A dispute brewing in a False Claims Act lawsuit against Abbott Laboratories and other defendants could have wide-ranging implications for how the Department of Justice handles investigations of qui tam whistleblower complaints. At issue is whether DOJ has an obligation to instruct government agencies to preserve emails and other documents that might eventually become relevant to defenses raised by defendants in a lawsuit that DOJ has not yet even decided to join.
In the Abbott Labs case, a qui tam relator filed a False Claims Act lawsuit under seal in 1995. The case involved the “average wholesale pricing,” or AWP, requirements of Medicare and Medicaid. DOJ, with the help of other government agencies, investigated the claims for 11 years before intervening and unsealing the case. Abbott Labs alleges that, during that 11-year period, numerous potentially relevant documents — including huge numbers of emails among employees of relevant government agencies — were destroyed (or, as lawyers like to say, spoliated), and that DOJ never gave any instructions to the agencies to preserve documents that might be relevant to the case. Abbott Labs now claims that its defense of the case has been prejudiced by the destruction of those emails and other documents. That’s the short version of the story; for the full story, you can read the brief filed by Abbott Labs.
DOJ has not yet responded to the Abbott Labs motion for sanctions, and the court’s decision on this issue is likely a long way off. But the Abbott Labs motion certainly raises some thorny issues for DOJ. A broad, general rule that DOJ must routinely instruct agencies not to destroy records that might potentially be relevant to qui tam cases would likely be completely unworkable and unrealistic. At least two practical problems comes to mind. First, the DOJ investigations are often conducted in a very confidential way, for a host of good reasons. If DOJ was forced to routinely send out instructions to government agencies about these investigations, this confidentiality would be jeopardized. Second, the DOJ investigations are conducted for the purpose of determining whether the government will intervene, and the government declines to intervene a majority of the time. So, a general requirement for document prevervation instructions would mean that the burden of complying with such instructions would be visited upon government agencies even where the qui tam cases have little merit, or turn out to be of no intest to the government for a variety of reasons.
While it may be that the court will need to take some action to alleviate the prejudice claimed by Abbott Labs, one would hope that the court does not overreact to the facts of the case before it by laying down a standard that makes DOJ’s investigations in more routine qui tam cases more burdenson, slow or expensive for taxpayers.