United States District Court, C.D. Illinois
UNITED STATES OF AMERICA, et al., ex rel Tracy SCHUTTE and MICHAEL YARBERRY, Relators,
SUPERVALU, INC., et al., Defendants.
SCHANZLE-HASKINS, UNITED STATES MAGISTRATE JUDGE
matter comes before the Court on Relators Tracy Schutte and
Michael Yarberry's Motion to Compel (d/e 109) (Motion).
For the reasons set forth below, the Motion is ALLOWED in
part and DENIED in part.
brought this case against Defendants Surpervalu, Inc., and
related entities (collectively Supervalu) for violation of
the False Claims Act, 31 U.S.C. § 3729 et seq.
Plaintiffs' First Amended Complaint with Jury Demand
Pursuant to the Federal and State False Claims Act (d/e 33)
(Amended Complaint). Relators allege that Supervalu
pharmacies intentionally misrepresented the Usual and
Customary (U&C) prices that the pharmacies charged for
medications in order to receive inflated reimbursements from
federally funded programs such as Medicare Part D, Medicaid,
and federal employee and retiree health insurance programs
(collectively Federal Programs).
Relators allege Supervalu established a Price Matching
Program in 2006 under which Supervalu pharmacies matched
discount prices offered by Walmart, Kmart, and other
competitors to customers paying cash for medications, but did
not include the discounted prices in Supervalu's
determination of its U&C prices. The U&C prices were
used to calculate the reimbursement amounts that the Federal
Programs paid Supervalu pharmacies for the medications
dispensed to covered individuals. The Relators allege that
the miscalculation of the U&C prices constituted a
fraudulent misrepresentation used to secure funds from the
federal government in violation of the False Claims Act.
Supervalu denied the allegations.
December 20, 2016, Relators served their First Set of
Requests to Produce on Supervalu. Memorandum in Support
of Motion to Compel (d/e 110) (Relators Memorandum),
Exhibit A, Relators' First Set of Requests for
Production of Documents to Defendants (Request). The
Request included the following requests relevant to this
1. All Documents and Communications Defendants submitted to
or received from the United States (including the United
States Department of Justice and the United States Department
of Health & Human Services, Office of the Inspector
General) and/or to any of the Plaintiff States since October
1, 2011 Relating to any of the allegations made or damages
sought in this action and/or to the Government's
investigation of this matter, including, but not limited to
Documents calculating damages to the Massachusetts Medicaid
program and any and all privilege logs. This request does not
seek production of documents that have previously been
produced by Defendants to Relators.
2. All Documents identifying Discount Programs offered by You
for any Drug, including but not limited to Documents that
contain the following information:
d. The Drugs covered in your Discount Program(s), including
product name, NDC, GCN, dosage, dates covered, and discount
amount offered, advertised or matched for each Drug. This
request includes any formularies, Competitors' price or
drug lists including those maintained at local stores, or
other Documents used or distributed by You to determine drugs
eligible for any price matching or other Discount Program.
e. Marketing or advertising information of any kind used to
publicize or advertise Your Discount Program(s), including:
signage (or facsimile thereof) displayed in your stores or on
Your store premises; information published in newspapers,
magazines, flyers, leaflets, on internet websites, Facebook
pages, radio, or television; and, or any other marketing,
advertising or promotional information used by You to promote
Your Discount Program(s).
15. Documents and Communications reflecting or concerning
Your determination or calculation of U&C price, Reported
U&C price, Negotiated Price, and/or Reported Negotiated
Price for all Drugs sold by You during the relevant time
period including Drugs in Your Discount Program(s) or
reimbursed by Government Health Programs. This request
includes, but is not limited to Documents related to Your
discussions or decisions regarding these prices, and any
Documents You reviewed or relied on in determining or
calculating these prices for each Third Party Payor,
including Government Health Programs. . . . .
19. Documents and Communications (including but not limited
to emails, reference manuals, handbooks, training materials,
directives, guidance, memoranda, or other rules and/or
instructions to pharmacy or IT staff) reflecting or
concerning Your policies and procedures regarding: . . . .
f. paying, processing, submitting or adjudicating cash
transactions for Drugs; g. paying, processing, submitting or
adjudicating claims for reimbursement of Drugs by Third Party
22. Documents and Communications reflecting or concerning
business and financial studies, analyses, reports, summaries,
memoranda, opinions, and recommendations relating to or
concerning: the calculation of U&C price, Reported
U&C Price, Negotiated Price or Reported Negotiated Price;
Your Discount Program(s), including price matching and
whether discount prices should be included in calculations of
Reported U&C Price or Reported Negotiated Price;
31. All Documents that discuss or refer to Your
competitors' Discount Programs, including programs under
which Walmart or any other competitor offered generic
prescription drugs for $4 for a 30-day supply, $8 for a
60-day supply, or $10 or $12 for a 90-day supply or brand
drugs during the Relevant Time Period, including any prices
lists or formularies of Drugs offered at a discount.
42. For the Relevant Time Period, Documents related to
compliance, fraud or abuse training related to ...