Opinion
No. CIV 96-0098 PK/LFG
July 9, 2002
ORDER
THIS MATTER comes on for consideration of the Relator's Objections to Magistrate's Order Granting Defendant's Motion to Unseal Disclosure Statement and to Compel Discovery filed February 7, 2002 (Doc. 110), and Plaintiff's Motion to Reconsider Memorandum Opinion and Order (Doc. 113; filed 2/19/02) by Judge Garcia on Relator's Motion to Compel Further Responses filed March 1, 2002 (Doc. 117). Upon consideration thereof,
(1) Objections to the magistrate's orders may be made pursuant to Fed.R.Civ.P. 72(a) and 28 U.S.C. § 636(b)(1)(A). A non-dispositive pretrial order by the magistrate is reviewed by a district court under a clearly erroneous and contrary to law standard. First Union Mortgage Corp. v. Smith, 229 F.3d 992, 995 (10th Cir. 2000). This differs markedly from de novo review. A reviewing district court is not free to substitute its judgment for that of the magistrate judge merely because the district court may prefer a different outcome. Grimes v. City and County of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991). Additionally, within this framework, the magistrate judge's discovery rulings are reviewed for an abuse of discretion. See Pippinger v. Rubin, 129 F.3d 519, 533 534 n. 8 (10th Cir. 1997).
(2) Harold Tate brought this qui tam action pursuant to 31 U.S.C. § 3730(b)(1), seeking to impose liability on the Defendant Honeywell, Inc. ("Honeywell") for alleged violations of the False Claims Act, 31 U.S.C. § 3729. The United States declined to intervene.
(3) In compliance with the Act, Mr. Tate filed with the original complaint a written disclosure ("disclosure statement") of substantially all material evidence and information in his possession. 31 U.S.C. § 3730(b)(2). According to the statute, the complaint must remain sealed for at least sixty days, but the statutory language does not clearly indicate whether the disclosure statement must also be filed under seal, and, if so, how long it must remain sealed. Id.
(4) United States District Judge Martha Vazquez entered orders unsealing the First and Second Amended Complaints. The first order stated that, "[a]ll other contents of the Court's file in this action filed prior to entry of this Order [August 10, 2000] shall remain under seal and not be made public or served upon the defendant. . . ." Doc. 38. Judge Vazquez used similar language in the order unsealing the second amended complaint, but also indicated that either party might in the future move to unseal the additional materials. Doc. 70.
(5) Honeywell sought to unseal and compel production of the disclosure statement as well as certain documents and the answers to certain deposition questions pertaining to Mr. Tate's communications with the government, including government attorneys. (Doc. 88). Mr. Tate objected to the requested disclosures based on several asserted privileges. Doc. 90. The magistrate judge granted Honeywell's motion. Doc. 105 ("Order Granting Defendant's Motion to Unseal Disclosure Statement and to Compel Discovery," entered January 28, 2002). Mr. Tate objected. Doc. 110. The government seeks to join in Mr. Tate's objections. Doc. 122 (filed March 14, 2002). Just as the government is too late to object to the magistrate judge's order, so too is the government's attempt to join in Mr. Tate's objections. See Fed.R.Civ.P. 72(a) (requiring service and filing of any objections within 10 days after service of the magistrate judge's order); 28 U.S.C. § 636(b)(1) (same); Hutchinson v. Pfeil, 105 F.3d 562, 566 (10th Cir. 1997) (for a party to obtain district court review of a magistrate judge's non-dispositive orders, there must be a timely objection).
(6) Nothing in the language of the False Claims Act prohibits Honeywell's discovery of the disclosure statement. Indeed, prohibiting the revelation of the factual summary contained in the disclosure statement would obstruct the efficient prosecution of a qui tam action, see United States ex rel. Stone v. Rockwell Int'l Corp., 144 F.R.D. 396, 399 (D.Colo. 1992), and would offend the fundamental principles that encourage broad discovery under federal law. See United States v. Proctor Gamble Co., 356 U.S. 677, 682 (1958). The disclosure statement is perhaps more adept than any other document "at apprising Defendant of the nature of the alleged charges." United States ex rel. Burns v. A.D. Roe Co., Inc., 904 F. Supp. 592, 593 (W.D. Ky 1995).
(7) The policy reasons offered by Mr. Tate in support of maintaining the seal are unavailing. First, Mr. Tate's identity and the general basis for his claims are known to all parties. Unsealing the disclosure statement would not offend the statutory goal of preserving the anonymity of the complainant. See A.D. Roe, 904 F. Supp. at 594. Second, Mr. Tate claims that keeping the statement sealed would further the government's interest in keeping potential criminal investigations secret from the Defendant. However, the statute provides a sixty day window during which the complaint (and perhaps the disclosure statement) remains sealed, allowing the government to investigate unaware targets. Furthermore, after nearly six years of proceedings, Honeywell may not know all the particular facts contained in the disclosure statement, but it is well aware of the contours of the claims against it. The magistrate judge's determination that, in these circumstances, the False Claims Act provides no basis for withholding the disclosure statement, Doc. 105 at 5-6, is not clearly erroneous or contrary to law.
(8) Mr. Tate argues that attorney-client privilege protects the disclosure statement. The conclusion that the communications between Mr. Tate and his attorneys for the purpose of drafting the disclosure statement and forwarding it to the government do not constitute privileged attorney-client communications, Doc. 105 at 6-7, is not clearly erroneous or contrary to law. The attorney acts as a conduit for information in preparing the required disclosure statement, not as a legal adviser. The statement itself is merely a factual recitation required by statute. The statement does not have to be prepared by an attorney, and it would be inconsistent to indefinitely suppress some statements and unseal others based solely upon whether they were prepared by an attorney. Rockwell Int'l Corp., 144 F.R.D. at 399; United States ex rel. Burroughs v. DeNardi Corp., 167 F.R.D. 680, 683 (S.D. Cal 1996). Finally, the document was prepared with no expectation of privacy or confidentiality, but rather with the expectation that it would be given to the United States. A.D. Roe, 904 F. Supp. at 594. The magistrate judge's determination that the disclosure statement is not protected by the attorney-client privilege is not clearly erroneous or contrary to law.
(9) Mr. Tate claims that the disclosure statement is protected by the work product doctrine. The doctrine generally protects "documents and tangible things . . . prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative." Fed.R.Civ.P. 26(b)(3). The protection can be overcome if the party requesting production can demonstrate "a substantial need of the materials in the preparation of the party's case and . . . is unable without undue hardship to obtain the substantial equivalent of the materials by other means." Id. If the work product reveals "mental impressions, conclusions, opinions, or legal theories of an attorney" then it is almost always protected regardless of the showing of substantial need. Id.
(10) The magistrate judge's conclusion, after an in camera inspection, that the disclosure statement contains no opinion work product, Doc. 105 at 8-9, is not clearly erroneous or contrary to law. Nor is the magistrate judge's implicit conclusion that Honeywell has shown a substantial need for the disclosure statement and that it is unable without undue hardship to obtain the substantial equivalent of the materials by other means. Id. at 9. The statement would materially assist Honeywell in determining the precise nature of the claims made against it and aid in determining whether Mr. Tate has standing to sue as the original source of the information contained therein. A.D. Roe, 904 F. Supp. at 594.
(11) The magistrate's holding that the joint prosecution privilege does not protect the disclosure statement from discovery, Doc. 105 at 10, follows from its conclusions that neither the work-product or attorney-client privilege apply. Adding the government (which has declined to intervene) and its contingent interest to the mix does not somehow make the arguments concerning work-product and attorney client more compelling.
(12) Mr. Tate argues that the attorney-client privilege, the work product doctrine, and the joint prosecution privilege, protect the notes of communications between Mr. Tate and government personnel and documents received by Mr. Tate from the government. The magistrate's order that these documents be made available to Honeywell follows from its reasoning and is not clearly erroneous or contrary to law.
(13) The magistrate judge also denied Mr. Tate's motion to compel as to Interrogatories 3, 4, and 5, and Requests for Production 10, 11, 12, 13, 14, 15, 25, and 26. Doc. 113 ("Memorandum Opinion and Order on Relator's Motion to Compel Further Responses"). Mr. Tate's statement that the magistrate judge assumed "that Relator had somehow conceded that pre-1995 contracts relating to manufacture of the CMFD's were not relevant to the present lawsuit," Doc. 117 at 2, is belied by the magistrate judge's express words. The magistrate judge commented on non-CMFD contracts in a gratuitous footnote, Doc. 113 at 6 n. 1, and, with a correct understanding of what information was requested, decided that any relevancy was outweighed by other factors. The affidavit by Mr. Tate's expert, Doc. 117, Ex. A, should have been provided in the motion to compel, but it does not persuade the court to the contrary position, let alone that the magistrate judge's decision to limit discovery to a set time period was an abuse of discretion, clearly erroneous or contrary to law. Insofar as Mr. Tate's request that the court reconsider the magistrate judge's rulings concerning settlement negotiations, Doc. 117 at 2-3; Doc. 113 at 12-14, the court does not read the magistrate judge's order as extending beyond documents involving settlement negotiations and affirms the magistrate judge's ruling.
NOW, THEREFORE, IT IS ORDERED, ADJUDGED and DECREED:
(1) that the United States' Motion to File Joinder in Relator's Objections to Magistrate's Order Granting Honeywell's Motion to Unseal Disclosure Statement and to Compel Discovery filed March 14, 2002 (Doc. 122) is denied as untimely.
(2) Relator's Objections to Magistrate's Order (Doc. 105) Granting Defendant's Motion to Unseal Disclosure Statement and to Compel Discovery filed February 7, 2002 (Doc. 110) are overruled and the magistrate judge's order is affirmed.
(3) Plaintiff's Motion to Reconsider Memorandum Opinion and Order (Doc. 113) by Judge Garcia on Relator's Motion to Compel Further Responses filed March 1, 2002 (Doc. 117) is denied and the magistrate judge's order is affirmed.