United States District Court, D. Minnesota
UNITED STATES OF AMERICA and THE STATE OF CALIFORNIA, ex rel. STEVEN HIGGINS, Plaintiffs,
BOSTON SCIENTIFIC CORP., Defendant.
N. ERICKSEN UNITED STATES DISTRICT JUDGE
matter is before the court on Defendant Boston Scientific
Corporation's (“BSC”) objections to
Magistrate Judge Steven E. Rau's July 16, 2019 oral order
compelling discovery of presentations BSC made to government
officials. BSC also filed a motion for leave to file a reply
brief. Having reviewed the record, the Court denies BSC's
motion, overrules BSC's objections, and affirms the
magistrate judge's ruling because it was neither clearly
erroneous nor contrary to law. 28 U.S.C. § 636(b)(1)(A);
Fed.R.Civ.P. 72(a); D. Minn. LR 72.2(a)(3).
Steven Higgins brought this qui tam action pursuant
to 31 U.S.C. § 3730(b)(1) and (c)(3), alleging that BSC
violated the federal False Claims Act, 31 U.S.C. §
3729(a)(1), and the California False Claims Act, Cal.
Gov't Code § 12651(a). Higgins alleged that BSC, a
company that develops, makes, and sells medical devices,
caused physicians to make false claims for federal health
care program reimbursements by certifying that certain
defibrillators were reasonable and necessary for the medical
procedures during which the devices were implanted. See,
e.g., Am. Compl. ¶¶ 175, 182-83.
Relator filed this action, the government conducted an
investigation into Relator's allegations. During its
investigation, the Department of Justice (“DOJ”)
issued a civil investigative demand (“CID”) to
BSC under 31 U.S.C. § 3733. BSC produced documents and
made presentations to the government in response to this
demand. The government ultimately declined to intervene.
Prosecuting the case on the government's behalf, Relator
requested all presentations, and documents related to any
presentations, that BSC made to the government during its
investigation. BSC responded to this request with several
objections. Relator filed a motion to compel production of
the presentations, which Magistrate Judge Rau granted from
the bench at a hearing on the motion.
Judge Rau held that neither the False Claims Act nor the
Federal Rules of Evidence restricted discovery of the
materials requested by Relator. Additionally, he held that
BSC waived any claims to work-product or attorney-client
privilege by intentionally disclosing the requested materials
to an adversary, that the work-product doctrine does not
protect materials used in litigation, and that the materials
contain relevant information. Id. BSC now objects to
this order, arguing that the materials are privileged and
protected for public policy reasons. After Relator responded
to BSC's objections, BSC requested leave to file a reply
magistrate judge's order on nondispositive pretrial
matters should be reversed only if it is clearly erroneous or
contrary to law. 28 U.S.C. § 363(b)(1)(A); Fed.R.Civ.P.
72(a); D. Minn. L.R. 72.2(a). “A finding is clearly
erroneous when ‘although there is evidence to support
it, the reviewing court on the entire evidence is left with
the definite and firm conviction that a mistake has been
committed.'” Lisdahl v. Mayo Found., 633
F.3d 712, 717 (8th Cir. 2011) (quoting Anderson v. City
of Bessemer City, 470 U.S. 564, 573 (1985)). This
standard is “extremely deferential.” Reko v.
Creative Promotions, Inc., 70 F.Supp.2d 1005, 1007 (D.
Minn. 1999). “A decision is contrary to law when it
fails to apply or misapplies relevant statutes, case law or
rules of procedure.” Knutson v. Blue Cross &
Blue Shield of Minn., 254 F.R.D. 553, 556 (D. Minn.
2008) (internal quotation marks omitted).
objects to the magistrate judge's order on four grounds,
none of which identify a clear error.
BSC argues that settlement negotiations are subject to a
heightened relevance standard in discovery under Federal Rule
of Evidence 408. At trial, Rule 408 prohibits evidence
contained in settlement negotiations from being admitted to
prove a claim or to impeach another party. But the Rules of
Evidence do not govern discovery. In discovery, parties may
obtain “any nonprivileged matter that is relevant to
any party's claim or defense” and
“[i]nformation within this scope of discovery need not
be admissible in evidence to be discoverable.”
Fed.R.Civ.P. 26(b)(1). Some courts have applied a heightened
standard for discovery of confidential settlement-related
communications while two circuit courts have rejected this
approach. Compare In re Teligent, Inc., 640 F.3d 53,
58 (2d Cir. 2011) (applying a heightened standard); Young
v. State Farm Mut. Auto Ins. Co., 469 F.R.D. 72, 76
(S.D. W.Va. 1996) (collecting cases) with In re MSTG,
Inc., 675 F.3d 1337, 1344 (Fed. Cir. 2012) (rejecting a
heightened standard); Doe No. 1 v. United States,
749 F.3d 999, 1010 (11th Cir. 2014) (same).
Eighth Circuit has not considered or adopted a heightened
standard. Absent any binding authority applying a heightened
discovery standard for settlement-related negotiations, the
magistrate judge's application of the Rule 26(b)(1)
relevancy standard was neither clearly erroneous nor contrary
to law. The magistrate judge properly found that materials
requested by Relator were discoverable because they were
related to his claims about the medical devices at issue.
BSC argues that public policy requires the court to protect
communications between defendants and the government in
qui tam cases. Citing a district court opinion and a
statement of interest from DOJ in a similar case, BSC argues
that the government will not be able to settle False Claims
Act cases if a defendant's presentations to the
government could later be revealed to relators. See
United States ex rel. Cairns v. D.S. Medical, No.
1:12CV00004 AGF, 2016 WL 3198622, at *2 (E.D. Mo. June 9,
2016); Statement of Interest, United States ex rel.
Underwood v. Genentech, Inc., Civil Action No. 03-3983,
2010 WL 10020467 (E.D. Pa. Sept. 28, 2010).
provisions of the False Claims Act, not DOJ's policy
concerns in another case, govern the custody of documents
shared with the government in this case. 31 U.S.C. §
3733(i). The statute prohibits the government from disclosing
materials “while in the possession” of the
government. Id. § 3733(i)(2)(C). While this
provision prevents the government from disclosing materials,
nothing in the statute prohibits the defendant from later
disclosing those materials in discovery. See Id.
§ 3733. Because the materials at issue here are ...