"Dishonest" discovery misconduct dooms Medicare fraud whistleblower's recovery

Mary T. Scott was hired by Metropolitan Health Corporation or "Metropolitan Enterprises" as a member of theOakland County corporation's Billing and Coding Task Force.  She discovered illegal conduct which she reported to the federal government and which became the subject of a federal qui tam action against the hospital and its associated enterprises.  According to the Michigan Court of Appeals opinion filed on August 18, the U.S. government joined her whistleblower action for medicare fraud and secured a settlement against Metropolitan which resulted in a substantial fee payable to Scott as the "relator."  Her fee was impounded, however, while her retaliatory discharge claim was litigated.

In the course of the litigation, Scott apparently refused to comply with discovery requests by Metropolitan that she turn over corporate tapes and minutes of meetings.  Instead, she maintained possession of the corporate property, responded falsely about its existence, gave it up on a piece-meal basis, and made additions and deletions to the minutes she produced.  Ultimately, the Court not only dismissed Scott's retaliatory discharge claim but also subjected her "relator fee" to a $1.6 million dollar sanction which the U.S. District Court imposed for "disreputable and widespread bad faith conduct" by Scott.

Scott then sued her (second group of) attorneys, arguing that they committed malpractice in their advice to her and in their management of her litigation.  The Michigan Court of Appeals dismissed Scott's malpractice claim for the reason that the Federal Court had already ruled that the dishonest discovery in that court was initiated by, and the fault of, Scott and not her attorneys.  By her actions in failing to turn over the original evidence she held (in the form of corporate property of the Defendant) and filing untrue statements about the existence of that property, Scott apparently denied herself the substantial benefits due her as a result of reporting Metropolitan's Medicare fraud.