It Is Never Really Over: Bad Faith Leads To the Reopening of Discovery and Sanctions

It Is Never Really Over: Bad Faith Leads To the Reopening of Discovery and Sanctions

In this case involving the False Claims Act, whistleblowers, or relators, alleged that the defendants, a large company, falsified testimony and spoiled discovery affecting their claim. The case was initially brought by the relators who argued that the defendants used a third party computer program, Snappy, to manipulate dosing protocols to increase reimbursements by Medicare.

During discovery, a Rule 30(b)(6) witness was deposed, after being presented by the defendants as a person with the most knowledge of the computer software. This testimony would stand as the basis of discovery and arguments. A year later, the witness and the defendants claimed that the witness “misremembered” the details and the witness revised his testimony.  It was after this truth came out that the relators filed this motion for sanctions, claiming the defendants “pervasively and intentionally manipulated evidence and engaged in witness tampering in an attempt to hide the functions that Snappy performed during the relevant time period.”

The court ultimately sided with the relators and decided to reopen discovery and punish the defendants with sanctions. The court found that the actions of the witness and the defendants led the case astray during discovery by reasoning that either, at worst, the defendants purposely manipulated the discovery or, at best, they failed to act in correcting the issues. The court held that the relator’s evidence did not “unequivocally” demonstrate that the defendants committed the more “nefarious” level of discovery and refused to grant their request to strike defendants’ answer. However, it found the “forgetfulness” and altered testimony “highly suspect.” Thus, these actions showed bad faith and warranted the reopening of discovery and the cost of attorney’s fees against the Defendants.

Amanda is a third-year student at Seton Hall University School of Law, where she is pursuing a J.D. with a certificate in Health Law. Prior to law school, she was a 2011 magna cum laude graduate of Seton Hall University, where she earned Bachelor of Arts in Political Science and a minor in Philosophy. Presently, she is a law clerk at a small firm handling real estate and bankruptcy matters. After graduation, this native New Yorker hopes to work at a mid-sized firm in the Big Apple.

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Comments (1):

  1. It is interesting to see how seriously courts take ediscovery issues when evidence is being withheld or manipulated. In comparison to other areas of law, like family law, a case can be dismissed if there is non-compliance with discovery and sanctions are not awarded. However, attorneys’ fees may be awarded. A parallel is the good faith effort during discovery.

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