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United States ex rel. Doe v. Biotronik, Inc.

United States District Court, E.D. California

March 20, 2015

UNITED STATES OF AMERICA; THE STATES OF ARKANSAS, CALIFORNIA, DELAWARE, FLORIDA, GEORGIA, HAWAII, ILLINOIS, INDIANA, LOUISIANA, MICHIGAN, MASSACHUSETTS, MONTANA, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, OKLAHOMA, RHODE ISLAND, TENNESSEE, TEXAS, VIRGINIA, AND WISCONSIN, AND THE DISTRICT OF COLUMBIA ex rel. JOHN DOE, Relator, Plaintiffs,
v.
BIOTRONIK, INC. and WESTERN MEDICAL, INC., Defendants.

ORDER

EDMUND F. BRENNAN, Magistrate Judge.

This matter was before the court on March 18, 2015, for hearing on the relator, Brian Sant, and his counsel Mychal Wilson and Kershaw, Cutter & Ratinoff, LLP's (collectively referred to as "fee claimants") motion to compel the production of defendant's relevant billing records. ECF No. 113. Attorney Jeremy Friedman appeared on behalf of fee claimants; attorneys Vince Farhat and Christopher Myers appeared on behalf of defendant.[1] For the following reasons, the motion is granted in part and denied in part.

I. Background

On December 31, 2009, relator filed a qui tam complaint under seal, alleging, among other things, that defendant Biotronik provided kickbacks to physicians who use Biotronik's cardiac rhythm management devices. ECF No. 1 ¶¶ 1-6. The complaint also alleged that Biotronik caused physicians to bill Medicare and Medicaid and the military's TRICARE program for using its devices for off-label purposes, which is not reimbursable. Id. ¶¶ 93-94, 96. The complaint contains five federal claims: (1) a violation of the False Claims Act based on kickbacks; (2) a conspiracy to violate the False Claims Act based on kickbacks; (3) a violation of the False Claims Act based on billing for off-label uses; (4) a conspiracy to violate the False Claims Act based on off-label billing; and (5) a violation of the False Claims Act based on defendants' fraudulent promotion of cardiac rhythm devices.

After receiving numerous extensions of time, on May 14, 2014, the United States intervened in part for purposes of effectuating a settlement. ECF No. 51. On June 5, 2014, the court dismissed the complaint pursuant to the United States and Nevada's settlement agreements with Biotronik and relator, ECF No. 69, and judgment was entered accordingly, ECF No. 70. Kershaw, Cutter & Ratinoff ("KCR") and Wilson subsequently filed separate motions for attorneys' fees for their work performed on behalf of the relator. ECF Nos. 80, 91. KCR seeks a total of $897, 347 for fees and costs, while Wilson seeks a total of $1, 181, 300. ECF Nos. 80, 91. Defendant filed a consolidated opposition to fee claimants' motions. ECF No. 100. The hearing on the fee motions is currently set for April 24, 2015, with fee claimants' reply briefs due March 27, 2015. ECF No. 107, 108.

Both Wilson and KCR have served defendant with discovery requests seeking information related to the attorneys' fees it incurred in defending this action. ECF No. 117 at 5, 36-52. Defendant filed objections to the discovery requests. Id. at 6. The parties met and conferred in an attempt to resolve their dispute, but ultimately no resolution was obtained. The instant motion to compel followed. ECF No. 113. The parties have submitted their joint statement, which focuses on a central dispute of whether the billing records sought are relevant to the pending fee motions.

II. Standard

A district court may permit a party to conduct discovery related to a motion for attorneys' fees. Lobatz v. U.S. West Cellular of Cal., Inc., 222 F.3d 1142, 1148 (9th Cir. 2000). However, the U.S. Court of Appeals for the Ninth Circuit has declined "to adopt a rule that a district court must grant a request for discovery of contemporaneous time records in every case in which attorney fees are sought." Id. Under the Federal Rules of Civil Procedure ("Rule"), upon notice, a party may move for an order compelling discovery after a good faith attempt to confer with a party failing to make disclosure or discovery. Fed.R.Civ.P. 37(a)(1) and (3); see also E.D. Cal. L.R. 251. Rule 26(b)(1) provides that the scope of discovery includes "any nonprivileged matter that is relevant to any party's claim or defense." Relevant information encompasses "any matter that bears on, or that reasonably could lead to other matters that could bear on, any issue that is or may be in the case." Ibanez v. Miller, 2009 WL 1706665, at *1 (E.D. Cal. Oct. 22, 2009) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)). Moreover, "[t]he question of relevancy should be construed liberally and with common sense' and discovery should be allowed unless the information sought has no conceivable bearing on the case." Id. (quoting Soto v. City of Concord, 162 F.R.D. 603, 610 (N.D. Cal. 1995)).

Additionally, Rule 26(b)(2)(C) provides that "[o]n motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues."

III. Discussion

This dispute concerns five interrogatories and three requests for production of documents served by KCR, as well as four requests for production served by Wilson. ECF No 117 at 36-51. These discovery requests seek information as to the attorneys' fees Biotronik incurred in this litigation. Id. Specifically, they request information regarding the number of attorneys' hours billed and the hourly rates charged for those hours for the representation of Biotronik in this case by the law firm Holland & Knight ("H&K"). Id.

Fee claimants' theory for the relevancy of this information is predicated on Biotronik's challenge to the reasonableness of the fees sought in the pending attorney fee motions. Fee claimants explain that Biotronik challenges their requests for fees on a number of grounds, including that: (1) fee claimants improperly seek fees for work performed on unsuccessful claims and collateral issues, (2) KCR impermissibly seeks fees for work performed by Andrew Prough;[2] (3) the hourly rates charged by each fee claimant are unreasonable, and (4) the number of hours expended and rates charged for preparation of the fee petition are excessive. ECF No. 117 at 7.

Fee claimants contend that they have a right to know if H&K "submitted bills to their own client that (a) included similarly overlapping work on a common core of facts and theories underlying numerous claims; (b) charged rates equal to or greater than those sought by the fee claimants; (c) billed for the types of expenses they now characterize as excessive or noncompensable; and/or (d) include dbilling [sic] entries of the type Biotronik now attacks as vague, duplicative, or block-billed.'" ECF No. 117 at 9. As succinctly put by the fee claimants: "if Biotronik's argument [in its opposition to the motions for attorneys' fees] is hypocritical, the Court should not tolerate it...." Id.

Biotronik argues that H&K's billing records are not relevant to the pending motions because, contrary to fee claimants'' contention, Biotronik does not seek a reduction of fees based on a claim that counsel spent too much time on any particular tasks. ECF No. 117 at 18. Rather, Biotronik argues that the fee claimants are not entitled to fees for any hours expended on certain tasks because they were unrelated to the settlement reached in this case. Id. Biotronik also contends that any relevance that the billing records have is greatly outweighed by the prejudice that would result from Biotronik or H&K being ordered to produce its confidential billing records. Biotronik contends that its records contain time narratives that are privileged and confidential information and producing such documents would require substantial and careful ...


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