Several health care industry companies, including Medicis, ArthroCare and Amedisys, reported in their 2012 first quarter reports that they were under Department of Justice investigations and had received civil investigative demands from the government.
Civil investigative demands, referred to as CIDs, are a particularly powerful pre-lawsuit administrative tool for federal investigations. Using CIDs, the government can demand documents, propound interrogatories and conduct depositions, all prior to the filing of a lawsuit and without the opportunity for a prospective defendant to have reciprocal discovery. CIDs are often used by the government in the investigative phase of health care qui tam actions, when the government is determining whether it will intervene in the suit. CIDs can also be part of parallel civil and criminal investigations by the government.
CIDs have been available for some time, but they were not frequently used in practice because (1) they required the signature of the Attorney General, and (2) that authority could not be delegated. Amendments to the False Claims Act in 2009 permitted the Attorney General to delegate that authority to the Assistant Attorney General for the Civil Division, and in some cases, to individual U.S. Attorneys.
The use of CIDs has become much more frequent since 2009. Earlier this year, at an ABA conference, DOJ Civil Division Assistant Attorney General Tony West said that the Department had issued six times more CIDs than it had prior to the 2009 amendments to the False Claims Act.
Since the delegation of authority to issue CIDs to the AAG and U.S. Attorneys, practitioners have seen an increasing use by government attorneys and investigators of CIDs, giving the government the opportunity for one-sided discovery. As the government’s use of CIDs increases, companies large and small who find themselves under investigation will face the prospect of significant discovery obligations, including depositions, prior to the filing of any lawsuit.