The U.S. District Court for the Eastern District of Tennessee answered what it acknowledged was a novel question: whether statistical sampling and extrapolation are appropriate to establish liability under the False Claims Act (FCA). The court found the government could extrapolate from a sample of patient records to prove FCA liability. While the court’s decision approved the use of sampling, it emphasized the defendant could challenge the government’s methodology and that the government was not using sampling to prove all of the elements of the alleged FCA violations.
Kelly Schulz
Are Internal Investigations Protected by the Attorney-Client Privilege and Work Product Doctrine? Recent Case Says Maybe Not.
By Kelly Schulz & Cori Turner on
On March 6, 2014, the District Court for the District of Columbia issued an opinion in United States ex rel. Barko v. Halliburton Company et al. requiring Kellogg, Brown & Root Engineering Corporation (“KBR”) to produce documents originally withheld on the basis of attorney-client privilege and the work product doctrine. The Court found that the documents, which related to internal investigations of possible violations of KBR’s code of conduct, were ordinary business records created to satisfy regulatory requirements and were not created for purposes of obtaining or receiving legal advice. The Court’s decision was based on the fact that KBR’s internal investigation was required under the Federal Acquisition Regulation and internal KBR policy, and that the investigation was conducted by non-lawyers. The Court’s holding raises significant questions about existing corporate compliance and investigation programs in regulated industries, including healthcare.
In Barko, the plaintiff brought a qui tam complaint alleging that KBR employees subcontracted to certain third parties who inflated invoices for substandard work, resulting in overcharges to the government. Barko sought, in the course of discovery, documentation from the internal review performed by KBR’s Office of Business Conduct into these allegations. After an in camera review of the documents at issue, the Court determined that the documents were not protected.