by Ben Vernia | March 9th, 2010
In a March 3 decision, District Judge James C. Cacheris in Alexandria, Virginia, overturned a magistrate judge’s ruling which granted Halliburton’s motion to compel a False Claims Act relator to produce the disclosure statement.
The relator alleges that Halliburton used falsified time sheets to submit false claims to the U.S. for Iraq water purification services which were never performed. Facing an April 20, 2010 trial date, the company moved to compel production of the disclosure statement (which the False Claims Act requires be filed in camera and under seal, 31 U.S.C. § 3730(b)(2)). It argued that it needed the statement in order to impeach the relator, and to challenge the relator’s standing as an “original source” under the Act. See 31 U.S.C. § 3730(e)(4).
The magistrate judge found that although the statement was fact work product, the company had met its burden of establishing a substantial need for the materials and the absence of any other means of obtaining the information, as required under Fed. R. Civ. P. 26(b)(3).
Judge Cacheris disagreed, and overruled the magistrate judge’s decision. He noted that Halliburton had extensively deposed the relator, who had answered questions concerning the origins of his time sheet allegations, and to whom he had reported them. The relator had identified three persons to whom he had reported the alleged misconduct, Judge Cacheris observed, whom the company could depose if it wished. Thus, although the company had a substantial need for impeachment evidence, it had failed to establish that it had no other means to obtain it.
The court next agreed with the relator that the company’s original source basis for its request failed to establish a substantial need, because Halliburton had not identified a public disclosure of the allegations upon which an original source defense could be based.
Lastly, the court rejected the company’s argument that it needed the disclosure statement in order to determine if the relator had satisfied the disclosure statement requirement, which it characterized as jurisdictional to a False Claims Act case. Judge Cacheris wrote that there is no settled caselaw establishing a jurisdictional requirement in 31 U.S.C. § 3730(b)(2), and then dismissed this basis for the company’s request:
The opportunity to make an uncertain legal argument regarding potential procedural short comings of the Statement is not sufficient. The disclosure statement is filed in camera and intended for the eyes of the Government in order for the Government to make a well informed decision on intervention. The statute allows the complaint to be served on the defendants; however, Congress chose not require that the disclosure statement be turned over by default. 31 U.S.C. § 3730(b)(2). If the Defendants desire to make such an argument was sufficient to establish a “substantial need” for a FCA disclosure statement, such a statement would never be protected from production by the work product doctrine.
