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United States v. Cameron-Ehlen Group, Inc.

United States District Court, D. Minnesota

April 2, 2019

United States of America, ex rel., et al., Plaintiffs,
v.
Cameron-Ehlen Group, Inc., et al., Defendants.

          ORDER

          DAVID T. SCHULTZ UNITED STATES MAGISTRATE JUDGE.

         INTRODUCTION

         In this qui tam action under the False Claims Act, Defendants Cameron-Ehlen Group (d/b/a Precision Lens) and Paul Ehlen move to compel discovery responsive to several interrogatories and a document request served on the Government. Specifically, they seek the basis for allegations in the Complaint that doctors paid below fair market value for expensive trips arranged by Defendants, as well as the identification of specific false claims of which the Government is currently aware. Defendants also seek production of memoranda of interviews the Government conducted during its pre-suit investigation. Relatedly, Defendants argue that the Government, though asserting privilege in response to some of the discovery requests, has provided an inadequate privilege log that must be supplemented. Defendants are entitled to almost all that they seek.

         FACTS

         The present action began more than five years ago when, in November 2013, Relator Kipp Fesenmaier filed a qui tam action under seal and served the United States Attorney's Office. Over an approximately four-year period, the Government sought-and received-eleven extensions of the deadline to intervene in the case. The Government eventually decided to intervene against select defendants, including Precision Lens and Paul Ehlen, in late 2017. The Government filed its Complaint, which became the sole operative complaint, in February 2018. Compl. in Intervention, Docket No. 105; Order, Feb. 26, 2018, Docket No. 114.

         Nearly a year before Fesenmaier filed his qui tam action, the Federal Bureau of Investigation began investigating Defendants' business activities. Herrett Decl. ¶¶ 2-3, Docket No. 182. The FBI interviewed Precision Lens employees in 2013, coordinating at least minimally with the United States Attorney's Office. Id. at ¶ 4; Beimers Decl. ¶ 2, Docket No. 103. By 2014, Assistant United States Attorneys with the Office's civil division were coordinating regularly with the FBI on the investigation, including interviews of Precision Lens employees and customers. Herrett Decl. ¶ 5; Beimers Decl. ¶ 3.

         ANALYSIS

         Defendants bring the present motion to compel, seeking more fulsome responses to three Interrogatories and a Request for Production of Documents. Federal Rule of Civil Procedure 26(b) provides that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” The rule contemplates a liberal scope of discovery, though this Court “possess[es] considerable discretion in determining the need for, and form of, discovery.” In re Nat'l Hockey League Players' Concussion Injury Litig., 120 F.Supp.3d 942, 949 (D. Minn. 2015).

         I. Basis for Allegations of Below Fair Market Value Transfers

         In its Complaint, the Government alleges specific instances of physicians who were remunerated by not paying the full fair market value for trips and other benefits provided by Defendants. E.g., Compl. ¶¶ 56, 64-65, 97, 102, 121, 127, 131, 139. Defendants seek the Government's estimation of the fair market value regarding these specific allegations, and the basis of such estimations. Their original Interrogatory was considerably broader:

INTERROGATORY NO. 2: Identify each alleged kickback, including but not limited to the alleged provider, the recipient, the date, the nature of the kickback. For each such instance, identify:
a) The amount and form of payment by the alleged provider.
b) The amount and form of payment by the alleged recipient.
c) The estimated fair value.
d) The basis for the valuation.

         Huyser Aff. Ex. 3, at 4, Docket No. 175-1. Although the Government partially answered the Interrogatory, it objected to providing an estimation for the fair market value “because it places the burden on the United States when this is in fact Defendants' burden, and Defendants are in a position at this point in ...


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