Sanctions Imposed on Qui Tam Counsel for Failing to Meet Ethical Standards Relating to the Use of Privileged Documents

Relators and their counsel are being held accountable for the misuse of qui tam defendants’ confidential and privileged documents in connection with lawsuits alleging violations of the False Claims Act (FCA). As a January 12, 2012 ruling in United States ex rel. Jerre Frazier v. IASIS Healthcare Corporation in the District of Arizona makes clear, attorneys representing either relators or the government risk adverse consequences if they accept potentially privileged documents without taking precautionary steps to avoid use of or exposure to privileged communications.

Sensitive internal documents that whistleblowers use to support their claims may include privileged attorney-client communications. Where defendants have reason to believe that an investigation or qui tam lawsuit is based on a whistleblower’s misuse of privileged communications, defendants should affirmatively act to enforce their rights. And such defense actions may form the basis for the imposition of sanctions against relators and their counsel if they fail to follow the rules of ethical legal practice in the state where the case was filed.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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