293 F.3d 289 (6th Cir. 2002), 00-6059, In re Columbia/HCA Healthcare Corp. Billing Practices Litigation

Docket Nº:00-6059.
Citation:293 F.3d 289
Party Name:In re COLUMBIA/HCA HEALTHCARE CORPORATION BILLING PRACTICES LITIGATION. Tennessee Laborers Health & Welfare Fund; Board of Trustees of the Carpenters & Millwrights of Houston & Vicinity Health And Welfare Trust Fund; Board of Trustees of the Pipe-fitters Local 522 Hospital, Medical and Life Benefit Fund; Operating Engineers Local 312 Health & Welfa
Case Date:June 10, 2002
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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293 F.3d 289 (6th Cir. 2002)

In re COLUMBIA/HCA HEALTHCARE CORPORATION BILLING PRACTICES LITIGATION.

Tennessee Laborers Health & Welfare Fund; Board of Trustees of the Carpenters & Millwrights of Houston & Vicinity Health And Welfare Trust Fund; Board of Trustees of the Pipe-fitters Local 522 Hospital, Medical and Life Benefit Fund; Operating Engineers Local 312 Health & Welfare Fund; United Paperworkers International Union; Cordula Boysen, Plaintiff’s-Appellees,

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v.

Columbia/HCA Healthcare Corporation, Defendant-Appellant.

No. 00-6059.

United States Court of Appeals, Sixth Circuit

June 10, 2002

Argued: Jan. 22, 2002.

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Jane B. Stranch (briefed), Branstetter, Kilgore, Stranch & Jennings, Nashville, TN, Morris A. Ratner (briefed), Lieff, Cabraser, Heimann & Bernstein, San Francisco, CA, Richard M. Heimann (briefed), David S. Stellings (argued and briefed), Erik L. Shawn (briefed), Lieff, Cabraser, Heimann & Bernstein, New York, NY, for Plaintiff’s-Appellees.

Peter L. Winik (briefed), Richard P. Bress (argued and briefed), Latham & Watkins, Washington, DC, for Defendant-Appellant.

Before: BOGGS and MOORE, Circuit Judges; RUSSELL, District Judge.[*]

RUSSELL, D.J., delivered the opinion of the court, in which MOORE, J., joined. BOGGS, J. (pp. 307-314), delivered a separate dissenting opinion.

OPINION

RUSSELL, District Judge.

This action is an interlocutory appeal from an order of the district court compelling Columbia/HCA Healthcare Corporation ("Columbia/HCA") to produce certain otherwise privileged documents. Columbia/HCA having previously produced the documents to the Department of Justice ("DoJ"), the Health Care Finance Administration and other related governmental agencies, the district court concluded that the company had waived any privilege associated with the documents. Because the Court agrees that the district court properly rejected the selective waiver argument presented by Columbia/HCA, we AFFIRM.

BACKGROUND

The underlying facts of this action, at least as they pertain to the instant appeal, are relatively simple. The Department of Justice began investigating Columbia/HCA in the mid 1990s for possible Medicare and Medicaid fraud. Columbia/HCA, either in response to the investigation or in anticipation of it, conducted several internal audits1

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of its Medicare patient records. The Coding Audits pertained not only to Columbia/HCA itself, but nearly all of its subsidiary and related corporations. The audits examined the various billing codes assigned to the patients in order to receive reimbursement from the Medicare program, and any possible miscoding (deliberate or otherwise) of the Medicare patients. When DoJ attempted to obtain the audits, Columbia/HCA rebuffed the request based on attorney-client privilege and the work product doctrine.

A change in corporate control at Columbia/HCA led the company to engage in negotiations with the Government about a possible settlement of the fraud investigation. In coordination with this effort, Columbia agreed to produce some of the Coding Audits and related documents to the Government. In exchange for this cooperation, DoJ agreed that certain stringent confidentiality provisions would govern its obtaining of the documents. As relevant to the instant appeal, the agreement provided that:

[t]he disclosure of any report, document, or information by one party to the other does not constitute a waiver of any applicable privilege or claim under the work product doctrine. Both parties to the agreement reserve the right to contest the assertion of any privilege by the other party to the agreement, but will not argue that the disclosing party, by virtue of the disclosures it makes pursuant to this agreement, has waived any applicable privilege or work product doctrine claim.2

Ultimately, DoJ and Columbia/HCA reached a settlement of the fraud investigation, which resulted in Columbia/HCA paying a $ 840,000,000 fine to the Government. The sum represented criminal penalties as well as civil remuneration to the Government for overcharges incurred due to the miscoding of Medicare patients.

Once the nature, extent and results of the DoJ investigation came to light, private insurance companies and private individuals undertook to evaluate the billing they received from Columbia/HCA. This review resulted in the filing of numerous lawsuits around the country, which the Panel on Multidistrict Litigation transferred to the Middle District of Tennessee.3 The various plaintiff’s4 contend that like the Health Care Finance Administration, Columbia/HCA overbilled them for various services. The litigation seeks the recovery of excess sums tendered by the Private Payors to Columbia/HCA.

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The Private Payors sought an order from the district court compelling Columbia/HCA to produce the Coding Audits. According to the Private Payors, the billing codes used by Columbia/HCA for Medicare billing were also used in calculating charges paid by the Private Payors. Thus, the Coding Audits would contain highly relevant information pertaining to alleged overbilling by Columbia/HCA to these persons and insurance funds. Importantly, the Private Payors alleged that notwithstanding whatever privilege the Coding Audits may have once held, Columbia/HCA waived the protections of those privileges by disclosing the materials to the Government.

As it had initially with DoJ, Columbia/HCA refused to produce the Coding Audits on grounds of the work product doctrine and attorney-client privilege. It argued that based on case law from other jurisdictions, disclosing the information to the Government did not waive the protections of the two privileges. See generally Diversified Industries, Inc. v. Meredith, 572 F.2d 596 (8th Cir. 1978) (en banc). Moreover, Columbia/HCA pointed out that in disclosing the information to the Government, it had expressly reserved the right to assert attorney-client privilege and the work product doctrine pursuant to the confidentiality agreement negotiated with DoJ.

In a published opinion, the court below granted the motion to compel. In re Columbia/HCA Healthcare Corporation Billing Practices Litigation, 192 F.R.D. 575 (M.D.Tenn.2000). After first noting that this Court had not spoken on the issue, the district court examined the approaches taken by other courts, including the Eighth Circuit in Diversified Industries. Relying heavily on the opinion of the First Circuit in United States v. Massachusetts Institute of Technology, 129 F.3d 681 (1st Cir. 1997), it found that "voluntary disclosure of privileged materials to the government constitutes a waiver of the attorney-client privilege to all other adversaries." In re Columbia/HCA Healthcare, 192 F.R.D. at 579. Turning to the Third Circuit for support, see Westinghouse Electric Corp. v. Republic of the Philippines, 951 F.2d 1414 (3d Cir. 1991), the court below also found that by disclosing the documents to DoJ, Columbia/HCA waived any protections under the work product doctrine as well. In re Columbia/HCA Healthcare, 192 F.R.D. at 579-80.

However, the court did find that the case presented a "controlling question of law as to which there is a substantial ground for difference of opinion," and certified its decision on the issue for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). A previous panel of this Court ruled that immediate appeal was proper in this case. The panel found that the resolution of the issue presented "may materially advance the ultimate termination of the litigation." Cardwell v. Chesapeake & Ohio Railway Co., 504 F.2d 444, 446 (6th Cir. 1974); see 28 U.S.C. § 1292(b)(same).

In its appeal, Columbia/HCA renews the arguments it presented to the court below. It contends that this Circuit should adopt the approach of the Eighth Circuit in Diversified Industries and reject the "all-or-nothing" methodology represented by the decision of the court below. According to Columbia/HCA, various public policy arguments, as well as caselaw from other jurisdictions, provides support for its position. The Private Payors encourage the Court to join the majority position and affirm the opinion of the district court.

STANDARD

"The question of whether the attorney-client privilege applies is a mixed question of law and fact, subject to de novo

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review." Reed v. Baxter, 134 F.3d 351, 355 (6th Cir. 1998) (citing In re Grand Jury Proceedings October 12, 1995, 78 F.3d 251, 253-54 (6th Cir. 1996)); see also United States v. Dakota, 197 F.3d 821, 825 (6th Cir. 2000) ("This court reviews de novo a district court's decision regarding waiver of the attorney-client privilege") (citing United States v. Collis, 128 F.3d 313, 320 (6th Cir. 1997)). While "[t]he burden of establishing the existence of the privilege rests with the person asserting it," Dakota, 197 F.3d at 825 (citing In re Grand Jury Investigation No. 83-2-35, 723 F.2d 447, 450 (6th Cir. 1983)), in this case the parties have assumed for purposes of this appeal that the Coding Audits and related documents are covered by the attorney-client privilege and the work product doctrine. Claims of attorney-client privilege are "narrowly construed because [the privilege] reduces the amount of information discoverable during the course of a law-suit." Collis, 128 F.3d at 320 (citing In re Grand Jury Proceedings, 78 F.3d at 254). The privilege "applies only where necessary to achieve its purpose and protects only those communications necessary to obtain legal advice." In re Antitrust Grand Jury, 805 F.2d 155, 162 (6th Cir. 1986) (citing Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1975)).

The work product doctrine "is distinct from and broader than the attorney-client...

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