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United States v. Boston Scientific Corp.

United States District Court, D. Minnesota

August 28, 2019

UNITED STATES OF AMERICA and THE STATE OF CALIFORNIA, ex rel. STEVEN HIGGINS, Plaintiffs,
v.
BOSTON SCIENTIFIC CORP., Defendant.

          ORDER

          JOAN N. ERICKSEN UNITED STATES DISTRICT JUDGE

         This 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).

         BACKGROUND

         Relator 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.

         After 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.

         Magistrate 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 brief.

         STANDARD OF REVIEW

         A 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).

         DISCUSSION

         BSC objects to the magistrate judge's order on four grounds, none of which identify a clear error.

         First, 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).

         The 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.

         Second, 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).

         The CID 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. ยง 3733. Because the materials at issue here are ...


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