06 May 2015

Court Provides Guidance Regarding DOJ’s Invocation of Deliberative Process Privilege

Posted by Ellyce Cooper and Alexis Miller Buese

In a recent opinion in United States ex rel. Martin v. Life Care Centers of America Inc., No. 08-cv-251 (E.D. Tenn. April 27, 2015), a federal district Court provided guidance regarding the standard for evaluating the government’s assertion of the deliberative process privilege. DOJ alleges that Life Care, a provider of skilled nursing services comprised of more than 200 facilities, submitted fraudulent claims to Medicare as part of a nationwide scheme to provide medically unnecessary services. The defendants’ discovery requests to the government sought, among other things, drafts of government reports, documents relating to funding for skilled nursing facilities, briefing papers, press releases; documents reflecting responses or comments on regulatory rules, and notes from meetings and emails of government officials. DOJ objected to many of the requests and provided thirteen privilege logs setting forth various claims of privilege, including the deliberative process privilege.

The deliberate process privilege “protects from discovery ‘documents reflecting advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and policies are formulated.'” NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 149 (1975). Once an agency has made a sufficient showing that documents are entitled to the privilege, the deciding court must “balance the competing interests of the parties. Additionally, the party requesting the information may overcome the privilege by showing a “sufficient need for the material in the context of the facts or the nature of the case . . . or by making a prima facie showing of misconduct.” Redland Soccer Club Inc., v. Dep’t of Army of U.S., 55 F.3d 827, 854 (3d Cir. 1995).

Defendants filed a motion challenging DOJ’s assertion of the deliberative process privilege. DOJ filed a response that included affidavits from government officials in support of the assertions of privilege. The Defendants asked the Court to overrule the deliberative process privilege claims because the agency officials who submitted affidavits did not personally examine each document over which they claimed the privilege. The Court held that while the agents may not have individually reviewed each document, it was sufficient that they used their experience and professional background to reach the conclusion that the requested documents were covered by the deliberative process privilege. The Court noted that general consideration in lieu of a individualized review is “by no means a best practice,” but it was unable to conclude the government’s process resulted in an improper assertion of the privilege.

While the Court found that DOJ’s claims of privilege were properly supported by affidavits, it nevertheless appointed a special master to review each of the documents to determine whether the deliberative process privilege applies. The court set out a list of factors for the special master should consider when determining whether the documents fall under the deliberative process privilege:

1. Documents that are inter-agency or intra-agency which comprise part of a process by which governmental decisions and policies are formed that are both predecisional and deliberative and whose disclosure would affect candid deliberations within an agency shall fall within the scope of the deliberative process privilege, subject to specific exceptions:

a. “Predecisional”

i. A document from a subordinate to a superior officer is more likely to be predecisional, whereas a document from a superior officer to a subordinate is more likely to involve a decision that has already been made.

b. “Deliberative”

i. A document is deliberative when it reflects the give-and-take of the consultative process.

2. Communications made by outside consultants may fall under the privilege so long as they were acting as an employee.

3. Factual information within privileged documents shall not be covered by the deliberative process privilege as long it can be severed from the privileged document.

4. Communications which were made subsequent to an agency decision shall not be covered by the deliberative process privilege.

A copy of the court’s order can be found here.

23 February 2015

District Court: Government Need Not Provide Discovery on Allegedly False Claims Outside of the Government’s Selected Sample

Posted by Jaime L.M. Jones and Brenna Jenny

The Eastern District of Tennessee recently clarified the discovery implications of its September 2014 ruling (reported here) permitting the government to establish FCA liability based on a sampling of claims. See U.S. ex rel. Martin v. Life Care Centers of America, Inc., No. 08-cv-251 (E.D. Tenn. Feb. 18, 2015). In rejecting the defendant’s motion to compel discovery as to the allegedly false claims outside of the government’s sample, the court underscored the significance of its earlier ruling narrowing the evidence necessary to establish liability, and significantly constrained the government’s discovery obligations.

Well before the court’s September 2014 ruling, the defendant, a chain of skilled nursing facilities, had served on the government an interrogatory requesting that it “[i]dentify each false or fraudulent claim or false record or statement that you contend [defendants] knowingly presented or caused to be presented, or knowingly made, used, or caused to be made or used, in violation of the False Claims Act.” The government only provided claims information as to the ten patients identified in its complaint, and, following the court’s ruling, the government confirmed that it would only provide information relating to its sample of 400 patients. The defendant moved to compel the government to produce the information it had requested, arguing that, regardless of the government’s “trial strategy” to only present evidence as to a sample of patients, it was nonetheless entitled under the Federal Rules of Civil Procedure to “the foundational information on the claims it contends violated the FCA–and not just those that it has self-selected for proof at trial.”

The court denied the motion, ruling that the defendant was attempting to relitigate the same arguments regarding sampling that the court rejected in its September 2014 ruling and subsequent denial of the defendant’s motion to certify the decision for an interlocutory appeal. According to the court, allowing the defendant to conduct discovery as to claims outside of the government’s sample would require the very claim-by-claim review that the court previously determined to be unnecessary for establishing FCA liability. Thus, this court not only has lowered the government’s burden to establish liability for the submission of false claims but also has significantly lessened the government’s discovery obligations, particularly when alleging fraudulent schemes caused the submission of voluminous claims.

A copy of the court’s order can be found here.

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