One of the more important decisions in False Claims Act litigation is whether--and how--a school intends to rely upon prior advice of legal counsel in defending against an FCA case. For instance, when schools are faced with allegations of violations of the incentive compensation provision, powerful evidence in defeating any claim that the school committed a "knowing" violation is that the school sought and obtained legal counsel's blessing of its compensation plan.
On March 14, 2013, Magistrate Judge Frank J. Lynch, Jr. issued a ruling showing the importance of a school making a decision early on in a case about how prior legal advice will be used. In that matter, U.S. ex rel. Matheny v. Medco Health Solutions, No. 08-14201-CIV-Graham/Lynch, ECF No. 258 (S.D. Fla. Mar. 14, 2013), Magistrate Lynch ruled that the defendants' production of materials potentially relating to this "advice of counsel" argument three days before the discovery deadline was untimely, and therefore barred the defendant from asserting this argument. See id. at 8, 12-13. This ruling shows the critical importance of early planning as to whether--and how--the argument will be raised, and what will be the potential scope of waiver. It is also a reminder to in-house counsel that their communications may in the end be subject to discovery--and will not always be cloaked with the privilege--as some lawyers often assume.