United States of America ex rel. et al v. D.S. Medical LLC et al

Filing 264

MEMORANDUM AND ORDER re: 164 MOTION to Compel Production of Documents Withheld Under Defendants' "Limited Waiver' of Privilege filed by Plaintiff United States of America. IT IS HEREBY ORDERED that the government's m otion (ECF. No. 164) to compel production of documents withheld under Defendants' waiver of the attorney client privilege is GRANTED with respect to Document CTRL00012437 and related attachments, and DENIED in all other regards. Defendants shall turn over the document at issue to the government within five days of the date of this Memorandum and Order. Signed by District Judge Audrey G. Fleissig on 8/9/17. (CSG)

UNITED STATES DISTRICT COURT
SOUTHEASTERN DISTRICT OF MISSOURI

UNITED STATES OF AMERICA,
ex rel. PAUL CAIRNS, et al.,
Plaintiff,
vs.
D.S. MEDICAL, L.L.C., et al.,
Defendants.

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Case No. 1:12CV00004 AGF

MEMORANDUM AND ORDER
This qui tam action is before the Court on the government’s motion (ECF No.
164) to compel production of documents withheld by Defendants as privileged under
the attorney-client privilege.
The operative complaint claims that the four Defendants – Dr. Sonjay Fonn, a
neurosurgeon; Midwest Neurosurgeons, LLC, a company formed and operated by Dr.
Fonn; Deborah Seeger, Dr. Fonn’s fiancée; and D.S. Medical, LLC, a company formed
and created by Seeger for the distributorship of spinal implant devices – violated the
False Claims Act, 31 U.S.C. §§ 3729-33, by submitting or causing to be submitted to
the federal Medicare and Medicaid programs false claims for reimbursement for Dr.
Fonn’s services in performing spinal surgeries at a hospital in Cape Girardeau,
Missouri, between December 2008 and March 2012, and for the purchase of implant
devices used in those surgeries. The claims for reimbursement were allegedly false
because they did not disclose that they were the result of alleged kickbacks that violated

the federal criminal Anti-Kickback Statute (“AKS”).
On June 1, 2016, Defendants filed a notice that they were asserting an advice-ofcounsel defense (regarding their state of mind for purposes of the alleged AKS
violations), and were waiving the attorney-client privilege, limited to communications
with counsel prior to the time of Defendants learning of the government’s investigation
arising from the qui tam suit, and limited to nine topics, including, for example, the
relationships between the various Defendants, and discussions regarding pricing of
spinal implants with the hospital in question. ECF No. 148. Defendants thereafter
withheld numerous documents as privileged, asserting that they did not come within the
“limited waiver.” The government disputed the ability of Defendants to limit their
waiver to the nine specified topics, as opposed to turning over documents related to
their “state of mind.”
Following the course of several months during which the parties engaged in
discovery discussions and Defendants made supplemental disclosures, the parties’
dispute with respect to the motion to compel directed to Defendants now involves four
documents, some of which have attachments. Defendants assert that these documents
are privileged because they do not relate to Defendants’ state of mind with regard to the
alleged ACS violations that underlie the government’s theory of liability in this case.
These documents, by agreement of the parties, were submitted to the Court for in
camera review.
Upon reviewing the documents, the Court concurs with Defendants except with
respect to Document CTRL00012437 and related attachments. Not having been a party
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to the parties’ extensive discussions regarding the production of documents relevant to
Defendant’s advice-of-counsel defense and waiver of privileges, the Court cannot be
certain whether this document meets the parties’ understanding of what must be
produced by Defendants. Arguably, the document relates to Defendants’ state of mind
with respect to the AKS in a manner that is relevant to the present case. The Court is
not holding that this document is relevant or would be admissible at trial. Furthermore,
any use by the government of this document shall be limited to this case, and no other
purpose.
Accordingly,
IT IS HEREBY ORDERED that the government’s motion (ECF. No. 164) to
compel production of documents withheld under Defendants’ waiver of the attorney
client privilege is GRANTED with respect to Document CTRL00012437 and related
attachments, and DENIED in all other regards. Defendants shall turn over the
document at issue to the government within five days of the date of this Memorandum
and Order.

AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 9th day of August, 2017.

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