United States of America et al v. Halifax Hospital Medical Center et al

Filing 188

ORDER Granting in part and Denying in part 137 Motion for Determination of Defendants' Privilege Claims; Granting 145 Motion to Alter the Amended Case Management and Scheduling Order; Granting 151 Renewed Motion for In Camera Review; Grant ing 152 Motion to Compel; Granting 155 Motion to Modify Amended Case Management and Scheduling Order; Denying 164 Motion to Strike; Denying without prejudice 175 Motion to Designate As Confidential Deposition Transcripts. Signed by Magistrate Judge Thomas B. Smith on 11/6/2012. (KWH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
UNITED STATES OF AMERICA, ex rel.
ELIN BAKLID-KUNZ,
Plaintiff,
Case No: 6:09-cv-1002-Orl-31TBS

v.
HALIFAX HOSPITAL MEDICAL CENTER and
HALIFAX STAFFING, INC.,
Defendants.

ORDER
The following motions are before this Court for resolution:
1. Relator Elin Baklid-Kunz’s Renewed Motion for Determination of Defendants’
Privilege Claims and Memorandum in Support Thereof (Doc. 137);
2. United States’ Motion to Alter the Amended Case Management and
Scheduling Order (Doc. 145);
3. Relator’s Renewed Motion for In Camera Review (Doc. 151);
4. United States’ Motion to Compel the Production of a Response to
Interrogatory No. 2 and Documents Improperly Withheld (Doc. 152);
5. Relator’s Motion to Modify the Amended Case Management and Scheduling
Order (Doc. 155);
6. Halifax’s Motion to Strike the Declaration of Mary Ann Norvik (Doc. 164); and
7. Halifax’s Motion to Designate as Confidential the Deposition Transcript of
Relator Elin Baklid-Kunz, dated August 20, 2012 (Doc. 175).
I. Background
On June 16, 2009, Elin Baklid-Kunz (“Relator” or “Ms. Kunz”), filed this qui tam
action against Halifax Medical Center, d/b/a Halifax Health, a/k/a Halifax Community

Health System, a/k/a Halifax Medical Center and Halifax Staffing, Inc. (collectively referred
to as “Halifax”),1 for alleged violations of the Civil False Claims Act (“FCA”), 31 U.S.C. §§
3729-3733. (Doc. 1). Relator is Halifax’s Director of Physician Services and has been
employed by the Daytona Beach hospital for more than fifteen years. (Doc. 29). She
alleges that Defendants (1) received improper and excess compensation from the federal
government and (2) paid illegal kickbacks, profit-sharing incentives and other illegal
compensation to physicians in violation of the Stark Amendment to the Medicare Act, 42
U.S.C. § 1395nn and the Anti-Kickback Act, 42 U.S.C. § 1320a-7b. (Id.).
On November 4, 2011, the United States of America intervened on behalf of the
Department of Health and Human Services (“HHS”) and the Centers for Medicare &
Medicaid Services (“CMS”), to sue Defendants for damages resulting from false claims
submitted to the Medicare and Medicaid programs in violation of the FCA. (Doc. 73). In its
Complaint in Intervention, the United States alleges: the presentation of false claims
(Count I); the use of false statements to get false claims paid (Count II); the creation of
false records material to an obligation to pay (Count III); unjust enrichment (Count IV);
payment by mistake (Count V); and disgorgement, constructive trust, and accounting
(Count VI). (Id.). Defendants deny all allegations of wrongdoing. (Docs. 47 and 112).
The Court entered a scheduling order on January 5, 2011 (Doc. 22) and amended it
on January 3, 2012 (Doc. 92). Currently, the parties have until December 21, 2012 to
complete discovery. On February 17, 2012, Relator filed her original Motion for
Determination of Defendants’ Privilege Claims (Doc. 102) and amended the motion on July
31, 2012. (Doc. 137). I directed the parties to file a representative sample of the
According to the allegations in the Government’s Complaint in Intervention, Halifax Hospital
provides inpatient and outpatient health care services and owns and operates hospitals in Volusia County
and surrounding counties. (Doc. 73 ¶ 8). Halifax Staffing, a wholly owned and operated subsidiary of Halifax
Hospital, provides staffing services to Halifax Hospital in exchange for payments to cover the cost of
employee salaries, benefits, and administrative costs. (Id. ¶ 11).
1

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documents for in camera review, and on September 13, 2012, I heard oral argument on the
matter. Upon consideration of all relevant filings and case law, and being otherwise fully
advised, I hereby resolve the motions as follows.
II. Law
The Federal Rules of Civil Procedure “strongly favor full discovery whenever
possible.” Farnsworth v. Proctor & Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985).
Parties may obtain discovery of "any nonprivileged matter that is relevant to any party's
claim or defense . . .” FED. R. CIV. P. 26(b)(1). It is not necessary that the material be
admissible at trial “if the discovery appears reasonably calculated to lead to the discovery
of admissible evidence.” Id. Under the federal rules, a party is permitted to assert the
attorney-client privilege to prevent certain otherwise discoverable information from being
produced, as an “exception to the general rule that the law is entitled to every man’s
evidence.” In re Vioxx Prods. Liab. Litig., 501 F. Supp. 2d 789, 795 (E.D. La. 2007); see
FED. R. CIV. P. 26(b)(5). “The purpose of the attorney-client privilege is to encourage open
and complete communication between a client and his attorney by eliminating the
possibility of subsequent compelled disclosure of their confidential communications.” In re
Seroquel Prod. Liab. Litig., No. 6:06-md-1769-Orl-22DAB, 2008 WL 1995058, at *2 (M.D.
Fla. May 7, 2008) (citing United States v. Noriega, 917 F.2d 1543, 1550 (11th Cir. 1990)).
The privilege applies only to communications and does not extend to facts. See United
States ex rel. Locey v. Drew Med., Inc., No. 6:06-cv-564-Orl-35KRS, 2009 WL 88481, at *1
(M.D. Fla. Jan. 12, 2009) (quoting Upjohn Co. v. United States, 449 U.S. 383, 395-96
(1981)). Because it is an exception to the general rule, courts narrowly construe the
privilege and place the onus of proving its applicability on the proponent. See In re Vioxx,
501 F. Supp. 2d at 799 n.15; see also In re Seroquel, 2008 WL 1995058, at * 2 (“The party

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invoking the attorney-client privilege has the burden of proving that an attorney-client
relationship existed and that the particular communications were confidential.”).
A. Attorney-Client Privilege Standard
The party invoking the privilege must establish that (1) the professed privilege
holder is or sought to become the attorney’s client; (2) the person to whom the
communication was made was a licensed attorney “or his subordinate” acting in the
capacity of a lawyer at the time the communication was made; (3) the communication
concerns a fact that was communicated to the attorney by his client outside the presence
of strangers; (4) for the purpose of obtaining a legal opinion, legal services, or “assistance
in some legal proceeding;” (5) the communication was not made “for the purpose of
committing a crime or tort;” (6) the professed holder actually claimed the privilege; and (7)
he did not waive the privilege. Noriega, 917 F.2d at 1550. For the privilege to apply the
communication must be confidential, meaning that the professed privilege holder “(1)
intended [the communication] to remain confidential and (2) under the circumstances [the
communication] was reasonably expected and understood to be confidential.” Id. at 1551
(emphasis in original); see Paul R. Rice, Electronic Evidence Law and Practice 193 (2d ed.
2008). Stated another way, “[t]he key elements of the privilege . . . are (1) the attorney; (2)
the client; (3) a communication; (4) the confidentiality that was anticipated and preserved;
and (5) the legal advice or assistance (as opposed to business or personal advice) that
was the primary purpose of the communication.” 1 Paul R. Rice, Attorney-Client Privilege
in the United States § 2:1 (2012). “The privilege also provides a derivative protection to
responsive communications from attorney to the client to the extent that those
communications reveal the content of prior confidential communications from the client.”
Rice, Electronic Evidence 193-94.

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B. Applicability of the Privilege to Corporations
“[T]he attorney-client privilege applies to corporations” and protects communications
to corporate counsel for purpose of obtaining legal advice. In re Vioxx, 501 F. Supp. 2d at
796; see also Upjohn, 449 U.S. at 390. Communication between corporate client and
outside litigation counsel are cloaked with a presumption of privilege. Rice, Electronic
Evidence 258. Communications between corporate client and corporate counsel—on the
other hand—involve a much different dynamic and require the proponent to satisfy a
“purpose and intent” threshold test. “[M]odern corporate counsel have become involved in
all facets of the enterprises for which they work. As a consequence, in-house legal
counsel participates in and renders decisions about business, technical, scientific, public
relations, and advertising issues, as well as purely legal issues.” In re Vioxx, 501 F. Supp.
2d at 797. As such, general “[b]usiness advice, unrelated to legal advice, is not protected
by the privilege even though conveyed by an attorney to the client,” because the purpose
and intent is not to communicate legal advice. Id. (quoting In re CFS-Related Securities
Fraud Litig., 223 F.R.D. 631 (N.D. Okla. 2004)).
Simply labeling a document “Confidential – Attorney Client Privilege” is not “a
sufficient basis for legally presuming or even logically assuming a primary legal purpose.”
Rice, Electronic Evidence 260. And, simply funneling non-privileged information through
an attorney does not automatically encase the document in the privilege. In re Vioxx, 501
F. Supp. 2d at 797. “The content of the message must request legal assistance, and the
information conveyed must be reasonably related to the assistance sought.” Rice,
Electronic Evidence 260; Tyne v. Time Warner Entm’t Co., 212 F.R.D. 596 n.4 (M.D. Fla.
2002) (the attorney-client privilege “label may serve to put recipients on notice that the
document is confidential, but it does not at all prove the existence of privilege.”).

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The privilege also protects “communications between corporate employees in which
prior [legal] advice received is being transmitted to those who have a need to know in the
scope of their corporate responsibilities.” In re Vioxx, 501 F. Supp. 2d at 797. In some
cases, the privilege may also be extended to protect “information gathered by corporate
employees for transmission to corporate counsel for the rendering of legal advice[.]” 1
Edna Selan Epstein, The Attorney-Client Privilege and the Work Product Doctrine 151-52
(5th ed. 2007) (The court, relying on the proposed but never adopted Rule 503(b) of the
federal rules, “concluded it was not necessary for the attorney to be either the sender or
direct recipient of the privileged communications. The documents at issue were
documents gathered to prepare a patent application and forward to patent counsel.”) (citing
In Eutectic v. Metco,61 F.R.D. 35, 37 (E.D.N.Y 1973)). A draft of a document is protected
by attorney-client privilege if it was “prepared with the assistance of an 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 version.” In re Seroquel, 2008 WL
1995058, at *3. A draft is not protected “[i]f the ultimate document is purely a business
document which would not have received any protection based upon privilege in any event
. . .” Id.
C. The Assertion of Privilege Over Email Communication
The advent of email has added to the difficulty of determining the purpose and intent
of communications that involve corporate legal counsel. In re Vioxx, 501 F. Supp. 2d at
798. In the corporate setting, “the content of what was communicated to legal counsel by
the client and . . . the substance of the advice rendered by the lawyer in response” are
typically protected by attorney client privilege. Rice, Electronic Evidence 248. This
principle applies to email communication so long as corporate counsel’s participation in the

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communications was “primarily for the purpose of rendering legal advice or assistance.” In
re Vioxx, 501 F. Supp. 2d at 798.
Courts have held that when a communication is simultaneously emailed to a lawyer
and a non-lawyer, the corporation “cannot claim that the primary purpose of the
communication was for legal advice or assistance because the communication served both
business and legal purposes.” In re Seroquel, 2008 WL 1995058, at *4; In re Vioxx, 501 F.
Supp. 2d at 805 (citing United States v. Chevron Corp., No. C 94-18855BA, 1996 WL
444597, at *2 (N.D. Cal. 1996) (“When a document is prepared for simultaneous review by
non-legal as well as legal personnel, it is not considered to have been prepared primarily to
seek legal advice and the attorney-client privilege does not apply.”); United States v. Int’l
Bus. Mach. Corp., 66 F.R.D. 206, 213 (S.D.N.Y 1974) (“If the document was prepared for
purposes of simultaneous review by legal and non-legal personnel, it cannot be said that
the primary purpose of the document is to secure legal advice.”)). In such cases, the email
and attachments are not privileged and are discoverable. When an email is sent to a
lawyer and non-lawyers in the corporation are copied, it “raise[s] a question as to whether
the primary purpose of the communication was for legal advice or assistance.” In re Vioxx,
501 F. Supp. 2d at 812.
A privileged communication may be subsequently emailed to non-legal personnel
only if the additional recipients are being sent the communication “to apprise them of the
legal advice that was sought and received.” In re Vioxx, 501 F. Supp. 2d at 810; see also
Santrade, Ltd. v. General Elec. Co., 150 F.R.D. 539, 545 (E.D.N.C. 1993) (“[D]ocuments
subject to the privilege may be transmitted between non-attorneys (especially individuals
involved in corporate decision making) so that the corporation may be properly informed of
legal advice and act appropriately.”).

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It is expected that the party asserting the privilege will satisfy Federal Rule of Civil
Procedure 26(b)(5)(A) by identifying the allegedly protected documents in its privilege log.
See Fiore v. Goodyear Tire & Rubber Co., Case No. 2:09-cv-843-FtM-29SPC, 2010 U.S.
Dist. LEXIS 122512, at *5 (M.D. Fla. Nov. 3, 2010) (“This [Rule 26(b)(5)(A)] disclosure is
done in the form of a privilege log.”) (citing Pitts v. Francis, Case No. 5:07cv169/RS/EMT,
2008 U.S. Dist. LEXIS 41894, at *13 (N.D. Fla. May 28, 2008) (“To preserve the privilege,
the objecting party must provide a log or index of withheld materials . . .”)). The privilege
log must contain “a description of the withheld documents that would be sufficient for [the
requesting party] to assess the privilege and protection claims.” Knights Armament Co. v.
Optical Sys. Tech., Inc., Case No. 6:07-cv-1323-Orl-22KRS, 2009 U.S. Dist. LEXIS 14271,
at *18 (M.D. Fla. Feb. 10, 2009); see Tyne, 212 F.R.D. at 598 (“Rule 26 (b)(5) requires that
a privilege log sufficiently describe the privileged documents so as to permit other parties,
and the court, to assess the applicability of the privilege.”).
Whether each email in an email string should be listed separately in a privilege log
is a matter upon which courts differ. The Eleventh Circuit Court of Appeals has yet to rule
on the issue. I adopt the position (for which there is overwhelming support) that each email
in an email string must be listed separately so the court (and the opposing party) may
make an attorney-client privilege determination with regards to each email in the string.
See In re Vioxx, 501 F. Supp. 2d at 812 (Email strings “in which attorneys were ultimately
involved were usually inappropriately listed on the privilege log as one message.”); TriState Truck Ins., Ltd. v. First Nat’l Bank of Wamego , Case No. 09-4158-SAC, 2011 U.S.
Dist. LEXIS 3610, at *3 (D. Kas. Jan. 13, 2011) (“[L]itigants generally must list each email
within a string as a separate entry on the privilege log rather than listing the email string as
a single entry . . . the Court was able to review each email within the string to ascertain the

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applicability of the attorney-client privilege . . .”); Rice Electronic Evidence 253 (“Each email is a separate communication (like separate letters and memoranda) and should be
described separately in the privilege log . . . [t]he fact that e-mail communications are
electronically tied together because they were sequentially created does not change their
fundamental character.”). As court-appointed “Special Master”2 Rice stated in In re Vioxx,
“[s]imply because technology has made it possible to physically link these separate
communications (which in the past would have been separate memoranda) does not justify
treating them as one communication and denying the demanding party a fair opportunity to
evaluate privilege claims raised by the producing party.” In re Vioxx, 501 F. Supp. 2d at
812. “For the adversarial system to function properly, each message needs to be identified
and described in a manner that fairly permits the opposing side to assess whether the
claim of privilege is valid.” Rice, Electronic Evidence 255.
III. Discussion
The Relator seeks a privilege determination for seven categories of documents: (1)
the compliance referral log; (2) all documents and/or communications described in the right
hand column of “Relator’s Hearing Exhibit 2” which are not to or from an attorney; (3) all
documents and/or communications that relate to audits and reviews performed by Halifax’s
Case Management Department, Compliance Department, Finance Department and/or any
hospital department other than the Legal Department; (4) all documents and/or
communications that relate to fair market value determinations or analyses with respect to
physician compensation, including drafts; (5) all documents produced to the United States
In In re Vioxx, District Judge Fallon appointed Paul R. Rice, author of two of the treatises cited
herein, “Special Master,” pursuant to Federal Rule of Civil Procedure 53. 501 F. Supp. 2d 791. “The Court
requested that Special Master Rice review the 2,000 representative documents, as well as approximately
600 additional documents” and “make recommendations as to whether or not Merck’s claim of privilege
should be upheld.” Id. at 792.
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in response to subpoenas in 2009 and/or 2010;3 (6) all email strings described in Exhibit D
to the Renewed Motion with redactions of any emails that are subject to the privilege; and
(7) the documents filed under seal as Relator’s Hearing Exhibits 6,7 and 8 (crime fraud
exception documents). I have examined the documents presented by the parties for in
camera review and find as follows:
A. Category 1
The parties disagree over whether Halifax’s referral log is protected by attorneyclient privilege. Relator argues that the referral log is a factual record “that is kept of all
reports about compliance issues that might need to be investigated.” (Tr. 21-22). She
maintains that the log was kept in Halifax’s normal course of business and that the reports
were not routinely shared with the Legal Department. (Doc. 137 at 13). In her declaration,
Relator explained that the referral log was a tool used by the Compliance Department to
manage “day-to-day complaints.” (Kunz Decl., Doc. 137-3 ¶ 13). She stated that as a
“Compliance employee, [she] had access to the referral log and [she] would input status
comments as [she] looked into the referrals,” or complaints. (Id.).
Halifax concedes that the referral log was maintained by the Compliance
Department, but argues that it is protected from disclosure because it was prepared “for
the purpose of obtaining legal advice” and “in anticipation of possible litigation and/or
adverse administrative proceedings relating to the issues identified on it by the Compliance
Department.” (Doc. 150 at 13). Halifax argues that its intention that the log remain
confidential is evidenced by the “header and footer on the log indicating its privileged and
The Relator has stated that she is concerned about the “documents produced to the United States
in response to [the] 2009 subpoenas,” while Halifax specifically referenced documents produced in response
to the 2009 and 2010 subpoenas. See Email from L. Lin Wood, Relator’s Counsel to the Honorable Thomas
B. Smith, United States Magistrate Judge (Sept. 19, 2012, 04:41 pm EST); Email from Amandeep S. Sidhu,
Halifax’s Counsel to the Honorable Thomas B. Smith, United States Magistrate Judge (Oct. 2, 2012, 07:14
pm EST).
3

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confidential nature.” (Id.). Compliance Director, George Rousis, affirmed that his office
maintained the log “to facilitate [his] discussions with [Halifax’s General Counsel,] David
Davidson and the Halifax Legal Department regarding the level of litigation risk and
potential exposure stemming from reported incidents” and that he was instructed by Mr.
Davidson4 to do so in 1998. (Rousis Decl., Doc. 150-1 at 30).
At the hearing, Relator relied on Exhibit 3, which is a questionnaire (Deloitte &
Touche LLP internal audit form) entitled, “Form 1430SHC---Questionnaire Regarding
Compliance with Federal Health Care Entity Laws and Regulations.” This questionnaire
memorializes Mr. Rousis’ answers to a series of questions. When asked whether Halifax
had written procedures for investigating offenses, Mr. Rousis stated that the procedures
were written in a “Compliance Program Reference Manual,” and added that investigations
are documented in an “Issue and Concerns Log,” which had been renamed the referral log.
(Hrn’g. Ex. 3, p. 6). Mr. Rousis stated that any corrective action taken (“policy/standards
development to address identified gaps, process improvements, additions to education
curriculum, and voluntary refunds”) was documented in the referral log. (Id. at 6-7). He
also explained that the log was reviewed quarterly by the “Compliance Committee,” but
failed to specify the make-up of the committee and whether it included employees from the
Legal Department. (Id.).
The parties submitted a representative sample of the referral log (Individual
Communications 97, 98, and 99) for in camera review. Each incident cover sheet is
addressed to the attention of Mr. Davidson, General Counsel, and all pages are stamped
“Confidential Attorney-Client Privileged Information.” This is not dispositive of the privilege
issue. A document is not privileged simply because the custodian wants it to be or
In his declaration, Mr. Davidson stated that he oversees Mr. Rousis’ “maintenance of the
Compliance Referral Log[.]” (Davidson Decl., Doc. 177-1 ¶ 2).
4

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because it is marked as such. In her declaration, Ms. Kunz stated that the content of the
log was sometimes generated by “employees who saw conduct that they thought might be
inappropriate” and was a recordation of factual accounts that were accessible for
editing/commenting by non-lawyer employees in the Compliance Department. (Kunz’s
Decl., Doc. 137-3 ¶ 13). To resolve this issue, I must first determine whether the referral
log is fact or communication. See United States ex rel. Locey, 2009 WL 88481, at *1 (The
privilege applies only to communications and does not extend to facts.) (quoting Upjohn
Co., 449 U.S. at 395-96). If the content of the log constitutes communication, and not fact,
I must consider whether the content of the message evidences a request for legal
assistance or the transmission of legal advice previously sought. Rice, Electronic Evidence
260; Tyne, 212 F.R.D. at 596 n.4.
I have reviewed the content of Individual Communications 97, 98, and 99 and find
that none of them evidence legal advice sought or received. In no instance has a lawyer
commented on the information recorded nor has an employee in the Compliance
Department indicated that he or she would seek advice of counsel. Some of the
information in the log can only be characterized as a recordation of fact. For instance, on
February 28, 2008, Ms. Kunz recorded the following:
Compliance provided Beth Hollis, Manager for IMC with a Self
Audit Checklist in order for the department to do self audit of
critical care codes. In the conversation, it was brought up that
the physicians no longer used the prolonged care code.
However, when compliance ran a utilization report for Dr. Arcot,
Prolonged care (CPT 99356) was billed 30 times for January
and part February 2008.
(Indiv. Comm. No. 97). Other log entries clearly contain email communications; however,
the privilege does not apply because (1) the communications are between non-lawyers, (2)
they do not reflect “prior [legal] advice received [that] is being transmitted to those who

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have a need to know in the scope of their corporate responsibilities,” and (3) the
communications do not expressly reflect “information gathered by corporate employees for
transmission to corporate counsel for the rendering of legal advice[.]” In re Vioxx, 501 F.
Supp. 2d at 796; Epstein, The Attorney-Client Privilege 151. Therefore, to the extent the
remainder of the referral log contains the types of entries produced for the Court’s in
camera review, they are not privileged and must be produced. To the extent any of the
remaining entries in the privilege log contain privileged information, as categorized in
section II, supra, those entries shall first be redacted and then produced.
B. Category 2
At the hearing, Relator offered into evidence a chart which it used to compare the
descriptions of documents over which Halifax maintains privilege with documents over
which it has withdrawn previously asserted claims of privilege. (Tr. 18-19; Hrn’g Ex. 2).
Relator argues that the document descriptions are essentially identical and that Halifax has
not met its burden necessary to sustain the privilege. (Tr. 20). In response, Halifax argues
that its assertion of attorney-client privilege is proper simply because its organization is
structured so that “the compliance department operates under the supervision and
oversight of [the] legal department.” (Tr. 60). I am not persuaded by this argument.
Halifax’s organizational structure is of no consequence. Halifax bears the burden of
proving that the primary purpose and intent of each allegedly privileged document was to
seek or give legal advice. Halifax has failed to meet its burden with regards to the
descriptions of the documents under the following headings: “facilitate the provision of
compliance advice,” “facilitate the rendering of compliance advice,”5 “reflecting request for

The last description in this list reveals communication that involved “A. Pike.” It is my
understanding that A. Pike is a member of Halifax’s legal department. See (Doc. 137-1 at 11). Based on the
description of this privilege log entry, the primary purpose of this communication was not to give or receive
5

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compliance advice,” “for the purpose of obtaining compliance advice,” “reflecting provision
of compliance advice,” “reflecting compliance advice,” and “request for and provision of
compliance advice.” These documents are not privileged and are discoverable. The
description of the legal documents for which privilege has been withdrawn do not offer any
insight into the validity of the privilege assertions over the documents in the right column. I
cannot tell from the descriptions whether the protection is properly asserted, which, I
recognize is Relator’s complaint. It is my expectation that the parties can resolve this issue
given the Court’s guidance outlined in section II of this order. If the parties are not able to
resolve this issue, Relator may file a renewed motion within fourteen days from the date of
this order. If this should occur, I will order that the relevant documents be produced for in
camera review.
C. Category 3
Relator seeks a privilege determination for documents or communications that
relate to audits and reviews performed by Halifax’s Case Management Department,
Compliance Department, Finance Department and/or any hospital department other than
the Legal Department. Examples of these communications and documents are contained
within the “Representative Communication Issues” binder submitted to the Court for in
camera review. This binder contains the documents listed in Exhibit A to Relator’s motion—
an exhibit that both parties agree represents the “core documents” in the dispute. See (Tr.

legal advice. The description clearly articulates that the purpose of this communication was to “facilitate the
rendering of compliance advice.” In addition, it is clear from the description that the communication was sent
to others besides “A. Pike,” which also weighs against a privilege finding. See Int’l Bus. Mach. Corp., 66
F.R.D. at 213 (“If the document was prepared for purposes of simultaneous review by legal and non-legal
personnel, it cannot be said that the primary purpose of the document is to secure legal advice.”); In re
Seroquel, 2008 WL 1995058, at * 4; In re Vioxx, 501 F. Supp. 2d at 805 (citing Chevron Corp., 1996 WL
444597, at *2 (“When a document is prepared for simultaneous review by non-legal as well as legal
personnel, it is not considered to have been prepared primarily to seek legal advice and the attorney-client
privilege does not apply.”)).

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13 (Relator’s counsel: “[W]e believe that the claims that they’re taking with respect to those
documents, the representative sample, when you look at that and deal with it in essence by
four or five categories, you will not only have solved the obstacle that prevents us from
using them, but you also have overcome the obstacles that exist with respect to the
thousands of [other] documents . . .”); Tr. 55 (Halifax’s counsel: “[T]he core documents at
issue, which are the Exhibit A documents, are privileged because they contain legal
advice, were prepared for the purpose of obtaining or rendering legal advice, or involve the
communication of legal advice.”)). I have conducted an in camera review and I find that,
for the most part, these communications are not protected by the attorney-client privilege.
My ruling with respect to all of the individual communications, including those within
category 3, is set forth in the table below:
Plaintiff’s
Individual
Communication
Number
1
2
3
4

Defendant’s Document
Number

Court’s Ruling

39
79 and 80
94
2

5

2

Privileged.
Not privileged.
Not privileged.
Not privileged.
 No attorney “to” or “from.”6
 No legal advice sought or
received.
 The primary purpose of
document is to assure that the
hospital’s internal process
successfully identifies the short
stay admissions that do not meet
the stated criteria.
Not privileged.
 Communication between nonlegal employees
 No legal advice sought or
received.

I have consulted the list attached to Relator’s motion to determine the identities of the
communication authors and recipients. (Doc. 137-1 at 11).
6

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

6

2

7

2

8

2

9

2

10

2

11

2

12

2

13

2

14

2

15

No indication that
correspondence was at the
behest of counsel or made in
preparation to confer with
counsel.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 Attorney listed among many
recipients in the “to” field. When
communication is simultaneously
emailed to a lawyer and a non-

7

- 16 -

16

13

17

14

18

14

19

14

20

14

21

14

22

lawyer, the corporation “cannot
claim that the primary purpose of
the communication was for legal
advice or assistance because the
communication served both
business and legal purposes.” In
re Seroquel, 2008 WL 1995058,
at * 4; In re Vioxx, 501 F. Supp.
2d at 805 (citing Chevron Corp.,
1996 WL 444597, at *2 (“When a
document is prepared for
simultaneous review by non-legal
as well as legal personnel, it is
not considered to have been
prepared primarily to seek legal
advice and the attorney-client
privilege does not apply.”); Intn’l
Bus. Machines Corp., 66 F.R.D.
at 213 (“If the document was
prepared for purposes of
simultaneous review by legal and
non-legal personnel, it cannot be
said that the primary purpose of
the document is to secure legal
advice.”)).
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.

14
- 17 -




23

14

24

14

25

14

26

14

27

14

28

14

29

14

30

14

31

14

32

14

33

No attorney “to” or “from.”
No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.

14

- 18 -

34

14

35

14

36

14

37

14

38

15

39

16

40

16

41

17

42

19

43

19

44

19

45

Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.

19

- 19 -

or

46

19

47

19

48

19

49

22

50

22

51

22

52

22

53

22

54

22

55

22

56

22

57

Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”

22

- 20 -



58

22

59

22

60

22

61

22

62

22

63

22

64

22

65

22

66

22

67

22

68

24

69

29

70

No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.
 Attorney listed among many
recipients in the “to” field.
Not privileged.

49
- 21 -

71

58

72

58

73

58

74

58

75

58

76

58

77

58

78

58

79
80

58
58

81
82

Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
 The “Attorney-Client Work
Product” stamp is immaterial.
See Rice Electronic Evidence, p.
260 (Simply labeling a document

58
59

- 22 -

83

60

84
85
86
87
88
89
90
91

79
80
84
94
105
105
113
182

92

“Confidential – Attorney Client
Privilege” is not “a sufficient basis
for legally presuming or even
logically assuming a primary
legal purpose. The content of the
message must request legal
assistance, and the information
conveyed must be reasonably
related to the assistance
sought.”); see also Tyne v. Time
Warner Entm’t Co., 212 F.R.D.
596 n. 4 (M.D. Fla. 2002).
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
 The “Attorney-Client Work
Product” stamp is immaterial.
See Rice Electronic Evidence, p.
260 (Simply labeling a document
“Confidential – Attorney Client
Privilege” is not “a sufficient basis
for legally presuming or even
logically assuming a primary
legal purpose. The content of the
message must request legal
assistance, and the information
conveyed must be reasonably
related to the assistance
sought.”); see also Tyne v. Time
Warner Entm’t Co., 212 F.R.D.
596 n. 4 (M.D. Fla. 2002).
Not privileged.
Not privileged.
Not privileged.
Not privileged.
See section III.G, infra.
See section III.G, infra.
See section III.G, infra.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.

182

- 23 -

93

182

94

182

95

184

96

193

97
98
99

Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 Attorneys listed among many
recipients in the “to” field.
 The primary purpose of this
communication is to disseminate
policy regarding the use of
auxiliary staff by hospital-based
physicians (compliance advice).
There is no evidence that this
review is being done at the
behest of the legal department.
Not privileged.
 There is no indication that this
“Shelly” is Shelly Shiflet
 No legal advice sought or
received.
 The primary purpose of this
communication is to convey
results of a review conducted by
the Compliance Department.
See section III.A, supra.
See section III.A, supra.
See section III.A, supra.

174
182
182

D. Category 4
Relator seeks a privilege determination for all documents and/or communications
that relate to fair market value determinations or analyses with respect to physician
compensation, including drafts. I have conducted an in camera review of these
documents. My ruling with respect to these individual communications is set forth in the
table at section III.C of this order.

- 24 -

E. Category 5
The Government argues that Halifax waived any privilege with respect to the
following twenty-eight (28) documents when it produced them in response to subpoenas
dated December 14, 2009 and August 9, 2010:
PTF 0003649; PTF 0008556, PTF 0005792; PTF 0001159;
PTF 0002857; PTF 0002859; PTF 0008411; PTF 0001539;
PTF 0008806; PTF 0008833; PTF 0008722; PTF 0008860;
HAL 0005534; HAL 0028827; HAL 0030624; HAL 0032255;
HAL 0033097; HAL 0033695; HAL 0005312; HAL 0330102;
HAL 0242656; HAL 0347538; HLFX-PST 0294540; HLFX-PST
0294541; HLFX-PST 0295340; HLFX-PST 0295341; HAL-1
0133092; and HAL-1 0131004.
(Doc. 154). The Government explains how it came to acquire the documents:
Based on the allegations in the complaint, the United States
initiated an investigation of various allegations raised by
Relator. As part of its FCA investigation, the United States
Department of Health and Human Services Office of Inspector
General (“HHS OIG”) issued three administrative subpoenas for
various documents maintained by Halifax. The subpoenas, two
dated December 14, 2009, and the other dated August 9, 2010,
required Halifax to identify any document not produced by
reason of a claim of privilege, and to provide to the United
States sufficient information to assess the validity of the
privilege asserted. See Subpoenas dated December 14, 2009
and August 9, 2010 (attached as Exhibits 1-3 to the Declaration
of Adam J. Schwartz (“Schwartz Decl.”)). Halifax began
producing documents pursuant to the subpoenas on January
22, 2010, and continued to produce documents pursuant to the
subpoena through March 4, 2011. Despite the explicit
requirement that Halifax identify any documents being withheld
on the basis of a claim of privilege, at no point during the United
States’ FCA investigation did Halifax produce a privilege log to
the United States identifying documents withheld as privileged.
(Id. at 2-3).
By March 2011, Halifax had ceased producing documents to the Government in
satisfaction of the subpoenas. (Schwartz Decl., Doc. 154-1 ¶ 5). The Government has
produced competent evidence to establish that on the face of the subpoenas it directed

- 25 -

Halifax to identify any documents not produced by reason of a claim of privilege. (Schwartz
Decl., Doc. 154-1 ¶ 4; Doc. 154-2 at 8; Doc. 154-3 at 8; Doc. 154-4 at 8). No privilege
identification was made. In April 2011, Halifax was made aware of the documents upon
which the Government intended to rely. (Doc. 154 at 3; Schwartz Decl., Doc. 154-1 ¶¶ 79). Again, no assertion of privilege was made.
In November 2011, Halifax made general privilege assertions to the Relator—not to
the Government, who, by that time, had intervened in the action. (Doc. 154 at 4). In
January 2012, the Government sequestered the documents that were the basis of Halifax’s
November 2011 privilege claim. (Id.). March 5, 2012, was the first time Halifax asserted
its specific privilege claims in a privilege log. (Doc. 154-7 at 1-3).
To the extent any of these documents are protected, my determination of whether
Halifax waived the privilege is guided by United States Fid. & Guar. Comp. v. Liberty
Surplus Ins. Co., 630 F. Supp. 2d 1332 (M.D. Fla. 2007). Under Liberty Surplus, courts
must consider:
(1) The reasonableness of the precautions taken to prevent
inadvertent disclosure, (2) the amount of time it took the
producing party to recognize its error, (3) the scope of the
production, (4) the extent of the inadvertent disclosure, and (5)
the overriding interest of fairness and justice.
630 F. Supp. 2d at 1336. First, Halifax concedes that it did not take any significant
precautions to prevent the disclosure of privileged material and that it produced documents
in response to the government’s subpoenas without conducting a manual privilege review.
See Tr. 43. This factor weighs against a finding that the documents are privileged. See In
re Fountainebleau Las Vegas Contract Litig., Case No. 09-02102-MD-GOLD/GOODMAN,
2011 U.S. Dist. LEXIS 4105, at *37 (S.D. Fla. Jan. 7, 2011) (“[I]n order to preserve a
privilege claim, a party ‘must conduct a privilege review prior to document production.’”).

- 26 -

Second, the evidence of record has established that Halifax (1) failed to lodge a
privilege objection to these documents until November 2011, which was approximately
eight months after production under the 2009 and 2010 subpoenas had concluded, and (2)
failed to identify its specific privilege assertions in a privilege log until March 2012. Halifax
delayed even though it was made aware of the documents upon which the Government
intended to rely as early as April 14, 2011. “[A] responding party’s failure to make a timely
and specific objection to a discovery request waives any objection based on privilege.”
Liberty Surplus, 630 F. Supp. 2d at 1340; see Third Party Verification, Inc. v. Signaturelink,
Inc., Case No. 6:06-cv-415-Orl-22DAB, 2007 U.S. Dist. LEXIS 32238, at *8 (M.D. Fla. May
2, 2007) (“A party who fails to file timely objections waives all objections, including those
based on privilege or work product.”). This factor weighs against a finding that the
documents are protected.
The third and fourth factors weigh neutrally. Halifax has produced thousands of
documents in this litigation. The Government argues that Halifax only waived the privilege
for twenty-eight documents. (Doc. 154). The number of documents at issue is an
extremely small portion of the total number of documents produced.
Lastly, the Government has relied on these documents for more than a year and to
withhold them now would be unfair considering that Halifax failed to take meaningful
precautions to prevent the disclosure of privileged information and failed to assert privilege
until eight months after production under the subpoenas had concluded. This factor
weighs against a privilege finding.
The balance of the Liberty Surplus factors weighs against Halifax’s privilege
assertions. To the extent any of the documents produced in response to the Government’s

- 27 -

2009 and 2010 subpoenas were protected by attorney-client privilege, the privilege was
waived.
F. Category 6
Relator seeks a privilege determination as to all email strings described in Exhibit D
to the Renewed Motion with redactions of any emails that are subject to the privilege. I
have conducted an in camera review of the random sample of communications identified at
the hearing and provided to the Court. As an initial matter, each email string listed in
Halifax’s privilege log must be disassembled and each email listed separately in an
amended privilege log. In re Vioxx, 501 F. Supp. 2d at 812; Tri-State Truck, 2011 U.S.
Dist. LEXIS 3610, at *3; Rice, Electronic Evidence 253. For the sake of clarity, my rulings
correspond to the document numbers as they were presented to me. To the extent any of
these documents consist of email strings, my rulings pertain to each individual email in the
string, except where noted. I find that some of these communications are protected by the
attorney-client privilege, others are not. My specific ruling with respect to each of the
fifteen (15) communications that comprise the random sample, is set forth below:
Tab Number

Document ID:

Court’s Ruling

1

HAL0343413

2

HAL0343999

3

HAL0301892

Privileged.
 Email sent to A. Pike in Legal
Department for purposes of
seeking legal advice.
Not privileged.
 Email correspondence involves
A. Pike and D. Davidson from the
Legal Department, but the
purpose of the communication to
resolve a business/Human
Resources related issue. The
communication does not involve
the request for or transmission of
legal advice.
Not privileged.

- 28 -




4

HAL0345376

5

No attorney “to” or “from.”
No legal advice sought or
received.
Not privileged.
 A. Pike is the recipient of one of
the emails, but the purpose of the
communication is not to request
or transmit legal advice. Rather,
the sender explicitly intends to
“keep [A. Pike] in the loop,” with
regards to a Human Resources
issue.
 No legal advice sought or
received.
The emails sent at 9:52 am and 9:57 am
are privileged and shall be redacted.

HAL0336000

6

HAL0327948

7

HLFXHLTH-E00293778

8

HLFXHLTH-E00421414

9

HLFXHLTH-E00227484

10

HLFXHLTH-E00490411

11

HLFXHLTH-E00440765

- 29 -

The remaining emails are not privileged
and must be produced because they do
not seek legal advice.
Privileged.
 Emails sent to A. Pike and S.
Shiflet in Legal Department for
purposes of seeking legal advice.
Not privileged.
 No attorney “to” or “from.”
 S. Shiflet is copied, but no legal
advice is sought or received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Privileged.
 These email messages were
sent between G. Rousis,
Halifax’s corporate lawyers and
outside counsel for purposes of
seeking legal advice.
Privileged.
 Emails sent to S. Shiflet in Legal
Department for purposes of
seeking legal advice.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.

12

13

14

15

HLFXHLTH-E00131137 Not privileged.
 These emails were either sent or
received by A. Pike and/or S.
Shiflet (among other non-lawyer
employees). The purpose of the
communication is to circulate the
minutes from a meeting. The
emails do not reflect a request for
or transmission of legal advice.
HLFXHLTH-E00455166 Privileged.
 The attorney-client privilege
protects “communications
between corporate employees in
which prior [legal] advice
received is being transmitted to
those who have a need to know
in the scope of their corporate
responsibilities.” In re Vioxx, 501
F. Supp. 2d at 797.
HLFXHLTH-E00482596 The emails sent at 12:03 pm and 5:05
pm are not privileged and must be
produced.
 S. Shiflet is the recipient of one of
the emails, but the purpose of the
communication is not to request
or transmit legal advice.
The remaining emails are privileged.
 These email messages involved
S. Shiflet and outside counsel for
purposes of seeking legal advice.
HLFXHLTH-E00168325 Privileged.
 The attorney-client privilege
protects “communications
between corporate employees in
which prior [legal] advice
received is being transmitted to
those who have a need to know
in the scope of their corporate
responsibilities.” In re Vioxx, 501
F. Supp. 2d at 797.

G. Category 7
Relator argues that attorney-client privilege does not protect documents 88, 89, and
90 in Exhibit A to Relator’s motion because “they evidence an attorney aiding in the

- 30 -

commission of a fraud.” (Doc. 137 at 18). Halifax maintains that the crime-fraud exception
does not apply because Relator is unable to meet her threshold burden of proof. (Doc. 150
at 12). I have reviewed these communications in camera.7
It is well established that “[t]he attorney-client privilege does not protect
communications made in furtherance of a crime or fraud.” In re Grand Jury Investigation
(Schroeder), 842 F.2d 1223, 1226 (11th Cir. 1987). These types of communications “are
subject to disclosure as an exception to the attorney-client privilege.” In re Warner, 87 B.R.
199, 202 (M.D. Fla. 1988). The party invoking the crime-fraud exception must establish:
First, there must be a prima facie showing that the client was
engaged in criminal or fraudulent conduct when he sought the
advice of counsel, that he was planning such conduct when he
sought the advice of counsel, or that he committed a crime or
fraud subsequent to receiving the benefit of counsel’s advice.
Second, there must be a showing that the attorney’s assistance
was obtained in furtherance of the criminal or fraudulent activity
or was closely related to it.
In re Grand Jury Investigation (Schroeder), 842 F.2d at 1226. “Mere allegations or
suspicions of fraud are not enough.” In re Warner, 87 B.R. at 202. In this case, Relator
alleges that Halifax violated the Stark Amendment by “providing improper financial
incentives to staff physicians (who are referring Medicare and other Government
beneficiaries) unrelated to their personal performance of services[.]” (Doc. 29 ¶¶ 98, 99146).
The Relator has offered no evidence to rebut Halifax’s argument that she was not
legally authorized to take document number 90 from the hospital. See (Tr. 55). Therefore,
Relator has not met her burden. Sackman v. Ligget Group, Inc. 173 F.R.D. 358, 365
(E.D.N.Y. 1997) (the court found no waiver where paralegal stole privileged document and
gave it to her lawyers) (citing Mayman v. Martin Marietta Corp., 886 F. Supp. 1243, 1246
7

Thus, Relator’s Renewed Motion for In Camera Review (Doc. 151) is GRANTED.

- 31 -

(D. Md. 1995) (court will not consider records removed without authority on the applicability
of the crime-fraud exception)); see Smith v. Armour Pharm. Co., 838 F. Supp. 1573, 157577 (S.D. Fla. 1993) (under Florida law a publicly disclosed stolen document does not lose
its privileged status). Consequently, document number 90 is privileged and will not be
produced.
Communications 88 and 89 are email messages between Ms. Pike, in Halifax’s
Legal Department, and Mr. Foster of the hospital’s Finance Department that were
eventually forwarded to Relator. The hospital’s General Counsel and two employees from
the Accounting Department are copied on the messages. The first prong of the In re Grand
Jury Investigation (Schroeder) test “is satisfied by a showing of evidence that, if believed
by a trier of fact would establish the elements of some violation that was going on or about
to be committed.” Gutter v. E.I. Dupont de Nemours, 124 F. Supp. 2d 1291, 1299 (S.D.
Fla. 2000) (quoting In re Grand Jury Investigation (Schroeder), 842 F.2d at 1226). The
court is permitted to “examine the privileged communications themselves to determine
whether they further a crime or fraud[.]” United States v. Boender, 649 F.3d 650, 656 (7th
Cir. 2011). I have reviewed communications 88 and 89 and find that Relator has made a
prima facie showing that Halifax was engaged in or about to be engaged in fraudulent
conduct when it sought Ms. Pike’s advice. See Gutter, 124 F. Supp. 2d at 1299.
Secondly, I find that Relator has offered sufficient evidence to show that Ms. Pike’s
assistance was sought and obtained in order to allow the Finance Departments to make
payments to the oncologists. Therefore, upon due consideration I find that the crime-fraud
exception applies to vitiate the attorney-client privilege over communications 88 and 89
and these documents must be produced.

- 32 -

IV.

Motion to Compel Interrogatory No. 2

Parties may obtain discovery of "any nonprivileged matter that is relevant to any
party's claim or defense . . .” FED. R. CIV. P. 26(b)(1) (emphasis added). Federal Rule of
Civil Procedure 33 allows parties to serve upon each other interrogatories which relate to
any matter that may be inquired into under Rule 26(b). The handbook entitled Middle
District Discovery (2001) directs that "[i]nterrogatories should be brief, simple,
particularized, unambiguous, and capable of being understood. . . ." Middle District
Discovery (2001) at 15.
Rule 33 directs that each interrogatory be answered "separately and fully in writing
under oath." FED. R. CIV. P. 33(b)(3). An opposing party must state its grounds for
objection with specificity. See id. at (b)(4). Objections to discovery must be “plain enough
and specific enough so that the court can understand in what way the [discovery is] alleged
to be objectionable.” Panola Land Buyers Assoc. v. Shuman, 762 F.2d 1550,1559 (11th
Cir. 1985) (quoting Davis v. Fendler, 650 F.2d 1154, 1160 (9th Cir. 1981)). Upon motion,
the court may compel a party to answer the interrogatories. See FED. R. CIV. P.
37(a)(3)(B)(iii). If the motion to compel is granted, the court must direct the party whose
conduct necessitated the motion, “or the attorney advising that conduct, or both,” to
compensate the movant for “reasonable expenses incurred in making the motion, including
attorney’s fees,” except in certain limited circumstances. FED. R. CIV. P. 37(a)(5)(A).
The Government served Halifax with interrogatories, including the following:
Interrogatory No. 2: Identify all documents, communications,
and facts Halifax Hospital Medical Center and Halifax Staffing,
Inc. relied upon or intend to rely upon in support of the
affirmative defenses asserted by Halifax Hospital Medical
Center and Halifax Staffing, Inc. i[n] the Answer to the United
States’ Complaint in Intervention.
(Doc. 153 at 2). Halifax responded to interrogatory 2 as follows:
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Response: Halifax objects to this request on the grounds that it
is overly broad, vague, and unduly burdensome. Subject to the
foregoing general and specific objections, Halifax responds that
“documents, communications, and facts” on which Halifax
“relied upon or intends to rely upon” have not yet been
determined and will be disclosed as required by the Court’s
Scheduling Order and in accordance with the applicable
Federal Rules.
(Doc. 153 at 3). The Government was not satisfied with Halifax’s response and asked it to
provide a supplement. (Doc. 153 at 3; Doc. 153-5). Halifax refused. (Doc. 153 at 3; Doc.
153-6). The Government now asks this Court to compel Halifax to “provide a response to
United States Interrogatory No. 2 and produce all responsive documents identified on
Halifax’s 4th Privilege Log that were improperly withheld from production.” (Doc. 153).
Specifically, the Government has asked this court to compel the disclosure of the
documents listed in Exhibit 6 to the motion to compel, which include
[D]ozens of additional communications regarding internal audits
that were apparently never seen by an attorney on the theory
that someone in the legal department directed the performance
of the audit. Finally, Halifax has withheld spreadsheets and
other factual information sent by non-lawyers to business and
legal personnel that do not appear to have been for the purpose
of obtaining legal advice.
(Doc. 153 at 6). Halifax maintains that its response was appropriate under the federal and
local rules of this Court. (Doc. 157). The parties provided me with a sampling of the
documents listed in Exhibit 6 to the Government’s motion. I have conducted an in camera
review of those documents and find as follows with regards to the sample
communications:8

Each email string listed in Halifax’s privilege log must be disassembled and each email listed
separately. In re Vioxx, 501 F. Supp. 2d at 812; Tri-State Truck, 2011 U.S. Dist. LEXIS 3610, at *3; Rice,
Electronic Evidence 253. For the sake of clarity, my rulings correspond to the document numbers as they
were presented to me. To the extent any of these documents consist of email strings, my rulings pertain to
each individual email in the string, except where noted.
8

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Tab Number

Document ID From
Exhibit 6

Court’s Ruling

1

HLFXHLTH-E00022728

2

HLFXHLTH-E0044440

3

HLFXHLTH-E0045130

4

HLFXHLTH-E00105298

5

HLFXHLTH-E00209388

6

HLFXHLTH-E00329556

7

HLFXHLTH-E00436245

8

HLFXHLTH-E00527004

9

HLFXHLTH-E00022199

10

HLFXHLTH-E00114304

11

HLFXHLTH-E00227879

Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 A. Pike is listed in the “To” field,
but the purpose and intent of the

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12

HLFXHLTH-E00389632

13

HLFXHLTH-E00390287

14

HLFXHLTH-E00390728

15

HLFXHLTH-E00391082

16

HLFXHLTH-E00410557

17

HLFXHLTH-E00410800

18

HLFXHLTH-E00412504

19

HLFXHLTH-E00527011

20

HLFXHLTH-E00527031

21

HLFXHLTH-E00527043

- 36 -

email is to transmit a meeting
agenda.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 S. Shiflet participated in the
discussion, but the purpose and
intent of the document was to
facilitate a group discussion.
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.

22

HLFXHLTH-E00527108

23

HLFXHLTH-E00527121

24

HLFXHLTH-E00527136

25

HLFXHLTH-E00527157

26

HLFXHLTH-E00527171

27

HLFXHLTH-E00527198

28

HLFXHLTH-E00527224

29

HLFXHLTH-E00527527

30

HLFXHLTH-E00527267

- 37 -

Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
 No indication that draft document
was created at the behest of
counsel or made in preparation
to confer with counsel.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
 No indication that memo or
attached document were created
at the behest of counsel or made
in preparation to confer with
counsel.

31

HLFXHLTH-E00527278

32

HLFXHLTH-E00527294

33

HLFXHLTH-E00527310

Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.
Not privileged.
 No attorney “to” or “from.”
 No legal advice sought or
received.

In addition, I direct Halifax to amend its response to the Government’s Interrogatory No. 2.
I am confident that Halifax is capable of providing the Government with a factual basis for
the asserted affirmative defenses without disclosing protected information or revealing, in
detail, a narrative of its case.9
Although the Government did not make a specific request for the award of its
expenses, Federal Rule of Civil Procedure 37(a)(5) requires the Court to award expenses
in connection with a motion to compel unless (a) the motion was filed without the moving
party having made a good faith effort to obtain the discovery without court action, (b) the
Court determines that the response of the non-moving party was substantially justified, or
(c) if other circumstances make an award of expenses unjust. FED. R. CIV. P. 37(a)(5)(A).
Based on the circumstances of this case and the nature of the discovery dispute, as
I reject Relator’s argument that Halifax waived attorney-client privilege because it asserted
affirmative defenses to the Stark Law allegations. (Doc. 137 at 17). The facts of this case are distinguished
from other cases in which defendants’ “advice of counsel” defense vitiated the privilege. See SEC v. Wall St.
Capital Funding, LLC, Case No. 11-20413-CIV-GRAHAM/GOODMAN, 2011 U.S. Dist. LEXIS 63186, at *21
(S.D. Fla. June 10, 2011) (“Defendants cannot assert the advice of counsel advice while simultaneously and
strategically selecting which communications to disclose for self-serving purposes and which
communications to retain as confidential.”); Southeastern Mech. Servs., Inc. v. Brody, Case No. 8:08-cv1151-T-30EAJ, 2009 U.S. Dist. LEXIS 80834, at *8 (M.D. Fla. Aug. 25, 2009) (“Waiver by implication may
occur when a client places the attorney-client relationship directly at issue or when a client asserts reliance
on an attorney's advice as an element of a claim or defense.”); Inmuno Vital, Inc. v. Telemundo Group, Inc.,
203 F.R.D. 561, 564 (S.D. Fla. 2001) (“It is well-established that when a party asserts a defense, such as the
advice of counsel defense, that makes an attorney's advice an issue in the litigation, that party waives the
attorney client privilege.”).
9

- 38 -

described herein, I find that an award of expenses would be unjust. FED. R. CIV. P.
37(a)(5)(A)(iii).
V. Motions to Amend the Scheduling Order
Relator and the Government have filed motions requesting that the Court modify the
Amended Case Management and Scheduling Order (Doc. 92) to extend the expert report
disclosure deadline. (Doc. 155; Doc. 145). Halifax has objected. (Doc. 159; Doc. 156).
Upon due consideration, the motions are GRANTED. Relator and the Government shall
have until December 21, 2012 to disclose their expert reports. Likewise, Halifax shall have
until February 11, 2013 to submit its expert report. The Court will enter a second amended
scheduling order forthwith.
VI.

Conclusion

Accordingly, it is hereby ORDERED that:
1. Relator Elin Baklid-Kunz’s Renewed Motion for Determination of Defendants’
Privilege Claims and Memorandum in Support Thereof (Doc. 137) is
GRANTED IN PART and DENIED IN PART;
a. The motion is GRANTED to the extent Relator requests a
determination of Halifax’s privilege claims.
b. The motion is DENIED to the extent Relator requests attorneys’ fees
for her efforts to obtain Court determination of the privilege claims.
2. United States’ Motion to Alter the Amended Case Management and
Scheduling Order (Doc. 145) is GRANTED;
3. Relator’s Renewed Motion for In Camera Review (Doc. 151) is GRANTED;

- 39 -

4. United States’ Motion to Compel the Production of a Response to
Interrogatory No. 2 and Documents Improperly Withheld (Doc. 152) is
GRANTED;
5. Relator’s Motion to Modify the Amended Case Management and Scheduling
Order (Doc. 155) is GRANTED;
6. Halifax’s Motion to Strike the Declaration of Mary Ann Norvik (Doc. 164) is
DENIED;10 and
7. Halifax’s Motion to Designate as Confidential the Deposition Transcript of
Relator Elin Baklid-Kunz, dated August 20, 2012 (Doc. 175) is DENIED
WITHOUT PREJUDICE.11
DONE and ORDERED in Orlando, Florida on November 6, 2012.

Copies to Counsel of Record

Halifax has failed to show any legal authority or good faith basis for its requested relief. Its reliance
on Local Rule 3.01(c) and (g) is misplaced.
10

Halifax filed a motion to designate as confidential the entire transcript of Relator’s August 20, 2012
deposition testimony. (Doc. 175). Halifax argues, inter alia, that “a majority of the transcript also relates
directly to privileged communications and information between Relator and Halifax employees and in-house
counsel.” (Doc. 176). Throughout this order, I have declared non-privileged communications and documents
over which Halifax had previously asserted attorney-client privilege. Accordingly, Halifax’s motion is denied
without prejudice to be reasserted, to the extent appropriate, once the parties have considered the effect of
the rulings herein.
11

- 40 -