United States District Court, E.D. Missouri, Southeastern Division
UNITED STATES OF AMERICA, ex rel. PAUL CAIRNS, et al., Plaintiff,
D.S. MEDICAL, L.L.C., et al., Defendants.
MEMORANDUM AND ORDER
AUDREY G. FLEISSIG, UNITED STATES DISTRICT
qui tam action under the False Claims Act, 31 U.S.C.
§§ 3729-33 (“FCA”) is before the Court
on two motions by the government: (1) a motion (ECF No. 181)
to compel the production of documents from the law firm
Thompson Coburn LLP (“TC”) regarding legal advice
that the firm provided Defendants; and (2) a motion (ECF No.
183) to re-open the depositions of James Fogle
(Defendants' primary lawyer at TC) and Defendant Dr.
Sonjay Fonn to allow questioning regarding documents that
were produced by Defendants after these deponents were
deposed; the government requests an additional four hours of
time with each deponent. For the reasons set forth below, the
motion to compel, as narrowed by the government's
supplemental brief, will be granted.
tam action was initiated by Relator on January 5, 2012. Upon
being served with the complaint, the government began
parallel civil and criminal investigations. The intervenor
complaint in this civil action (ECF No. 26) claims that the
four Defendants - Dr. Sonjay Fonn, a neurosurgeon; Midwest
Neurosurgeons, LLC, a company formed and operated by Dr.
Fonn; Deborah Seeger, Dr. Fonn's fiancée; and D.S.
Medical, LLC (“DCM”), a company formed and
created by Seeger for the distributorship of spinal implant
devices - violated the False Claims Act, 31 U.S.C.
§§ 3729-33, by submitting or causing to be
submitted to the federal Medicare and Medicaid programs false
claims for reimbursement for Dr. Fonn's services in
performing spinal surgeries at St. Francis Medical Center
(“SFMC”) in Cape Girardeau, Missouri, between
December 2008 and March 2012, and for the purchase of implant
devices used in those surgeries. For purposes of the motion
to compel under consideration, it is not disputed that the
first indication to Defendants of a government investigation
was the service of a subpoena on DSM in March 2012.
imposes civil liability on any person who “knowingly
presents, or causes to be presented, a false or fraudulent
claim for payment or approval” to an officer or
employee of the United States. 31 U.S.C. §
3729(a)(1)(A), (b)(2)(A)(i). The term “knowingly”
means that a person, with respect to information contained in
a claim, (1) “has actual knowledge of the
information;” (2) “acts in deliberate ignorance
of the truth or falsity of the information;” or (3)
“acts in reckless disregard of the truth or falsity of
the information.” Id. § 3729(b)(1). The
purpose of the FCA's scienter requirement is to avoid
punishing “honest mistakes or incorrect claims
submitted through mere negligence.” United States
ex rel. Owens v. First Kuwaiti Gen. Trading & Contracting
Co., 612 F.3d 724, 728 (4th Cir. 2010).
claims for reimbursement in this case were allegedly false
because they did not disclose that they were the result of
alleged kickbacks that violated the federal criminal
Anti-Kickback Statute (“AKS”), 42 U.S.C. §
1320a, et seq. The AKS punishes “knowing and
willful” violations. 42 U.S.C. § 1320a-7a(h).
“[A] person need not have actual knowledge of this
section or specific intent to commit a violation of this
section”; a person need only have acted with a wrongful
purpose. United States v. Jain, 93 F.3d 436, 441
(8th Cir. 1996).
1, 2016, Defendants filed a notice stating that they would be
asserting an advice-of-counsel defense. Specifically,
Defendants asserted that they “anticipate introducing
evidence at trial regarding communications between Defendants
and their attorney [Fogle], and, therefore, will be conceding
to a limited waiver of the attorney client privilege.”
ECF No. 148. The conceded waiver was limited to
communications prior to the time Defendants learned of the
government's investigation arising from the qui tam suit;
and to nine topics, including, for example, the relationship
between Dr. Fonn and the other three Defendants.
3, 2016, the government served TC and Fogle with third party
subpoenas for “[a]ny documents related to legal
advice” provided to each Defendant. ECF No.
TC withheld some documents based on Defendants'
“limited waiver” of the attorney-client
privilege, and other documents based on the work product
doctrine. These documents are the subject of the
government's present motion to compel. The government
challenges Defendants' assertion of a “limited
waiver, ” and TC's reliance on that “limited
waiver.” The government also argues that TC must
produce materials dated before March 2012 withheld on solely
work product grounds because TC did not have a reasonable
anticipation of litigation before that date.
supplemental memorandum, the government states that since its
current motion to compel was briefed, Defendants produced
additional documents, and that the motion is now limited to
the following documents: all documents discussing legal
advice regarding establishing DSM; draft versions of an AKS
memorandum dated April 1, 2009, prepared by Fogel and sent to
Dr. Fonn; any unproduced documents regarding legal
advice about a commission and inventory dispute with
Verticor; any documents related to legal advice regarding
difficulties with three companies doing construction work on
Seeger's house (Bloomfield Landscaping, Patriot Sunrooms,
and Bloomfield Fencing); and any unproduced documents that
were generated before March 2012 and withheld solely on work
defendant may avoid liability under the FCA if it can show
that it acted in good faith on the advice of counsel.
United States ex rel. Drakeford v. Tuomey, 792 F.3d
364, 381 (4th Cir. 2015). To establish an advice-of-counsel
defense in this context, a defendant “must show the (a)
full disclosure of all pertinent facts to counsel, and (b)
good faith reliance on counsel's advice.”
Id. When a party raises an advice of counsel
defense, “all advice on the pertinent topic becomes
fair game. “It has . . . become established that if a
party interjects the advice of counsel as an essential
element of a . . . defense, then ‘all advice received
concerning the same subject matter' is discoverable, not
subject to protection by the attorney-client
privilege.” Id. at 391 (quoting McCormick on
Evid. § 93 (7th ed. 2013)).
party seeking work product protection has the burden to prove
that the materials were prepared in anticipation of
litigation, that is “because of the prospect of
litigation.” PepsiCo, Inc. v. Baird, Kurtz &
Dobson LLP, 305 F.3d 813, 817 (8th Cir. 2002).
“[T]he mere possibility that litigation may result is
not sufficient to trigger the protection of the work product
doctrine.” In re Advanced Pain Centers Poplar Bluff
v. Ware, 11 F.Supp.3d 967, 973 (E.D. Mo. 2014). The
Eighth Circuit has articulated the test for “in
anticipation of litigation” as follows:
[T]he work product rule does not come into play merely
because there is a remote prospect of future litigation. In 8
Wright & Miller, [Federal Practice & Procedure,
Civil] pp. 198-99, it is said . . . Prudent parties
anticipate litigation, and begin preparation prior to the
time suit is formally commenced. Thus the test should be
whether, in light of the nature of the document and the
factual situation in the particular case, the document can
fairly be said to have been prepared or obtained because of
the prospect of litigation.
Diversified Indus., Inc. v. Meredith, 572 F.2d 596,
604 (8th Cir. 1977). “The party asserting the work
product privilege must set forth objective facts to support
its claim of privilege; a mere conclusory statement that the
work product was created in anticipation of litigation is not
enough.” AAB Joint Venture v. United States,
75 Fed.Cl. 432, 445 (2007).
the Court agrees with the government that by asserting the
advice-of-counsel defense, Defendants have waived the
attorney-client privilege with regards to TC documents
discussing legal advice on establishing DSM, and documents
regarding legal advice related to Verticor, Bloomfield
Landscaping, Patriot Sunrooms, and Bootheel Fencing. The
Court further agrees with the government that TC has not
supported its claim of work product protection for any
documents generated prior to March 2012, including draft
versions of the April 1, 2009, AKS memorandum that were or
were not sent to any Defendant. The record indicates that in
one draft, Fogle concluded that the arrangement proposed by
Dr. Fonn would violate the AKS. The government presents a
plausible theory of relevance of the drafts - that they may
reflect that Fogle received additional or different
information from Defendants as he was working on the final
memorandum, a factor relevant to the ...