by Ben Vernia | December 2nd, 2012
On November 28, Magistrate Judge Ronald L. Ellis in the Southern District of New York granted the motion of the defendants in a qui tam suit to conduct discovery aimed at determining if confidential communications were provided by a whistleblower’s prior attorneys who withdrew because of a conflict of interest. In the case, U.S. ex. rel. NPT Assoc. v. Lab. Corp. of America, the relator – a Delaware partnership – alleged that the defendants paid kickbacks to a health insurance plan in the form of unreasonably low prices for medical testing services in exchange for other testing business.
The relator’s initial attorney withdrew after the defendants argued that one office of the attorney’s law firm also represented the defendant when the suit was filed. The defendant argued in this case that it had discovered that four members of the relator partnership were also members of another partnership which had sued another medical testing company. In that case, (addressed by this blog here) the relator’s case was dismissed because one of the relator’s partners had served as general counsel to a company acquired by the defendant. The defendants in the first and the present cases now had the same ownership, so the defendant here argued that the relator was barred under the order dismissing the previous case.
The magistrate granted the request for discovery, rejecting as insufficient prior counsel’s affidavits that they had not shared any confidential information with the relator’s current counsel.
