Court Ruling Supports Employee Use of Company Documents to Report Alleged Fraud

In an April 2019 opinion from the Eastern District of Pennsylvania, the court denied a company’s motion to require its employee to return all documents the employee had taken for purposes of reporting a suspected fraud to the government. In United States ex rel. Behnke v. CVS Caremark Corp., No. 14-cv-824, the court addressed a motion filed by Aetna, Inc., the whistleblower’s employer, contending that she should have to return all documents she had provided to her attorneys and the government relating to an alleged fraud by CVS Caremark. CVS Caremark had served as a pharmacy benefits manager for Aetna, which was how the whistleblower had observed the allegedly fraudulent conduct.

Details About the Ruling

Aetna claimed that the documents had been wrongfully used by the whistleblower and that they contained “highly sensitive materials” that are privileged and/or contain confidential and proprietary business records and information. The court had previously denied Aetna’s motion to have the entire document dispute litigated under seal. In the recent ruling, the court found that Aetna had failed to refute the whistleblower’s showing that she had been circumspect in taking only documents needed to prove her claims, that she had not taken any documents that she did not have access to in the course of her normal work responsibilities and that she understood the company’s internal policies to permit appropriate reporting of suspected fraud.

Additionally, the court found that Aetna had totally failed to meet its burden of showing that any documents were, in fact, privileged or business confidential. Although expressing an “understanding” of Aetna’s preference to litigate those matters under seal, the court again stated that there were ways that Aetna could “sufficiently describe the purportedly privileged documents without revealing information that is itself privileged” and that privilege claims are routinely litigated on the record unless and until the court determines that an in camera review of documents is necessary.

Standards for Sustaining a Challenge to Employee Use of Company Documents

Although Aetna’s motion was denied without prejudice to refiling, the court set an appropriately high standard that Aetna would have to meet in order to have its motion granted. First, the court ordered that Aetna would have to identify the documents that it contends are confidential or proprietary, and also identify “any employment agreement or policy prohibiting disclosure.”

Additionally, any renewed motion would need to “set out any evidence that the documents at issue were not reasonably necessary to Relator in asserting a claim under the False Claims Act, or that Relator indiscriminately removed documents.” Absent those showings, the court recognized that the public interest embodied in the False Claims Act would preclude an order requiring plaintiff to return the documents.

About United States ex rel. Behnke v. CVS Caremark Corp.

Berger Montague has been litigating the underlying case on behalf of its client for over five years. The case was unsealed in April 2018 and is currently awaiting a ruling on defendants’ motion to dismiss. The action alleges false and fraudulent price reporting by CVS Caremark of prices for Medicare Part D drugs. In simplest terms, Relator alleges that CVS Caremark reported only the prices it was charging Aetna and other Medicare Part D plans for prescription drugs, but not reporting the actual prices that CVS Caremark was paying to the pharmacies for those drugs, as required under the Part D program. It is alleged that the unreported PBM spread was close to one billion dollars and that Part D beneficiaries were also overcharged hundreds of millions of dollars in co-pays and other cost-sharing.

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