United States District Court, C.D. Illinois
THE UNITED STATES OF AMERICA et al., ex rel. TRACEY SCHUTTE and MICHAEL YARBERRY, Plaintiffs and Relators,
SUPERVALU, INC., et al., Defendants.
SCHANZLE-HASKINS UNITED STATES MAGISTRATE JUDGE.
matter comes before the Court on Defendants' Motion for
Determination of Privilege and Inadvertent Production (d/e
146) (Motion). For the reasons set forth below, the Motion is
ALLOWED in part and DENIED in part.
Relators Tracy Schutte and Michael Yarberry bring this False
Claims Act case against Defendants Supervalu, Inc., and
related entities (Supervalu), alleging that Supervalu made
false claims to Medicare, Medicaid, and other federal and
state government health and welfare plans. Supervalu made the
claims for reimbursement for prescription drugs. Relators
allege that Supervalu misrepresented the Usual and Customary
price (“U&C” or “U and C”) on
these claims for reimbursement. Relators allege Supervalu
charged approximately $4.00 for certain 30-day generic drug
prescriptions ($4 prescription price) to customers who paid
cash through a price-matching program. This program matched
the prices that Walmart and other major retailers charged.
Relators allege that the $4 prescription price was in fact
Supervalu's Usual and Customary price for these generic
prescription drugs. Relators allege that Supervalu defrauded
the government programs by falsely representing on
reimbursement requests that its Usual and Customary prices
were higher than the $4.00 prescription price that cash
customers paid for the generic drugs under the price-matching
program. Relators claim that, because of these false
representations, the government programs overpaid Supervalu
on its prescription reimbursement claims. See generally
Plaintiffs' First Amended Complaint with Jury Demand
Pursuant to Federal and State False Claims Acts (d/e
33). Supervalu denies these allegations. See
generally Defendants' Answer to Plaintiffs' First
Amended Complaint with Jury Demand Pursuant to Federal and
State False Claims Acts (d/e 71).
course of discovery, Defendants Supervalu produced documents
to Relators. Supervalu withheld some documents and redacted
information from some documents based on claims of privilege,
including attorney-client privilege. Supervalu also produced
unredacted copies of some of withheld or redacted documents.
Supervalu asked Relators to return, or claw back, the
unredacted copies pursuant to Federal Rule of Civil Procedure
26(b)(5)(B), and paragraph 18(d) of the Stipulated Protective
Order entered February 7, 2017 (d/e 74). Supervalu stated
that it produced these documents inadvertently.
parties conferred on this issue, but could not resolve the
issue with respect to one complete email and portions of five
other emails (collectively the Emails). Supervalu asks the
Court to find that the Emails are privileged and to order
Relators to return the Emails to Supervalu. Relators do not
challenge Supervalu's claims that two of the Emails are
covered by attorney-client privilege, but still challenge
whether all the Emails were inadvertently produced in an
privilege law applies to this case because the Relators
assert federal claims against Supervalu. Wilstein v. San
Tropai Condominium Master Association, 189 F.R.D. 371,
375-76 (N.D. Ill. 1999). To establish the attorney-client
privilege, Supervalu must show that the Emails consist of:
(1) a confidential communication; (2) in connection with the
provision of legal services; (3) to an attorney; and (4) in
the context of an attorney-client relationship. United
States v. BDO Seidman, LLP, 492 F.3d 806, 815
(7thCir. 2007). The privilege only extends to
“those communications which ‘reflect the
attorney's thinking [or] are made for the purpose of
eliciting the lawyer's professional advice or other legal
assistance' fall within the privilege.”
Id. (quoting United States v. Frederick,
182 F.3d 496, 500 (7thCir. 1999)). Under
appropriate circumstances, the privilege can extend to
communications between non-attorneys who are properly privy
to the privileged information. United States v. Dish
Network, LLC, 283 F.R.D. 420, 423 (C.D. Ill. 2012). The
privilege further “only protects disclosure of
communications; it does not protect disclosure of the
underlying facts by those who communicated with the
attorney.” Upjohn Co. v. United States, 449
U.S. 383, 395 (1981). Supervalu has the burden to show that
the Emails are privileged. Towne Place Condominium
Association v. Philadelphia Indemnity Ins. Co., 284
F.Supp.3d 889, 895 (N.D. Ill. 2018).
attached, under seal, the unredacted versions of the Emails
as Exhibits M, N, and O to its Memorandum.
Defendants' Memorandum in Support of Motion for
Determination of Privilege and inadvertent Production (d/e
147) (Defendants' Memorandum), at 1 n.1; Sealed
Exhibits (d/e 149). Four of the disputed Emails are
included in Exhibit O. Defendants produced three redacted
versions of Exhibit O that Supervalu produced in discovery.
Relators' Response to Defendants' Motion for
Determination of Privilege and Inadvertent Production (d/e
157) (Relators' Memorandum), Sealed Exhibits
(d/e 159). Neither party filed the redacted versions of
Exhibits M and N. The correspondence attached to the
Relators' and Defendants' Memoranda, however,
identify the redacted portions of these two Emails.
Supervalu Exhibit M, Email from Maxine Johnson
to Ronald Richmond dated May 14, 2008 (unredacted version
Bates No. SVU00465079) (May 14, 2008 Email).
first Email, Supervalu employee Maxine Johnson responded to
an email from her subordinate Ronald Richmond. Richmond
sought advice on how to respond to an inquiry from a
third-party entity about Supervalu's corporate policy on
$4 generic drugs programs operated by other retailers.
Johnson told Richmond not to respond unless the third party
first disclosed what it intended to do with the information.
Supervalu does not claim a privilege to this portion of this
then wrote a sentence that Supervalu claims is privileged.
Supervalu redacted the sentence from the redacted version of
the Email. Supervalu described the sentence on its privilege
log as “Redacted email from M. Johnson to R. Richmond
requesting legal advice from inside counsel C. Morris
relating to Price Match program and U&C price.”
Defendants' Memorandum, Exhibit A, Privilege
Log Excerpt (Privilege Log).
Court finds that the sentence is not privileged. The
attorney-client privilege covers: (1) confidential
communication made to or from the attorney seeking or
receiving legal advice; or (2) a confidential communication
concerning the legal advice provided. See BDO Siedman,
LLP, 492 F.3d at 815-16; United States v.
McPartlin, 595 F.2d 1321, 1337 (7th Cir.
1979). Privileged communications may include communications
with parties who engage in a joint effort with a common legal
interest, and to the employees and agents of those parties.
BDO Siedman, LLP, 492 F.3d at 816. The ...