False Claims ActPublications

Feinwachs Holds FCA Relator’s Emails to Counsel, Even Though on Employer’s Server, Protected as Work Product

October 17, 2019Insight
Dinsmore on FCA

In the False Claims Act (FCA) case of Feinwachs v. Minnesota Hospital Association, the district court recently upheld relator David Feinwachs’ claim of work-product privilege over emails sent to his work email account. No. 11-cv-0008, 2019 U.S. Dist. LEXIS 155027 (D. Minn. Sept. 11, 2019). 

Feinwachs was formerly general counsel of the Minnesota Hospital Association (MHA), a trade association of Minnesota hospitals and health care systems. Before his firing in November 2010, several emails between Feinwachs and his counsel were forwarded to his MHA email account. In January 2011, he filed a qui tam suit under the federal FCA and the Minnesota False Claims Act (MFCA), naming MHA and other defendants. In addition to the FCA and MFCA fraud claims, Feinwachs also asserted retaliation claims, alleging he was unlawfully fired because of his efforts to stop Medicaid fraud.

In a ruling earlier this year on motions in limine, the court determined that the emails found on MHA’s computer network were “not private,” and thus not shielded by attorney-client privilege.  Feinwachs, 2019 U.S. Dist. LEXIS 155027, at *5–6. The court held that, under the law-of-the-case doctrine, that earlier decision stood. Id. at *6–7. However, because that decision pertained solely to attorney-client privilege, and because Feinwachs had also claimed the emails in question constituted work product, the court found the work-product claim not foreclosed by the law-of-the-case doctrine. Id. at *7–9. The court then determined the emails in question “were created in anticipation of litigation and are opinion work product.” Id. at *9, 21. 

The court also considered the defendants’ contention that work-product protection was waived because the emails had been “effectively disclosed to [d]efendants when they were forwarded to MHA’s computer network.” Id. at *21. Relying on Gundacker v. Unisys Corporation, the court held that “a party must intend for an adversary to see work product in order to waive the work-product protection through disclosure.” Id. at *21–22 (citing 151 F.3d 842, 848 (8th Cir. 1998)).  The court therefore granted Feinwachs’ motion in limine “to the extent that it seeks to exclude any evidence of or reference to” the emails in question. Id. at *22. Feinwachs thus imposed an intentionality requirement in order for disclosure to result in waiver of work-product protection.  

In Gundacker, the Eighth Circuit held that, though “disclosure to an adversary ordinarily waives work-product protection, there must be an intention that the opposing party see the work product.” 151 F.3d at 848 (citing Pittman v. Frazer, 129 F.3d 983, 988 (8th Cir. 1997)) (emphasis added). Pittman had held merely that where a party disclosed work product “with an actual intention that an opposing party may see” it, the disclosing party could not later claim work-product protection. 129 F.3d at 988. As later noted in Wells Fargo & Co. v. United States, Misc. No. 10-57 (JRT/JJG), 2013 U.S. Dist. LEXIS 79814 (D. Minn. June 4, 2013), the Gundacker court gave no explanation for how Pittman’s limited holding yields a broad rule maintaining work product protection in the face of any inadvertent disclosure. Wells Fargo, 2013 U.S. Dist. LEXIS 79814, at *120–24 (citing Gundacker, 151 F.3d at 848) (expressing uncertainty as to basis for Gundacker’s intentionality rule but nonetheless following it); see also United States v. Johnson, 378 F. Supp. 2d 1041, 1046 (N.D. Iowa 2005) (finding Gundacker’s application of intentionality rule unsupported by Pittman).

Such a capacious exception to waiver of work-product protection is not generally recognized beyond the Eighth Circuit.  Instead, courts have applied a variety of tests to determine whether an inadvertent disclosure of work-product results in waiver.

Unlike attorney-client privilege, which any disclosure to a third party waives, United States v. Deloitte LLP, 610 F.3d 129, 140 (D.C. Cir. 2010), disclosure of work product does not always constitute waiver. The protection generally survives where disclosure was in response to a subpoena or other legal requirement, see United States v. Bonnell, 483 F. Supp. 1070, 1078 n.14 (D. Minn. 1979) (citing, inter alia, Wright & Miller, Fed. Prac. & Proc. § 1024 (1970)), or was to a party sharing a “community of interest” with the disclosing party, see Transmirra Prods. Corp. v. Monsanto Chem. Co., 26 F.R.D. 572, 579 (S.D.N.Y. 1960). The protection is waived, though, where voluntary disclosure was made to an adversary, see, e.g., Deloitte, 610 F.3d at 140, or “increased the likelihood” an adversary would obtain the material, In re Imperial Corp. of Am., 167 F.R.D. 447, 454 (S.D. Cal. 1995), or “evidenced conscious disregard” of the risk an adversary might obtain the material, Westinghouse Elec. Corp. v. Republ. of Philippines, 951 F.2d 1414, 1431 (3d Cir. 1991).

What about inadvertent disclosures of work product? Courts have long held that, like attorney-client privilege, work-product protection “may be inadvertently waived through disclosure.”  See, e.g., United States v. Gulf Oil Corp., 760 F.2d 292, 295 (Emer. Ct. App. 1985); see also In re Grand Jury (Impounded), 138 F.3d 978, 981 (3d Cir. 1998) (citation omitted) (“[I]nadvertent or unintentional disclosures of protected materials . . . might result in the waiver of the privilege.”).  Some courts have even found inadvertence of disclosure “irrelevant.”  See, e.g., Carter v. Gibbs, 909 F.2d 1450, 1451 (Fed. Cir. 1990) (noting that even inadvertent disclosure of work product defeats the protection because “the cat has already escaped” from “the bag”); Eden Isle Marina, 89 Fed. Cl. at 504 (“[A]n inadvertent disclosure always resulted in the waiver of the protection afforded by the work-product doctrine for the disclosed document.”).

Courts have commonly applied various common law tests to determine whether inadvertent disclosure of work product waived protection. See, e.g., Empl’r’s Reins. Co. v. Clarendon Nat’l Ins. Co., 213 F.R.D. 422, 427–31 (D. Kan. 2003) (applying five-factor test assessing reasonableness of precautions taken to prevent the inadvertent disclosure, promptness in rectifying error, scope of discovery, extent of disclosure, and overriding issue of fairness); see also SEC v. Cassano, 189 F.R.D. 83, 85 (S.D.N.Y. 1999) (applying similar four-factor test).

Enactment of Federal Rule of Evidence 502, in 2008, further cemented the principle that inadvertent disclosure of work product does not necessarily waive protection. Under the rule, inadvertent disclosure “does not operate as a waiver” of protection, provided “the holder of the . . . protection took reasonable steps to prevent disclosure” and “promptly took reasonable steps to rectify the error.” Fed. R. Evid. 502(b); see also Eden Isle Marina, 89 Fed. Cl. at 504. The Court of Federal Claims, noting divided authority as to “whether an inadvertent disclosure of . . . work product constitutes a waiver,” observed that Rule 502(b) “‘opts for the middle ground’ between (1) requiring an intentional disclosure before finding a waiver and (2) declaring that any disclosure constitutes a waiver.” Id. (quoting Fed. R. Evid. 502, Adv. Comm. Note (2008)). In this light, Feinwachs, together with its parent case, Gundacker, constitutes something of an outlier, at one extreme distant from Rule 502(b)’s “middle ground.” See id.