Federal judge orders disclosure of emails with in-house counsel in FCA case

In light of a recent federal court order, companies - especially those at risk of False Claims Act suits - should revisit their protocol for handling communications with in-house counsel.\r
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In United States ex rel. Baklid-Kunz v. Halifax Hospital Medical Center, a federal magistrate judge ordered Halifax Hospital to produce communications involving in-house lawyers in an ongoing FCA suit against the hospital.1 The court determined that the communications contained 'business advice,' rather than 'legal advice,' or fell within the crime-fraud exception to the attorney-client privilege.\r
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The FCA suit was brought by an employee, alleging that Halifax had illegally paid compensation to physicians in violation of the Stark Law2 and the Anti-Kickback Statute.3 The United States intervened in the case and sought production of documents related to Halifax's statutory and regulatory compliance, including communications with the in-house compliance and legal departments.