ordered the deposition. Williams v. C. Martin Company Inc., et al., No. 07-6592, 2014 U.S. Dist. LEXIS 91802, at *6-9 (E.D. La. July 7, 2014).

The Williams decision streamlines FCA defendants’ ability to compel Agency testimony in an FCA action by removing the need to file a separate APA challenge. If adopted more generally, this decision may rein in one avenue by which Government agencies avoid producing relevant materials in FCA cases.