I. INTRODUCTION

*1 The United States Department of Justice (“DOJ”) has brought this Petition for judicial enforcement of three administrative subpoenas issued to Respondents Fresenius Medical Care RX, LLC (“Fresenius RX”), Fresenius Medical Care Pharmacy Services, Inc. (“Fresenius Pharmacy”), and Fresenius Medical Care Holdings, Inc. (“Fresenius Parent”) (collectively, “Fresenius”) by the United States Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”).[1] Docket No. 1. The DOJ asserts that:

Id. at 1. For the reasons set forth below, the DOJ's Petition is GRANTED IN PART and DENIED IN PART.

II. LAW AND ANALYSIS

A. Compliance with Local Rules and the Practice and Procedure Manual

As a threshold matter, Fresenius contends that the DOJ has not complied with Local Rules 7.01(a)(1) and 37.01, as well as this Court's Practice and Procedure Manual, and Administrative Order 174-1. Docket No. 30, p. 10-12. The DOJ responds that those rules and procedures (with the exception of Administrative Order 174-1) apply only to motions, not to “a new civil action in the form of a petition for summary enforcement.” Docket No. 40, p. 6. While acknowledging that “there are analogous concepts at issue,” the DOJ maintains that “a petition is nevertheless an original action” and the fact that “Fresenius filed an answer to the petition proves this point.” Id.

It is clear that the cited Local Rules and section of the Practice and Procedure Manual all deal with motions, not petitions. See LR 7.01(a)(1), 37.01; Practices and Proc. Man. (Frensley, J.), III.D.5. Equally clear is the spirit of these rules, which is that counsel should engage in meaningful conversations about pre-trial disputes before bringing them before the Court. The DOJ points to a large volume of email and telephone correspondence between the Parties related to these issues, and it is apparent that much discussion has taken place.[2] Still, some issues (such as the dispute related to documents potentially covered by the European Union's General Data Protection Regulation, discussed below) seem possibly amenable to resolution between the Parties without Court involvement. Administrative Order 174-1 sets forth the “Default Standard for Discovery of Electronically Stored Information” in this District, and was entered on September 12, 2018. The United States correctly states that in this matter, the subpoenas were served and e-discovery was negotiated in 2017. Docket No. 40, p. 6-7. Fresenius does not dispute these dates. See Docket No. 30. Therefore, the Court will not deny the Petition based on failure to abide by Administrative Order 174-1. The Court will not deny this Petition based on a failure to adhere to rules that do not apply to it, but encourages the Parties to continue their discussions and attempt to cover all areas of dispute before returning to the Court for further guidance.

B. Enforcement of the Administrative Subpoenas

*2 At issue are twenty-three requests for production, delivered by three subpoenas to the three Fresenius Defendants. See Docket Nos. 4; Docket Nos. 4-1, 4-2, 4-3. The DOJ maintains that:

Docket No. 2, p. 19-20. While Fresenius maintains that it has fully complied with the subpoenas, DOJ argues that Fresenius's repeatedly inadequate privilege logs represent a form of non-compliance. Docket Nos. 2, 30, 40.

Following the Supreme Court precedent on enforcement of administrative subpoenas, the Court of Appeals for the Sixth Circuit has held that “a subpoena is properly enforced if 1) it satisfies the terms of its authorizing statute, 2) the documents requested were relevant to the DOJ's investigation, 3) the information sought is not already in the DOJ's possession, and 4) enforcing the subpoena will not constitute an abuse of the court's process.” In re Admin. Subpoena John Doe v. United States, 253 F.3d 256, 265 (6th Cir. 2001), citing United States v. Markwood, 48 F.3d 969, 980 (6th Cir. 1995).

1. Do these Subpoenas Comply with the Inspector General Act's Statutory Requirements?

Congress has made it “the duty and responsibility of each Inspector General ... to conduct, supervise, and coordinate audits and investigations relating to the programs and operations of such establishment ... with respect to the prevention and detection of fraud and abuse, in programs and operations administered or financed by such establishment, or ... the identification and prosecution of participants in such fraud or abuse ....” 5 U.S.C. App. 3 § 4(a)(1), (3) (“the Inspector General Act” or “the Act”). An Inspector General may begin an audit or investigation “merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.” United States v. Morton Salt Co., 338 U.S. 632, 642-43 (1950). To facilitate these audits and investigations, the Act provides as follows:

5 U.S.C. App. 3 § 6(a)(4).

The DOJ asserts that HHS-OIG is investigating whether Fresenius engaged in fraud or abuse with respect to federal healthcare programs administered by HHS, and that the subpoenas were issued in furtherance of that investigation. Docket No. 2, p. 17-18, citing Docket No. 4. Specifically, the DOJ argues that the subpoenas “seek information and documents necessary to its investigation focused on whether fraud or abuse occurred with respect to Fresenius' use of co-payment waivers, automatic refills, and refused medications.” Id. at 19, citing Docket No. 4, p. 3-4. Fresenius does not contend that the subpoenas do not comply with the statutory requirements of the Inspector General Act. See Docket No. 30. But, Fresenius maintains that the Act does not authorize enforcement in this case, because Fresenius has not engaged in “contumacy or refusal to obey.” Docket No. 30, p. 10. Fresenius argues that it has produced responsive documents and that the DOJ “cites no case where a Petition for Summary Enforcement was used for the sole purpose of seeking a revised privilege log or in camera review where the respondent complied with all requests.” Id. As discussed below, some of the deficiencies in Fresenius's privilege log interfere with the DOJ's (and the Court's) ability to assess whether Fresenius has complied with the subpoenas. The Court finds that the subpoenas themselves comply with the Inspector General Act's statutory requirements.

2. Do these Subpoenas Seek Documents Relevant to the DOJ's Investigation?

The DOJ contends that the subpoenas “seek documents and communications regarding Fresenius' policies and procedures on co-payment waivers, automatic refills, and refused medications to enable HHS-OIG to determine whether they were compliant with federal and state healthcare laws.” Docket No. 2, p. 19-20, citing Docket Nos. 4-1, 4-2, 4-3. Fresenius essentially has taken the position that it cannot assess the relevance of the documents sought, because it has no notice of the allegations against it, believed to be contained in a sealed FCA qui tam complaint. Docket No. 30, p. 4.

Neither Party has cited any controlling authority addressing the administrative subpoena relevance requirement as it relates to documents requested under the Act, and the Court has not located any. But “other administrative subpoena cases in this circuit, as well as Supreme Court precedent, hold that relevance should be construed broadly.” Doe, 253 F.3d at 266. The Sixth Circuit has also noted that “courts must show deference to the statutory authority of the administrative agency,” and “subpoenas should be enforced when ‘the evidence sought by the subpoena [is] not plainly incompetent or irrelevant to any lawful purpose of the [agency] in the discharge of [its] duties.” Id., quoting Markwood, 48 F.3d at 977 (internal quotation marks and citation omitted). In the context of enforcement of administrative subpoenas, the Sixth Circuit has adopted an approach of “weigh[ing] the likely relevance of the requested material to the investigation against the burden ... of producing the material.” EEOC v. Ford Motor Credit Co., 26 F.3d 44, 47 (6th Cir. 1994).

*4 The Court finds that the DOJ has made a showing that the information sought is relevant to the underlying HHS-OIG investigation. In terms of burden, Fresenius argues that its response effort has already been “massive and burdensome.” Docket No. 30, p. 5 (citing more than $3.4 million already spent to produce more than 1.3 million pages and more than 350,000 documents). While the Parties spend considerable time discussing the burden (or lack thereof) imposed by past efforts to comply with the subpoenas, the relevant inquiry in this enforcement action is whether future efforts would impose an undue burden. In that regard, Fresenius argues only that being required to identify the roles of all non-legal personnel on its privilege log would be an “extreme” or “massive” burden. Docket No. 30, p. 21-22. As further discussed below, the Court will not require Fresenius to engage in such identification; therefore, that burden will be avoided. Having “weigh[ed] the likely relevance of the requested material to the investigation against the burden ... of producing the material,” the Court finds that the subpoenas seek documents relevant to the DOJ's investigation.

3. Is the Information that the DOJ Seeks Already in Its Possession?

The DOJ concedes that some of the information sought by the subpoenas is already in its possession because it had been produced in connection with a separate, prior matter. See Docket No. 2, p. 21-22; Docket No. 3-5, p. 2. The DOJ has agreed to exclude those documents from these subpoenas. Docket No. 2, p. 22. Fresenius does not contend that the DOJ is currently seeking documents already in its possession. See Docket No. 30.

4. Will Enforcing the Subpoenas Abuse the Court's Process?

The Sixth Circuit has held that “a court's process is abused where the subpoena is ‘issued for an improper purpose, such as to harass the [investigation's target] or to put pressure on him to settle a collateral dispute, or for any other purpose reflecting on the good faith of the particular investigation.’ ” Doe, 253 F.3d at 271-72, quoting United States v. Powell, 379 U.S. 48, 58 (1964). Additionally, “any bad faith asserted by a plaintiff may not be based on the improper motives of an individual agency employee, but instead must be founded upon evidence that the agency itself, in an institutional sense, acted in bad faith when it served the subpoena.” Id. at 272, citing United States v. LaSalle, 437 U.S. 298, 314-16 (1978).

The DOJ asserts that HHS-OIG has acted in good faith and with a proper purpose in issuing the subpoenas under its authority to investigate fraud and abuse in federal healthcare programs. Docket No. 2, p. 22, citing Docket No. 4, p. 3-4. It argues that it “has given Fresenius multiple opportunities to comply with the Subpoenas” and “also gave Fresenius notice that it would pursue an enforcement action to address the continued deficiencies with its privilege logs.” Id. at 22-23, citing Docket No. 3, p. 4-5. Fresenius does not assert bad faith on the part of HHS-OIG. See Docket No. 30. Neither does Fresenius contend that enforcement of the subpoenas would abuse the Court's process; rather, it argues that enforcement is unnecessary because it has already complied with the subpoenas. See Docket No. 30.

Having examined the subpoenas and the requests for production, the Court finds that the subpoenas can properly be enforced by this Court. The crux of the Parties' dispute is not the appropriateness of the subpoenas, but whether Fresenius has adequately complied.

C. Adequacy of Fresenius' Response to the Subpoenas

The Parties agree that Fresenius has produced documents in response to the subpoenas. See Docket Nos. 2, 30. The DOJ does not contend that Fresenius has failed to respond to any particular requests. See Docket Nos. 30, 40. Rather, the DOJ argues that Fresenius has failed to provide an adequate privilege log for documents withheld on the basis of attorney-client privilege or work product protection. Docket No. 2; Docket No. 40. The DOJ asks the Court to find that “Fresenius' disregard for clear privilege log requirements demands, at a minimum, a waiver of the asserted privilege.” Docket No. 2, p. 38. Alternatively, the DOJ requests that the Court conduct an in camera review of fifty sample emails and attachments, and then enter an order as to those documents. Id. at 39. If the in camera review reveals that “at least some” of the sample documents are not privileged or properly redacted, the DOJ asks the Court to order Fresenius to produce additional withheld documents “consistent with this Court's findings on the Sample Log.” Id. Further, the DOJ requests that the Court issue an order addressing “the widespread deficiencies remaining in Fresenius' Third Privilege Log” and requiring Fresenius “to produce a fully compliant privilege log within 21 days with the condition that anything less than full compliance by Fresenius will result in waiver of any privilege.” Id. (internal quotation marks, alterations, and citation omitted). Specifically, the United States complains of the following privilege log deficiencies:

Id.

The DOJ states that this Petition does not challenge the privileged or protected status of any document on the log. Docket No. 40, p. 7. Rather, the Petition challenges the adequacy of the log itself. Id. While “[t]he party raising a privilege has the burden of establishing the existence of the privilege,” privilege cannot be established as a “blanket” claim, but must be asserted, challenged, and examined on a document-by-document basis. Auto-Owners Ins. Co. v. A.G.O. Contracting, Inc., 2015 WL 13845881, 2015 U.S. Dist. LEXIS 195361, at *4 (M.D. Tenn. Sept. 10, 2015). Further, it is clear that the determination of whether a particular document is protected by the work product doctrine must be done on a document-by-document basis, as this is a “fact-intensive inquiry [that] should focus on who prepared the documents, the nature of the documents, and when the documents were created.” Ajose v. Interline Brands, Inc., No. 3:14-1707, 2016 WL 6893866, 2016 U.S. Dist. LEXIS 162617, at *6 (M.D. Tenn. Nov. 23, 2016), quoting United States v. Roxworthy, 457 F.3d 590, 595 (6th Cir. 2006). The Court therefore confines its analysis to the adequacy of the log, rather than the status of any particular withheld document.

1. Identification of Authors and Recipients

The DOJ contends that “[t]he Third Privilege Log remains inadequate because it does not provide information on the capacities, roles, or positions of the vast majority of authors and recipients included on the log.” Docket No. 2, p. 24. The DOJ concedes that Fresenius has provided a list of 86 “legal personnel and their positions,” but argues that Fresenius must also provide information on the capacities, roles, or positions of non-legal personnel. Id. at 25. The DOJ argues that without this information, it cannot determine whether the communications at issue were confidential, whether third parties were privy to them, or whether “internal distributions were sufficiently limited to maintain the confidentiality of the documents that Fresenius asserts are privileged.” Id. at 25-27. Fresenius responds that “[i]t would be an extreme burden for Fresenius to identify the hundreds of non-legal personnel on its logs” and maintains that it has already provided sufficient information regarding non-legal personnel:

Docket No. 30, p. 21-22.

The DOJ has not cited any controlling authority for its proposition that a party that creates a privilege log must identify the capacities, roles, and positions of non-legal personnel who author or receive documents. See Docket No. 2, Docket No. 40. Meanwhile, Fresenius appears to have already furnished a great deal of information about its non-legal personnel, although some of that was provided to another office of the DOJ in a different matter. See, e.g., Docket No. 31-6. On the whole, the United States has not made persuasive arguments as to why, in the absence of any authority requiring it, Fresenius should have to do more. One possible exception is the argument that “Fresenius' failure to include information on the roles of individuals included on the privilege log who appear to be associated with third parties makes it impossible for the United States to assess whether the communication at issue was confidential.” Docket No. 2, p. 26. For example, the DOJ cites a logged email addressed to a person with the email address “nconnell@amgen.com.” Id. at 26-27. Without further information, it is indeed difficult to see how such an email could be protected by an attorney-client privilege belonging to Fresenius. But, this example does not persuade the Court that more information about nonlegal personnel would assist the DOJ with its evaluation of privilege claims. Instead, it would appear that the information provided (including the recipient's email address) has been sufficient in this case to prompt the DOJ to challenge this specific entry. The Court finds that Fresenius has provided sufficient information regarding nonlegal personnel who may be authors or recipients of documents on the privilege log. The DOJ is of course free to challenge the privilege designations of particular documents.

2. Attorney Work Product Assertions

*6 The United States contends that the privilege log is inadequate with respect to its assertions of attorney work product protection because “the relevant entries do not identify any litigation the documents concern.” Docket No. 2, p. 30.

The Sixth Circuit has addressed the requirements for claiming attorney work product protection: “To determine whether a document was prepared ‘in anticipation of litigation,’ and is thus protected work product, we ask two questions: (1) whether that document was prepared ‘because of’ a party's subjective anticipation of litigation, as contrasted with ordinary business purpose; and (2) whether that subjective anticipation was objectively reasonable.” In re Professionals Direct Ins. Co., 578 F.3d 432, 439 (6th Cir. 2009), citing Roxworthy, 457 F.3d at 594. The Sixth Circuit has not held that it is necessary for litigation to actually be pending at the time the document was created; it must only be anticipated. Id. Additionally, attorney work product is protected even if it was created in response to reasonably-anticipated litigation unrelated to the matter in which the work product is sought. See U.S. v. Leggett & Platt, 542 F.2d 655, 660 (6th Cir. 1976).

Fresenius maintains that its log entries “clearly state who authored the document, the date it was created, the recipients, including carbon copies, whether the sender or recipient is an attorney, the type of document (e.g., an email chain), the privilege claimed (e.g., attorney-client and/or work product), and a description of why privilege is claimed (e.g., it discusses or contains reflections on confidential legal advice or work product).” Docket No. 30, p. 20 (internal quotation marks and citation omitted).

The example identified by the DOJ appears to contain all of the required information; enough information to enable the DOJ to decide whether to challenge the assertion of work product with respect to that document. If the DOJ chooses to challenge specific assertions of work product protection, it may do so. The DOJ has not pointed to any controlling authority for the proposition that Fresenius must identify a particular litigation matter in order to claim work product protection. Based on the information currently before the Court, it is not apparent that Fresenius has engaged in widespread abuse of the assertion of work product protection such that all such assertions should be deemed waived.

3. Specification of Legal Issue in Privileged Documents

*7 The DOJ contends that Fresenius's privilege log “is replete with assertions of attorney-client privilege that are entirely insufficient, because they do not specify the nature of the legal advice sought in the underlying documents.” Docket No. 2, p. 31. Fresenius agrees that a party asserting the privilege must provide “a statement in the privilege log explaining the nature of the legal issue for which the advice was sought.” Docket No. 30, p. 14, quoting Carhartt v. Innovative Textiles, 333 F.R.D. 118, 121 (E.D. Mich. 2019) (internal quotation marks omitted). Thus, the crux of this particular disagreement is whether the statements in Fresenius's log adequately explain the nature of the legal issue for which advice was sought. Arguing that they do not, the DOJ points to the privilege description in the first entry on the log:

Docket No. 2, p. 31, quoting Docket No. 3-21, p. 2. The DOJ argues that “[t]he entry is deficient due to its total lack of information on the bone mineral metabolism initiative and requires speculation about what legal issues and what legal advice was supposedly sought,” and that “[t]he insufficient detail regarding the subject is not cured by Fresenius' conclusory statement that the email was for ‘legal advice.’ ” Id. at 32.

The Sixth Circuit has held that:

In re Search Warrant Executed at Law Offices of Stephen Garea, No. 97-4112, 1999 U.S. App. LEXIS 3861, at *5-6 (6th Cir. Mar. 5, 1999).

Applying this standard to the example above, the Court finds that it fails to explain the nature of the legal issue for which advice was sought. While the description does provide some detail (the email was related to the bone mineral metabolism initiative), it does not include enough information for the court to determine that the document is a confidential communication involving legal advice. A review of the privilege log sample reveals that this type of privilege description is not unique. See Docket Nos. 3-21, 3-22, 3-23, 3-24. Fresenius's brief provides additional useful information, but this is the type of information that should be apparent from the face of the log itself. Compare Docket No. 3-21, p. 2; Docket No. 30, p. 17. The DOJ contends that the penalty for this inadequacy should be waiver of all asserted privileges, but the Court sees no justification for such a harsh result at this early stage of court involvement. Instead, the Court will order Fresenius to produce a new log with adequate privilege descriptions. The Court is sensitive to the DOJ's contention that Fresenius has already created substantial delay in this regard. Docket No. 2, p. 7. Therefore, the Court will order Fresenius to produce the revised log within twenty-one days of the entry of this Order.

4. Information Regarding Privileged Documents Not Sent to or From an Attorney

The DOJ contends that Fresenius has inappropriately withheld documents that were not sent to or from a professional legal advisor, claiming that the documents are protected by the attorney-client privilege. Docket No. 2, p. 33. Fresenius responds that authorship by an attorney is not a requirement for the privilege to apply, and that the documents at issue involve “non-lawyers ... discussing legal advice or obtaining information for lawyers.” Docket No. 30, p. 18.

*8 Because a corporation is made up of multiple individuals, “[i]n the corporate context, the attorney-client privilege may extend to communications between employees that convey legal advice given by an attorney to the corporation.” Ajose, 2016 U.S. Dist. LEXIS 162617, at *23. Therefore, documents not authored or received by an attorney, or where an attorney is only copied, may still be covered by the attorney-client privilege. Id. Nevertheless, the privilege log must contain enough information for the DOJ to be able to determine the basis for the privilege claim. The Court will order Fresenius, in its revised log, to provide revised and complete descriptions that provide enough information for the DOJ to determine whether to challenge the status of any particular document.

5. Basis for Withholding GDPR Documents

Fresenius contends that it is restricted in its ability to produce certain documents because its parent, German company Fresenius AG, is bound by the European Union's recently enacted Global Data Protection Regulation (“the GDPR”), which regulates the “processing of personal data.” Docket No. 30, p. 8. Fresenius asserts that there is an “inherent conflict between the GDPR and discovery in the United States” and that it has “offered a procedure for resolution of the issue” that has been acceptable to the DOJ in another out-of-district matter. Id. at 8-9, citing Docket No. 36-3. The DOJ does not contend that Fresenius's proposed solution is not acceptable, but instead that Fresenius never actually provided its proposal. Docket No. 40, p. 6. Citing a letter it had sent to an Assistant United States Attorney in the DOJ's Denver office, Fresenius asserts that it “offered to the Middle District of Tennessee to follow this same approach.” Docket No. 30, p. 22, citing Docket No. 36-3. The DOJ did not understand the furnishing of a letter written to the Denver office in another matter to be a proposal for dealing with GDPR documents here, and neither does the Court. The Court will therefore order Fresenius to present its proposal for dealing with the implications of the GDPR for documents in this matter to the DOJ within five days of the entry of this Order. The Parties are expected to engage in a meaningful discussion as to whether the proposal will be acceptable here.

C. Request for In Camera Review of Documents

As discussed above, the DOJ has alternatively requested that the Court conduct an in camera review of a sample of withheld documents. Docket No. 2, p. 39. Because the Court is instead entering an Order directing Fresenius to revise its privilege log, it is not necessary to consider this alternative. Additionally, the Court finds that the DOJ has not met the standard for such a review at this time. The Court cannot review all designations of privilege and work product protection. The Supreme Court has warned that “[t]here is no reason to permit opponents of the privilege to engage in groundless fishing expeditions, with the district courts as their unwitting (and perhaps unwilling) agents.” U.S. v. Zolin, 491 U.S. 554, 571 (1989).

In Zolin, the Supreme Court set forth the standard for determining when a challenge to the assertion of attorney-client privilege should be determined by an in camera review of the challenged documents:

*9 Zolin, 491 U.S. at 572 (internal quotation marks and citations omitted). While Zolin specifically dealt with the application of the crime-fraud exception, this Court has previously found that “the standard is appropriate ... to evaluate whether the documents requested for in camera review may reveal evidence of business advice that is not shielded from discovery by the attorney-client privilege ....” Armouth Int'l , Inc. v. Dollar Gen. Corp., No. 3:14-0567, 2015 WL 6696367, 2015 U.S. Dist. LEXIS 148784, at *7 (M.D. Tenn. Nov. 2, 2015). “In camera review is not appropriate simply because a party objects to the assertions of privilege.” Id. At this point, the DOJ has not made a showing of a factual basis adequate to support a good faith belief by a reasonable person that an in camera review of the materials may reveal evidence to establish the claim that Fresenius has engaged in widespread abuse of the attorney-client privilege and work product protection. While the privilege log is inadequate in some ways, the inadequacies may be remedied by Fresenius producing a revised log that conforms to this Order, and the Court will provide that opportunity.

III. CONCLUSION

For the reasons discussed above, the DOJ's Petition (Docket No. 1) is GRANTED IN PART and DENIED IN PART. Fresenius must provide a revised privilege log that conforms to this Order no later than twenty-one days from the entry of the Order. The updated log must include privilege descriptions that contain enough information to enable the DOJ to determine the nature of the legal issue for which advice was sought, and enable the Court (if necessary) to determine that the documents are confidential communications involving legal advice. Within five days of the entry of this Order, Fresenius must also provide the DOJ with its proposal for dealing with the documents that implicate the GDPR. The Parties must engage in meaningful discussion on this issue. The Parties must abide by the following procedure before returning to the Court for additional guidance. A Party may not bring a dispute related to these issues to the Court for resolution before lead counsel for that Party has held a telephonic or in-person discussion with lead counsel for the adverse Party and has made a good-faith effort to resolve the dispute.

IT IS SO ORDERED.