What Happens in Settlement Negotiations Might Not Stay in Settlement Negotiations…
In U.S. ex rel. Luke v. Healthsouth Corp., a district court confirmed to FCA defendants that the relators in their case were entitled to discovery materials generated during settlement negotiations with the government. The defendants had persuaded the government to not intervene, but not to dismiss the case. The relators requested “all documents” exchanged with the government during these discussions, and the district court ruled that this includes confidential white papers they had provided to the government under seal.
The defendants argued that the documents were not relevant, and furthermore would “chill the willingness” of future defendants to cooperate during an FCA investigation. The court was not persuaded, largely because the documents were evidently relevant to the case in an earlier phase.
