Shaun Thaxter, ALJ Ruling 2021-5 (HHS CRD Jun. 10, 2021)

RULING DENYING PETITIONER’S MOTION TO COMPEL AND GRANTING THE IG’s MOTION FOR A PROTECTIVE ORDER

In a letter dated December 31, 2020, the IG notified Petitioner, Shaun Thaxter, that she was excluding him from participating in Medicare, Medicaid, and all federal health care programs for 10 years pursuant to section 1128(a)(1) of the Social Security Act (Act).  The IG advised Petitioner that the exclusion arose from his “conviction in the United States District Court for the Western District of Virginia, of a criminal offense related to the delivery of an item or service under the Medicare or a State health care program, including the performance of management or administrative services relating to the delivery of items or services, under any such program.”

Petitioner timely requested a hearing. 

On April 12, 2021, Petitioner requested discovery, asking that the IG produce a wide range of documents relating primarily to the IG’s decision-making processes in excluding Petitioner and others convicted of similar offenses, and requiring the IG to name all of its employees and others involved in the IG’s decision-making process.  Specifically, he asks for:

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• All documents that the IG used during a three-year period (January 1, 2018 until December 31, 2020) to evaluate mandatory “exclusions, considered by [the IG] in determining whether to exclude Petitioner” and the length of Petitioner’s exclusion;
• For the same three-year period, all documents regarding Petitioner;
• Documents identifying any IG employee, contractor, or other agent involved in the decision to exclude Petitioner;
• For the last 21 years (since January 1, 2000), all exclusion notices based on felony and/or misdemeanor convictions for violations of the misbranding sections of the Food, Drug, and Cosmetic Act; and
• For the last 21 years (since January 1, 2000), all hearing records for exclusions that were based on felony and/or misdemeanor convictions for violations of the misbranding sections of the Food, Drug, and Cosmetic Act.  In the alternative, Petitioner wants access to the DAB E-file system for those exclusion hearing records. 

The IG has produced some of the requested documents – those relating to Petitioner’s criminal conviction, but objects to the bulk of the request.  As provided in the regulation governing discovery in exclusion cases, Petitioner asks me to compel discovery, and the IG asks for a protective order.  42 C.F.R. § 1005.7(e)(1). 

For the reasons discussed below, I deny Petitioner’s motion to compel and grant the IG’s motion for a protective order.

Discussion

Discovery here is limited, and, as movant, Petitioner must show that discovery should be allowed.  42 C.F.R. § 1005.7(e)(4).  He has not done so.  

Discovery is limited to those documents that are “relevant and material” to the issues before me.  42 C.F.R. §§ 1005.7(a) and (c).  Petitioner identifies no specific documents but instead describes broad categories, covering the IG’s deliberative processes and the exclusions she has imposed in other cases.  Petitioner has not shown that any particular document is relevant or material to the narrow issues before me, which are:  whether the IG has a basis for excluding Petitioner from participating in Medicare, Medicaid, and other federal healthcare programs; and whether the length of the exclusion, beyond five years, is reasonable.

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Petitioner argues that the deliberative documents he requests are relevant to show how the IG arrived at her determination.  However, the IG’s decision-making processes are not relevant and thus not subject to discovery.  42 C.F.R. § 1005.7(e)(2)(i).  The Act provides that my review here is de novo.  I make my decision based on the evidence adduced during these proceedings.  If I find that the IG has a valid basis for imposing this exclusion, I have no authority “to look beyond that basis to determine if the IG arbitrarily applied this particular mandatory exclusion authority to Petitioner but not to other individuals convicted of similar offenses.”  Benny R. Bailey, DAB No. 2935 at 11, 13, 15 (2019); see Act §§ 1128(f), 205 (b)(1);Valentine Okonkwo, DAB No. 2832 at 6 (2017); Dike H. Ajiri, DAB No. 2821 at 4 (2017); Mohamed Basel Aswad, M.D., DAB No. 2741 at 13 (2016) (holding that documents related to the IG’s decision to exclude are irrelevant and documents related to the length of exclusions in other cases have little, if any, relevance); Fady Fayad, M.D., DAB No. 2266 (2009), aff’d, Fayed v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011) (in a similar context, holding that the “ALJ proceeding is not an appellate or quasi-appellate review of the adequacy of the federal agency’s decision making process, [but] a de novo proceeding in which the ALJ determines the legality of the challenged determination based on the evidence presented in that proceeding.”).

For the same reason, Petitioner is not entitled to documents identifying the IG personnel involved in deliberations regarding his exclusion.  Petitioner argues that he needs the information so that he can consider whether to subpoena witness testimony.  P. Motion to Compel at 5.  But such testimony is simply irrelevant.  Bailey, DAB No. 2935 at 15.

I may also grant the IG’s motion for a protective order, and deny Petitioner’s motion to compel, if I find that the discovery sought is privileged.  42 C.F.R. § 1005.7(e)(2)(iv).  The IG points out that its internal deliberations, which include attorney-client communications, are protected from discovery by the deliberative process privilege and by the attorney-client privilege.  It is hard to argue that most, if not all, of the IG’s internal deliberations would not be protected by the deliberative process privilege.  After all, by definition, they are deliberative.  Petitioner nevertheless points out that, “consistent with standard discovery practice,” the IG should “provide a log or index identifying any documents withheld on the basis of privilege, with an explanation of the basis for that privilege.”  P. Motion to Compel at 7; see Rule 26(b), Fed. R. Civ. P.

The Board has not yet considered what, if anything, the IG must show in order to invoke the deliberative process privilege.  But the federal rules do not apply here, and the applicable regulation specifically excludes from discovery some of the documents likely covered by Petitioner’s discovery request:  interview reports or statements of those who will not be called as witnesses; analyses and summaries prepared in conjunction with the investigation or litigation of the case; otherwise privileged documents.  42 C.F.R. § 1005.7(d).  Ultimately, however, I need not decide whether any of these documents are exempt from discovery based on privilege, because Petitioner has not established that

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they are relevant and material.  Further, requiring the IG to sort through all of its deliberations, as Petitioner suggests, would be unduly burdensome and would unduly delay these proceedings.  See 42 C.F.R. § 1005.7(a), (e)(2)(i), (ii), (iii).

With respect to the documents from other exclusion cases, Petitioner maintains that they are relevant and material because they could confirm that he has been singled out for different treatment and because they could show that the term of his exclusion is unreasonable when compared to that imposed on others.  P. Motion to Compel at 6.  The Departmental Appeals Board has repeatedly rejected the notion that administrative law judges should be guided by the IG’s actions in other exclusion cases:  “[T]he I.G.’s enforcement action against . . . any . . . other individual has no bearing on whether the IG had a valid basis to exclude Petitioner.”  My review is limited to the exclusion action before me, “not to determining the I.G.’s reasons for not applying mandatory authority in a different case.”  I make my decision “regardless of what transpired in other cases.”  Benny R. Bailey, DAB No. 2935 at 10 (2019), citing Lena Lasher, aka Lena Contang, aka Lena Contang, DAB No. 2800 at 3 (2017), aff’d Lena Lasher v. U.S. Dept. of Health & Human Services, 2019 WL 1382961(D.D.C. Mar. 27, 2019); Jewish Home of Eastern Pa., DAB No. 2254 at 14 (2009) (“[A]llegations by a party against which an action has been taken that the treatment accorded to it is harsher than that accorded to others similarly situated do not prohibit an agency of this Department from exercising its responsibility to enforce statutory requirements.”) (internal quotations omitted), aff’d, Jewish Home of Eastern Pa. v. Ctrs. for Medicare & Medicaid Servs., 693 F. 3d 359 (3d Cir. 2012). 

The IG also maintains that requiring staff to sort through, manually, 21 years of exclusion appeals (more than 69,000 case files) in order to identify which meet Petitioner’s criteria would be unduly burdensome and would unduly delay these proceedings.  I agree.  As here, the IG’s notice letters do not refer to any specific criminal statute, such as the Food, Drug, and Cosmetic Act.  They refer generally to “a criminal offense” within the purview of the exclusion statute (e.g., “related to the delivery of an item or service under the Medicare or a state health care program”).  IG staff would thus not be limited to examining 69,000 notice letters (which, in itself, is a significant burden); they would be delving into all of those files, looking for evidence of a conviction under the Food, Drug, and Cosmetics Act. 

Finally, neither the IG nor I have the authority to grant Petitioner access to the Departmental Appeals Board’s e-file system.  See Bailey, DAB No. 2935 at 19.

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Conclusion

I deny Petitioner’s motion to compel and grant the IG’s motion for a protective order.

Petitioner has not demonstrated that the documents he seeks are relevant, as required by sections 1005.7(a) and (e)(2)(i).  Moreover, requiring the IG to produce the requested documents would be “unduly costly or burdensome” and would unduly delay these proceedings.  42 C.F.R. § 1005.7(e)(2)(ii), (iii).