Qui Notes
December 27, 2019

Not-So-Common Interest: Privilege Claim by Relator and Government Runs Aground

Qui Notes: Unlocking the False Claims Act

Does the common interest doctrine apply to all communications between a relator and the government? A recent decision from the District of Minnesota reinforces that the answer to that question is no. In U.S. ex rel. Fesenmaier v. Cameron-Ehlen Group, Inc., No.13-cv-3003 (WMW/DTS), 2019 WL 6875354 (D. Minn. Dec. 17, 2019), a relator and the government (which had intervened in the suit) sought to shield from discovery certain communications that they had exchanged between April 24, 2013 (the date on which relator told an FBI agent investigating the defendants that he had hired a lawyer to draft a qui tam complaint) and September 20, 2013 (the date on which relator submitted its pre-filing disclosure to DOJ per 31 U.S.C. § 3730(b)(2)).

According to plaintiffs, relator's comment to the FBI agent reflected that he and the government shared a common legal interest from that point on. The court disagreed.

In particular, the court found that the common interest exception to the attorney-client privilege applied in this case only once relator had made its pre-filing disclosure. Invoking its prior decision on the issue (Discovery Order, U.S. ex rel. Fesenmaier v. Cameron-Ehlen Group, Inc., No. 13-cv-3003 (WMW/DTS) (D. Minn. June 10, 2019), ECF No. 275) and the caselaw cited there, the court observed that "[t]he very nature of the pre-filing disclosure makes the date [on which] it occurred a clear point of demarcation," and found that "[r]elator does not waive applicable privileges by following the [FCA's] disclosure requirements."

But this was not the case for communications that took place prior to relator's submission of its disclosure statement. The court rejected plaintiffs' argument that informing the FBI agent that relator had hired an attorney was sufficient to cloak his subsequent communications with government agents in privilege. The court found that, even assuming the FBI agent's knowledge that relator had hired an attorney could be imputed to the government, the facts did not support a finding that a common legal strategy or unity of interests existed at that time: the FBI's investigation in April 2013 was still criminal in nature; the relator was cooperating with the FBI's investigation at the time; the civil division of the US Attorney's Office did not become involved in interviewing witnesses until 2014; and it was "far from obvious" that the comment to the agent was made in furtherance of any common legal interest as opposed to a comment by a cooperating witness.

Notably, the court rejected plaintiffs' argument "that a broad view of the common interest privilege . . . is consistent with the purpose of the [FCA]." Although acknowledging that an alignment of interests between the government and a relator can be assumed "at certain points" before intervention, the court noted that "[t]he interests of the Relator and the Government are not always and necessarily aligned"—pointing to, among other things, the government's "power effectively to sideline a relator when useful to litigating the case as the Government sees fit," per 31 U.S.C. 3730(c)(2)(A)-(D), for example, through a so-called "Granston dismissal" (a topic we have blogged about). Ultimately, the court held that if relator and the government shared otherwise privileged documents or communications with each other prior to the disclosure date, they waived any otherwise applicable privilege.

Although questions remain as to the scope of the common interest doctrine as applied to relator-government communications, Fesenmaier is a noteworthy decision adding contour to the caselaw and reinforcing that defendants in qui tam actions should not assume that all communications between a relator and the government are beyond reach in discovery.

© Arnold & Porter Kaye Scholer LLP 2019 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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