In a recent case in the District of Puerto Rico, United States ex rel. Valdez v. Aveta Inc., et al., No. 15-cv-01140-CCC (D.P.R.), the former president of Puerto Rican-based managed health care provider Aveta Inc., Jose Valdez, alleged that the health care company submitted as much as $350 million in false claims to the government through the Medicare Advantage program by manipulating risk adjustment scores. Valdez’s claims largely rest on more than 26,000 documents he (allegedly inadvertently) failed to return to the company after his termination, in violation of his nondisclosure agreement. Aveta claims that many of the documents are confidential or subject to the attorney-client privilege.

In a pre-discovery motion requesting return of the documents, Aveta argued that Valdez’s actions violated the Federal Rules of Civil Procedure’s discovery procedures, including protections for applicable privileges and unresponsive documents, and that retaining the information post-termination was wrongful. Valdez disagreed, citing precedent allowing for use of confidential information in qui tam actions so long as that information was obtained through lawful means, which he claims he did in the course of his employment as company president. Further, according to Valdez, enforcing the confidentiality agreement and requiring him to return the documents would be contrary to public policy as it would preclude him from pursuing his fraud claim on behalf of the government and allow companies to limit contractually their liability for fraud against the government.

Originally published in Law360 on July 19, 2016.