This transcript has been auto generated
00;00;01;14 - 00;00;32;08
Jonathan Porter
Welcome to another episode of Husch Blackwell's False Claims Act Insights podcast. I'm your host, Jonathan Porter. A couple of months ago, in our episode on CID set aside positions with Rebecca Furdek, I ended the podcast by talking about an intriguing case in which it became apparent that DOJ had shared CID materials with a whistleblower. As soon as that episode aired, I started hearing questions from listeners about that case, the MD Spine case, in federal court in Boston.
00;00;32;20 - 00;00;58;27
Jonathan Porter
And who am I to let our listeners down and not deliver the details on the MD Spine case? And so today we are delivering details. We'll talk about how MD Spine waived privilege by giving the Justice Department privileged documents. We'll talk about whether the Justice Department is allowed to share documents with a whistleblower. And we'll talk about some strategies for dealing with the issues brought up in this really interesting case about spine from last year.
00;00;59;20 - 00;01;22;01
Jonathan Porter
Joining me to talk all things MD Spine is my colleague Kip Randall. Regular listeners of the podcast will remember Kip from our first episode on materiality, where Kip and I talked about the difference between garden variety shortcomings and the type of shortcomings that would make a government agency change its mind on something and how that analysis is actually pretty hard in the real world.
00;01;22;28 - 00;01;56;24
Jonathan Porter
I'll note that in that episode we talked about whether cybersecurity could one day be considered a material shortcoming in government contracts. And right after we recorded that, a handful of cybersecurity cases got announced. And so kudos to Kip for jumping out ahead on that cutting edge issue. And now we're bringing Kip back to get a little more of that magic on this MD Spine case, because Kip has an excellent background in complex e-discovery and government investigations and knows why we do the things that we do when we respond to CIDs.
00;01;57;04 - 00;02;27;22
Jonathan Porter
I introduced Kip in full in our earlier episodes. Why I won't repeat Kip's excellent background here, except to say that Kip just this month made partner here at Husch Blackwell. So, Kip, congratulations on that. You'll be a great partner just as soon as you build up that thriving book business. No pressure there, Kip. But seriously, Kip, congratulations and thanks for coming back on the podcast and telling our listeners about CIDs and this most mind case that impacts privilege issues and who gets to look at DOJ in response to kids.
00;02;27;22 - 00;02;28;17
Jonathan Porter
And so much more.
00;02;29;01 - 00;02;33;15
Kip Randall
Well, thanks, Jonathan, and thank you for having me on again. It's always a pleasure to talk with you.
00;02;34;01 - 00;03;01;20
Jonathan Porter
Kip. As I mentioned a minute ago, we've talked about kids already on this podcast. I think hopefully our listeners recall that kids are DOJ's main tool for FCA investigations and that with kids, DOJ can get documents, they can ask questions, they can get oral testimony. We don't need to retread that ground. But Kip, before we get into this MD Spine case, there are important limits to what DOJ can get that we should call out for our listeners.
00;03;01;20 - 00;03;07;17
Jonathan Porter
So, Kip, start us out by telling our listeners what DOJ cannot get these.
00;03;07;17 - 00;03;32;02
Kip Randall
Sure. As you've already indicated, what DOJ can get through SIDS is pretty expansive, but there are some limits. First, it has to be relevant to an FDA investigation, and that's still quite broad. So narrowing it a bit more, the DOJ can obtain anything not discoverable under the federal rules of civil procedure. And so there are some key categories that are excluded there.
00;03;32;13 - 00;03;57;29
Kip Randall
First, there's anything protected by the the work product doctrine, meaning anything created by or for attorneys in anticipation of litigation. And I've kind of buried the lead here because the one that we're focused on today within this slide is actually attorney client privilege documents. These are going to be documents or communications between an attorney and their client for the purpose of seeking or providing legal advice.
00;03;58;12 - 00;04;03;09
Kip Randall
And DOJ cannot reach those attorney client privilege documents with the CIB.
00;04;03;17 - 00;04;27;26
Jonathan Porter
Thanks. That's really helpful. Background. So the big thing that a lot of non lawyers don't get is that communications with lawyers are privileged. Long time ago, long, long, long ago before any of us people said, look, we want people to be able to come forward to their attorney, tell them everything about what they're doing, and be able to not feel like that's going to get them in trouble.
00;04;27;27 - 00;04;56;26
Jonathan Porter
They said this is a super important thing, having open and honest communications with your lawyer. And they said, that's going to be privilege. That's going to be something that you can't ever get unless you really want to. The important big piece in that there is, unless you want to, you can waive this your right to not turn over privileged communications can be waived if you choose to tell the government about what your lawyer told you, about what you told your lawyer you can do that.
00;04;57;05 - 00;05;12;00
Jonathan Porter
You can waive privilege. And I think that waiver is sort of what we're talking about in today's episode to tell our listeners how we protect our clients privilege in document productions and oral testimony sides, and then tell our listeners why it's important to protect that privilege.
00;05;12;21 - 00;05;35;22
Kip Randall
Right? So if we don't want to intentionally waive that privilege, it's important to protect the attorney client privilege because once it's waived, you waive it for that entire communication or in some instances for the entire subject matter. So if we want to protect that subject matter of that communication, we need to make sure that we're not waiving it inadvertently.
00;05;35;22 - 00;06;09;06
Kip Randall
And you can't put that back in the bottle. So you want to be careful. You don't ever want to even come close to skirting that line of of potentially you inadvertently waiving by talking about a communication or producing a communication that could be privilege. And so really, before I talk about specifically what we do for productions and testimony to ensure we're not inadvertently waiving that privilege, I want to note that every prosecutor that I've ever dealt with has been very cognizant of privilege.
00;06;09;18 - 00;06;36;18
Kip Randall
And when it comes to testimony, if they're asking you a question that could come close to that line, they say, look, we're not asking you about any communication you've had with your attorney. They've always been very professional in that way. And fortunately, I've never had to deal with a situation that we're going to discuss here with my spine, where a prosecutor has come to me and said, we think you produce potentially privileged documents.
00;06;37;01 - 00;07;07;27
Kip Randall
But, you know, with all that being said on both productions and testimony, it takes work on the front end to ensure that you don't have to rely on that professionalism of the prosecutor to identify potentially privilege documents or testimony. Now, for productions, our responsiveness review always includes a privilege review as well. Ideally, we'll have a list of attorneys or firms that the client has used in the past, and we're going to highlight those right at the outset.
00;07;08;15 - 00;07;35;12
Kip Randall
But then when our reviewers are going through the documents, they report back to me. If they find any additional attorney's names and then highlight those that point. But it's also a bit more nuanced than that because you're not just talking about whether or not the attorneys name is on the document or communication is whether or not that attorney is providing advice or the client is seeking advice of that communication.
00;07;35;12 - 00;08;13;29
Kip Randall
So you have to really take a deeper look in. Those are being given a harder look before they're being produced and ultimately before the production ever goes to the government. We conduct a final quality control review to ensure that among other things, there are no privileged documents in that production. And I don't mean to bore you to really get into the intricacies of our document review process, but I think it's important to realize that the number of eyes on a document production before it goes out so that we never have to worry about the government potentially receiving those privileged communication.
00;08;14;23 - 00;08;41;05
Kip Randall
And then when it comes to testimony, I mean equally or more preparation goes into that, right? So before sitting down with the government any capacity, we're preparing the witness by covering the subject matter, but then also discussing these are some of the potential areas of attorney client privilege. And this question comes up. Let's take a pause how not to get close to securing that line again, as I talked about.
00;08;41;16 - 00;08;52;02
Kip Randall
And then, of course, we're going to be in the room with the witness this time, and we can stop a line of questioning if it seems to be approaching those attorney client communications.
00;08;52;02 - 00;09;09;14
Jonathan Porter
Thanks, Skip. You made a couple of points there that I want to emphasize, because I do think they're really important. One is, you're right, we put a lot of eyes on documents before they go to the Justice Department clients. I mean, that's expensive. Having that many lawyers look at documents, that is expensive. And I do hear from clients who say, just a note, this is expensive.
00;09;09;26 - 00;09;31;03
Jonathan Porter
It's expensive for a reason because you don't want to waive your privilege, send documents that shouldn't be sent because privilege is not always client a sending an email to a lawyer. A And that's the end of it. A lot of times you then use within corporations you use that. And so the privilege can actually seep into other communications.
00;09;31;03 - 00;09;46;23
Jonathan Porter
Then you've got to check all of it. And the last thing you want, if you're doing something that is sort of a regulatory gray area, is for the decision to waive to be made for you because you weren't careful enough to check on the front end. So this is a process. It's a time consuming process. There's a reason we go through it.
00;09;46;24 - 00;10;06;23
Jonathan Porter
It's really important that we go through it. And one of the things that you said, you're right, my experience at DOJ was that we did not want anyone to inadvertently waive privilege. It happened more often than I expected. I would get documents that appeared to me to be attorney client privilege. I would stop reviewing, I'd call defense counsel, I'd say, I've got this email.
00;10;06;23 - 00;10;24;23
Jonathan Porter
I don't know if you intended to waive, but I don't want to make that decision for you. So I'm going to stop looking at this. You tell me if you want it to start up, back up again. I prefer if you put that in writing. Just so I know that you've made a decision one way or another. DOJ is for the most part, very respectful of privilege.
00;10;24;26 - 00;10;43;21
Jonathan Porter
They get that that's really important. They don't want to violate that sacred thing that we hold in the legal profession to be up above a lot of other things. So when I was a DOJ, we wanted people to think carefully about privilege and not produce documents. So I absolutely picked up the phone a lot to say. I'll make sure you're doing what you are supposed to be doing.
00;10;44;04 - 00;11;06;26
Jonathan Porter
Now, there have been some cases in recent years where attorneys have been involved in criminal conduct, and there's been some interesting case law on that front of what happens when lawyers are involved in criminal conduct. Again, as I mentioned, case law, we could go into that some time is sort of beyond the scope of this episode. The crime fraud exception has been used lately to sort of defeat the A privilege client.
00;11;06;26 - 00;11;25;20
Jonathan Porter
It's really interesting to me you don't see that a lot in the False Claims Act world, but it's interesting to me. So we've talked about limitations on what DOJ can receive from those they've served series on. But before we get into the details of the empty spying case, we should also talk about another set of limits the limits of who DOJ can share.
00;11;25;20 - 00;11;33;07
Jonathan Porter
Information learned through kids with Congress. Put limits on DOJ here. So, Chip, what are those limits?
00;11;33;28 - 00;12;18;07
Kip Randall
Yeah, for those limits, we look at the statute 31 U.S. 3733, and that covers the use of CIA IDs for False Claims Act investigations. So looking specifically at subsection I, a false claims law investigator, which is defined by the statute as a DOJ attorney or investigator, is designated as a custodian of the documents. The answers to that audit worries and to those oral testimony transcripts and other than that custodian, only other false claims, law investigators or officers or employees of the DOJ are permitted to examine those documents.
00;12;18;25 - 00;12;27;22
Kip Randall
Nowhere within the statute or the does it say that a whistleblower is permitted to receive those documents.
00;12;27;22 - 00;12;49;29
Jonathan Porter
Thanks, Skip. Yeah. So this statute is actually surprising to me. I did a lot of false claims act worked at DOJ, and I'm sure I read this statute at some point, but I never drilled into figure out who DOJ is allowed to share documents with. I had always sort of assumed that DOJ could enter into common interest agreements and share documents with particular people.
00;12;50;07 - 00;13;13;00
Jonathan Porter
But I think the statute is actually quite clear here. I think there's a reason that Congress said here are the people who can look at CID returns and then people who are not in that group you can't share them with. I think it's really important to know this background, to know that Congress created the list. Congress curated a list of people who DOJ gets to show False Claims Act returns with.
00;13;13;14 - 00;13;31;13
Jonathan Porter
And so that's really important background as we go into this case. So now, Kip, let's talk about D Spine. Yep. Tell our listeners about how this problem came about, why this got litigated, what the court said, and then tell our listeners some critical takeaways from this case despite.
00;13;32;04 - 00;14;04;03
Kip Randall
The first kind of looking at the factual background here. So this is the a key team matter. During the government's investigation, AMD Spine produced over 90,000 documents and about four months later, the prosecutor, it seems from the communications, was at that point going through the documents and starts emailing the defense counsel three times within less than an hour period, identifying 12 documents as potentially privileged.
00;14;04;15 - 00;14;40;00
Kip Randall
So at that point, it seems like the prosecutor halted his review of the documents, got on the phone with defense counsel and defense counsel, asked Go and review those and call them back if they were in fact privilege. So that happened. Defense counsel reviewed those documents and clawed them back from there. The facts aren't entirely clear on what additional document review was done by the prosecutor, but we know that sort of during this time, MD SPY and the government were in settlement negotiations.
00;14;40;21 - 00;15;12;20
Kip Randall
So ultimately they reached a settlement agreement where all the claims were dismissed. Except for the whistleblower's claim related to the alleged unnecessary medical testing, the whistleblower continued to prosecute the claim and the government declined to intervene. So so about a year after the settlement and nearly two years after the document production, the Government entered a common interest agreement with the whistleblower and provided them with the documents.
00;15;12;20 - 00;15;36;29
Kip Randall
MD Spine and spine did learn of this sharing of documents and tell another a year later when the whistleblower used some of the documents during a deposition. And so to kind of be clear on the timeline here, we're now talking about nearly three years after the initial production by MD Spine that these documents come up in a deposition.
00;15;37;07 - 00;16;18;17
Kip Randall
And so at that point, MD Spine looks at the 90,000 documents. And a week after the deposition, attempts to claw back 639 of those documents as potentially privileged, the whistleblower objected to that clawback back and the parties conferred and MD spine provided a privileged log for what ended up being 613 potentially privileged documents that they were attempting to claw back and so this case then is before the court on the whistleblowers motion to compel the production of those 613 documents.
00;16;18;17 - 00;17;01;15
Kip Randall
Now, in the order that the Court goes through the analysis of whether in this finds inadvertent production to the Government was an implied waiver of the privilege. And to determine that, the court looked at five factors. Those are the reasonableness of the precautions taken to prevent that inadvertent disclosure. The amount of time it took amd spine to recognize the error, the scope of the production, the extent of the inadvertent disclosure, and then the overriding interest of fairness and justice and all go through the Court's reasoning on each one of those factors.
00;17;01;23 - 00;17;30;17
Kip Randall
First, on the reasonableness of the precautions taken, the court looked at and finds cover letter for the production and found that it was actually the company that conducted the privilege review and not counsel based on the wording of the cover letter, it appeared that they had just run those terms in-house and then provided the documents to the counsel without actually counsel doing a subsequent privilege review.
00;17;30;17 - 00;18;04;08
Kip Randall
And the court found that that wasn't a reasonable precaution. MD Spine tried to point out that they had organized or coordinated for the government to do what they called confirmatory searches, which was essentially the government rerunning those same terms over the production again. And the court found that that wasn't reasonable for a couple of reasons. One, the Court didn't see how running the same terms over the production again would do anything to confirm whether or not there was any privilege documents.
00;18;04;20 - 00;18;27;10
Kip Randall
And also the court didn't think it was reasonable for defense counsel to rely on the government to go ahead and review the documents for privilege. And then also MD SPY and included in the cover letter a clawback provision basically saying that they didn't intend to waive privilege and so they wanted to reserve the right to clawback any documents that were potentially privileged.
00;18;27;28 - 00;19;08;12
Kip Randall
But the court ultimately found that none of the precautions were reasonable and that this particular factor weighed in favor of waiver. Similarly with the next factor, which is the timeliness of fines action after the disclosure, the court found that that again weighed in favor of waiver. And that's really because although MDS spine clawed back those 12 documents identified by the government with in a timely manner, the court found that they should have been on notice that there were potentially other privilege documents in the production and they waited over two years to conduct a full review of the production.
00;19;08;28 - 00;19;39;07
Kip Randall
MDs Spine argued that they were in settlement negotiations and they were focused on that rather than the privilege review. So they didn't want to put the resources towards the privilege review. The court wasn't convinced by the spines argument because the court said the MD spine should have known that the whistleblower was prosecuting that one outstanding claim. And even if they didn't know that there was a common interest agreement, they shouldn't have forgone the privilege check.
00;19;39;07 - 00;20;07;08
Kip Randall
After the prosecutor had identified that there were 12 documents that were privileged, go into the next factor. Then the scope of the production. The court found this was a sort of a neutral factor because although there were 613 potentially privileged documents, the overall production was 92,000. So the percentage of privileged documents was a fairly low based on the overall size of the production.
00;20;07;24 - 00;20;32;21
Kip Randall
And then before the fourth factor, the extent of the disclosure, the court found this was significant because the government had the documents for three years and at least one prosecutor had reviewed 12 documents. And then the Relator or the whistleblower had them for over a year and used them in the deposition. So the extent of the disclosure was fairly significant.
00;20;32;21 - 00;20;53;22
Kip Randall
And the court's mind there and then for the last factor, the court found that fairness and justice weighed in favor of waiver. So overall, based on all of those factors, the court found that the spine had waived privilege, and that was a long discussion of the court's reasoning there. But I want to provide just a few key takeaways from the case there.
00;20;53;22 - 00;21;22;12
Kip Randall
So well, the clients maybe best to identify who its past attorneys are. Counsel should always conduct the privilege review before sending out the production. We shouldn't just rely on the client's internal search. We have a duty to go ahead and do that additional research. And so that's one of the key takeaways. We need to make sure that counsel is doing that before that production goes out.
00;21;22;23 - 00;21;47;05
Kip Randall
And then also, if there are potentially privileged documents identified in the production, then regardless of the posture of the matter, you need to stop and review all of those documents again to claw back or potentially claw back anything that might be privileged in there. And as you can see here, if you don't, it could be potentially way further down the line.
00;21;48;01 - 00;22;08;11
Kip Randall
And then finally, the last takeaway is, even though 31 UST, the 3733 seems to prohibit sharing documents, they might make it into the hands of the whistleblower. And that's something that you have to consider later down the line if the whistleblower is continuing to prosecute the case after the government declines to intervene.
00;22;09;00 - 00;22;31;20
Jonathan Porter
Thanks. KIBBE Yeah, this is a fascinating case to me for so many reasons. A few things that you said I just want to highlight yet the fact that there's a chance now that whistleblowers could get your documents. I think that means you've got to look at them even harder. You've got to have eyes on what you're giving DOJ, because now we know there's at least some instances where whistleblowers are receiving these documents.
00;22;31;20 - 00;22;49;05
Jonathan Porter
And I think you've got to get out ahead of that. You know, what's interesting about this case is the U.S.A. quickly spotted a dozen privileged documents that should have put defense counsel on notice that they'd messed up, that there was a problem with the production, but they didn't do anything. That's where the waiver came in. You know, mistakes happen.
00;22;49;05 - 00;23;15;12
Jonathan Porter
I think the law understands that mistakes happen. That's why clawbacks are a thing. But once you learn of a mistake, you do nothing. That's where the problem was in my spine. It's not the U.S. job to do your privilege. Review for you. And so it was good of the U.S.A. to reach out and say, Hey, look, I've just started reviewing these and I found a bunch, so let's talk about these, maybe want to claw these back, but it's not the agency's job to go through every document saying, here's what I suggest you prove should should look like.
00;23;15;12 - 00;23;34;11
Jonathan Porter
That's not the agency's job. Don't expect the U.S. to do that for you. Now, I have seen other cases where DOJ did not alert defense counsel to inadvertent production. Then they waited a while and they tried to use the documents. That's wrong. That's also rare. But the big picture here is you can not just sort of in-house your privilege review.
00;23;34;19 - 00;23;58;10
Jonathan Porter
Hopefully you've got lawyers that you respect and like and who you think will do a good job with your privilege. Review what those lawyers do, your privilege review for you because bad things happen when you turn over privileged documents to the government attorney client privilege documents can be devastating to a case. You're sort of laying out the pros and cons, and when you then make a decision to go one way or another, that's going to be second guessed.
00;23;58;10 - 00;24;28;23
Jonathan Porter
That's why the privilege is so important to maintain and that just that that didn't happen here. That's bad for any spine. But the rest of us, we need to learn from this. So given this mighty spine case, knowing that DOJ is not going to do an exhaustive filter review when someone produces attorney client privilege documents and knowing that DOJ has in the past shared documents, including privileged documents with Relator's counsel, how do we, as attorneys for those receiving sides, change our approach to SIDS?
00;24;28;23 - 00;24;34;14
Jonathan Porter
Close, close us out. Get by telling our listeners how we should adjust to this MD spine case.
00;24;35;02 - 00;25;01;01
Kip Randall
Well, first, I hope that it's clear from everything that we have talked about that there needs to be a very thorough privilege review done before any production goes to the Government. And also I'll reiterate sort of my key takeaways from my spine that if something does inadvertently get through, you need to stop and do a full review that production again immediately.
00;25;01;16 - 00;25;31;27
Kip Randall
Now some other ways to adjust are perhaps to remind the the prosecutor of the limitations of 31 U.S. 3733. Privileged or not, you want to make sure that the prosecutor is not sharing those documents with the whistleblower. And so, you know, maybe a simple reminder in the cover letter about those limitations. As we saw in my spine, the content of the cover letter can matter if there's a dispute.
00;25;31;27 - 00;25;46;05
Kip Randall
So, you know, it's important to get it in there. So for now, we need to make sure we're continuing to conduct those privilege reviews and then also start adding that provision to the cover letter, reminding the prosecutor about the limitations of Section 3733.
00;25;46;13 - 00;26;09;02
Jonathan Porter
Thanks, Skip. Those are excellent takeaways from my spine and I think those should become standard. So Kit, thanks for joining us on today's episode, telling our listeners about this case. It's been really good. So to close out this episode, you know, I understand from talking with clients and other people's clients that responding to subpoenas or sides is really expensive.
00;26;09;10 - 00;26;32;14
Jonathan Porter
I get that and I feel for you. The issue is there could be just catastrophic results if you waive privilege. If you waive privilege, a lot of times that's a whole waiver, brokering the door to things that are potentially extensive. And when you try to take shortcuts, like I think my spine must have done here where they did an in-house privilege review, that's not going to help things.
00;26;32;20 - 00;26;58;16
Jonathan Porter
You know, what you've got to do is just say, look, government investigations are critical. They have the potential to put you out of business. They have potential for health care, for Medicare, to say you're no longer participating in federal health care programs, in defense contracting. The defense Department can say you're disbarred. So these investigations are super important. Even if you think you've done nothing wrong, let your law firm help you by doing a privilege check.
00;26;58;20 - 00;27;20;10
Jonathan Porter
Don't take shortcuts or anything like that. What we do is meant to protect you, and so let us do our job. I know it's going to be expensive, but it's really, really important. The last thing I'll say to close is, you know, I don't think DOJ wants to do anything wrong. I think if DOJ understood that sharing documents with whistleblowers goes against the text of the False Claims Act, they wouldn't do it.
00;27;20;10 - 00;27;40;22
Jonathan Porter
So I think your final point is important. One, make sure you're telling your AUSA in your productions, hey, our reading of the False Claims Act is that this is going to go into the custody of false claims law investigators. If you're going to give these documents to someone else, let me know. I'd like to talk to you about that, and I'd like to stop you from doing that.
00;27;40;29 - 00;27;59;15
Jonathan Porter
And so educating DOJ on this point, I think is really important. And that's why you go to a law firm like Blackwell for this work is we're going to help protect you on those things. Your run of the mill lawyer who's handling a bunch of different stuff may not know to peek behind those corners, but that's why I'm so thankful to practice with this excellent false claims act
00;27;59;15 - 00;28;21;07
Jonathan Porter
groupo here at Husch Blackwell, so that's our podcast for today. I hope you enjoyed this episode and we'll continue in the new year to bring you more and more episodes on cutting edge false claims act issues. But for now, thanks for listening. This has been a great year for this podcast and I'm grateful to each and every one of you for listening and supporting us.
00;28;21;07 - 00;28;31;02
Jonathan Porter
So thanks, everyone. We'll see you next time.