Federal Court In Georgia Orders Health Care Provider To Produce Privileged Documents In False Claims Act Action

Last month, a federal district court in Georgia ordered Columbus Regional Healthcare System to turn over communications protected by the attorney-client privilege in a decision that could have a chilling effect on requests for legal advice, if misunderstood. In U.S. ex rel. Barker v. Columbus Regional Healthcare System, Inc., No. 4:12-cv-108 (CDL), 2014 WL 4287744 (M.D. Ga. Aug. 29, 2014), the court ruled that defendant Columbus Regional impliedly waived the attorney-client privilege with respect to past communications with counsel about the legality of its conduct under the False Claims Act (FCA), Stark Law, and Anti-Kickback Statute, merely by pleading good faith in its answer to the complaint.

Overview of the Attorney-Client Privilege

The attorney-client privilege is the oldest privilege recognized by common law to protect confidential communications. As the US Supreme Court explained in the landmark 1981 decision Upjohn Co. v. United States, "[i]ts purpose is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice. The privilege recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer's being fully informed by the client." 449 U.S. 383, 389 (1981). To that end, the attorney-client privilege generally protects from disclosure confidential communications between clients and counsel requesting or providing legal advice.

But the privilege is not absolute. Not only are there narrow exceptions, but a party can also waive the privilege, sometimes impliedly. For instance, in asserting an advice-of-counsel defense, a defendant essentially contends it believed in good faith that its actions were lawful, because it relied on legal advice, and therefore it lacked the culpable mental state to be liable. In this situation, courts typically hold that the party impliedly waived the privilege by putting its mental state and legal advice at issue in the litigation and, out of fairness, must produce otherwise-privileged communications to the opposing party. A party cannot plead it unknowingly violated the law while at the same time hiding behind the privilege and refusing to turn over communications with counsel that suggest it actually acted knowingly. As the adage goes, the attorney-client privilege is a shield—not a sword.

The Court's Recent Decision in Barker

In...