In re Special Grand Jury Investigation

[Cite as In re Special Grand Jury Investigation, 2019-Ohio-4014.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
In re: Special Grand Jury Investigation :
of Medicaid Fraud and Nursing Homes,
:
No. 18AP-730
Appellants. : (C.P.C. No. 16CM-41)
: (ACCELERATED CALENDAR)
D E C I S I O N
Rendered on September 30, 2019
On brief: Webster & Associates, Co., LPA, Geoffrey E.
Webster, and Conrad Dillon, for appellants. Argued:
Geoffrey E. Webster.
On brief: Dave Yost, Attorney General, and Anthony J.
Molnar, for appellee State of Ohio.
APPEAL from the Franklin County Court of Common Pleas
DORRIAN, J.
{¶ 1} This appeal arises from grand jury proceedings before the Franklin County
Court of Common Pleas. Appellants, a rehabilitation and nursing center ("Rehabilitation
Center") and its parent organization,1 appeal from an order of the common pleas court
compelling production of certain documents subpoenaed by appellee, State of Ohio, and
rejecting appellants' claim the documents are protected from discovery by the work-
product doctrine. For the following reasons, we affirm.
I. Facts and Procedural History
{¶ 2} The controversy giving rise to this appeal began when the Ohio Attorney
General's Medicaid Fraud Control Unit issued subpoenas duces tecum to appellants
1The documents in this case are filed under seal, and we accordingly refrain from identifying appellants by
name. In re Grand Jury Proceeding of Doe, 150 Ohio St.3d 398, 2016-Ohio-8001, ¶ 2, fn. 2.
No. 18AP-730 2
requesting production of the complete internal investigative documentation relating to the
investigation of an alleged incident of abuse of a resident that was the subject of a self-
reported incident ("SRI") appellants submitted to the Ohio Department of Health on
September 15, 2014. Appellants declined to produce their internal investigation
documents, asserting those materials were protected by the work-product doctrine.
Appellants produced a privilege log listing the documents withheld from production. The
privilege log indicated the withheld documents consisted of: (1) "General Incident
Investigation Cover Sheet & General Investigation of Incident," (2) "Incident/Accident
Report," (3) written statements from 12 individuals, and (4) Rehabilitation Center
administrator's notes.
{¶ 3} Appellee moved for an order directing appellants to appear and show cause
why they should not be held in contempt for failure to comply with the subpoenas duces
tecum. Appellants filed a memorandum in opposition, asserting the withheld documents
were protected from discovery under the work-product doctrine and that appellee failed to
establish good cause to compel production of the documents. The trial court conducted a
hearing on the motion to show cause on April 26, 2017.
{¶ 4} On May 12, 2017, the trial court issued an entry holding the withheld
documents were not protected by the work-product doctrine and ordering appellants to
produce the documents to appellee under penalty of contempt. Appellants appealed to this
court, which sua sponte raised the issue of jurisdiction and dismissed for lack of a final
appealable order. In re Special Grand Jury Investigation, 10th Dist. No. 17AP-446, 2018-
Ohio-760.
{¶ 5} On remand following this court's decision in Grand Jury, the trial court
scheduled a show cause hearing for August 27, 2018 to determine whether appellants
should be held in contempt for failure to comply with the subpoenas. Following the
hearing, on August 31, 2018, the court issued an entry ordering appellants to produce
appellee with copies of the 12 witness statements identified on the privilege log and provide
the remaining documents to the court for in camera inspection. As identified on appellants'
privilege log, the remaining withheld documents consisted of the "General Incident
Investigation Cover Sheet & General Investigation of Incident," the "Incident/Accident
Report," and the Rehabilitation Center administrator's notes. On August 31, 2018,
No. 18AP-730 3
appellants filed a notice of compliance indicating they had provided the 12 witness
statements to appellee and the other documents to the court for in camera review. After
conducting an in camera inspection of the remaining withheld documents, on
September 21, 2018, the trial court ordered that all documents on the privilege log be
produced to appellee.2
II. Assignments of Error
{¶ 6} Appellants appeal3 and assign the following two assignments of error for our
review:
I. THE TRIAL COURT ERRED IN FINDING APPELLANTS'
COUNSEL'S INTERNAL INVESTIGATION WAS NOT
PROTECTED, PRIVILEGED WORK PRODUCT.
II. THE TRIAL COURT ERRED BY FINDING THE STATE
WAS ENTITLED TO SECURE APPELLANTS' COUNSEL'S
DOCUMENTS THROUGH SUBPOENA.
Appellants' two assignments of error both assert the trial court erred by ordering them to
produce documents they claim to be protected from discovery by the work-product
doctrine; therefore, we will consider appellants' assignments of error together.
III. Analysis
{¶ 7} The work-product doctrine was initially recognized by the United States
Supreme Court in Hickman v. Taylor, 329 U.S. 495 (1947). The Hickman decision held
that attorney-client privilege did not protect from discovery information secured by an
attorney from a witness while acting in anticipation of litigation; likewise, the attorney-
client privilege did not protect memoranda and other writings prepared by counsel for her
own use in prosecuting a client's case. Hickman at 508. However, the court recognized the
2Although the trial court's September 21, 2018 order required that all documents listed on the privilege log be
produced to appellee, appellants had previously given the court notice of production of the 12 witness
statements to appellee. Thus, it appears appellants are only contesting the trial court's order to the extent it
ordered production of the three remaining documents that were provided to the court for in camera
inspection.
3During the pendency of this appeal, appellee moved to dismiss for lack of a final appealable order. This court
denied that motion, holding that to the extent the trial court erred in ordering disclosure, appellants would be
deprived of a remedy on appeal after final judgment. In re Special Grand Jury Investigation of Medicaid
Fraud & Nursing Homes, 10th Dist. No. 18AP-730, 2019-Ohio-2532, ¶ 25.
No. 18AP-730 4
need to protect an attorney's case preparation materials from discovery by opposing
counsel:
Proper preparation of a client's case demands that [an
attorney] assemble information, sift what he considers to be
the relevant from the irrelevant facts, prepare his legal theories
and plan his strategy without undue and needless interference.
That is the historical and the necessary way in which lawyers
act within the framework of our system of jurisprudence to
promote justice and to protect their clients' interests. This work
is reflected, of course, in interviews, statements, memoranda,
correspondence, briefs, mental impressions, personal beliefs,
and countless other tangible and intangible ways -- aptly
though roughly termed * * * as the "work product of the
lawyer." Were such materials open to opposing counsel on
mere demand, much of what is now put down in writing would
remain unwritten. An attorney's thoughts, heretofore involate,
would not be his own. Inefficiency, unfairness and sharp
practices would inevitably develop in the giving of legal advice
and in the preparation of cases for trial. The effect on the legal
profession would be demoralizing. And the interests of the
clients and the cause of justice would be poorly served.
Id. at 511. The work-product doctrine addresses the concerns with overbroad discovery of
case preparation materials expressed in Hickman, providing a qualified privilege that
affords a zone of privacy in which an attorney can analyze and prepare her client's case.
Squire, Sanders & Dempsey, LLP v. Givaudan Flavors Corp., 127 Ohio St.3d 161, 2010-
Ohio-4469, ¶ 55. The work-product doctrine "is an intensely practical one, grounded in the
realities of litigation in our adversary system." United States v. Nobles, 422 U.S. 225, 238
(1975).
{¶ 8} The work-product doctrine in civil cases in Ohio is set forth in Civ.R.
26(B)(3):
Subject to the provisions of [Civ.R. 26(B)(5)], a party may
obtain discovery of documents, electronically stored
information and tangible things prepared in anticipation of
litigation or for trial by or for another party or by or for that
other party's representative (including his attorney, consultant,
surety, indemnitor, insurer, or agent) only upon a showing of
good cause therefor.
"Thus, attorney work product, including but not limited to mental impressions, theories,
and legal conclusions, may be discovered upon a showing of good cause if it is directly at
No. 18AP-730 5
issue in the case, the need for the information is compelling, and the evidence cannot be
obtained elsewhere." Squire, Sanders & Dempsey at ¶ 60.
{¶ 9} In its May 12, 2017 decision, the trial court concluded the documents
designated on appellants' privilege log were not protected by the work-product doctrine
because they were not prepared in anticipation of litigation. The court concluded the
witness statements and other materials were compiled to respond to the alleged abuse
incident and prepare the SRI filing. Because preparation of the SRI was required by law,
the trial court reasoned the documents were prepared in the ordinary course of business,
rather than in anticipation of litigation. On remand following Grand Jury, appellants
produced the 12 witness statements to appellee and the trial court conducted an in camera
inspection of the remaining withheld documents. The court subsequently ordered
appellants to produce the remaining withheld documents to appellee. The entry ordering
production of the documents did not set forth the trial court's reasoning for ordering
production; presumably, the in camera inspection affirmed the trial court's prior
conclusion that the remaining withheld documents were not protected as attorney work
product.
{¶ 10} The Supreme Court of Ohio has held that determination of whether the work-
product doctrine applies and whether good cause exists to overcome the protection of the
work-product doctrine are discretionary decisions of the trial court. State ex rel. Greater
Cleveland Regional Transit Auth. v. Guzzo, 6 Ohio St.3d 270, 271 (1983) ("The existence
of a Civ.R. 26(B)(1) 'privilege' as well as Civ.R. 26(B)(3) 'good cause' are discretionary
determinations to be made by the trial court."). See also Zimpfer v. Roach, 3d Dist. No. 17-
16-03, 2016-Ohio-5176, ¶ 21, citing Guzzo; Galati v. Pettorini, 8th Dist. No. 101712, 2015-
Ohio-1305, ¶ 23, citing Guzzo. Therefore, we review the trial court's decision for abuse of
discretion. An abuse of discretion occurs when a court's judgment is unreasonable,
arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).
{¶ 11} The three remaining withheld documents were described on appellants'
privilege log as: (1) General Incident Investigation Cover Sheet & General Investigation of
Incident, (2) Incident/Accident Report, and (3) Rehabilitation Center administrator's
notes. The general investigation documents and incident/accident report appear to have
been prepared by the nightshift supervisor who was on duty when the alleged incident
No. 18AP-730 6
occurred; the other document consists of notes compiled by the administrator of the
Rehabilitation Center. The work-product doctrine extends to materials prepared by agents
of an attorney, in addition to those prepared by an attorney himself. Nobles at 238-39
("One of [the realities of litigation in our adversary system] is that attorneys often must rely
on the assistance of investigators and other agents in the compilation of materials in
preparation for trial. It is therefore necessary that the [work-product] doctrine protect
material prepared by agents for the attorney as well as those prepared by the attorney
himself."); In re Election of November 6, 1990 for the Office of Atty. Gen. of Ohio, 57 Ohio
St.3d 614, 615 (1991) (holding that notes prepared by agents of attorney at attorney's
direction were subject to work-product doctrine protection). Appellants' counsel,
Geoffrey E. Webster, testified at the April 26, 2017 show cause hearing that he directed the
Rehabilitation Center administrator gather written statements from potential witnesses or
individuals related to the situation and undertake an evaluation of the allegations.
Therefore, we will consider whether the documents at issue are within the scope of the work
product protection.
{¶ 12} The party seeking protection under the work-product doctrine bears the
burden of establishing that the doctrine applies. Sherwin-Williams Co. v. Motley Rice,
LLC, 8th Dist. No. 99591, 2013-Ohio-3737, ¶ 14, fn. 2 ("It is the burden of the party claiming
protection to prove that the protected documents were prepared in anticipation of litigation
or trial."). See also Owens v. ACS Hotels, LLC, 9th Dist. No. 27787, 2016-Ohio-5506, ¶ 9
(holding that party seeking protection under the work-product doctrine bears the burden
of demonstrating that the doctrine applies); Nationwide Agribusiness Ins. Co. v. Heidler,
12th Dist. No. CA2015-07-013, 2016-Ohio-455, ¶ 11 ("The party claiming that documents
or statements are work product has the burden of showing that the materials should not be
discoverable."). Where the work-product doctrine is found to apply, the party seeking
discovery of materials covered by that protection then bears the burden of establishing good
cause to overcome the protection. Civ.R. 26(B)(3).
{¶ 13} The United States Court of Appeals for the Sixth Circuit has adopted a two-
part test for determining whether a document was created in anticipation of litigation for
the purpose of the work-product doctrine under the federal rules:
We therefore embrace the test used by a number of the district
courts in our circuit, including the district court in this case,
No. 18AP-730 7
which asks (1) whether a document was created because of a
party's subjective anticipation of litigation, as contrasted with
an ordinary business purpose, and (2) whether that subjective
anticipation of litigation was objectively reasonable.
United States v. Roxworthy, 457 F.3d 590, 594 (6th Cir.2006). Several Ohio courts have
adopted a standard consistent with Roxworthy, finding it to be the prevalent position
among federal circuit courts. See Komorowski v. John P. Hildebrand Co., LPA, 8th Dist.
No. 101500, 2015-Ohio-1295, ¶ 23-24; Estate of Hohler v. Hohler, 185 Ohio App.3d 420,
2009-Ohio-7013, ¶ 49-50 (7th Dist.). As the Seventh District Court of Appeals stated,
" '[t]he test should be whether, in light of the nature of the document and the factual
situation in the particular case, the document can fairly be said to have been prepared or
obtained because of the prospect of litigation.' " Hohler at ¶ 48, quoting Wright & Miller, 8
Federal Practice and Procedure, Section 2024, at 198 (1970). Thus, the central question
in this appeal is whether the trial court abused its discretion in concluding the remaining
withheld documents were not protected as work product because they were not prepared
in anticipation of litigation.
{¶ 14} The underlying incident leading to the filing of the SRI was an allegation by
one staff member of the Rehabilitation Center that she witnessed another staff member
strike a resident. Under state and federal law, appellants are required to investigate and
report allegations of abuse, neglect, exploitation, or mistreatment. See 42 C.F.R. 483.12(c);
R.C. 3721.22. Appellants are also required to "[h]ave evidence that all alleged violations are
thoroughly investigated." 42 C.F.R. 483.12(c)(2). Appellants are prohibited from refusing
to permit the director of the Ohio Department of Health to review its records, including
materials gathered during the course of an investigation of abuse, neglect, exploitation, or
mistreatment. Ohio Adm.Code 3701-64-02(C)(3). At the April 26, 2017 show cause
hearing, a special agent from the Attorney General's Healthcare Fraud Section testified that
in his experience it was typical for a nursing home to ask witnesses to an alleged abuse
incident to prepare written statements. He further testified he had participated in two prior
investigations involving the Rehabilitation Center where he was provided with copies of
internal investigation materials, including witness statements.
{¶ 15} The incident of alleged abuse occurred on the evening of September 14, 2014.
Attorney Webster testified at the April 26, 2017 show cause hearing that he spoke with the
No. 18AP-730 8
administrator of the Rehabilitation Center the morning after the alleged abuse incident,
prior to completion and filing of the SRI. Webster discussed the matter with the
administrator and they concluded an SRI should be filed. Webster further testified he
asked the administrator to perform an initial evaluation of the event and to gather written
statements from anyone connected to the situation. Webster testified that beyond the filing
of the SRI, he wanted information about the incident to assess other legal issues, including
potential liability or malpractice insurance claims, regulatory oversight or penalties, or
workers' compensation or employment consequences. Webster stated the employee who
reported the alleged abuse had a history of non-compliance with personnel policies and the
resident who was allegedly abused had a history of being vocal and aggressive, and that
these details also prompted concerns about potential legal issues beyond the filing of the
SRI. Appellants argue that Webster's testimony establishes that the remaining withheld
documents were prepared in anticipation of litigation and, therefore, constitute protected
work product.
{¶ 16} Based on our review of the remaining withheld documents, we conclude the
trial court did not abuse its discretion by finding the documents were not protected from
discovery under the work-product doctrine. The General Incident Investigation Cover
Sheet & General Investigation of Incident documents and the Incident/Accident Report
appear to have been completed by the nightshift supervisor at the Rehabilitation Center on
the date of the alleged incident, which was prior to Webster's conversation with the
Rehabilitation Center administrator directing her to gather additional information. These
documents identify the resident who was allegedly abused, the staff member making the
allegation, the staff member who allegedly committed the abuse, a brief description of the
abuse allegation, and a chart documenting the "skilled nurses notes" regarding the
condition of the patient (although no patient is identified in this part of the document).
These documents appear to be standardized forms completed by the supervisor and/or
skilled nurse. Thus, based on the timing, title, and contents of these documents, they
appear to have been prepared in the normal course of business in response to the alleged
abuse incident. The administrator's notes appear to consist of notes taken while reviewing
a video recording at or around the time of the alleged abuse, based on the detailed times
included in those notes, as well as notes of interviews with the staff member who made the
No. 18AP-730 9
abuse allegation and the staff member who was alleged to have committed the abuse. All
of the administrator's notes involve details of the events immediately before, during, and
after the alleged abuse incident. As with the other withheld documents, the administrator's
notes appear to be focused on the details of the alleged abuse, which was the subject of the
SRI, rather than the broader legal concerns cited in Webster's testimony.
{¶ 17} Appellants argue the trial court's decision is contrary to the United States
Supreme Court's decision in Upjohn Co. v. United States, 449 U.S. 383 (1981), where the
court held the work-product doctrine applied to notes and memoranda prepared by a
corporation's attorney while conducting interviews with corporate officers and employees
as part of an internal investigation of potential misconduct. In Upjohn, a corporation
discovered that one of its subsidiaries made payments to foreign government officials to
secure government business. The corporation then conducted an internal investigation of
payments to foreign government officials, led by its general counsel. Upjohn at 386-87. As
part of the investigation, questionnaires were sent to managers within the company. The
general counsel and outside counsel also conducted interviews with recipients of the
questionnaire and other officers or employees of the corporation. Id. at 387. The company
voluntarily reported certain questionable payments to the Securities and Exchange
Commission and the Internal Revenue Service. The Internal Revenue Service immediately
began an investigation of the payments and subpoenaed all files relative to the internal
investigation conducted by the general counsel, including the written questionnaires sent
to managers and memoranda or notes of interviews conducted by general counsel and
outside counsel. Id. at 387-88. The corporation declined to produce the requested
documents, citing attorney-client privilege and work product protection.
{¶ 18} Much of the Supreme Court's decision in Upjohn addressed the attorney-
client privilege, which is not relevant to the present appeal. However, the court also
addressed the work-product doctrine in analyzing whether the attorneys' notes of
interviews with corporate officers and employees were subject to discovery. The court
noted that special protection is given to work product revealing an attorney's mental
processes. Id. at 400. The court concluded the appellate court applied the wrong standard
in evaluating the work-product doctrine, and remanded for further consideration of the
work product issue, providing the following guidance to the appellate court:
No. 18AP-730 10
The notes and memoranda sought by the Government here,
however, are work product based on oral statements. If they
reveal communications, they are, in this case, protected by the
attorney-client privilege. To the extent they do not reveal
communications, they reveal the attorneys' mental processes in
evaluating the communications. As Rule 26 and Hickman
make clear, such work product cannot be disclosed simply on a
showing of substantial need and inability to obtain the
equivalent without undue hardship.
Id. at 402.
{¶ 19} The present appeal is distinguishable from Upjohn, and the work-product
doctrine does not apply in the same manner to appellants' remaining withheld documents
in this case. As explained above, appellants were under a legal obligation to investigate and
report the allegation of abuse. Appellants are legally required to allow the director of the
Ohio Department of Health to access the records of their internal investigations; thus, they
were on notice that such materials might be accessed by a government agency. Moreover,
the contents of the remaining withheld documents relate directly to the alleged incident
abuse and do not involve the broader legal issues Webster cited in discussing his
anticipation of litigation. In Upjohn, the corporation's general counsel described his
interview notes as containing "what I considered to be the important questions, the
substance of the responses to them, my beliefs as to the importance of these, my beliefs as
to how they related to the inquiry, my thoughts as to how they related to other questions.
In some instances they might even suggest other questions that I would have to ask or
things that I needed to find elsewhere." Upjohn at 400, fn. 8. By contrast, in the present
case, the remaining withheld documents appear to contain a basic review of the alleged
abuse incident and documentary evidence and witness statements regarding the events
surrounding that incident. This is the type of information that would have been necessary
for preparation of the SRI filed by appellants.
{¶ 20} Under these circumstances, considering the factual situation of this
particular case and the contents of the documents claimed to be protected from discovery,
we conclude the trial court did not abuse its discretion by holding that the remaining
withheld documents were not prepared in anticipation of litigation and, therefore, did not
constitute protected work product. Having affirmed the trial court's conclusion regarding
No. 18AP-730 11
the work-product doctrine, we need not reach the question of whether appellee made a
sufficient showing of good cause to overcome the protection of the work-product doctrine.
{¶ 21} Accordingly, we overrule appellants' two assignments of error.
IV. Conclusion
{¶ 22} For the foregoing reasons, we overrule appellants' two assignments of error
and affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
SADLER and BEATTY BLUNT, JJ., concur.