Ingham Regional Medical Center v. United States

In the United States Court of Federal Claims

No. 13–821

(Filed Under Seal: 6 January 2020)

(Reissued for Publication: 14 January 2020) *

***************************************

INGHAM REGIONAL MEDICAL *

CENTER et al., *

*

Plaintiffs, *

v. * Work Product Doctrine; Motion to Compel;

* RCFC 26(b)(3).

THE UNITED STATES, *

*

Defendant. *

*

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Alexander J. Pires, Pires Cooley, Washington, DC, with whom was Gregory A. Brodek, of

counsel, Duane Morris LLP, Bangor, ME, for plaintiffs.

A. Bondurant Eley, Senior Trial Counsel, with whom were Joseph H. Hunt, Assistant Attorney

General, Steven J. Gillingham, Assistant Director, and Robert E. Kirshman, Jr., Director,

Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC, for

defendant.

*

This Opinion and Order was originally filed under seal, to allow the parties the opportunity to propose redactions.

No redactions were proposed. The order is reissued for publication with a few minor, non-substantive corrections.

OPINION AND ORDER

HOLTE, Judge.

Plaintiffs Ingham Regional Medical Center (“Ingham”), Bay Regional Medical Center,

McLaren Northern Michigan, Gifford Medical Center, Inc., and Lakewood Health System

(collectively, “plaintiffs”), allege the United States, acting through the Secretary of the

Department of Defense (“DoD”) in his official capacity as operator of TRICARE, underpaid

them for medical services they administered through the TRICARE program. Pending before the

Court are five motions: (1) Plaintiffs’ Motion for Determination that Certain Documents

Produced in Discovery are not Privileged or Subject to the Work Product Doctrine, ECF No. 106

(“Pls.’ Mot.”); (2) Plaintiffs’ Motion to Compel Deposition Testimony, ECF No. 109 (“Pls.’

Mot. to Comp.”); (3) Defendant’s Motion to Seal Plaintiffs’ Motion to Compel, ECF No. 111;

(4) Defendant’s Response to Plaintiffs’ Motion to Compel and Defendant’s Motion to Strike

Portions of Plaintiffs’ Expert Report that Rely Solely upon Privileged Material, ECF No. 113

(“Def.’s Resp. to Pls.’ Mot. to Comp.”); and (5) Defendant’s Motion to Seal Plaintiffs’ Reply to

Defendant’s Response to Plaintiffs’ Motion to Compel and Plaintiffs’ Opposition to Defendant’s

Motion to Strike, ECF No. 117. The Court held oral argument on these motions on 7 October

2019. For the following reasons, the Court GRANTS plaintiffs’ motions and DENIES the

government’s motions.

I. Background

TRICARE is a “military health care system” that “provides medical and dental care for

current and former members of the military and their dependents.” Ingham Reg’l Med. Ctr. v.

United States, 874 F.3d 1341, 1342 (Fed. Cir. 2017). TRICARE Management Activity

(“TMA”), a “field office in the Defense Department,” managed and oversaw TRICARE. 1 N.

Mich. Hosps., Inc. v. Health Net Fed. Servs., LLC, 344 F. App’x 731, 734 (3d Cir. 2009).

Hospitals providing TRICARE services are reimbursed according to DoD guidelines. Ingham

Reg’l Med. Ctr., 874 F.3d at 1343 (citing 32 C.F.R. § 199.14). In 2001, the TRICARE statute

was amended to require DoD to use Medicare reimbursement rules when reimbursing outside

healthcare providers, which DoD was not previously required to do. Id. At the time, adopting

Medicare reimbursement rules was impractical for TRICARE due to “the lack of TRICARE cost

report data comparable to Medicare’s.” Id. (quoting TRICARE; Sub-Acute Care Program;

Uniform Skilled Nursing Facility Benefit; Home Health Care Benefit; Adopting Medicare

Payment Methods for Skilled Nursing Facilities and Home Health Care Providers, 67 Fed. Reg.

40,597–02, 40,601 (June 13, 2002)). In 2005, DoD issued a Final Rule, “which provided a more

detailed explanation of the payment rules for hospital-based outpatient services.” Id. That rule

specified, “[f]or most outpatient services, hospitals would receive payments ‘based on the

TRICARE-allowable cost method in effect for professional providers or the [Civilian Health and

Medical Program of the Uniformed Services (“CHAMPUS”)] Maximum Allowable Charge

(CMAC).’” Id. (quoting TRICARE; Sub-Acute Care Program; Uniform Skilled Nursing Facility

Benefit; Home Health Care Benefit; Adopting Medicare Payment Methods for Skilled Nursing

Facilities and Home Health Care Providers, 70 Fed. Reg. 61,368–01, 61,371 (Oct. 24, 2005)

1

TMA is now known as the Defense Health Agency (“DHA”).

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(codified at 33 C.F.R. pt. 199)). These rules “applied until 2009, when TRICARE introduced a

new payment system for hospital outpatient services that was similar to the Medicare [Outpatient

Prospective Payment System] rules.” Id.

A group of hospitals (hereinafter referred to as “the 400 Hospitals”) “complained that

CMAC was only intended to be used for individual health care providers, not institutions with

large overhead costs.” 2 Ingham Reg’l Med. Ctr., 874 F.3d at 1343. The 400 Hospitals are a

separate, but similarly situated group of hospitals as plaintiffs in this case, who seek to represent

a group of approximately 1,610 hospitals. 3 See Pls.’ Mot. to Certify Class Action & Appoint

Class Counsel, ECF No. 77 (“Pls.’ Mot. to Certify”). In response to hospital complaints,

TRICARE hired a consulting firm, Kennell and Associates, to “undertake a study of the accuracy

of its payments to the hospitals.” Ingham Reg’l Med. Ctr., 874 F.3d at 1343–44. Kennell and

Associates performed a study (the “Kennell study”) which “compared CMAC payments to the

payments that would have been made using Medicare payment principles, and determined that

DoD ‘(1) underpaid hospitals for outpatient radiology but, (2) correctly paid hospitals for all

other outpatient services.’” Id. at 1344 (emphasis omitted).

Due to the Kennell study findings, “DoD created a discretionary payment process,” and

on 25 April 2011, DoD notified TRICARE hospitals by letter of the process which allowed

hospitals to “request a review of their TRICARE reimbursements.” Id. 4 In addition to the letter,

2

On 23 January 2007, the 400 Hospitals “filed their first amended complaint in the [United States District Court for

the District of Delaware] asserting claims for breach of contract implied in fact and breach of quasi-contract/unjust

enrichment” against one of TRICARE’s managed care support contractors. N. Mich. Hosps., Inc., 344 F. App’x at

735. On 30 May 2008, the District Court dismissed the complaint because the hospitals failed to exhaust their

administrative remedies. Id. at 736. The Third Circuit affirmed the dismissal. Id. at 740. Thereafter, the parties to

that suit exchanged email communications regarding further steps and potential readjustment with TRICARE.

3

Plaintiffs in this case are represented by the same law firm as the 400 Hospitals but are a separate, albeit similarly

situated group as the 400 Hospitals. See Def.’s Resp. to Pls.’ Mot. for Determination that Certain Docs. Produced in

Disc. are not Priv. or Subject to the Work Product Doctrine (“Def.’s Resp. to Pls.’ Mot.”) at 6, ECF No. 108. The

400 Hospitals initially included 2,500 hospitals, but over time, this number decreased to approximately 400

hospitals. Compare id. at App12 (mentioning representation of “approximately 2,500 hospitals”), with id. at App59

(email mentioning representation of “approximately 400 hospitals”).

4

The letter states, in pertinent part:

For purposes of this process, DoD will treat your submission as an untimely but discretionary appeal

under 32 Code of Federal Regulations 199.10(a)(5) and (c), provided it is received no later than 60

days from the date of this letter. Based on the request, your hospital may be paid an adjustment,

subject to the availability of appropriations, in return for your acceptance of DoD’s offer of

additional payment based on criteria established by the agency. . . . In order to bring closure to any

concerns regarding payment of hospital outpatient services under the TRICARE regulation prior to

implementation of OPPS, payment of the discretionary adjustments will also be contingent on the

execution of a release by the hospital of any hospital outpatient service claims against the agency,

TRICARE beneficiaries, and TRICARE MCSCs. We value your hospital as a partner in this effort

and remain committed to working with you to complete the analysis of claims data and determine

if any additional payments may be allowed.

Ingham Reg’l Med. Ctr. v United States, 126 Fed. Cl. 1, 12 (2016), aff’d in part, rev’d in part by Ingham Reg’l Med.

Ctr. v. United States, 874 F.3d 1341 (Fed. Cir. 2017). Approximately 5,200 hospitals, including the named plaintiffs

in this case and the 400 Hospitals, submitted a request. Id. at 16. Once TRICARE sent the 400 Hospitals

recalculated amounts proposed for reimbursement, the hospitals identified errors in the recalculation. Id. at 17.

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“DoD published a document titled ‘NOTICE TO HOSPITALS OF POTENTIAL

ADJUSTMENT TO PAST PAYMENTS FOR OUTPATIENT RADIOLOGY SERVICES’ (the

“Notice”)” on the TRICARE website. Ingham Reg’l Med. Ctr., 874 F.3d at 1344. 5 The Notice

also described a “nine-step process by which hospitals could ‘request an analysis of their claims

data for possible discretionary adjustment’ and to ‘govern the review of payments for hospital

outpatient radiology services and payment of any discretionary net adjustments.’” 6 Ingham

Reg’l Med. Ctr. v United States, 126 Fed. Cl. 1, 14 (2016), aff’d in part, rev’d in part by Ingham

Reg’l Med. Ctr. v. United States, 874 F.3d 1341 (Fed. Cir. 2017). If DoD determined a hospital

was entitled to an adjustment, payment was conditioned upon availability of appropriations and

TRICARE allegedly acknowledged errors in the calculations but claimed it was not aware of the errors prior to

sending the proposed payment adjustments. Id.

5

The Notice explained, in pertinent part:

The TRICARE regulation provisions on hospital outpatient services, in the absence of adoption of

the Medicare OPPS methodology, adopted comparable Medicare payments for similar services

provided in other sites (i.e., physician offices). That is, TRICARE looked to the similarity of services

being provided, not the site of services, in adopting a reimbursement methodology for hospital

outpatient services. . . .

[I]n reviewing payments for hospital services, DoD has determined that, for radiology services . . .

the technical component of the allowable charge did not approximate the Medicare fair payment for

such hospital services as well as it could have. That is, looking at the Medicare reimbursement

methodologies in existence prior to adoption of Medicare OPPS in 2000, . . . some radiology services

were underpaid in comparison. . . . Thus, although payments to hospitals for radiology services were

consistent with the duly promulgated regulation, there is a basis for TRICARE to provide an

opportunity to make some discretionary net payment adjustments to approximate more closely

Medicare payment methods. . . .

General TRICARE policy is that payment methodologies follow to the extent practicable Medicare

payments. Prior to adopting [OPPS], Medicare used a blended rate that factored in a percentage of

hospital costs and a percentage of the global physician fee schedule to reimburse hospital outpatient

radiology services. In contrast, TRICARE regulation limited reimbursement to hospitals for

individual outpatient radiology services to the technical component portion of the CHAMPUS

Maximum Allowable Charge (CMAC), which was one component of Medicare’s physician fee

schedule. Consistent with TRICARE policy under statute to pay similar to Medicare, we have

determined that discretionary adjusted payments may better reflect the Medicare payment amounts

for outpatient radiology claims.

Ingham Reg’l Med. Ctr., 874 F.3d at 1344.

6

“Step 1 instructed hospitals to submit a request for analysis of their claims data.” Ingham Reg’l Med. Ctr., 126

Fed. Cl. at 14 (internal quotation marks omitted). “Step 2 described the procedure for submitting a request,”

including “[a] separate Excel spreadsheet must be completed for each hospital” accompanying a request. Id. “Steps

3 through 7 described the review process.” Id. Step 8 stated, “[a] written response to the hospital’s request . . . will

provide the calculated discretionary adjusted payment and the calculations from which the adjustment was derived.”

Id. at 15. Step 8 further explained:

While the methodology for calculating the adjustment is not subject to questions, any questions

regarding the data used in the calculations should be received by TMA within 30 days of the date

of TMA’s response as specified in the response. Any questions should be accompanied by detailed

explanation of the alleged errors and the proposed corrections with supporting documentation.

Id. Lastly, Step 9 noted, “TRICARE’s response would include a release and agreement to accept the discretionary

payment.” Ingham Reg’l Med. Ctr., 874 F.3d at 1345 (internal quotation marks omitted).

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the hospital signing a release of claims against DoD. Ingham Reg’l Med. Ctr., 874 F.3d at 1344–

45.

Plaintiffs submitted requests for discretionary payment, and TRICARE provided written

responses. Ingham Reg’l Med. Ctr., 126 Fed. Cl. at 16. “Plaintiff Ingham signed the Release

and received the proposed payment,” but alleged “the payment it received . . . was less than the

amount it was owed.” Id. DoD informed plaintiff Bay Regional Medical Center “it had been

overpaid for radiology services and was owed nothing.” Ingham Reg’l Med. Ctr., 874 F.3d at

1345. “Plaintiffs McLaren Northern Michigan, Gifford Medical Center, Inc., and Lakewood

Health System refused to sign the Release after receiving proposed payment amounts that they

believed, due to multiple errors in the [Kennell study] and TMA’s calculations, understated the

amount they were owed for outpatient radiology services.” Ingham Reg’l Med. Ctr., 126 Fed.

Cl. at 17.

A. Procedural History

Plaintiffs are a group of hospitals, separate from the 400 Hospitals, that provide medical

services as part of the TRICARE program. On 21 October 2013, plaintiffs brought this action

claiming the government underpaid them for medical services they provided between 1 August

2003 and 1 May 2009. Ingham Reg’l Med. Ctr., 126 Fed. Cl. at 9. Plaintiffs allege this

underpayment breached two contracts and violated various statutory and regulatory provisions. 7

Id. Plaintiffs seek to represent a class of approximately 1,610 similarly situated hospitals,

separate from the 400 Hospitals. See Pls.’ Mot. to Certify. 8

On 13 January 2015, the government filed a motion to dismiss plaintiffs’ complaint for

failure to state a claim pursuant to Rule 12(b)(6) of the Rules of the United States Court of

Federal Claims (“RCFC”). See Def.’s Mot. to Dismiss Pls.’ First Am. Compl., ECF No. 41. The

government argued plaintiffs “fail[ed] to allege facts” sufficient to establish a binding contract

with the government or that any contract was breached, and absent a valid contract, “there

[could] be no mutual mistake or breach of the covenant of good faith and fair dealing.” Id. at 1–

2. On 22 March 2016, this Court dismissed plaintiffs’ complaint for failure to state a claim.

Ingham Reg’l Med. Ctr., 126 Fed. Cl. at 55. Plaintiffs appealed, and on 3 November 2017, the

Federal Circuit “reverse[d] the dismissal of [plaintiff] Ingham’s breach of contract claim,

affirm[ed] the dismissal of [plaintiffs’] money-mandating claim, and [did] not reach the claim for

mutual mistake.” Ingham Reg’l Med. Ctr., 874 F.3d at 1348. 9 The Federal Circuit remanded the

case “for further proceedings on the breach of contract claim.” Id. On remand, plaintiffs filed an

amended complaint, the government filed its answer, and the parties engaged in ongoing

7

Plaintiffs raise five counts in their first amended complaint: (1) breach of express contract; (2) breach of implied-

in-fact contract; (3) mutual mistake; (4) breach of covenant of good faith and fair dealing; and (5) violations of 10.

U.S.C. §§ 1079, 1086, and 32 C.F.R. § 1997.7(h)(2). Am. Compl., ECF No. 40.

8

This Court stayed consideration of plaintiffs’ motion for class certification on 30 April 2018. See Order, ECF No.

78.

9

On appeal, plaintiffs appealed three claims: “(1) breach of express contract between Ingham and DoD based on

the discretionary payment process; (2) revision of Ingham’s contract based on mutual mistake, in light of the errors

in the calculations of radiology outpatient services and the Kennel study; and (3) violations of money-mandating

statutes and regulations, 10 U.S.C. §§ 1079 and 1086 and 32 C.F.R. § 199.7(h)(2).” Ingham Reg’l Med. Ctr., 874

F.3d at 1346.

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discovery. 10 This case was transferred to the undersigned Judge on 29 July 2019. See Order,

ECF No. 114.

B. Factual History Relevant to this Dispute 11

On 26 July 2010, counsel for the 400 Hospitals, C. Mitchell Goldman, sent a letter to

TMA’s general counsel, Robert Seaman, inviting him to engage in recalculation negotiations to

address the alleged underpayments. Def.’s Resp. to Pls.’ Mot. for Determination that Certain

Docs. Produced in Disc. are not Priv. or Subject to the Work Product Doctrine at App2–3, ECF

No. 108 (“Def.’s Resp. to Pls.’ Mot.”). If TMA was unwilling to negotiate, Mr. Goldman

requested Mr. Seaman provide more direction on how the 400 Hospitals “may resubmit [their]

claims in question to comply with [TRICARE’s] requirements,” their contracts, and applicable

law. Id. 12

On 19 November 2010, Gregory Brodek, also counsel for the 400 Hospitals, emailed Mr.

Seaman explaining once the 400 Hospitals exhausted their administrative remedies, they would

“be forced to resume the legal course of action, which will remove any ability to structure a

resolution that addresses both your clients [sic] and ours [sic] needs and concerns.” Id. at App4.

On 19 January 2011, Mr. Brodek wrote Rear Admiral Christine Hunter, Deputy Director

of TMA, about several items the parties must address to resolve the alleged underpayments,

including “the proposed repayment process, the methodology used to determine the existence of

underpayments, and our representation.” Id. at App13. 13

10

On 11 June 2019, the previous Judge assigned to this case scheduled expert discovery to close on 22 August 2019.

Order, ECF No. 104. On 21 August 2019, the parties filed a joint motion to stay expert discovery pending

resolution of unresolved discovery motions at issue in this order and opinion. ECF No. 120. On 29 August 2019,

the undersigned Judge issued an order stating, “[t]he Court shall extend all deadlines contained within the 11 June

2019 scheduling order (ECF 104) at the time the pending discovery motions are ruled upon.” Order, ECF No. 122.

All pending discovery disclosures and motions occurred after the 3 November 2017 Federal Circuit opinion.

11

The facts relevant to this discovery dispute occurred during the 400 Hospitals’ recalculation discussions with

TRICARE, prior to the commencement of this suit.

12

The letter stated in pertinent part:

At the conclusion of our meeting, we made two specific requests [to] which you agreed . . . . First,

we would like for your client to consider . . . entering into negotiations to settle this dispute. A

settlement would avoid both sides incurring significant cost of claims processing and ultimately

litigation. . . . Second, if your client is unwilling to enter into settlement discussions, please provide

us with clear and concise directions on how our hospitals may resubmit the claims in question to

comply with Tricare’s requirements and not violate their existing payer contracts and existing law.

. . . It is our belief that all parties are benefitted by avoiding protracted litigation which has been

ongoing for more than 6 years.

Def.’s Resp. to Pls.’ Mot. at App3.

Mr. Brodek further stated:

13

During the meeting, there appeared to be a misunderstanding of Duane Morris’ representation of

the Hospitals in this dispute and where this dispute is procedurally. Duane Morris was retained to

file class action lawsuits on behalf of hospitals that had submitted claims for reimbursement of

facility charges which were denied by two of TRICARE’s three regional contractors. Those lawsuits

were filed by representative hospitals on behalf of all similarly situated Hospitals in these two

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On 2 February 2011, Mr. Brodek again emailed Mr. Seaman to express his understanding

that “TRICARE is currently analyzing how to . . . address the payment error,” but said, “if the

currently pending appeals cannot be resolved in a manner that addresses our clients’ concerns,

they will be forced to proceed back to court.” Id. at App17. Mr. Brodek stated litigation was not

“in either our clients’, nor TRICARE’s, best interest,” and he offered a proposal he said “avoids

these undesirable outcomes, and allows for a prompt, and final, resolution of this matter.” Id.

After TRICARE sent its 25 April 2011 letter and issued the Notice establishing its

discretionary payment review, the 400 Hospitals claimed there were deficiencies in the data

TMA used to calculate proposed adjustments. Def.’s Resp. to Pls.’ Mot. at 7. On 14 July 2011,

Mr. Brodek emailed Paul Hutter, the new General Counsel of Defense Health Agency (“DHA”),

confirming the 400 Hospitals and DHA would each run a calculation for a sample of data for ten

TRICARE hospitals and compare their results. Def.’s Resp. to Pls.’ Mot. at App27. Once they

exchanged their findings, in a 27 July 2011 letter to Mr. Hutter, Mr. Brodek confirmed “it

appears our data may not be as disparate as we originally believed,” and he accepted Mr.

Hutter’s offer to “run . . . calculations on several additional hospitals.” Id. at App41–42.

After exchanging additional calculations, on 16 September 2011, Mr. Brodek sent Mr.

Hutter an email titled “Global Settlement,” proposing a $92 million recalculated payment for all

400 Hospitals. Id. at App57. Mr. Hutter responded to the proposal on 21 September 2011 by

indicating TRICARE would agree to a $22 million payment. Id. at App59. Mr. Brodek

responded on 22 September 2011 requesting Mr. Hutter’s “rationale for a 20% increase based

upon data on which we have repeatedly disapproved the accuracy of,” and requested to speak the

following day “to either resolve, or agree this matter needs to be pushed into litigation.” Id. at

App61.

On 26 September 2011, in response to an email from Mr. Hutter titled “Settlement,” Mr.

Brodek wrote “it does not appear that there should be anything controversial left to discuss,” and

“there is enormous benefit to all parties to resolve the matter in its totality.” Id. at App61.

Thereafter, the parties agreed to a final recalculated adjustment, and on 6 December

2011, Mr. Brodek sent Mr. Hutter an “invoice” for the agreed upon recalculated adjustment for

“TRICARE hospital outpatient laboratory, radiology, and diagnostic services.” Id. at App356.

C. Documents Under Review

regions. Those lawsuits were ultimately dismissed without prejudice to enable the parties to exhaust

their administrative remedies. That dismissal without prejudice was affirmed by the United States

Court of Appeals for the Third Circuit, in which the Third Circuit noted that the reason for the

dismissal was to enable a factual record to be compiled in the administrative process concerning (1)

whether expenses that qualify as facility charges were incurred; (2) whether such charges were

properly billed; and (3) how much is owed. TRICARE has now shown through its own analysis that

the expenses qualified as facility charges and were both incurred and billed by the Hospitals. The

only remaining unanswered question is the amount owed to the Hospitals.

Def.’s Resp. to Pls.’ Mot. at App14 (emphasis omitted).

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On 21 October 2013, plaintiffs initiated this litigation. See Compl., ECF No. 1. Between

June and October 2018, plaintiffs served the government with various requests for production of

documents. Pls.’ Mot. to Comp. at Appx111–116, 146. In response, the government produced

around 380,000 pages of documents and compiled a privilege log with 2,500 entries. Def.’s

Resp. to Pls.’ Mot. at 9. Plaintiffs now request the Court determine whether two documents and

three emails the government produced during discovery are privileged. See Pls.’ Mot. at 1; Pls.’

Mot. to Comp. at 1–2. The Court refers to each document individually as follows: “Document

One”; “Document Two”; “Email One”; “Email Two”; and “Email Three.”

The government produced the documents in question through various discovery

productions between 20 September 2018 and 9 April 2019. See Pls.’ Mot. to Comp. at 9–10.

Government counsel is unsure how Document One and Document Two were produced but

explains the documents were likely “mis-coded . . . in [the government’s] document management

database as non-privileged.” Def.’s Resp. to Pls.’ Mot. at 11. The government marked

Document One in its privilege log at least sixteen times and Document Two at least twelve

times, but both documents were inadvertently produced to plaintiffs. Id. at 8–9. Document One

and Document Two were contained in a group of documents attached to an email which was

marked privileged, but the attachments were not secondarily marked. Id. The government

marked Email One twice in its privilege log, but Email One “did not receive consistent privilege

treatment over the course of the [g]overnment’s many productions,” and it was produced twice to

plaintiffs. Def.’s Resp. to Pls.’ Mot. to Comp. at 6–7. Email Two and Email Three were never

marked privileged and were produced by the government. Id. at 5–6.

a. Document One

On 30 September 2011, Dave Kennell, principal of Kennell and Associates, prepared

Document One, Bates number ING0262545-53, and sent it to Mr. Hutter. Pls.’ Mot. at A29–

A37. Document One, titled “Data Problems Related to Payment Adjustments for [the 400

Hospitals],” contained the stamp “Attorney-Client Protected Work Product Not To Be

Disclosed” on the bottom of every page. Id. In the document, Mr. Kennell identifies data

problems encountered while calculating adjustments for the 400 Hospitals. Id. Mr. Kennell

estimates a total payment adjustment based on the issues identified in the document. Id. The

government produced Document One on 5 February 2019, but listed it at least sixteen times on

its privilege log. Def.’s Resp. to Pls.’ Mot. at 9, 11.

On 8 December 2011, “Melissa Walters, an individual providing staff support to DHA’s

Fall Church [sic] Office of General Counsel . . . forwarded a packet of six [of the 400 Hospitals’]

settlement-related documents . . . at Mr. Hutter’s request to Walt Ruggles, the then-Head of

TMA’s Financial Operations Division, to facilitate payment of the [400 Hospitals] Settlement.”

Id. at 9–10. That packet included Document One. See id.

On 13 May 2019, plaintiffs’ counsel notified government counsel the government

produced two potentially privileged documents. Pls.’ Mot. at A232. On 2 June 2019,

government counsel informed plaintiffs’ counsel the documents were subject to work product

privilege and clawback. Id. at A233.

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b. Document Two

Document Two, Bates number ING0262544, titled “Estimated TMA Liability in 3

Categories of Hospital Outpatient Services if Settlement does not Happen (2003-2009),” does

not specify its author or date of creation. Pls.’ Mot at A38. Document Two contains

summarized calculations in boxed rows on an x and y axis. Id. On the y axis, Document Two

lists four boxes: (1) “Additional TMA Liability for Radiology using ‘costs’”; (2) “Additional

TMA Liability for Radiology using ‘billed charges’”; (3) “Additional TMA Liability for

Radiology, Labs, and Diagnostic Tests using ‘costs’”; and (4) “Additional TMA Liability for

Radiology, Labs, and Diagnostic Tests using ‘billed charges.’” Id. On the x axis, Document

Two lists three boxes corresponding to the y axis: (1) “6 Months in 2008 for all Hospitals ~

3,500”; (2) “6 Years for all Hospitals ~ 3,500”; and (3) “6 Years for Duane Morris Hospital ~

400.” Id. In the corresponding boxes for the x and y axes, Document Two provides estimated

calculations for the listed hospital services and listed variables. Id. The government produced

Document Two on 5 February 2019, but listed the document at least 12 times on its privilege log.

Def.’s Resp. to Pls.’ Mot. at 9, 11.

Document Two’s creation is unclear. The government cannot ascertain its creator, but

states after Document One’s creation, “Mr. Hutter, or another individual employed in the Fall

Church [sic] Office of DHA’s Office of General Counsel, summarized [Document Two].” Id. at

8. In a footnote in its response to plaintiffs’ privilege motion, the government explains:

Based on the circumstantial evidence . . . we reasonably believe that Mr. Hutter is,

in fact, the author of the substance of [Document Two]. We have been unable to

confirm this with absolute certainty, however, because Mr. Hutter no longer works

for the Government, and has not responded to our attempts to contact him with

respect to this issue.

Id. at 8 n.2. The government states, however, “[t]he metadata identifies the original author of

this liability projection as Melissa Walters.” Id. at 9.

On 13 May 2019, plaintiffs’ counsel notified government counsel the government

produced two potentially privileged documents. Pls.’ Mot. at A232. On 2 June 2019,

government counsel informed plaintiffs’ counsel the documents were subject to work product

privilege and clawback. Id. at A233.

c. Email One

On 26 August 2011, Christina Witsberger, a Senior Research Analyst at Kennell and

Associates, sent Email One, Bates number ING0366488–89, to Mr. Kennell. Pls.’ Mot. to

Comp. at 9. Email One contained the subject line “HOPD Rad Adj - D. Morris - Childrens Hosp

of the Kings Daughters, Norfolk VA TIN [redacted] zip 23507.” Id. In Email One, Ms.

Witsberger analyzes billing patterns by comparing TRICARE Encountered DATA (“TED”) for

the subject line hospitals to the data the 400 Hospitals sent. 14 Id. The government produced

Email One on 4 March 2019 and 9 April 2019. Id. at 9–10.

14

Ms. Witsberger wrote, in relevant part:

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On 7 June 2019, plaintiffs deposed Ms. Witsberger, during which Email One was marked

Exhibit 29. Id. at Appx88. Government counsel instructed Ms. Witsberger not to answer

questions relating to Email One on the basis of work product doctrine and indicated the

government would seek to clawback the document. Id.

d. Email Two

On 2 September 2011, Ms. Witsberger sent Email Two, Bates numbers USA000129,

USA000396, and ING0000961, to Mr. Kennell. Pls.’ Mot. to Comp. at 8–9. Email Two

contained the subject line “Duane Morris Latest Email.” Id. In Email Two, Ms. Witsberger

explained certain CPT codes were excluded from their analysis because “they did not have

CMAC rates,” not because they were “purely technical.” Id. She further explained because the

excluded codes were lab codes, not radiology codes, they did not have anything in the CMAC

field. Id. The government produced Email Two on 20 September 2018 and on 15 November

2018. Pls.’ Mot. to Comp. at 8–9.

On 11 October 2018, plaintiffs deposed Mr. Kennell. Id. at 10. Email Two was part of a

group of documents marked as Exhibit 21 during the deposition. Id. at Appx40. Mr. Kennell

testified, without objection of government counsel, he compiled Exhibit 21. Id. Email Two was

also marked Exhibit 32 during the 5 June 2019 deposition of Ms. Witsberger. Id. at Appx90.

Government counsel instructed Ms. Witsberger not to answer questions relating to Email Two on

the basis of the work product doctrine and indicated the government would seek to clawback the

document. Id. at Appx90–Appx91.

e. Email Three

On 13 September 2011, Ms. Witsberger sent Email Three, Bates numbers USA000141

and ING0000969, to Mr. Kennell. Pls.’ Mot. to Comp. at 8–9. Email Three contained the

subject line “TC and 76499 analysis -- S and W.” Id. Email Three analyzed cost data for certain

coded procedures performed in hospitals in the southern and western United States. 15 Id. The

government produced Email Three on 20 September 2018 and 15 November 2018. Id. at 8–9.

I have examined some billing patterns of the above hospital to compare line item info sent by Duane

Morris versus our TED records, to try to figure out the discrepancy in number of line items for

Period 2, which was off about 13% (Duane Morris had 13 pct more line items).

Although there are some claims they have which I cannot match (and a few we have they do not),

examining some high volume CPT codes for these hospitals uncovered many cases where the CPT

code on the TED record is just a general radiology “unlisted” (i.e. dump) code of 76499 whereas

Duane Morris has a specific CPT code. The allowed amounts match what the CMAC for the TC

was during the time period, so it does appear they were paid by CMAC for a specific CPT code

rather than for dump code 76499.

Pls.’ Mot. to Comp. at Appx137. Ms. Witsberger lists “examples of claims where the TED has CPT 76499 but

Duane Morris has a specific CPT code on the hospital’s claim record.” Id. at Appx138.

15

Ms. Witsberger wrote “[f]or the West, there is not a huge problem. All look normal except for the TINs beginning

with 9305…. as we discussed (the ones in Oregon). Dump code 76499 is not an issue in the West.” Pls.’ Mot. To

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On 11 October 2018, plaintiffs deposed Mr. Kennell, and he testified about Email Three’s

contents without objection from government counsel. Id. at Appx45–Appx47. On 30 April

2019, plaintiffs deposed Martha Maxey, a former TMA employee, and Email Three was marked

Exhibit 41. Id. at 11. Ms. Maxey testified about Email Three’s contents without objection from

government counsel. Pls.’ Mot. to Comp. at 11. Email Three was similarly marked Exhibit 34

during Ms. Witsberger’s 7 June 2019 deposition. Id. at Appx92. Counsel for the government

instructed Ms. Witsberger not to answer questions relating to Email Three on the basis of the

work product doctrine and indicated the government would seek to clawback the document. Id.

at Appx92–Appx93.

II. Discussion

A. Work Product Privilege

The work product doctrine is codified in Rule 26(b)(3) of the RCFC. 16 The doctrine “is

intended to preserve a zone of privacy in which a lawyer can prepare and develop legal strategy

Comp. at Appx125. Further, “[f]or the South, two of the example [sic] I chose turned out to have huge numbers

under another zip which does appear to be the same hospital in Peters file. We did not search these zips or report

results.” Id. Additionally, “[d]ump codes are a problem in period 2 for all of them to some degree, being around

10-15 pct of period 2 (20 pct for Jackson County and Kings Dtrs).” Id.

16

RCFC 26(b)(3) provides:

(A) Documents and Tangible Things. Ordinarily, a party may not discover documents and tangible

things that are prepared in anticipation of litigation or for trial by or for another party or its

representative (including the other party’s attorney, consultant, surety, indemnitor, insurer, or

agent). But, subject to RCFC 26(b)(4), those materials may be discovered if:

(i) they are otherwise discoverable under RCFC 26(b)(1); and

(ii) the party shows that it has substantial need for the materials to prepare its case and

cannot, without undue hardship, obtain their substantial equivalent by other means.

(B) Protection Against Disclosure. If the court orders discovery of those materials, it must protect

against disclosure of the mental impressions, conclusions, opinions, or legal theories of a party’s

attorney or other representative concerning the litigation.

(C) Previous Statement. Any party or other person may, on request and without the required

showing, obtain the person’s own previous statement about the action or its subject matter. If the

request is refused, the person may move for a court order, and RCFC 37(a)(5) applies to the award

of expenses. A previous statement is either:

(i) a written statement that the person has signed or otherwise adopted or approved; or

(ii) a contemporaneous stenographic, mechanical, electrical, or other recording—or a

transcription of it—that recites substantially verbatim the person’s oral statement.

RCFC 26(b)(3) and Rule 26(b)(3) of the Federal Rules of Civil Procedure (“FRCP”) are identical. Compare RCFC

26(b)(3), with Fed. R. Civ. P. 26(b)(3). The Court therefore uses other federal courts’ interpretations of the FRCP as

persuasive authority. See Adams v. United States, 391 F.3d 1212, 1218 n.3 (Fed. Cir. 2004) (“Rule 12 of the Court

of Federal Claims mirrors Rule 12 of the Federal Rules of Civil Procedure”); see also 2002 Rules Committee Note,

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‘with an eye toward litigation,’ free from unnecessary intrusion by adversaries.” Pac. Gas &

Elec. Co. v. United States, 69 Fed. Cl. 784, 789 (2006) (quoting Hickman v. Taylor, 329 U.S.

495, 510–11 (1947) (observing that Rule 26(b)(3) codified the principles underlying the

Hickman work product doctrine); see also In re EchoStar Commc’ns Corp., 448 F.3d 1294, 1301

(Fed. Cir. 2006) (citing Hickman, 329 U.S. at 511) (“[T]he work-product doctrine encourages

attorneys to write down their thoughts and opinions with the knowledge that their opponents will

not rob them of the fruits of their labor.”). “At its core, the work-product doctrine shelters the

mental processes of . . . attorney[s], providing a privileged area within which [they] can analyze

and prepare [their] client’s case.” United States v. Nobles, 422 U.S. 225, 238 (1975). RCFC

26(b)(3) prevents a party from discovering “documents and tangible things that are prepared in

anticipation of litigation or for trial by or for another party or its representative (including the

other party’s attorney, consultant, surety, indemnitor, insurer, or agent).” Although the rule

protects documents prepared in anticipation of litigation, it does not address the scope of this

immunity. See, e.g., Fed. Trade Comm’n v. Grolier Inc., 462 U.S. 19, 25 (1983) (“[Federal Rule

of Civil Procedure] 26(b)(3) does not in so many words address the temporal scope of the work-

product immunity.”).

A primary treatise on the work product doctrine published by the American Bar

Association titled, “The Attorney-Client Privilege and the Work-Product Doctrine” (“ABA Work

Product Treatise”) explains the work product privilege applies “not to all materials in an

attorney’s files, but only to those materials that were prepared in anticipation of litigation or for

trial.” 2 Edna Selan Epstein, The Attorney-Client Privilege and the Work-Product Doctrine 1082

(6th ed. 2017). The privilege applies when: (1) there is “a threat of litigation”; and (2) the

“document [was] prepared because of that threat.” Id. at 1082–83. To constitute “in anticipation

of litigation,” the document “must also have been prepared for litigation and not for some other

purpose.” Id. at 1094 (emphasis omitted). A document may have been prepared “before or

when litigation is imminent or pending without necessarily having been in the least prepared ‘in

anticipation’ of litigation.” Id. If a document would have been prepared regardless of the

litigation, the document is generally not subject to work product protection. Id. at 1114.

The ABA Work Product Treatise outlines two approaches to determine the primary

motivation for a document’s preparation: the “because of” approach and the “primary purpose”

approach. Id. Two questions guide this determination: (1) “[w]ere the documents prepared in

the ordinary course of business”; and “(2) [w]as there an independent business purpose for which

the document would have been prepared even if there had been no litigation anticipated?”

Epstein, supra, at 1115. “If the answer to either question is yes, then there is no need to accord

the document work-product protection.” Id. 17 “The fact that litigation eventually does occur is

Rules of the United States Court of Federal Claims (as amended July 1, 2019) (“[I]nterpretation of the court’s rules

will be guided by case law and the Advisory Committee Notes that accompany the Federal Rules of Civil

Procedure.”).

17

Wright & Miller’s treatise, Federal Practice and Procedure, underscores this point: “even though litigation is

already in prospect, there is no work-product immunity for documents prepared in the regular course of business

rather than for purposes of the litigation.” 8 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal

Practice & Procedure § 2024 (3d ed.), Westlaw (database updated Aug. 2019). Additionally, the Advisory

Committee Note to Rule 26(b)(3) states in part: “[m]aterials assembled in the ordinary course of business, or

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not sufficient justification for making every document prepared before litigation work-product

protected.” Id. at 1122. The ABA Work Product Treatise provides, for example, “internal audits

and accident investigations [are] not to be work-product protected unless litigation is clearly the

primary motive.” Id. at 1125 (emphasis in original). Additionally, “documents or other

materials prepared looking toward, or in implementation of, a settlement often have been held

not to be in anticipation of litigation.” Id. at 1132. This is also true with investigative

documents because “even though litigation may be foreseeable, courts have not hesitated to

make investigative documents discoverable on the ground that there was a business purpose

separate and distinct from the prospect of possible litigation that led to the investigation.” Id. at

1156.

Three recent Court of Federal Claims cases address the work product doctrine. See Pac.

Gas & Elec. Co. v. United States, 69 Fed. Cl. 784 (2006); Weston/Bean Joint Venture v. United

States, 128 Fed. Cl. 1 (2014); Northrop Grumman Corp. v. United States, 80 Fed. Cl. 651

(2008).

In the first comparable Court of Federal Claims case, Pacific Gas & Electric, the Court

discussed the work product doctrine in depth and explained, “‘documents that are prepared in the

ordinary course of business or that would have been created in essentially similar form

irrespective of the litigation’ are not protected.” Pac. Gas & Elec. Co., 69 Fed. Cl. at 798

(quoting United States v. Adlman, 134 F.3d 1194, 1202 (2d Cir. 1998)). In that case, an electric

utility sued the United States for breach of contract. The government moved “to compel the

production of documents and deposition testimony” withheld on the basis “of the attorney-client

privilege and the work product doctrine.” Id. at 786. The government argued plaintiff

improperly asserted work product privilege over documents prepared for regulatory agencies

overseeing plaintiff’s company. Id. at 786–87. In response, plaintiff argued the work product

privilege applies to “material prepared for administrative proceedings . . . as well as proceedings

before the court of record” because administrative proceedings constitute litigation. Id. at 788.

This Court discussed whether the proceedings, or some aspect thereof, constituted litigation for

the documents to gain work product protection. Id. at 799. It explained, “‘[t]he threshold

determination in a case involving a claim of work product privilege is whether the material

sought to be protected from discovery was prepared in anticipation of litigation’ or was prepared

in the ordinary course of business or for other purposes.” Id. at 790 (quoting Allendale Mut. Ins.

Co. v. Bull Data Sys., Inc., 145 F.R.D. 84, 86 (N.D. Ill. 1992)).

This Court outlined two approaches to determine if a document was prepared “in

anticipation of litigation,” because “there are ‘a variety of approaches and conflicting decisions

in the case law.’” Id. at 790 (quoting Harper v. Auto-Owners Ins. Co., 138 F.R.D. 655, 659

(S.D. Ind. 1991)). Under the first approach, a court considers “‘the primary motivational

purpose behind the creation of the document.’” In re Raytheon Secs. Litig., 218 F.R.D. 354, 357

(D. Mass. 2003) (quoting United States v. Gulf Oil Corp., 760 F.2d 292, 296 (Temp. Emer. Ct.

App. 1985)). “Under this approach, ‘if the primary motivating purpose behind the creation of the

document is not to assist in pending or impending litigation, then a finding that the document

pursuant to public requirements unrelated to litigation, or for other nonlitigation purposes are not under the qualified

immunity provided by this subdivision.” 48 F.R.D. 487, 501.

-13-

enjoys work product immunity is not mandated.’” Pac. Gas & Elec. Co., 69 Fed. Cl. at 791

(quoting Gulf Oil Corp., 760 F.2d at 296). Under the second approach, known as the “because

of” approach, “[w]here a document was created because of anticipated litigation, and would not

have been prepared in substantially similar form but for the prospect of that litigation, it falls

within [the work product doctrine.] Id. at 791 (quoting Adlman, 134 F.3d at 1195) (emphasis

omitted). As the Second Circuit observed in Adlman, “[t]he formulation of the work-product

rule used by the Wright & Miller treatise, and cited by the Third, Fourth, Seventh, Eighth and

D.C. Circuits, is that documents should be deemed prepared ‘in anticipation of litigation,’ and

thus within the scope of [Federal Rule of Civil Procedure 26(b)(3)], if ‘in light of the nature of

the document and the factual situation in the particular case the document can fairly be said to

have been prepared or obtained because of the prospect of litigation.’” Adlman, 134 F.3d at

1202 (quoting 8 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice

& Procedure § 2024, at 343 (1994)) (emphasis omitted).

In Pacific Gas & Electric, this Court did not decide whether the “‘primary motivating

purpose’ or the ‘because of’ approach is the correct application of RCFC 26(b)(3),” because its

determination did not turn on which approach was used. Pac. Gas. & Elec. Co., 69 Fed. Cl. at

798. This Court noted, however, “under either formulation, ‘documents that are prepared in the

ordinary course of business or that would have been created in essentially similar form

irrespective of the litigation’ are not protected.” Id. (quoting Adlman, 134 F.3d at 1202)).

Additionally, in Pacific Gas & Electric, this Court discussed a line of cases describing

the proper standard for identifying “dual-purpose” documents, which are prepared for concurrent

purposes, not simply for litigation. Id. at 797–98. In the first case, the District Court for the

Northern District of Nevada held documents prepared as part of an aircraft manufacturer’s

investigation into a crash of one of its planes did not gain work product protection. Soeder v.

Gen. Dynamics Corp., 90 F.R.D. 253, 255 (D. Nev. 1980). In addition to preparing for litigation,

the manufacturer had an “equally reasonable desire . . . to protect future pilots and passengers of

its aircraft, to guard against adverse publicity in connection with such aircraft crashes, and to

promote its own economic interests by improving its prospect for future contracts for the

production of said aircraft.” Id. Therefore, that court found because those documents were

investigative, they were not subject to the work product doctrine. See id. In the second case,

Stout v. Illinois Farmers Ins. Co., 150 F.R.D. 594, 602 (S.D. Ind. 1993), aff’d, 852 F. Supp. 704

(S.D. Ind. 1994), the District Court for the Southern District of Indiana analyzed whether an

insurer’s documents “for concurrent litigation and non-litigation uses” related to a fire loss claim

were protected under the work product doctrine. That court reasoned:

If a document or thing would have been created for non-litigation uses regardless

of its intended use in litigation preparation, it should not be accorded work product

protection. Because the document would have been created for non-litigation

reasons anyway . . . the document’s release in discovery would not contravene the

policies supporting the work product rule.

Id. at 604. Thus, the court “presume[d] that documents which were produced by an insurer for

concurrent purposes before making a claims decision would have been produced regardless of

litigation purposes and therefore do not constitute work product.” Id. at 605.

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This Court held in Pacific Gas & Electric, “[d]ocuments created by plaintiff ‘in the

ordinary course of business or that would have been created in essentially similar form

irrespective of’ the potential adversarial aspects” of the proceedings were not protected. 69 Fed.

Cl. at 805 (citing Adlman, 134 F.3d at 1202). The court analyzed various documents listed in

plaintiff’s privilege log “for the purpose of permitting the parties to analogize these examples to

disputed documents not mentioned . . . to resolve any further discovery disputes involving the

work product doctrine.” Id.

In the second comparable Court of Federal Claims case addressing the work product

doctrine, Weston/Bean Joint Venture v. United States, the government filed a motion in limine,

arguing various exhibits were prepared in anticipation of litigation and accordingly protected

under the work product doctrine. 128 Fed. Cl. at 5. This Court applied the Adlman standards

and held, “[t]he challenged documents addressed to the validity of the plaintiff’s administrative

claims would have been created whether or not the claims ultimately ended up in litigation and

so were not prepared ‘because of’ anticipated litigation.” Id.

In the third comparable Court of Federal Claims case, Northrop Grumman, plaintiff

moved to “compel production of documents based on an alleged waiver of [work product]

privilege.” 80 Fed. Cl. at 651. In response, the government argued the relevant documents were

not subject to work product protection because they were prepared for the contracting officer

making a final decision on plaintiff’s claim. Id. at 652. This Court discussed the two approaches

to the work product determination and, agreeing with the Pacific Gas & Electric holding, found,

“under either formulation, documents that are prepared in the ordinary course of business or that

would have been created in essentially similar form irrespective of the litigation are not

protected.” Id. at 654–55 (quoting Pac. Gas & Elec. Co., 69 Fed. Cl. at 798) (internal quotation

marks omitted). Although the documents were marked “produced in direct or indirect

anticipation of litigation pursuant to the direction of the government attorney,” this Court stated,

“the court’s responsibility is to look at the essence of the document itself, and not be driven to

conclusions merely by a stamp affixed to the document.” Id. at 653, 655. This Court held the

documents were prepared in the ordinary course of business because the primary motivational

purpose for their creation was the contracting officer’s final decision. Id. at 656. This Court

accordingly found the documents not subject to work product protection. Id.

Finally, the ABA Work Product Treatise cites several district and circuit court cases

presenting similar fact patterns to the documents and emails at issue in this case. Epstein, supra,

at 1133 (citing Binks Mfg. Co. v. Nat’l Presto Indus., Inc., 709 F.2d 1109 (7th Cir. 1983); Willis

v. Westin Hotel Co., No. 85 Civ. 2056, 1987 WL 6155, at *1 (S.D.N.Y. Jan. 30, 1987); Scott

Paper Co. v. Ceilcote Co., 103 F.R.D. 591, 595 (D. Me. 1984); Grumman Aerospace Corp. v.

Titanium Metals Corp. of Am., 91 F.R.D. 84, 86 (E.D.N.Y 1981); Coastal Corp. v. Duncan, 86

F.R.D. 514, 515 (D. De. 1980). In Scott Paper Co., the District Court for the District of Maine

distinguished “reports prepared in response to an unfortunate event, that might well lead to

litigation” from “materials prepared as an aid to litigation.” 103 F.R.D. at 595 (emphasis in

original). In the documents at issue in that case, “the possibility of litigation is expressly

mentioned,” but “[i]n each instance, the document’s author expressed the hope that litigation

could be avoided.” Id. The court analyzed the term “settlement,” as used in the documents, and

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reasoned, “‘settlement’ in this context refers to a negotiated business settlement and not to the

settlement of a legal action.” Id.; see also Rupert v. United States, 225 F.R.D. 154, 157 (M.D.

Pa. 2004) (finding an appeals officer’s memorandum prepared “to evaluate a settlement with the

Plaintiffs . . . [was] not protected by the work-product privilege.”).

In Coastal Corp. v. Duncan, plaintiffs challenged the validity of certain Department of

Energy (“DOE”) regulations. 86 F.R.D. at 515. The DOE asserted work product privilege to

protect “pre-decisional, internal documents of a recommendatory or deliberative nature” from

production. Id. at 516. The DOE argued the documents were prepared when litigation was

“considered likely” and in “the context of DOE enforcement activities . . . the ‘likelihood of

litigation’ is very strong.” Id. at 522. The District Court for the District of Delaware held:

because DOE did “not point[] with specificity to the litigation anticipated by DOE attorneys in

preparing the documents,” it “failed to properly assert the attorney work-product privilege.” Id.

In Grumman Aerospace Corp., plaintiffs sought discovery of an economic analysis report

a “neutral fact-finder” prepared for the DoD to evaluate potential settlement of antitrust claims.

91 F.R.D. at 86. DoD asserted work product privilege, and the District Court for the Eastern

District of New York found “the very fact of settlement ordinarily presupposes the existence, and

assertion of identifiable claims that adversary parties prefer to settle rather than litigate.” Id. at

89. Moreover, settlement negotiations do not “require[] . . . the ‘adversary preparation’ the

doctrine protects.” Id. The court further reasoned since the DoD was contractually bound to

never use the report in litigation against the defendant, the report was not subject to protection.

Id. at 89–90.

In Willis, the defendant sought “the production of an accident report prepared by an

employee of its codefendant.” 1987 WL 6155, at *1. The District Court for the Southern

District of New York stated, “material prepared by non-attorneys in anticipation of litigation,

such as accident reports and other investigative reports, is immune from discovery only where

the material is prepared exclusively and in specific response to imminent litigation. The mere

contingency that litigation may result does not give rise to the privilege.” Id.; see also Harper v.

Auto-Owners Ins. Co., 138 F.R.D. 655, 663 (S.D. Ind. 1991) (“It is presumed that a document or

thing prepared before a final decision was reached on an insured’s claim, and which constitutes

part of the factual inquiry into or evaluation of that claim, was prepared in the ordinary and

routine course of the insurer’s business of claim determination and is not work product.”).

Finally, in Binks Manufacturing Co., the Seventh Circuit affirmed a district court order

compelling production and admission of two internal memoranda defendant’s in-house counsel

prepared. 709 F.2d at 1121. The first memorandum, prepared for defendant’s general counsel,

detailed mechanical problems defendant’s machinery experienced, which gave rise to the claim.

Id. at 1113. The second memorandum, prepared for defendant’s production manager, further

detailed the mechanical problems and provided the counsel’s opinion of the proper allocation of

responsibility between the parties. Id. The court considered letters the parties exchanged when

the memoranda were prepared, and while one letter’s tone was threatening, the court determined

it fell short of explicitly threatening litigation. Id. at 1120. The court reasoned, “while there may

have been the remote prospect of litigation . . . the appellant has failed to meet its burden of

proving that the memoranda were prepared . . . because of the prospect of litigation, or, that some

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articulable claim, likely to lead to litigation, had arisen,” even though litigation resulted. Id.

(emphasis and internal quotation marks omitted).

a. The Parties’ Arguments – Document One and Document Two

Plaintiffs argue Document One and Document Two are not subject to work product

protection 18 because “[t]he documents at issue here reflect Kennell’s historic involvement in the

Government’s discretionary payment program.” Pls.’ Mot. at 11. Additionally, Document One

and Document Two “were not created in anticipation of litigation with the [400 Hospitals] over

the discrepancies that they had identified because, by the time the documents were created, the

essential terms of a settlement had already been agreed to.” Id at 12. 19

In response, the government argues Document One and Document Two are subject to

work product privilege because “the fact that the documents are privileged is apparent on their

face.” Def.’s Resp. to Pls.’ Mot. at 13. Further, the “major strategy” the 400 Hospitals used to

“bring about both the discretionary payment process and the later [400 Hospitals] settlement was

the repeated and explicit threat of litigation.” Id. at 14. The government cites two letters and

two emails written prior to the discretionary payment process and three emails written after the

discretionary payment process, which it argues contain the “explicit threat of litigation” that lead

to Document One’s creation. 20 See id. at 3–4, 7–8, 13–14; see also supra pgs. 6–7 (quoting all

seven correspondences the government cites). Additionally, the government argues the “threat

of litigation had [not] been removed by September 22, 2011, before [Document One] and

[Document Two] were created.” Id. at 14. 21

18

Plaintiffs also argue Document One and Document Two are not subject to attorney-client privilege. Pls.’ Mot. at

10–22. During the 7 October 2019 oral argument, counsel for the government confirmed the government does not

assert the attorney-client privilege for Document One or Document Two. See Order, ECF No. 122. The Court

therefore does not address whether Document One or Document Two are subject to the attorney-client privilege.

19

Plaintiffs raise four other arguments why Document One and Document Two are not privileged if the Court finds

they are protected work product: (1) “[t]he Government’s voluntary production of documents, and its lack of

objection to testimony by Kennell and Witsberger, relating to the Kennell Study and the discretionary payment

program operates as a waiver of any possible work product protection”; (2) the government’s production of the

documents waived any protection because “the Government’s process to screen for work product and privilege was

insufficient” and “the Government did not take prompt steps to rectify the disclosure, instead waiting over two

weeks to assert a claim of work product protection”; (3) “providing [a government employee] with a copy of

[Document One] months after it was created, and providing him with both documents after the settlement agreement

was signed, when litigation was not threatened, the Government waived any work-product protection that the

documents may have had”; and (4) even if the documents are protected work product, “they are necessary to

impeach the false testimony of Kennell and Witsberger” and “are necessary to aid Plaintiffs, and ultimately this

Court, to quantify the underpayment resulting from the Government’s exclusion of categories of outpatient services

besides radiology.” Id. at 16–17, 21–22.

20

The government cites five emails and two letters: 26 July 2010 letter from C. Mitchell Goldman to Mr. Seaman;

19 November 2010 email from Mr. Brodek to Mr. Seaman; 19 January 2011 letter from Mr. Brodek to Rear Admiral

Christine Hunter; 2 February 2011 email from Mr. Brodek to Mr. Seaman; 16 September 2011 email from Mr.

Brodek to Mr. Hutter; 21 September 2011 email from Mr. Brodek to Mr. Hutter; 26 September 2011 email from Mr.

Brodek to Mr. Hutter. See Def.’s Resp. to Pls.’ Mot at 3–4, 7–8.

21

In response to plaintiffs’ four other arguments, the government argues: (1) “[t]he fact that the Government has

permitted plaintiffs broad discovery into the non-privileged aspects of this case does not operate as a privilege

waiver”; (2) the government did not waive privilege because Document One was identified and withheld 16 times

and Document Two 12 times, their disclosure was inadvertent, and two weeks is not “an inappropriately long period

of time” to seek clawback; (3) the government did not waive privilege by disclosing the documents to one of its

-17-

b. Analysis – Document One and Document Two

i. Document One

Although the government argues Document One’s privilege is apparent on its face, “[t]he

court’s responsibility is to look at the essence of the document itself, and not . . . a stamp affixed

to the document.” Northrop Grumman, 80 Fed. Cl. at 655. Therefore, the Court must determine

“whether the material sought to be protected from discovery was prepared in anticipation of

litigation or was prepared in the ordinary course of business or for other purposes.” Pac. Gas &

Elec. Co., 69 Fed. Cl. at 790 (quoting Allendale Mut. Ins. Co., 145 F.R.D. at 86) (internal

quotation marks omitted). “‘[D]ocuments that are prepared in the ordinary course of business or

that would have been created in essentially similar form irrespective of the litigation’ are not

protected.” Id. at 798 (citing Adlman, 134 F.3d at 1202).

The Court initially reviews the factual circumstances surrounding Document One’s

creation. First, the Court considers the nature of the government’s hospital payment business

during TRICARE’s recalculation and discretionary payment process. Prior to the 25 April 2011

Notice, TRICARE’s overarching goal was to avoid litigation by reconciling previous

underpayments the 400 Hospitals identified. Consistent with this goal, the recalculation Notice

stated TRICARE “review[ed] payments for hospital services . . . [and] has determined that, for

radiology services . . . looking at the Medicare reimbursement methodologies in existence prior

to adoption of Medicare OPPS in 2000, . . . some radiology services were underpaid in

comparison,” and “[c]onsistent with TRICARE policy under statute to pay similar to Medicare,

we have determined that discretionary adjusted payments may better reflect the Medicare

payment amounts.” Ingham Reg’l Med. Ctr., 874 F.3d at 1344. Additionally, Step 8 of the

Notice’s nine-step review process detailed TRICARE would provide a written response to all

hospitals who submitted a request for analysis of the claims, which “would provide the

calculated discretionary adjusted payment and the calculations from which the adjustment was

derived.” Id. at 1345 (internal quotation marks omitted). Further, Step 8 provided, “[a]ny

questions [about the response] should be accompanied by detailed explanation of the alleged

errors and the proposed corrections with supporting documentation.” Ingham Reg’l Med. Ctr.,

126 Fed. Cl. at 42. Through this internal review process, TRICARE sought to identify payment

discrepancies and made the business decision to allow hospitals to submit their TRICARE

payments for recalculation review.

TRICARE’s invitation for participant hospitals to submit claims for review is comparable

to business decisions insurance companies make during internal claims evaluation processes.

When an insurer receives a claim, part of its internal business process is to undertake

investigatory steps to evaluate the claim. This internal review process is conducted as a key

component of its business to assure the correct payment is made to the claimant. Other federal

employees because “[i]t was necessary for [him] to have access to information regarding the proposed settlement”;

and (4) “[n]o [e]xceptional [c]ircumstances [w]arrant [d]iscovery [o]f [Documents One and Two]” because

“plaintiffs failed to collect and preserve all of their own data in order to prove their claims” and this “does not now

mean that plaintiffs now have a substantial need justifying access to privileged information.” Def.’s Resp. to Pls.’

Mot. at 14, 16–20 (emphasis omitted).

-18-

courts have dealt with documents similarly created from internal review and have likewise held

those internal documents were prepared as part of a business process.

As this Court discussed in Pacific Gas & Electric, in Stout, the District Court for the

Southern District of Indiana stated, “[i]f an insurer anticipates litigation over a pending claims

decision and undertakes extra-ordinary investigations for the purpose of ensuring a correct

decision, the resulting documentation is not work product because the insurer generated the

reports to use in evaluating the claim.” Stout, 150 F.R.D. at 598. In the evaluation process,

“[m]any documents are produced ‘because of’ anticipated litigation, in the sense that they would

have not been created but for the prospect of litigation, but they were not created to prepare for

that litigation.” Id.; see also Harper, 138 F.R.D. at 663 (“It is presumed that a document or thing

prepared before a final decision was reached on an insured’s claim, and which constitutes part of

the factual inquiry into or evaluation of that claim, was prepared in the ordinary and routine

course of the insurer’s business of claim determination and is not work product.”). The ABA

Work Product Treatise similarly notes, “the very nature of an insurer’s business [is] to

investigate and evaluate merits of claims . . . in the ordinary course of an insurer’s business.”

Epstein, supra, at 1101. Here, just like an insurer’s claim investigation, DoD investigated

hospitals’ underpayment claims further before making a payment determination. During the

evaluation, both internal communications and communications with the parties are expected, and

these communications are generated as part of the repayment evaluation process. While there

may have been communication exchange between the parties regarding “settlement” after the

Notice, the comments were related to calculation review regarding repayment. The ABA Work

Product Treatise notes any time insurance coverage is considered, “factual inquiry into or

evaluation of a claim . . . are produced in the ordinary course of an insurer’s business.” Id.

Similarly in this case, when the Notice was posted, the government’s business focus was to

recalculate data to reconcile any past discrepancies in its payments to hospitals. Recalculating

TRICARE payments therefore became the government’s business during the discretionary

payment period, and any additional steps were in furtherance of this business goal.

The Court next considers whether Document One was prepared in anticipation of

litigation. The government argues three 2011 emails (16 September, 21 September, and 26

September) threatened litigation after the 400 Hospitals disputed the amount of proposed

payment adjustment. Def.’s Resp. to Pls.’s Mot. at 7–8. The government argues it was this

explicit threat of litigation which led to Document One’s creation, and the threat of litigation was

not removed prior to its creation. Id. at 14. 22

The 2011 emails discuss the benefits of agreeing on calculation figures to avoid disputes.

The ABA Work Product Treatise cites cases with comparable facts in the insurance context,

including Scott Paper Co., discussing whether documents prepared after an accident are subject

to work product protection. Epstein, supra, at 1133. The Scott Paper Co. court distinguished

22

“Paul Hutter, and [the 400 Hospitals] attempted to reconcile their competing calculations . . . and [the 400

Hospitals] repeatedly tied this separate settlement process to an explicit threat of litigation, including the following

correspondence: [a] September 16 2011 email . . . [a] September 21, 2011 email . . . [a] September 26, 2011 email.”

Def.’s Resp. to Pls.’s Mot. at 8–9. “[I]n the face of threatened litigation by [the 400 Hospitals], on September 30,

2011, Mr. Kennell provided DHA General Counsel Paul Hutter with [Document One].” Id. at 8.

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between “reports prepared in response to an unfortunate event that might well lead to litigation”

and “materials prepared as an aid to litigation.” Scott Paper Co., 103 F.R.D. at 595 (citing Binks

Mfg. Co., 709 F.2d at 1120); see also Soeder, 90 F.R.D. at 255 (finding an “in-house” accident

report prepared for a purpose other than for litigation was not protected). Although the

“possibility of litigation [was] expressly mentioned . . . the document’s author expressed the

hope that litigation could be avoided,” and held the documents were not protected. Id. at 596. In

this case, prior to the 2011 emails, between 14 July 2011 and 2 August 2011, the parties worked

to clarify discrepancies identified in their respective recalculation analyses. At the time the 2011

emails were exchanged, there was no prospect of litigation because the letter and Notice

initiating the discretionary payment process were sent to expressly avoid litigation. Although the

2011 emails mention “litigation” and “settlement,” as discussed in Scott Paper Co., the term

“settlement” in this context refers to a negotiated business settlement, not the settlement of a

legal action, because the government sought to correct payment errors and avoid litigation.

When parties engage in a negotiated business settlement, “the very fact of settlement ordinarily

presupposes the existence, and assertion of identifiable claims that adversary parties prefer to

settle rather than litigate.” Grumman Aerospace Corp., 91 F.R.D. at 90. The 2011 emails

demonstrate the authors hoped litigation could be avoided and refer to the term “settlement” as a

negotiated business settlement to bring finality to payment adjustments.

Moreover, steps businesses take “to ensure that their current or future conduct conforms

to the law or contractual obligations cannot be held to constitute steps in preparation for

litigation merely because there is a substantial prospect of litigation if another party believes they

have failed.” Stout, 150 F.R.D. at 598. Here, the 2011 Notice stated, “[c]onsistent with

TRICARE policy under statute to pay similar to Medicare, we have determined that discretionary

adjusted payments may better reflect the Medicare payment amounts.” See Ingham Reg’l Med.

Ctr., 874 F.3d at 1344. Consequently, the government’s efforts to better comply with the statute,

including analysis it procured in Document One, cannot constitute preparation for litigation.

As the ABA Work Product Treatise summarizes, multiple cases conclude where there

may be a prospect of litigation, a party must meet its burden to demonstrate documents were

prepared because of the prospect of litigation. Epstein, supra, at 1133; see also Binks Mfg. Co.,

709 F.2d at 1120. In Binks, the litigation concerned defective contract performance. Binks Mfg.

Co., 709 F.2d at 1111. An attorney for the purchaser, Presto, prepared two letters. The attorney

sent the first letter to Presto’s General Counsel, describing a conversation between three Presto

corporate officers detailing the mechanical problems Presto experienced operating machinery.

Id. at 1113. The attorney sent the second letter to Presto’s Production Manager, containing a

detailed list of the system’s malfunctions, as well as the attorney’s opinion concerning the

allocation of responsibility between Presto and Binks regarding the machinery breakdowns. Id.

Afterwards, “Binks and Presto made several unsuccessful attempts to reach a negotiated

settlement” before “Binks filed a complaint seeking recovery under the contract for the balance

of the purchase price.” Id. The court analyzed the events leading to the preparation of the

memoranda, including letters the companies sent to each other. The first letter, which Binks sent

to Presto, “request[ed] full payment of the [s]ystem’s purchase price” and if not paid, Binks

would send a team to “dismantle and remove the equipment.” Id at 1119. Presto responded by

sending Binks a letter, which said in relevant part:

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It should be specifically noted that your proposed avenues of resolving this matter

are not available. We have already indicated that we shall withhold further payment

to set off against our damages. . . . If you persist in your choice not to make the

necessary corrections, we shall have to proceed on our own and continue to hold

you fully responsible for any damages and expenses incurred.

Id. at 1120. The court observed although the letter’s tone was threatening, it fell short of

threatening litigation. Binks Mfg. Co., 709 F.2d at 1120. The court held the letters were not

privileged, reasoning “while there may have been the remote prospect of litigation . . . the

appellant has failed to meet its burden of proving that the memoranda were prepared . . . because

of the prospect of litigation, or, that some articulable claim, likely to lead to litigation, had

arisen.” Id. (emphasis and internal quotation marks omitted).

In this case, the 2011 emails mention “litigation,” but they also discuss the benefits of a

negotiated business settlement to avoid litigation. Def.’s Resp. to Pls.’ Mot. at App17. The

government argues it was the “explicit threat of litigation” in the 2011 emails which led to

Document One’s creation. Id. at 7–8. While there may have been a remote prospect of litigation

at the time of Document One’s creation, similar to Binks, the communications leading up to the

creation of the document contained demands as to what each party wished to receive from the

other, but the substance of the communications did not rise to the level of an articulable claim

likely to lead to litigation. Binks Mfg. Co., 709 F.2d at 1120. Here, in the communications prior

to Document One’s creation and the 2011 Notice, Mr. Brodek stated in his 2 February 2011

email to Mr. Seaman that litigation was not “in either our clients’, nor TRICARE’s, best

interest,” and he offered a proposal he thought “avoids these undesirable outcomes, and allows

for a prompt, and final, resolution of this matter.” Def.’s Resp. to Pls.’ Mot. at App17. Mr.

Brodek offered his proposal on how to avoid litigation, and while there may have been a future

remote prospect of litigation, the government fails to identify an articulable claim likely to lead

to litigation as Document One was created during the government’s factual investigation into

payment adjustments for the 400 Hospitals.

Additionally, the Court in Binks found the letter at issue in that case was not protected by

the work product doctrine even though it contained attorney mental impressions. Binks Mfg. Co.,

709 F.2d at 1113. Conversely, in this case, Document One did not contain attorney mental

impressions, but was nonetheless marked “Attorney-Client Protected Work Product Not To Be

Disclosed.” Pls.’ Mot at A29–A37. Although marked privileged, the Court reviews the

substance of the document; here, the communications exchanged prior to Document One’s

creation were merely a back-and-forth dialogue to identify payment discrepancies to reach a

business settlement recalculation across all payees.

Finally, this Court’s opinion in Pacific Gas and Electric discussed a line of cases

describing the proper standard for “dual-purpose” documents, such as Document One, which are

prepared for concurrent purposes, not simply for litigation. 69 Fed. Cl. at 797–98. First, in

Soeder, an “in-house” report prepared in response to an airplane crash was not deemed protected

work product despite the defendant anticipating litigation. 90 F.R.D. at 255. The Court held

litigation does not automatically grant work product protection because defendant had an

“equally reasonable desire . . . to improve its aircraft products, to protect future pilots and

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passengers of its aircraft, to guard against adverse publicity in connection with such aircraft

crashes, and to promote its own economic interests by improving its prospect for future

contracts.” Id. Second, in Stout, the insurance company had an equally reasonable desire to

avoid litigation and provide a correct claims decision, but any extra investigation was to arrive at

a calculation and not to form a litigation strategy. 150 F.R.D. at 598. Similar to these cases,

here, Document One may have assisted if the case proceeded to litigation to provide evidence of

miscalculations in the discretionary payment process, but the government had an equally

reasonable desire to provide a correct adjustment to its TRICARE participants. When Document

One was created, the government’s primary focus was the calculation, and recalculation, of

TRICARE payments which became the government’s business during the discretionary payment

process. The parties communicated to identify discrepancies in the recalculation process.

Although emails mention the term “litigation,” the emails’ tone, language, and history

demonstrate the authors’ hope to avoid litigation. The emails refer to the term “settlement” as a

negotiated business settlement to agree on a recalculation figure. Although Document One may

have served a dual-purpose to provide evidence of miscalculations, Document One would have

been produced regardless of any litigation to ensure the correct payment was made; any

additional research the government conducted to make a correct payment determination is not

protected work product.

ii. Document Two

Document Two does not indicate its author or date of creation. See Pls.’ Mot. at A38.

The government argues circumstantial evidence establishes Mr. Hutter, the General Counsel of

DHA, as Document Two’s author, but also states metadata shows Ms. Walters is the original

author. Def.’s Resp. to Pls.’ Mot. at 8–9. The government did not submit an affidavit from Mr.

Hutter establishing he is the author of Document Two. Regardless of authorship, documents

prepared by non-attorneys do not immediately lose work product protection. See RCFC

26(b)(3)(A) (preventing a party from discovering “documents and tangible things that are

prepared in anticipation of litigation or for trial by or for another party or its representative

(including the other party’s attorney, consultant, surety, indemnitor, insurer, or agent”)).

The government argues Document Two was created because the 400 Hospitals threatened

litigation. No date of creation is listed for Document Two, but its figures concern TRICARE

recalculation, and Document Two comprises accounting numbers for the 3,500 hospitals who

participated in the TRICARE program, so the date range is likely between 1 January 2011 and 30

September 2011 when Document One was produced. See Pls.’ Mot. at A38. In this time period,

the government’s primary focus on payments was recalculating data to reconcile past

discrepancies. For payment recalculation analysis, like the analysis during the discretionary

payment process, the government required an extrapolated compilation of numbers previously

calculated. Similar to an insurance company’s internal claims evaluation process, documents

prepared by an insurer in evaluating claim fulfillment “would have been produced regardless of

litigation purposes and therefore do not constitute work product.” Pac. Gas & Elec. Co., 69 Fed.

Cl. at 797 (quoting Stout, 150 F.R.D. at 598); see also Harper, 138 F.R.D. at 663 (“It is

presumed that a document or thing prepared . . . which constitutes part of the factual inquiry into

or evaluation of that claim, was prepared in the ordinary and routine course of the insurer’s

business . . . and is not work product.”). Here, the government took extra investigatory steps to

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compile calculations as part of a business decision, which arose from the discretionary payment

process in mid-2011. This documentation, at a time when the government compiled calculations

based on evaluation of recalculations, relates directly to the government’s business of

recalculating data to reconcile past discrepancies. Document Two is a user-friendly way of

capturing estimated summary statistics based on estimated final values for listed factors on the x

and y axes of the table. Although Document Two’s title contains the word “settlement,” the

calculations in the document refer to a negotiated business recalculation settlement, not the

settlement of a legal action, as the comments were related to repayment review. Further,

Document Two only contains calculations compiled during the discretionary payment process

and does not contain any attorney mental impressions or legal strategy.

iii. Document One and Document Two

Document One and Document Two’s calculations relate to the government’s business

during the discretionary payment process and were part of a business decision prepared to

provide extrapolated calculations regardless of litigation threat. Like the insurance context, if an

insurer anticipates litigation and takes extra investigatory steps to ensure a correct decision, the

documents are produced for use in evaluating claim fulfillment and not subject to work product

protection. Therefore, both documents are not subject to work product protection. This is

consistent with Supreme Court and Federal Circuit precedent as the documents were prepared as

part of a business recalculation and no part concerned a lawyer’s preparation with an “eye

towards litigation.” Hickman, 329 U.S. at 510–11 (Work product doctrine is intended to allow a

lawyer to develop a legal strategy “with an eye towards litigation”); Nobles, 422 U.S. at 238 (“At

its core, the work-product doctrine shelters the mental processes of . . . attorney[s], providing a

privileged area within which [they] can analyze and prepare [their] client’s case.”); In re

EchoStar Commc’ns Corp., 448 F.3d at 1301 (“[T]he work-product doctrine encourages

attorneys to write down their thoughts and opinions with the knowledge that their opponents will

not rob them of the fruits of their labor.”). RCFC 26(b)(3) prevents a party from discovering

“documents and tangible things that are prepared in anticipation of litigation or for trial by or for

another party or its representative (including the other party’s attorney, consultant, surety,

indemnitor, insurer, or agent).” The ABA Work Product Treatise explains the privilege applies

“not to all materials in an attorney’s files, but only to those materials that were prepared in

anticipation of litigation or for trial.” Epstein, supra, at 1082. Further, “documents or other

materials prepared looking toward, or in implementation of, a settlement often have been held

not to be in anticipation of litigation.” Id. at 1132. In this context, “‘documents that are prepared

in the ordinary course of business or that would have been created in essentially similar form

irrespective of the litigation’ are not protected.” Pac. Gas & Elec. Co., 69 Fed. Cl. at 798

(quoting Adlman, 134 F.3d at 1202).

c. The Parties’ Arguments – Email One; Email Two; and Email Three

Plaintiffs argue the three emails are not subject to work product protection because they

were “from an employee of a government contractor to another employee of that contractor,” and

“[a]gency counsel is not listed as a recipient on any of the three emails, nor is there any

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indication that agency counsel requested the information contained in them.” Pls.’ Mot. to

Comp. at 14. 23

The government argues the three emails are subject to work product protection because it

was the explicit threat of litigation which led to Ms. Witsberger conducting the initial data

analysis for Mr. Kennell, and this analysis led to the creation of the emails. Def.’s Resp. to Pls.’

Mot. to Comp. at 11–12.24 Additionally, the government argues pursuant to RCFC 26(b)(5)(B),

the Court should strike all reference to the challenged material plaintiffs’ expert used as a basis

for the opinions in his report. Id. at 18.

In reply, plaintiffs argue: (1) the government failed to provide any affidavits to

substantiate its argument that agency counsel directed Ms. Witsberger to perform tasks related to

the three emails; (2) the motion to strike plaintiffs’ expert report which relies upon disputed

documents should be denied because “the documents in question are not privileged and, if they

were, that privilege was unequivocally waived by [the government’s] actions and inactions”; and

(3) if the motion to strike is granted, it will prejudice plaintiffs as “[p]laintiffs have relied upon

the contents of all of the Witsberger emails as well as the deposition testimony of Mr. Kennell

and Ms. Maxey regarding some of those emails in framing their case against defendant.” Pls.’

Reply to Def.’s Resp. to Pls.’ Mot. to Comp. and Pls.’ Opp’n to Def.’s Mot. to Strike, ECF No.

116 at 3, 10, 19–21.

d. Analysis – Email One; Email Two; and Email Three

i. Email One

On 26 August 2011, Ms. Witsberger sent Email One to Mr. Kennell with the subject line

“HOPD Rad Adj - D. Morris - Childrens Hosp of the Kings Daughters, Norfolk VA TIN

[redacted] zip 23507.” Pls.’ Mot. to Comp. at Appx137. The government argues the analysis in

this email was conducted due to the explicit threat of litigation and was then sent to Mr. Kennell,

who created Document One. See Def.’s Resp. to Pls.’ Mot. to Comp. at 12.

Prior to Email One’s creation, as detailed for Document One, the parties exchanged

emails discussing recalculation to address alleged underpayments and the discretionary payment

process. At this time, after DoD sent the letter and Notice, the government’s primary focus was

23

Plaintiffs raise two other arguments why the three emails are not privileged if the Court finds they are protected

work product: (1) the government waived work product protection because it intentionally disclosed the emails, and

even if their disclosure was inadvertent, “marking . . . two of the documents at depositions, without objection from

government counsel, was a clear waiver as to those documents”; and (2) plaintiffs’ substantial need for the three

emails is sufficient to overcome work product protection because the emails are highly relevant to plaintiffs’

allegations that “in calculating the amounts owed to hospitals during the discretionary payment process Kennell and

Associates failed to capture all of the relevant outpatient radiology data,” and plaintiffs do not have access to a

substitute for the three emails. Pls.’ Mot. to Comp. at 21, 23.

24

In response to plaintiffs’ other arguments, the government argues: (1) it did not waive privilege by inadvertently

disclosing the three emails because they “contain absolutely no indications that they are work product, and because

they overtly appear to be something they are not,” it was not readily apparent that the documents were privileged

prior to their disclosure; and (2) no exceptional circumstances justify their discovery because “[t]he fact that

plaintiffs neglected to pursue discovery that they deem to be relevant to their claims is not a valid reason for them to

now invade the work product privilege.” Def.’s Resp. to Pls.’ Mot. to Comp. at 14, 16 (emphasis omitted).

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recalculating TRICARE payments, which became the government’s business during the

discretionary payment process. The parties subsequently exchanged calculations to identify any

differences in recalculating their data. At this point, the parties communicated as part of the

repayment process, when there was no prospect of litigation because the process was intended to

avoid litigation. To achieve a correct recalculation, the non-attorney research Ms. Witsberger

provided to Mr. Kennell analyzed different calculations in the discretionary payment process—a

process the government pursued for all payees. Here, Email One contains research into specific

problems identified in the discretionary payment process. Email One contains no attorney

mental impressions or legal strategy, and only contains analysis into the discretionary payment

process. This documentation, produced in the ordinary course of business, does not

automatically gain work product protection because “‘documents that are prepared in the

ordinary course of business or that would have been created in essentially similar form

irrespective of the litigation’ are not protected.” Pac. Gas & Elec. Co., 69 Fed. Cl. at 791

(quoting Adlman, 134 F.3d at 1202). While communications prior to Email One’s creation

contain back and forth argument regarding a negotiated business settlement, the comments only

related to repayment. This non-attorney research contained in Email One generated solely for

the purpose of claim investigation is not subject to work product protection. See Harper, 138

F.R.D. at 663 (finding an insurer’s investigative records were not subject to work product

protection because the records pertained to investigation before a claim decision was made).

ii. Email Two

On 2 September 2011, Ms. Witsberger sent Email Two to Mr. Kennell with the subject

line “Duane Morris Latest Email.” Pls.’ Mot. to Comp. at Appx123. Ms. Witsberger “examined

the issue in the email regarding deleting CPT codes billed on a global basis that are purely

technical,” and analyzes why codes were excluded from Kennell’s analysis and why Duane

Morris may not have realized why certain fields were not populated. Id. The government argues

this analysis was conducted due to the explicit threat of litigation and sent to Mr. Kennell who

produced Document One. Def.’s Resp. to Pls.’ Mot. to Comp. at 12.

As discussed supra for Email One, the government’s primary focus was recalculating

TRICARE payments during the discretionary payment process. The parties exchanged

calculations to identify any data discrepancies to achieve a correct recalculation. The non-

attorney research Ms. Witsberger provided analyzed a specific issue relating to the government’s

business at the time of the discretionary payment process. Ms. Witsberger provided calculations

and explained why information was excluded from the initial Kennell study. Pls.’ Mot. to Comp.

at Appx123. At the time of its creation, the parties exchanged emails regarding repayment

calculations, and the non-attorney research relates directly to the recalculation analysis. Email

Two contains no attorney mental impressions or legal strategy, and its information directly

relates to the government’s business of providing a correct recalculation to TRICARE program

payees. This document therefore is not protected because “‘documents that are prepared in the

ordinary course of business or that would have been created in essentially similar form

irrespective of the litigation’ are not protected.” Pac. Gas & Elec. Co., 69 Fed. Cl. at 791

(quoting Adlman, 134 F.3d at 1202).

iii. Email Three

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On 13 September 2011, Ms. Witsberger sent Email Three to Mr. Kennell with the subject

line “TC and 76499 analysis – S and W.” Pls.’ Mot. to Comp. at Appx125. In Email Three, Ms.

Witsberger analyzes data for hospitals located in the southern and western United States. Id.

As discussed for Email One and Email Two supra, the government’s primary focus and

business was recalculating TRICARE payments during the discretionary payment process. The

parties discussed differences in their data prior to Email Three’s creation, and the non-attorney

research Ms. Witsberger provided to Mr. Kennell analyzed different calculations used in the

discretionary payment process. At the time of its creation, the parties exchanged emails

regarding repayment calculations, and the non-attorney research relates directly to the

recalculation analysis. Email Three contains no attorney mental impressions or legal strategy,

and its information directly relates to the government’s business of providing a correct

recalculated adjustment to TRICARE program payees. This document therefore is not protected

by the work product doctrine because it was created in the government’s ordinary course of

business. 25

iv. Email One; Email Two; and Email Three

When Email One, Email Two, and Email Three were created, the government’s primary

focus was recalculating TRICARE payments, which became the government’s business during

the discretionary payment process. The parties exchanged emails to identify discrepancies in the

recalculation process, and any additional research conducted in order to arrive at a correct

decision was a “negotiated business settlement.” Scott Paper Co., 103 F.R.D. at 596 (finding use

of the term “settlement . . . refers to a negotiated business settlement”); Epstein, supra, at 1125

(“[I]nternal audits and accident investigations [are] not to be work-product protected unless

litigation is clearly the primary motive.”) (emphasis in original). The three emails only contain

discretionary payment analysis and no attorney mental impressions for “preparation [of] [the

government’s] case.” Nobles, 422 U.S. at 238 (“At its core, the work-product doctrine shelters

the mental processes of . . . attorney[s], providing a privileged area within which [they] can

analyze and prepare [their] client’s case.”); Hickman, 329 U.S. at 510–11 (explaining work

product doctrine is intended to allow a lawyer to develop a legal strategy “with an eye toward

litigation”); In re EchoStar Commc’ns Corp., 448 F.3d at 1301 (“[T]he work-product doctrine

encourages attorneys to write down their thoughts and opinions with the knowledge that their

opponents will not rob them of the fruits of their labor.”). Therefore, the three emails are not

subject to work product protection.

III. Conclusion

25

The government’s response brief to plaintiffs’ motion for privilege determination notes original counsel for the

government concluded Email Two and Email Three were business “responses to routine challenges brought

pursuant to Step 8 of the [Discretionary Payment Process].” Def.’s Resp. to Pls.’ Mot. to Comp. at 5. The

government acknowledges the emails merely “reflect an analysis by Christina Witsberger . . . of the discrepancies

between the data submitted by several hospitals and the data that TMA had used to calculate each hospital’s

proposed adjustment.” Id. at 6.

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The Court hereby GRANTS: (1) Plaintiffs’ Motion for Determination that Certain

Documents Produced in Discovery are not Privileged or Subject to the Work Product Doctrine,

ECF No. 106; and (2) Plaintiffs’ Motion to Compel Deposition Testimony, ECF No. 109. The

Court hereby DENIES: (1) Defendant’s Motion to Seal Plaintiffs’ Motion to Compel, ECF No.

111; (2) Defendant’s Response to Plaintiffs’ Motion to Compel and Defendant’s Motion to

Strike Portions of Plaintiffs’ Expert Report that Rely Solely upon Privileged Material, ECF No.

113; and (3) Defendant’s Motion to Seal Plaintiff’s Reply to Defendant’s Response to Plaintiffs’

Motion to Compel and Plaintiffs’ Opposition to Defendant’s Motion to Strike, ECF No. 117.

The Court does not address plaintiffs’ remaining arguments regarding waiver of the work

product doctrine and exceptional circumstances regarding justification of their disclosure. As

this order is filed under seal pursuant to the protective order in this case and motions containing

arguments of privilege and attorney work product, the parties shall meet and confer to discuss

unsealing all motions and exhibits, or other reasons for related pleadings on these motions to

remain sealed. Additionally, the parties shall discuss the need for further discovery, including

deposition of Christina Witsberger, and a proposed schedule for all discovery and motions

extended by the Court’s 29 August 2019 order, ECF No. 122. On or before 27 January 2020,

the parties shall file a joint status report addressing: (1) the unsealing of pleadings and exhibits

related to the motions in this order; and (2) a proposed schedule for remaining discovery and

motions extended by the Court’s 29 August 2019 order, ECF No. 122.

IT IS SO ORDERED.

s/ Ryan T. Holte

RYAN T. HOLTE

Judge

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