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United States v. Boston Scientific Corp.

United States District Court, D. Minnesota

October 16, 2019

United States of America and the State of California, ex rel. Steven Higgins, Plaintiffs,
v.
Boston Scientific Corporation, Defendant.

          Daniel R. Miller, Joy P. Clairmont, William H. Ellerbe, and Jonathan Z. DeSantis, Berger Montague PC, 1818 Market Street, Suite 3600, Philadelphia PA 19103, and E. Michelle Drake, Berger Montague PC, 43 Southeast Main Street, Suite 505, Minneapolis MN 55414 (for Relator Steven Higgins); and

          Fredrick Robinson and Lesley Reynolds, Reed Smith LLP, 1301 K Street Northwest, Suite 1100 - East Tower, Washington DC 20005, Caitlin Chambers, Reed Smith LLP, 811 Main Street, Suite 1700, Houston TX 77002, and Allison M. Lange Garrison, Norton Rose Fulbright U.S. LLP, 60 South Sixth Street, Suite 3100, Minneapolis MN 55402 (for Defendant Boston Scientific Corporation).

          ORDER

          STEVEN E. RAU UNITED STATES MAGISTRATE JUDGE

         This case is what happens when you cross an approach to discovery à la Inspector Clouseau with a corporate lawyer caricature found in cartoon caption contests. Even though modern discovery and pretrial procedures are in place to “make a trial less a game of blind man's buff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent, ” United States v. Procter & Gamble Co., 356 U.S. 677, 682 (1958), this case has tested the definitions of “fair, ” “contest, ” “basic, ” “issues, ” “facts, ” “disclosed, ” “fullest”, “practicable, ” and “extent.” Even then, the Court might be underestimating what would be left unchallenged. Not even the one-eyed man would be king over this disaster.

         Clearly, the Court is not enamored with the parties' conduct to date. This case has dragged on and, despite the Court's strong guidance and various rulings along the way, the parties have been unable to engage in fulsome and fair discovery. While both parties share the blame as to certain discovery woes, Defendant Boston Scientific's discovery actions throughout this case have tiptoed the line of permissible, albeit discouraged, behavior. Now, with the discovery end in sight, Boston Scientific has crossed the line into sanctionable conduct. It must be awarded its just deserts for these efforts.

         I. PROCEDURAL AND FACTUAL BACKGROUND

         A. Courtship: Complaints, Motions to Dismiss, and Leave to Amend

         Relator Steven Higgins, MD, initiated this qui tam action on August 26, 2011 on behalf of the United States and the State of California under the False Claims Act (“FCA”) and the California False Claims Act (“CFCA”). (Compl. ¶ 1, ECF No. 1). Relator alleged that Boston Scientific engaged in two distinct schemes: (1) selling defective cardiac defibrillator devices under the names Cognis and Teligen; and (2) providing kickbacks. (Compl. ¶ 2). Almost five years later, the United States and the State of California declined to intervene and, on May 6, 2016, Relator was permitted to pursue this action on their behalf. (ECF Nos. 44, 47).

         Relator thereafter filed his Amended Complaint on October 7, 2016. (Am. Compl., ECF No. 61). The Amended Complaint alleged one fraudulent scheme: that Boston Scientific sought Food and Drug Administration (FDA) approval and subsequently sold defective cardiac defibrillator devices under the names Cognis and Teligen. (Am. Compl. ¶ 2). Boston Scientific moved for dismissal of Relator's suit. (ECF No. 63). In deciding that motion, the Court first addressed whether the Court had subject matter jurisdiction with respect to the FCA's public disclosure bar, concluding it does. United States ex rel. Higgins v. Boston Sci. Corp., 2017 WL 3732099, at *3-*4 (D. Minn. Aug. 29, 2017).[1] The Court next found that while Relator appeared to state a viable claim under Rule 12(b), he failed to satisfactorily plead his fraud claim with particularity as required by Rule 9(b). Id. at *4-*10. Relator's Amended Complaint was dismissed but he was permitted to amend his complaint to cure the Rule 9(b) pleading deficiencies. Id. at *10.

         Relator filed his Second Amended Complaint on September 19, 2017, alleging that Boston Scientific engaged in a fraudulent scheme whereby it sought FDA approval and subsequently sold defective cardiac defibrillator devices under the names Cognis and Teligen. (Sec. Am. Compl., ECF No. 98). Again, Boston Scientific sought dismissal of the complaint, arguing that Relator failed to plead his fraud claims with particularity. (ECF Nos. 103, 106). The Court rejected that argument, finding “Higgins has particularly pled fraud in how Boston Scientific allegedly misled the FDA.” United States ex rel. Higgins v. Boston Sci. Corp., 2017 WL 6389671, at *1 (D. Minn. Dec. 13, 2017).[2]

         Next, the Court set a pretrial scheduling conference and the parties were directed to jointly prepare a Rule 26(f) report. (ECF No. 121). As the Court has already summarized:

The parties disagreed on nearly every part of the discovery plan and schedule. (ECF No. 130 passim). Following the pretrial conference, this Court directed the parties to meet and confer further in an attempt to reach an agreement on a pretrial schedule that met all parties' needs in lieu of a wholly court-imposed schedule. (ECF Nos. 134, 135). The parties complied and developed a pretrial schedule. (ECF No. 135). The parties also agreed that regular telephone status conferences would “keep discovery in this case moving forward efficiently.” (ECF No. 135, at 1). This Court incorporated the parties' agreed-upon deadlines in a pretrial scheduling order and set monthly telephonic status conferences. (ECF Nos. 137, 138).

United States ex rel. Higgins v. Boston Sci. Corp., 2018 WL 5617565, at *1 (D. Minn. Oct. 30, 2018).[3]

         Relator then sought leave to file a third amended complaint, seeking to add a claim under the California Insurance Frauds Prevention Act (“CIFPA”). (ECF No. 145). Boston Scientific argued the new claim under CIFPA was futile for three reasons: (1) Relator did not file the proposed Third Amended Complaint under seal as CIFPA requires; (2) CIFPA's statute of limitations bars Relator's claim; and (3) Relator's claim is not plead with particularity as required by Rule 9(b). The Court rejected all of Boston Scientific's futility arguments, but ultimately found that Boston Scientific would be unduly prejudiced by the amendment, so the motion was denied. United States ex rel. Higgins v. Boston Sci. Corp., 2018 WL 5617565, at *2-*8.

         B. The Honeymoon Phase: Discovery's Gentle First Touches

         As noted above, the Court set monthly telephonic status conferences-to be preceded by monthly meetings between the parties and a joint status report-to monitor discovery in this matter. (ECF Nos. 138, 182).

         The parties began with their first monthly status report on June 11, 2018. (ECF No. 139). The parties were “happy to report that they continue to work through outstanding discovery issues in a cooperative and productive way.” (ECF No. 139, at 1).[4] Of note, the parties were still meeting-and-conferring on June 11 regarding Relator's April 3, 2018 requests for production. (ECF No. 139). The parties were discussing electronically stored information (“ESI”) search terms and custodians. (ECF No. 139).

         As of July 9, 2018, the parties were still discussing the April 2018 requests for production, with Boston Scientific having raised further concerns on July 3, six days before its production deadline. (ECF No. 142). Likewise, the parties were still discussing ESI search terms and custodians. (ECF No. 142). This process continued through August 14, 2018. (ECF No. 151). And it still continued on September 13, 2018. (ECF No. 161). At the least, Boston Scientific had served requests for production on June 19, but like Relator's discovery, the parties were engaged in a meet-and-confer process regarding the responses. (ECF No. 161). Relator agreed to “substantially complete” his production three weeks in advance of his noticed deposition. (ECF No. 161).

         On October 9, 2018, the parties finally admitted they were at an impasse regarding one discovery matter: Relator's relevancy objections to Boston Scientific's June 2018 requests for production. (ECF No. 172). This dispute had carry-over effects as to the timing of Relator's deposition. (ECF No. 172). The parties were back to working in a “cooperative and productive way” come November 12, 2018. (ECF No. 178). As such, the Court cancelled the monthly status conference. (ECF No. 179).

         For their December 2018 status update, the parties indicated they had finally agreed upon ESI search terms and custodians after approximately six months of meeting and conferring. (ECF No. 180). Thus, Boston Scientific anticipated it would “begin producing documents pursuant to [the parties'] agreement in the near future.” (ECF No. 180). Relator requested that the Court set a deadline on the production, (ECF No. 180), but the Court declined to impose any internal deadlines so as to not interfere with the parties' discovery.

         For the next three months, the parties indicated they were working through discovery. (ECF Nos. 183, 188, 190). In January, the parties were finalizing an issue related to metadata for Relator's document production, (ECF No. 183), that arose three months prior in October 2018, (ECF No. 172). Meanwhile, Boston Scientific was beginning to review documents that were “potentially responsive” to Relator's June 2018 requests for production and expected to begin its “rolling production” by the end of January. (ECF No. 183). To speed this process up, Relator proposed a priority list for the ESI custodians. (ECF No. 183). Boston Scientific produced a privilege log dating back to documents produced in May 2018. (ECF No. 183). The parties were still meeting-and-conferring one remaining ESI search term. (ECF No. 183). That conversation was still ongoing in February 2019, but the parties had finally agreed upon a set of 28 custodians and priority order. (ECF No. 188). Boston Scientific produced responsive documents related to 2 of the 28 custodians on January 31. (ECF No. 188). In March 2019, the parties had finally resolved the last remaining ESI search term dispute but were now discussing the reasonableness of Boston Scientific's searches. (ECF No. 190). Boston Scientific made productions relating to 18 of the 28 custodians by March 12, 2019. (ECF No. 190). Relator recently served a second set of requests for production and a revised first set of interrogatories. (ECF No. 190). As a result of the parties' representations, the Court cancelled the status conferences for January, February, and March 2019. (ECF Nos. 184, 189, 191).

         C. The Breakdown in Communication: Discovery Gets Contentious

         Through the March 2019 joint status letter-that is, after approximately one full year of discovery-the parties appeared to be functioning as well as could be expected of a qui tam matter with its inherently asymmetrical discovery aimed at a deep-pocketed corporate defendant. But the April 2019 status letter shattered that illusion. The April 2019 status letter showcased the complete breakdown of discovery and, through hindsight, shed light on the discovery failures leading to this point.

         As of April 5, 2019, Relator believed he had substantially completed his discovery productions to Boston Scientific. (ECF No. 192, at 1). Nearly the entirety of the letter detailed a dispute the parties had been hemming and hawing on since Relator's April 2018 requests for production. (ECF No. 192). Essentially, there was a dispute about whether and to what extent Boston Scientific would perform non-custodial searches of its internal database related to FDA reports concerning defects in the defibrillator devices. (ECF No. 192). To date, Boston Scientific had not produced any non-custodial searches of the internal database, known as Lighthouse, to Relator; Boston Scientific had only produced documents that happened to be revealed in the custodial searches. (ECF No. 192). At the monthly conference, the Court reprimanded the parties for failing to properly utilize the status letters as this was a dispute that should have been raised much earlier, particularly given its critical importance to the case. The Court indicated motion practice would be heard on an expedited basis.

         The Court heard Relator's motion to compel on April 26, 2019. (ECF No. 202). After hearing arguments, the Court issued an immediate oral order. (ECF No. 202; Tr. of Apr. 26, 2019 Mot. Hrg., ECF No. 209). The Court found the information sought from the Lighthouse database to be both relevant and proportional. (Apr. 26, 2019 Tr. 28:17-30:23). The Court found Boston Scientific had “taken the parties' discovery protocols to the logical extreme” and “contort[ed] the proportionality limits embraced by Rule 26.” (Apr. 26, 2019 Tr. 29:24-30:6). Boston Scientific was ordered to produce “as many documents as are reasonable” with respect to 1, 200 identified events within two weeks. (Apr. 26, 2019 Tr. 32:21-33:4). The Court also expressed dissatisfaction at the parties' discovery efforts to date, including their use of the monthly status conferences. (Apr. 26, 2019 Tr. 30:24- 33:16). The Court warned the parties not to engage “in the big law firm meet and confer things to death” process, Relator delaying deposition notices, and Boston Scientific “sandbagging” its response to the discovery order. (Apr. 26, 2019 Tr. 32:1-33:16). The Court again warned the parties that it would not extend discovery deadlines in this matter. (Apr. 26, 2019 Tr. 31:1-33:16).

         In their May 2019 status letter, Boston Scientific and Relator devoted almost four single-spaced pages to fight about two pages that Relator produced following a search to find the metadata for a document he already produced. (ECF No. 207). Essentially, Boston Scientific cried foul, demanding either more discovery or additional deposition time, because Relator came across two previously undisclosed pages while attempting to assuage Boston Scientific's metadata demands. (ECF No. 207). The parties had a much less idiotic dispute for the Court related to Relator's over-use of subparts in his interrogatories. (ECF No. 207). Ultimately, the Court limited Relator to 37 total interrogatories and left it to the parties to sort out counting interrogatories and their subparts.

         Before the next status conference, the parties raised an urgent dispute related to the deposition of Sumeet Dham, a former Boston Scientific employee central to the design of the Cognis and Teligen devices. (See ECF No. 212). Relator served a deposition subpoena on Dham and Dham's counsel indicated he would sit for 7 hours of testimony. (ECF No. 212, at 2). Boston Scientific then demanded that half of the deposition time, 3.5 hours, be allocated to it. (ECF No. 212, at 2). Relator asked the Court to extend the time to depose Dham to accommodate Boston Scientific's request, while Boston Scientific insisted on limiting the deposition to 7 hours and splitting the time equally between it and Relator. (ECF No. 212, at 3-5). The Court, via email, directed that Relator could use the full seven hours, if necessary, to depose Dham and Boston Scientific could request additional time at the upcoming status conference should it believe it was needed. (See ECF No. 219, at 9). The Court strongly encouraged the parties to be efficient in their use of time at Dham's deposition and warned that it would not look favorably upon any unwarranted objections or duplicitous questioning.

         Around the same time, Relator filed another motion to compel. (ECF No. 213). Relator sought all presentations that Boston Scientific made to federal or state governments during the course of investigating this qui tam lawsuit. (ECF No. 214).

         Before the motion to compel was heard and decided, the parties submitted their status letter for June 2019. (ECF No. 219). The parties raised five issues: (1) communications with deponents during breaks in the depositions; (2) Boston Scientific's interrogatory responses; (3) scheduling of fact depositions; (4) allocation of deposition time; and (5) the upcoming motion to compel. (ECF No. 219). At the onset, the Court directed the parties to submit a discovery outline for how the parties intended to complete discovery in time, particularly the impending heap of depositions. (ECF No. 222). The Court provided guidance on the parties' deposition communications and time allocation and made itself available should any breakdowns occur during depositions. Another issue was brought up regarding Boston Scientific's June 14, 2019 privilege log. The Court indicated it should be able to make ...


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