The opinion of the court was delivered by: Ricardo M. Urbina, United States District Judge.
Document Nos.: 6, 8, 9, 21
RULING FOR THE GOVERNMENT ON THE PRIVILEGE ISSUE; ADOPTING THE DEFENDANTS' ALTERNATIVE PROPOSAL FOR THE PROTECTIVE ORDER
This qui tam action comes before the court on a discovery dispute. Because the initial work-product dispute raises a novel question of law, the court provides an in-depth explanation of its reasoning.
Robert Purcell ("the relator") brings this case pursuant to the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3733. As is its option pursuant to 31 U.S.C. § 3730(b)(4), the government intervened in this action and now brings suit on its own accord against the MWI Corporation ("MWI") and J. David Eller (collectively, "the defendants"). The instant discovery dispute arose during the parties' preparation for the taking of the deposition of a key witness in the case. In the process of turning over documents related to this witness to the defendants, the government asserted that certain documents are covered by the joint-prosecutorial privilege between the government and the relator in qui tam cases. The defendants argue that no such privilege exists.
The court disagrees with the defendants' position and, for the reasons that follow, holds that such a privilege does exist in qui tam cases in which the government elects to intervene. Consequently, the court denies the defendants' emergency motion to continue the deposition of Mr. Leonard Johnson since the requested continuance is now moot. Additionally, the court adopts the defendants' proposed alternative for a protective order before the production of discovery materials.
On August 28, 1998, the relator filed his original complaint. After filing multiple requests for extensions of time to determine whether it would intervene, the government filed a notice of election to intervene in this FCA case pursuant to 31 U.S.C. § 3730. Gov't's Notice of Election to Intervene dated Jan. 28, 2002. As per the government's request, the court ordered that the complaint in this action "be unsealed and served upon the defendants by the United States." Order dated Jan. 31, 2002. The court also ordered that the seal be lifted as to all future matters in this case. Id. Finally, the court directed the government to serve its complaint in intervention within 30 days of the January 31 Order. Id. On April 4, 2002, the government filed an amended complaint ("the complaint") in intervention.*fn1
The government alleges that the defendants failed to disclose to the Export Import Bank of the United States ("EXIM") various commissions, other payments and agreements to make payments in connection with their sale of irrigation and pumping equipment to the Federal Republic of Nigeria. Compl. at 1. The EXIM financed the equipment. Id. at 1. The government seeks treble damages and civil penalties. Id. The plaintiff is the United States, acting on behalf of the EXIM. Id. at 2. The relator is Robert Purcell, who was formerly the Vice President of National Sales at MWI. Id. A Florida corporation, defendant MWI manufactures, assembles, sells and distributes pumping equipment and related items used primarily for irrigation and drainage. Id. Defendant J. David Eller was President and owner of MWI from 1989 to 1994. Id. On May 28, 2002, the defendants filed a motion to dismiss the complaint. The court will resolve that motion in a future ruling. *fn2
The instant discovery dispute arose when the parties sought a ruling from the court about the parameters of discovery relating to one key witness ("the witness"), whose deposition the parties agreed to take on February 6, 2002. Because the witness is very ill, the deposition date occurred earlier than it would otherwise have in the normal course of business. On January 29, 2002, the court held a discovery dispute conference call to hear the parties' arguments about which, if any, documents related to the witness should be turned over to the defendants. The court ruled that the government and the relator had to: turn over all documents relating to the witness (including those in the possession or control of the witness); provide a calculation of damages, as per Federal Rule of Civil Procedure 26(a)(1)(C); and provide a description of any other documents that the relator had, as per Rule 26(a)(1)(B). On the other hand, the court ruled that the government and the relator did not need to provide the names and addresses of witnesses, as per Rule 26(a). Lastly, the court ordered that all of these requirements be completed by Friday, February 1. Defense counsel indicated during the call that it would turn over similar categories of documents.
On February 5, 2002, the defendants filed an emergency motion to continue the deposition of the witness and a motion for a protective order. The court held a follow-up conference call that same day with counsel for the defendants, the government and the relator. During the conference call, defense counsel summarized the grounds for its motion, and counsel for the government and the relator both explained the ir reasons for opposing the motion. The relevant point for this discussion is that the defendants challenged the government's assertion of a joint-prosecutorial privilege between the government and the relator in FCA cases as the basis for the government's non-production of certain documents.
After assessing the parties' arguments, the court issued an order denying the defendants' emergency motion to continue the witness's deposition and for a protective order. *fn3 Order dated Feb. 6, 2002. In that order, the court said it would review the work-product privilege issue and would render a ruling. Id. Subsequently, the defendants submitted a "supplemental filing" to further inform the court about its reasons for a reconsideration of the February 6 ruling, which directly corresponds to the work-product issue. Defs.' Supplemental Filing at 1. *fn4
Meanwhile, on July 3, 2002, the defendants filed a motion for a protective order to restrict the government's use of "data and material including a substantial amount of proprietary financial and operational information relating to defendant MWI's business and Mr. Eller's personal financial records." Defs.' Mot. for Protective Order at 1-2. The defendants contest the government's request on the ground that the produc tion of this material would harm MWI's competitive position in the business of manufacturing and marketing large industrial ...