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There are approximately 1.4 million people currently serving in the United States military and 16.5 million US military veterans—and we thank them all for their service.  In prescription medical product liability litigation, especially in MDLs and mass torts, that means defendants are more likely than not to run into plaintiffs who received at least some medical care from the Department of Veterans Affairs (“VA”).  So, both sides in this type of litigation are familiar with requesting medical records and depositions from the VA.  Which means they are also familiar with Touhy regulations and the frequency with which those regulations are used to deny requests for medical records and depositions in civil litigation.  While decisions on discovery requests often turn on case specific facts, we thought it would be useful for defense litigators to know about one of the most extensive government losses in Touhy litigation that we have ever seen.

The case is Schroeder v. United States VA, 2023 U.S. Dist. LEXIS 85835 (D. Kan. May 16, 2023).  But the story starts with plaintiff’s qui tam action against the manufacturer of certain medical devices alleging the manufacturer illegally remunerated the VA, leading the VA to overuse and use off-label those medical devices.  Id. at *3.  Not surprisingly, both plaintiff and defendant served discovery requests on the VA for various records of medical procedures at 11 VA hospitals (based on the court’s prior expansion of discovery).  While the VA provided some discovery, it denied the large majority of the requests under their Touhy regulations.  Touhy regulations are the familiar name given to regulations promulgated pursuant to 5 U.S.C. § 301 which provides that a federal agency “may prescribe regulations for … the custody, use, and preservation of its records, papers, and property.”  The VA’s regulations provide that “VA personnel may not provide testimony or produce VA records in legal proceedings with the prior written approval of the responsible VA official designated.”  Schroeder, at *4.  Making a Touhy request requires providing a written explanation for the request including a summary of the nature and relevance of the discovery requested.  These are often multi-page letters which attempt to address the 15 factors VA officials consider in deciding whether to agree to or deny the request.  Schroeder sets out all 15 factors, including some of the most often relied on by the VA in denying requests – conserving time and money of the US, undue burden, privacy, sufficient specificity of the request.  Id. at *5-7.  Once the VA issued its final position on plaintiff’s and defendant’s requests, plaintiff filed his case against the VA under the Administrative Procedures Act (“APA”) and defendant intervened. 

 The standard of review on an APA action is whether the agency’s decision was arbitrary, capricious, or an abuse of discretion.  Plaintiff challenged the VA’s decision as arbitrary and capricious, and the court agreed.  For instance, plaintiff requested data about the number of certain procedures done at the VA hospitals and the VA objected on the grounds of confidentiality and HIPAA privacy.  But that overlooked that plaintiff was requesting numerical data, not patient identifying information.  Id. at *21-22.  In the context of prescription medical products liability litigation, this consideration should also not be a factor against production because plaintiffs will have placed their personal health information at issue and signed authorizations allowing disclosure.  Therefore, the “VA’s reliance on [the] confidentiality factor fails to set forth a rational connection between the facts found and the choice made.”  Id. at *22.  The VA also failed to consider plaintiff’s offer to pay the VA’s costs in collecting and producing the requested data obviating any expense or burden factor.  The VA’s reliance on resource and burden factors was also “not reasonable” because it had collected similar information already for its own internal investigation.   Id. at *23-24. 

Plaintiff also sought a representative sampling of medical records which the VA also denied on similar grounds.  Here, plaintiff offered to redact personal identifying information to protect the privacy of those not parties to the case.  More important to products liability cases, the court noted that the VA failed to properly consider that the litigation has a protective order in place that would permit the medical records to be kept confidential.  Id. at *25.  Once again, the court found no “rational connection” between the facts and the VA’s decision.    

While the VA’s denial “cited a litany of other factors” purportedly in support of its decision, the court found its denial letter to contain only generalized assertions that “never tried to explain why the facts relevant here support denying [plaintiff’s] requests.”  Id. at *27.  Another good ruling to use in challenging denials that do not contain sufficient evidence that the VA addressed the specific facts and evidence at issue.  Further, simply stating how many hours a production would take is not enough to demonstrate undue burden without also explaining “why staff couldn’t devote that amount of time.”  Id. at *28. 

Another factor relied on by the VA was “the need to minimize VA’s possible involvement in issues unrelated to its mission.”  Id. at *30.  But the VA’s mission is “[t]o care for him who shall have borne the battle.”  Id.  Plaintiff’s qui tam action dealt directly with medical care provided to veterans.  The same could be said of any products liability action and allegations that certain devices or prescriptions should not have been used in the treatment of veterans.  Making it difficult to understand what rationale the VA could ever offer for not assisting veterans in their personal injury lawsuits regardless of whether it is plaintiff or defendant making the request.  In Schroeder, the VA failed to offer any explanation for its conclusion that plaintiff’s lawsuit was unrelated to the VA’s mission.  Id. at *31. 

Not only did the VA fail to offer any explanation to justify the Touhy factors it did rely on, it failed to consider several other relevant factors.  While the VA need not consider all the factors, neither can it ignore those that are germane.  In this case, that included factors such as “how production of records would assist VA in performing its statutory duties,” or “whether disclosure of the records …is necessary to prevent the perpetration of fraud.”  Id. at *32.  Nor did the VA consider that plaintiff “has no other means to discover the information he seeks.”  Id. at *34.  An issue defendants are often faced with in products liability cases where plaintiff’s medical care is completely administered by the VA.     

Defendant in the underlying action intervened and argued that the VA’s denial of its discovery requests was also arbitrary and capricious for essentially the same reasons.  And the court reached almost identical conclusions.  Id. at *46-54.  In addition to the factors already discussed, the court took issue with the VA’s failure to consider one of the “most important aspects of a Touhy request” – “whether production of records…is appropriate or necessary under the rules of procedure governing the case or matter in which the demand or request arose.”  Id. at *51.  The VA did not consider that defendant had requested records that were necessary for its defense, noting that several of defendant’s requests were issued to respond to discovery the court had authorized. *52.  Like with plaintiff, another significant factor was that defendant had no other source for the information requested.  Id. at *53. 

Having found the VA’s decision arbitrary and capricious, the court had to decide what to do about it.  Plaintiff wanted an order compelling production, but precedent supported remand to the VA for reconsideration in light of the court’s conclusions.  The same result was ordered for defendant’s requests.   The takeaway from the decision is that conclusory reliance on select Touhy factors should not be enough for the VA to deny requests for information necessary to civil litigation, regardless of who is asking for it.