Limiting Geographic and Temporal Discovery in False Claim Act Cases: Dalitz v. Amsurg Corp.

Dear Readers:

Relators in False Claims Act ('FCA") cases are always looking for more discovery in order to expand their qui tam claims and put pressure on the defendants, especially in health care qui tam cases where the FCA penalties can easily dwarf any damage claims. Thankfully, courts in FCA cases are increasingly willing to impose reasonable limits for both the geographic scope and time period for discovery. See e.g., here and here. 

A recent example of this trend may be found in the case of Douglas Dalitz et al. v. Amsurg Corp., et al, 2:12-cv-2218-TLN-CKD (December 15, 2015, E.D. CA). In Dalitz, the Court refused to permit the relators to conduct nationwide discovery when they had only alleged FCA violations at one California location of the defendants. The Court also rejected the relators' request for 8 years of discovery and confined the scope of discovery to a much shorter period.

The Court based its ruling primarily on three different factors. First, the Court relied on the recent amendment to Rule 26(b)(1) which provides that discovery be "proportional to the needs of the case." Second, the Court limited discovery in large part based upon its reading of the relators' complaint and its "factual" allegations. Third, the Court relied on an affidavit submitted by the defendants which explained that their business was made up of ambulatory surgical centers ("ASCs") throughout the country; that local management operated each ASC; and that there was no central "database" for all locations.

The Court confined relators' geographic discovery to the only ASC alleged in their complaint and denied the relators' request for nationwide discovery or, alternatively to discovery of defendants' 14 California locations. In limiting geographic discovery, the Court observed:

• Relators' factual allegations were confined to the one California location at which they worked and there were no factual allegations to back up their claim that the fraudulent conduct they observed was the "standard practice of the entire . . . corporate enterprise";

• Defendants' affidavit further explained that "clinical management and billing operations" of each their locations was handled locally by the physicians or Board of each ASC and thus not "dictated by [defendants'] national directives";

• Nationwide discovery in the 34 states where defendants operated would be an "extreme burden" on defendants because there was "no central nationwide database from which they can obtain the requested documents from each ASC"; and

• That state-wide discovery of all 14 California locations was "still disproportionate to [relators'] need" because relators' "allegations almost exclusively centered on defendants' actions" at the one location.

The Court also limited the temporal scope of discovery sought by relators. Relators had requested discovery from January 1, 2007 to the present, but the Court confined discovery to the period of December 2008 to August 2012. The Court rejected the defendants' request to limit discovery to the relators' 5 month period of employment from late 2010 to early 2011 because the relators' complaint "demonstrated" that the "alleged wrongful behavior" occurred prior to and continued after the relators had left. Yet, the Court noted that relators had not shown why discovery "relating back to January 1, 2008" was warranted, since the defendants' had not acquired the location until December of that year. In turn, the Court did not permit relators to pursue discovery after the date on which they filed their original complaint because the complaint itself "repeatedly refers to those actions in the past tense, strongly suggesting that [relators] claims are limited to the time frame prior to the date on which this action was initiated."

A. Brian Albritton

January 19, 2016

Why the 5th Circuit's Rigsby v. State Farm Fire and Casualty Opinion Is Favorable to False Claims Act Defendants

Dear Readers:

In US ex rel Rigsby v. State Farm Fire and Casualty Co., 2015 WL 4231645 (5th Cir. July 13, 2015), the 5th Circuit recently addressed the limits of Rule 9(b), which requires that fraud be pled with particularity, and whether it applied to limit discovery after trial. The Court held that the district court abused its discretion when it refused on the basis of Rule 9(b) to permit relators to pursue "at least some additional discovery" after they had prevailed at trial. Though at first glance the Rigsby decision may appear to be favorable to relators, the case is, in fact, quite favorable to False Claims Act defendants.

I originally wrote about the district court's decision in Rigsby in "Limiting Discovery and Preventing Claim Smuggling in False Claims Act Cases." Relying in part on Rule 9(b) and scope of the relators' knowledge as an "original source," the district court prevented relators from seeking additional discovery and searching for new claims after they had prevailed at trial. Prior to trial, the district court found that although relators had alleged a broad scheme, the relators only had first hand knowledge of a single claim.  As a result, the district court only permitted the relators to obtain discovery about and proceed to trial on that single claim. The district court reserved ruling on whether to permit the relators to expand their suit and obtain additional discovery until after the trial of that single claim. Having prevailed at trial and shown that the defendant, State Farm, violated the False Claims Act, relators asked the district court after trial to "initiate expanded discovery" for other potential claims. The district court refused to permit the relators additional discovery in order to expand their claims into areas where they did not have knowledge and when it was unclear whether other claims really existed. The district court noted that satisfying Rule 9(b) with "sufficient detail" and defeating a motion to dismiss permits a relator access to the discovery process, but discovery should be "targeted" only to "the claims alleged, avoiding a search for new claims." 

In overturning the district court's decision, the 5th Circuit 

• Observed that the district court "focused discovery and the subsequent trial on a [single] claim rather than permitting [relators] to seek out and attempt to prove other claims in order to 'protect the interests of the parties.'" The district court structured discovery and trial in this manner in order to "strike a balance between the relators' interest in identifying . . . other allegedly false claims and the defendant's interest in preventing a far ranging and expensive discovery process." The Court approved of the district court's decision to limit discovery and initially confine the case to what it referred to as a "bellwether false claim" and to leave till after the trial the decision as to "whether additional discovery and further proceedings were warranted."

• Whereas the parties and the district court had framed much of the dispute on whether Rule 9(b) permitted the prevailing relators to conduct post-trial discovery, the Court found that Rule 9(b) was "inapplicable" to the decision "about whether this case should move forward after trial."  

• As Rule 9(b) did not apply, the Court found that the district court abused its discretion by refusing to permit "at least some additional" post-trial discovery given that the "scope of discovery is broad" and the relators had both alleged and offered proof at trial of a scheme "far beyond the realm" of the single claim that was tried.

• Yet, though it permitted discovery, the Court stressed that Rigsby "presents something exceptional that most (if not all) plaintiffs in FCA cases are unable to show when seeking discovery: a jury's finding of a false claim and a false record" together with allegations in the "final pretrial order."  These two factors, the Court observed, made it "more than probable, nigh likely . . . that additional false claims might have been submitted" and as a result the relators had "at least edged the door ajar for some additional, if superintended, discovery."

• Far from declaring that relators have free rein in discovery to search for FCA claims, the Court "emphasize[d] that our decision hinges in large part on the idiosyncratic nature of this case--seldom will a realtor in an FCA case present an already-rendered jury verdict in her favor while seeking further discovery."  

• "[T]he typical case," the Court observed, "might warrant shutting the door to more discovery."

Overall, the lessons of Rigsby are very favorable to the defense. Courts in False Claim Act cases may "balance" the interests of the relator and the defendant in determining the scope of discovery and may limit discovery and trial to bellwether or representative claims. In turn, far from being confined to a motion to dismiss, the only identified limit of Rule 9(b) and its corresponding application to discovery is after a jury verdict in favor of relators. While the relators may have "edged the door ajar" for some limited post-trial discovery for new claims, the Rigsby case is "exceptional" and "idiosyncratic." In the "typical case," a court appropriately acts within its discretion to limit relators from trying to search out new claims beyond what they have pled with specificity.

A. Brian Albritton

August 18, 2015

Limiting Discovery and Preventing Claim Smuggling in False Claims Act Cases

Dear Readers:

Joining the growing number of courts that limit or phase discovery in False Claims Act cases ("FCA"), the Southern District of Mississippi recently rejected attempts by the relators to obtain "unfettered discovery" so that they may search for new claims beyond the single claim for which they were an original source and on which they won at trial. See United States ex rel. Rigsby v. State Farm Fire and Casualty Co., 2014 WL 691500 (S.D. Miss., Feb. 21, 2014).

In Rigsby, two relators sued State Farm alleging that it engaged in a massive scheme to defraud the National Flood Insurance Program ("NFIP") in its administration of flood claims arising from Hurricane Katrina and they filed a list of 18 properties in which they asserted that State Farm had defrauded the NFIP. When initially considering case, the Court found that only one of the properties, the "McIntosh claim," was the sole "instance of State Farm's having submitted an allegedly false claim of which either relator had first hand knowledge." Having first hand knowledge of a single claim, the Court initially permitted the relators to obtain discovery about and proceed to trial on the McIntosh claim. The Court reserved ruling on whether to permit the relators to expand their suit and obtain additional discovery until after the trial of the McIntosh claim, stating it would "consider [then] whether additional discovery and further proceedings are warranted." The jury found that State Farm had presented a false claim for payment to the NFIP in connection with its processing of the McIntosh flood claim. Relators then asked the court to "initiate expanded discovery into claims on other properties insured by State Farm."

The Court refused to permit the relators additional discovery in order to expand their claims into areas where they did not have knowledge and when it was unclear whether other claims really existed. Relying on the 5th Circuit's decision in US ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir. 2009), the Court noted that satisfying Rule 9(b) with "sufficient detail" and defeating a motion to dismiss permits a relator access to the discovery process, but discovery should be "targeted" only to "the claims alleged, avoiding a search for new claims." Applying Grubbs, the Court observed: "Armed with knowledge of a purported scheme and evidence related to the single Mcintosh claim, Relators seek far-reaching, unfettered discovery in order to search for new claims beyond the Mcintosh claim, the only false claim which they have firsthand knowledge. Grubbs states that even if a complaint survives a Rule 9(b) challenge, discovery should be tailored to the claims alleged, so as to avoid a search for new claims. To allow expanded discovery in the fashion Relators seek would permit improper smuggling of additional claims beyond the single claim to which Relators have personal knowledge."

In short, the Court showed that simply satisfying Rule 9(b) as to one claim does not open the door for relators to go in search of other claims to which they do not have personal knowledge, even if they have broadly described a scheme to defraud for which they have only one example. Since "Relators have not pleaded sufficient details regarding any other claims to survive a Rule 9(b) challenge . . . . . discovery would necessarily be overly broad because the Amended Complaint lacks enough detail to permit the Court to craft reasonable discovery parameters."

A. Brian Albritton
March 19, 2014

Limited Discovery in Qui Tam Cases: Satisfying Rule 9 Is Not Enough to Open Door to Fishing Expedition

Dear Readers:

The recent decision in U.S. ex rel Spay v. CVS Caremark Corp, 2013 WL 4525226 (August 27, 2013, E.D. Pa.) adds to the growing number of qui tam cases in which courts appear willing to limit discovery in the face of weak or limited complaints which have nevertheless satisfied Rule 9 (b), Fed. R. Civ. P. Rule 9 (b) requires that fraud be pled with particularity, and it is usually the chief hurdle in pleading a False Claims Act violation that a relator's qui tam complaint must overcome to avoid dismissal. 

In CVS Caremark, the relator alleged that CVS and its related corporations had "violated the False Claims Act . . . in their role as a Pharmacy Benefit Manager by engaging in a nationwide practice of fraudulently adjudicating and submitting improper Prescription Drug Event claims to the Center for Medicaid and Medicare Services." The defendants moved to dismiss, but the Court denied their motion and permitted the claims to proceed. The relator served a broad request to produce documents on the defendants, to which the defendants objected, and it was in the context of deciding the relator's motion to compel production of documents that the Court addressed the discovery issues.

The Court limited the "temporal scope" of discovery to a two year period. Whereas the relator had sought discovery for a 7 year period, the Court found that the relator's allegations of "continuing misconduct are superficial at best." "Such cursory allegations," the Court pointed out, "made on information and belief alone, are unquestionably insufficient to open the door to broad and burdensome discovery into Defendant's nationwide practices for over seven years." The Court noted further that this was especially true given that so much of the complaint specifically dealt only with a two year period from 2006 - 2008. Relying in part on U.S. ex rel Clausen v. Lab. Corp. of Am., Inc., 198 F.R.D. 560, 564 (N.D. Ga. 2000), aff'd 290 F.3d 1301 (11th Cir. 2002), the Court "decline[d] to allow such a fishing expedition into potential fraudulent claims beyond 2007 absent some particularized pleading that any such claims occurred."

The Court permitted nationwide discovery on 3 of the 6 fraudulent practices alleged by the relator, and it did this in part because the relator had "aptly identified hundreds of specific false claims occurring within a specific contract and then defined various company-wide practices that were part of Defendants' nationwide claims-processing services." Yet, the Court also recognized that notwithstanding the relator's showing of possible nationwide violations, the Court considered what it called an "unwelcome conundrum" between the relator's right to broad discovery and the burdens of such discovery on the defendants. The Court observed: "The cost of discovery in this case could be so prohibitive as to force Defendants into a settlement based not on any assessment of the merits of the case against it, but simply to avoid the undue burden associated with what could potentially be a mere fishing expedition. Such a result is not desirable and does not satisfy the ends of justice."

The Court adopted a phased discovery process of "an initial period of limited discovery to regions in which specific false claims had been alleged, while reserving for a later date broader nationwide discovery on claims that were supported only by reasonable inferences drawn from the allegations of the complaint." The Court explained that this "approach will achieve the dual purposes of protecting Defendants from unduly burdensome and potentially unnecessary discovery while allowing Plaintiff to test the waters of his nationwide claim with the opportunity for broadening its scope should its allegations ring true."

In short, CVS Caremark adds to that growing number of cases wherein courts are increasingly willing to limit discovery or to only permit it to proceed in phases. Simply satisfying Rule 9 and defeating a motion to dismiss is not sufficient to permit discovery. Cases such as CVS Caremark show that the courts will permit discovery only in those areas in which there are substantive factual allegations and will not allow fishing expeditions, especially when allegations are based on "information and belief."

A. Brian Albritton
September 15, 2013

Limiting Discovery in False Claims Act Cases: US ex rel Duxbury v. Ortho Biotech Products, L.P.

I recently came across an interesting case that provides some hope to False Claims Act ("FCA") defendants who seek to limit discovery in the event they have not been successful in stopping a FCA complaint at the motion to dismiss stage: U.S. ex rel. Duxbury v. Ortho Biotech Products, L.P., 2013 WL 2501930 (1st Cir., June 12, 2013). Essentially, in Duxbury, the relator alleged that the defendant had engaged in a "nationwide" kickback scheme to encourage healthcare providers "across the United States" to prescribe the drug, Procrit, to patients. In turn, the relator argued that he should be permitted discovery for the six year period after he left the company and that discovery be allowed "nationwide" since his amended complaint alleged a "nationwide" kickback scheme. The District Court refused to permit discovery past the date of the relator's termination from the company and beyond the state where the relator worked for the company. The relator could not substantiate his kickback claim with this limited discovery and summary judgement was granted against him. 

On appeal, the First Circuit affirmed the District Court's order and discretion in limiting relator's discovery of the defendant to the time period when the relator worked for the company as well as to the "five accounts" in Washington state about which the relator "had direct and independent knowledge." The First Circuit observed that the "district court was not required to expand the scope of discovery based upon the amended complaint's bald assertions that the purported kickback scheme continued after [the relator's] termination or that it was nationwide in scope." The Court agreed with the district court to limit relator's discovery to only those allegations for which the relator had satisfied Rule 9(b)'s requirement to plead fraud with particularity and rejected the relator's attempt to "undertake a fishing expedition into the amended complaint's purely speculative allegations." 

Duxbury is a reminder that just because a relator survived a Rule 9(b) challenge, that does not open the flood gates to all discovery based on the bald allegations of a relator's complaint. Courts can and in many instances should fashion limits on discovery, such that the relator is first allowed a limited though reasonable opportunity to substantiate or support their specific claims before permitting more wide ranging and burdensome discovery, especially on a nationwide basis. 

The question, of course, is the basis or principle on which a court should limit discovery or allow it only in stages. In U.S. ex rel Minge v. Tect Aerospace, Inc, 2012 WL 1118948 (April 3, 2012 D. Kan), we saw one solution. In that case, the Court permitted the relator to engage in what it called "litmus test" discovery, whereby the relator obtained discovery of a sample of "exemplar aircraft" in order to prove his claims. In Duxbury, we see another solution: the Court permitted the relator to obtain discovery in that region and time period in which the relator had "direct experience." I would be interested in hearing from readers about other cases where courts have allowed relators only limited discovery and their basis for doing so.

A. Brian Albritton
July 2, 2013

Wake Up Call for Those Asserting Broad Privilege Claims: U.S. ex rel Kalid-Kunz v. Halifax Hospital

The Court in the False Claims Act/Qui Tam case of US ex rel Kalid-Kunz v. Halifax Hospital Medical Center, et al., 2012 WL 5415108 (M.D. Fla., November 6, 2012) recently rejected a number of privilege claims made by the defendant in that hotly contested litigation. See previous blog post. The Court’s opinion evaluating Halifax Hospital’s privilege claims is a wake up call both for litigators and in-house counsel, and serves as a refresher on where and when the attorney-client privilege and work product doctrine applies. Though it did not really apply new law as some commentators have claimed, the Court examined Halifax’s privilege claims in a manner and at a level of detail not usually seen in discovery orders. In doing so, the Court emphasized that the attorney-client privilege applies to communications made by or to counsel in the course of obtaining or receiving legal advice and it rejected privilege claims for any email, document, or record that did not exhibit such a clear purpose, regardless of whether a lawyer was copied on the document. The Court’s rulings are quite instructive.  For example: 

·                  The Court rejected the hospital’s attempts to shield as privileged hospital compliance communications that only tangentially involved legal counsel;

·                  In lieu of examining every single document for which defendant claimed a privilege, the Court required that the parties file a “representative samples” for in camera review and based its rulings on review of those samples;

·           Communications by in-house counsel were not entitled to a “presumption” of being privileged, given the mixed role of in-house counsel and their involvement in business decisions; 

·                  Just because a document is labeled “attorney-client privilege” and “funneled through an attorney” does not “automatically encase the document in the privilege.” It has to be related to providing or receiving legal assistance;  

·                  Emails on which both a lawyer and non-lawyer are copied or sent are not considered to have the “primary purpose” of seeking legal advice and thus did not qualify for the privilege; 

·                  You can send “privileged” emails to non-lawyers if you are “apprising “them of the legal advice that was sought and received” -- essentially passing along advice of a lawyer;

·           “A draft of a document is protected by the attorney-client privilege if it was prepared with the assistance of any attorney for the purpose of obtaining legal advice or, after an attorney’s advice, contained information a client considered but decided not to include in the final,” and

·           Each email of an email string must be listed separately in a privilege log and the privilege evaluated for each email in an email string. Email string may not be listed as one message.

Additionally, the Court rejected the Hospital’s privilege claim over its “compliance referral log.” In the face of Hospital’s claim that it was a “factual record about compliance issues that may need to be investigated" and that the log was prepared in anticipation of litigation, the Court found the log was kept in normal course, often just recorded facts, incorporated emails that were not privileged, and did not reflect review by counsel.

The Court rejected privilege log descriptions such as “facilitates the provision of compliance advice”, “facilitates the rendering of compliance advice”, and “reflecting request for compliance advice” on the grounds that you “cannot tell from the descriptions whether privilege is properly asserted.”

The Court rejected the Hospital’s privilege claims for “audit reviews” conducted by the management department, compliance department, and finance department. Again, these audits were not conducted primarily for the purpose of obtaining or receiving legal advice.

Overall, the Court refused to recognize privilege claims that were simply based on the fact that the lawyer may be a recipient of the document or information or on the fact that the subject matter of the report or document (e.g., audits or compliance log) might be of interest to counsel or report matters that might raise a legal concern.  

A. Brian Albritton

December 20, 2012

Recent False Claims Act Articles That Are Worth A Read

This week I came across two articles on the web concerning the False Claims Act which I commend to readers.

First, I recommend the "2012 Mid-Year False Claims Act Update" recently published by Gibson Dunn as it provides a good, succinct summary of False Claims Act highlights thus far in 2012.  The Update addresses such topics as (i) legislative action, both federal and state, and discusses several states that recently amended their statutes as well as numerous other proposed state bills; (ii) surveys recent significant False Claims Act settlements in health care, mortgage and financial services, and procurement and defense industries; and (iii) case law developments and trends, discussing many of the cases highlighted in the blog such as Davis and Schweizer along with recent cases addressing the False Claims Ac "first to file" bar and "public disclosure" bar.

Second, I commend to you the article,"False Claims Act Investigations:  Time for a New Approach?" published in October 2011 by John Bentivoglio, Jennifer Bragg, Michael Loucks, and Gregory Luce, all partners at Skadden Arps.  The article observes that companies subject to False Claims Act investigations are hampered in their ability to defend themselves since most such investigations are conducted under seal, and the government is able to investigate and use its limited resources at a timetable that suits it.   While a qui tam is under seal, the article point out "the government and the whistle-blower have an advantage" because "a company does not know the precise nature of the allegations pending against it and does not have the power of discovery and the right to defend that it is afforded by the federal court system once the suit has been disclosed and the litigation engaged."  During this time, the article argues, government and the whistleblower can use the all-to-common extended seal period to keep the defendant in the dark as to precise nature of the allegations against it and to gather the evidence they need. 

Given the advantages to the government and whistleblower of an extended seal period, the article asserts that "companies presently faced with a pending false claims investigation might consider whether a more aggressive strategy of forcing the government’s disclosure of the litigation (the unsealing of the complaint and other documents in the file) will better inform the company’s ability to defend itself: to engage in the process of discovery permitted by the Federal Rules of Civil Procedure."  In turn, the article contends that several cases and legislative history permit defendants to challenge the government's justification for keeping  a qui tam matter sealed.

Companies faced with False Claims Act investigations have a hard choice, and most prefer, as the article acknowledges, to settle or where possible, to dispose of the matter while under seal, thereby controlling the effects of bad press as well as other collateral damage.  At the same time, I think that every False Claims Act defense counsel has experienced the frustration of trying to defend a qui tam that is under seal because they are in the dark as to the allegations against the client and the government refuses to disclose the substance of the alleged fraud it is investigating.  From the vantage of the defendant, the government appears to employ a lengthy seal period to build a case at its leisure and to avoid having to actually litigate the matter.  I would certainly be interested in hearing of any instances where defendants sought to unseal a matter on behalf of their client in order to force the matter into civil litigation as the article suggests.

A. Brian Albritton
July 18, 2012

Limited Discovery in False Claims Act Cases: One Court's Attempted Solution

When a court denies a defendant's motion to dismiss a False Claims Act or qui tam complaint, does that mean that  that the relator or government should have free reign on obtaining discovery from the defendant?  In many instances it does.  The District Court in U.S. ex rel Minge v. Tect Aerospace, Inc, 2012 WL 1118948 (April 3, 2012 D. Kan), however, sought to only permit the parties limited discovery initially and to subject the relators' weak claims to an initial "litmus test" before allowing the case and discovery to be expanded.  The Magistrate Judgment's opinion shows just how hard it is to contain limited discovery and why some courts might just throw up their hands. 

Tect Aerospace was a qui tam case in which the Court had dismissed the relators' third amended complaint on Rule 9(b) grounds, finding that relators had failed to plead fraud with particularity.  Specifically, the Court found that the relators failed to specify "whether any aircraft were equipped with allegedly defective parts, and if so, which parties and planes."  The relators then obtained permission to file a fourth amended complaint, and the court found that it cured these Rule 9(b) deficiencies. 

Though it permitted the case to proceed, the Court recommended that "discovery be initially limited in this case to determining whether  non-conforming parts were in fact present on the planes identified in the fourth amended complaint and the extent of the false statements provided to the government at the time of the claim for payment."  After that initial discovery period, the Court invited defendants to file a motion for summary judgment, if appropriate.

In implementing the District Court's decision to limit discovery, the Magistrate Judge interpreted the Court as essentially instituting a "litmus test" on the relators' theories, such that the parties were permitted to conduct discovery "limited to determine whether relators can support their claims as to the exemplar aircraft sufficient to survive a summary judgment challenge."  The Magistrate Judge observed further:  "The intent of this initial procedure is to require relators to establish their basic claims concerning the exemplar aircraft before allowing the more extensive discovery which may be required to prove their broader claims  By recommending limited discovery in this initial phase, and by providing defendants an earlier opportunity to file a dispositive motion, the District Court intended to require relators, whose claims had been resuscitated by the fourth amendment . . . to establish that the parts installed on the exemplar aircraft were defective, before allowing broader discovery and litigation covering the entire manufacturing program."

Limiting discovery proved harder than the Magistrate Judge appeared to have anticipated in the Court's scheduling order.  This first phase of discovery was supposed to be limited to 8-10 months with 20 depositions each.  The Magistrate Judge ended up entering a second and then a third scheduling order and extending discovery twice further.  The Magistrate Judge observed that throughout the discovery period, "defendants have maneuvered to limit, and the relators to expand, discovery based" on their interpretation of the Court's initial limitation of discovery.  In turn, the parties filed 14 discovery motions between them.

The Magistrate Judge denied the relators request for 30 more depositions, beyond the initial 20, along with another extension of discovery.  That ruling, however, did not bring discovery to a close due to 7 pending discovery motions.  The final determination as to whether further discovery was to be permitted awaited the resolution of the motions.

This case illustrates that courts do not have to open the floodgates to all discovery in the event that they permit a qui tam complaint to proceed, especially one that just makes it across the threshold.  Subjecting the relator's claims to a litmus test of an early summary judgment and permitting only limited discovery appears to be a very sensible way to proceed.  Yet, permitting only limited discovery appears to have created substantial additional work and supervisory headaches for the Magistrate Judge and spawned a tremendous number of discovery motions.  Once this case is over, it will be interesting to see if the Court finds its attempt to allow only limited discovery to be worthwhile.

A. Brian Albritton
April 9, 2012