314 F.R.D. 1
D.D.C.2016Background
- Relator (Dani Shemesh) filed a qui tam FCA suit alleging CA, Inc. failed to disclose lower commercial prices to GSA under its MAS contract and thereby caused false claims and overpayments; the United States intervened and filed an Amended Complaint in Intervention.
- CA held a GSA MAS contract (GS-35F-08232M) from 2002 with multiple extensions through 2014; MAS contracts typically include a Price Reduction Clause (PRC) requiring vendors to pass through price reductions given to comparable commercial customers.
- GSA OIG subpoenaed CA’s sales database in 2010; the OIG identified eleven transactions of "significant concern." The United States’ Complaint included 18 example transactions, but did not include those eleven.
- CA served 37 document requests; the United States produced ~7,000 pages but refused Requests 15, 16, 18–22, 26, and 27. CA moved to compel production of (1) documents about the eleven OIG-identified transactions and any transactions for which the United States intends to seek damages (Requests 15, 26, 27), and (2) documents underlying GSA’s 2015 proposed rule to eliminate the PRC (Request 16 and 18–22).
- The magistrate judge held a December 9, 2015 hearing, applying the amended Rule 26(b)(1) relevancy/proportionality framework, and ruled: Request 15 granted; Requests 16 and 18–22 denied; Requests 26 and 27 denied as premature (discovery stay by the district judge).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the U.S. must produce documents relating to the eleven transactions previously identified as of "significant concern" (Request 15) | Production unnecessary now because the U.S. has not decided whether to pursue damages and needs CA’s sales database to confirm relevance | The U.S. previously identified these transactions and should produce documents supporting that designation; CA needs them to defend and depose witnesses | Granted — U.S. must produce responsive documents and supplement under Rule 26(e) |
| Whether the U.S. must produce documents underlying GSA’s 2015 proposed rule to eliminate the PRC and related factual findings (Requests 16, 18–22) | Irrelevant because the rule postdates the contract period and discusses voluntary vendor discounts, not alleged overcharges above PRC obligations; production would be disproportionate | The rule’s studies and data demonstrate the PRC was not relied upon and thus are relevant to materiality and knowledge defenses | Denied — excerpts do not reasonably bear on CA’s defense; duplicative with Request 17 and disproportionate |
| Whether the U.S. must identify and produce documents for all transactions for which it intends to claim damages (Requests 26, 27) | Production postponed because the U.S. needs CA’s sales data to identify damages transactions | CA says it has provided sufficient data and needs the U.S. disclosures to prepare its defense | Denied as premature in light of the district judge’s stay of discovery to permit database analysis and settlement talks |
Key Cases Cited
- Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (broad discovery relevance standard)
- Food Lion, Inc. v. United Food & Commercial Workers Int’l Union, 103 F.3d 1007 (D.C. Cir. 1997) (discovery rulings reviewed for abuse of discretion)
- Meijer, Inc. v. Warner Chilcott Holdings Co., 245 F.R.D. 26 (party seeking discovery must show relevance when objection raised)
- Alexander v. FBI, 194 F.R.D. 316 (burden shifts to objector once relevance is shown)
- United States ex rel. Fago v. M & T Mortg. Corp., 518 F. Supp. 2d 108 (false-statement materiality standard under FCA)