Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States ex rel. Strauser v. Stephen L. Lafrance Holdings, Inc.

United States District Court, N.D. Oklahoma

November 14, 2019

THE UNITED STATES OF AMERICA, ex rel. J. DOUGLAS STRAUSER, et al., Plaintiffs,
v.
STEPHEN L. LAFRANCE HOLDINGS, INC, et al., Defendants.

          OPINION AND ORDER

          FRANK H. MCCARTHY UNITED STATES MAGISTRATE JUDGE.

         Relator's Motion to Compel Designation of Custodians and Production of Documents, [Dkt. 163], and Walgreens' Motion for Leave to File Sur-Reply, [Dkt. 176], are before the court for decision.

         Background

         This is a False Claims Act case in which Relator, on behalf of the United States and several states, alleges Defendant Pharmacies obtained overpayment of reimbursements from government funded healthcare programs by reporting their usual and customary (U&C) prices to the public were higher than their actual U&C prices. The instant case involves a drug price-match program implemented by USA Drug which allegedly ran from October 2008 through May 2013. The price-match program allegedly served to lower the U&C prices to rates lower than those reported to the government programs. In September 2012, Defendant Walgreens purchased USA Drug and in May 2013 the USA Drug stores that remained in operation were converted to Walgreens' systems, at which time the price match program was no longer in effect. The Arcadia Valley Defendants' (AVD) involvement in the alleged pricing practice ended when the pharmacies were sold to Walgreens in September 2012.

         Analysis

         Identification of Custodians

         This aspect of Relator's motion is moot, as the parties have agreed to search the electronic files of the persons named as additional custodians in Relator's motion.

         Walgreens' Communications with Government

         In Request for Production No. 2, Relator requested all documents exchanged between the Defendants and the government concerning the investigation described in Request No. 1, [1] including correspondence and documents concerning legal defenses, preservation of evidence, or the calculation or estimate of damages from January 1, 2013 to present.[2]

         Walgreens represents that in response to Request No. 2, it has provided all non-privileged responsive documents produced to the government during its investigation. [Dkt. 170');">170, p. 11]. However, Walgreens objects to providing the documents it provided to the government in the course of settlement negotiations, arguing those documents are protected from discovery by Federal Rule of Evidence 408, [3] and by public policy favoring settlement of disputes. Walgreens further states that it withheld a small subset of documents that were confidential settlement communications exchanged between Walgreens' outside counsel and the government in which the attorneys exchanged mental impressions, expressly discussed the legal arguments and exposure contentions, and negotiated the possibility of settlement. Walgreens states that each of the withheld documents bore the designation on its face: “Confidential-Subject to FRE 408.” [Dkt. 170');">170, pp. 11-12].

         Relator argues that the settlement communications withheld are discoverable because Federal Rule of Evidence 408 addresses only the admissibility of compromise negotiations, not the discovery of them. Relator advises that courts in the Tenth Circuit, including this one have declined to recognize a settlement privilege. See Transportation Alliance Bank v. Arrow Trucking Co., No. 10-CV-16-GKF-FHM (N.D. Okla.), [Dkt. 178], 2011 WL 4964034 (finding Fed.R.Evid. 408 does not create a privilege from discovery, assessing relevance of discovery request and finding settlement agreement was relevant for discovery purposes, but drafts and communications concerning settlement were not relevant), Trinity Mortg. Co., Inc. v. Dryer, No. 09-CV-551-TCK-FHM (N.D. Okla.) [Dkt. 41], 2010 WL 2365525, at *2(finding documents related to settlement and negotiation were discoverable where client sued former attorney over conduct of the legal representation in the settled suit and damages are based, in part, on the amount of settlement).

         The court finds that Rule 408 does not establish a settlement or negotiation privilege. However, Fed.R.Civ.P. 26(b)(1) gives the court wide discretion to evaluate discovery requests to determine whether the discovery is relevant to the claims and defenses. The court has the further responsibility to balance the possible relevance against such factors as the needs of the case and the importance of the requested discovery in resolving the issues. Those considerations are not unlike the ones expressed by the Second Circuit in In re Telligent, Inc. v. K&L Gates, 640 F.3d 53, 58 (2nd Cir. 2011) where the Court recognized that confidentiality is an important feature in fostering the free flow of information in alternate dispute resolution. The Court observed that it vigorously enforced the confidentiality provisions of its own settlement program. In that case, the Court ruled that a party seeking disclosure of confidential mediation communications must demonstrate: (1) a special need for the materials; (2) unfairness would result from a lack of discovery of the materials; and (3) the need for the evidence outweighs the interest in maintaining confidentiality. Id. The court finds it is appropriate to consider these same factors in applying Rule 26(b)(1) to the instant case.

         In the present case, Walgreens has represented that it has withheld from production only a small subset of documents that were communications exchanged between counsel and the government regarding the possibility of settlement. Relator has expressed that he desires to obtain these communications, but makes no argument that he has any special need of the information, or that it is unfair to deny him access to the legal arguments and exposure contentions Walgreens communicated to the government in the negotiation of possible settlement. No. argument has been made that any of the underlying facts about the case have been withheld or that the fact Walgreens attempted settlement is relevant to the claims or defenses herein. Further, no argument has been made that facts relevant to the claims and defenses are available only in the compromise negotiation communications. Based on these considerations, in the context of the particular factual situation presented herein, the court finds that Relator is not entitled to discover the withheld settlement negotiation communications.

         The Motion to Compel is DENIED as to the communications exchanged between Walgreens and the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.