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United States ex rel. Fesenmaier v. The Cameron-Ehlen Group, Inc.

United States District Court, D. Minnesota

December 13, 2019

United States of America, ex rel. Kipp Fesenmaier, Plaintiffs,
v.
The Cameron-Ehlen Group, Inc., and Paul Ehlen, Defendants.

          ORDER

          Wilhelmina M. Wright United States District Judge

         Plaintiff United States of America appeals the September 12, 2019 Order of United States Magistrate Judge David T. Schultz. (Dkt. 317.) For the reasons addressed below, the September 12, 2019 Order is affirmed.

         BACKGROUND[1]

         Relator Kipp Fesenmaier filed a qui tam complaint in November 2013 against, among others, Defendants The Cameron-Ehlen Group, Inc., doing business as Precision Lens (Precision Lens), and Paul Ehlen, the founder and majority owner of Precision Lens. After investigating Fesenmaier's complaint, the United States elected to intervene in this case in August 2017. The United States subsequently filed an intervenor complaint (complaint) against Precision Lens and Ehlen on February 8, 2018. The complaint alleges that Precision Lens and Ehlen provided kickbacks to physicians in violation of the Anti Kickback Statute, 42 U.S.C. § 1320a-7b(b). According to the complaint, as a result of those kickbacks, false and fraudulent claims for payment were made to federal health care programs, including Medicare, in violation of the False Claims Act (FCA), 31 U.S.C. § 3729(a)(1), (a)(2). The complaint also alleges common-law claims for unjust enrichment and payment by mistake.

         On August 12, 2019, Defendants served a deposition notice on the United States pursuant to Rule 30(b)(6), Fed. R. Civ. P., identifying four deposition topics. Only the third topic in Defendants' deposition notice is relevant to this appeal:

For each claim identified as false by the government, the factual basis and methodology for the United States of America's determination that the claim resulted from the alleged kickback[.]

         The United States objected and refused to provide a witness to testify as to this topic.

         The magistrate judge held a discovery conference on September 12, 2019. At that hearing, Defendants argued that the third topic in their deposition notice seeks to discover what facts and methodologies the United States relies on to conclude (1) that particular surgeries occurred because of a kickback and (2) a particular physician would not have chosen to use Defendants' product but for the kickback. The United States countered that the foregoing causation questions are inconsistent with the relevant legal standard in a False Claims Act case. Instead, the United States argued, “[t]he standard is that once there is a kickback, that kickback taints claims going forward.” Under this legal standard, the United States asserted, it need only show that a physician received a kickback and subsequently submitted a claim to Medicare during the “taint period.” According to the United States, the presumptive taint period is one year.

         In response, Defendants argued that, if the United States is relying solely on a legal presumption, it can respond as such to the deposition topic; but if the United States is relying on any factual basis, it should be required to produce a witness to testify about that factual basis. In particular, Defendants asserted: “If they're going to contend that there's factual causation support, then we get to ask about it. And if it's their position that that's irrelevant and they don't have it, then fine, they just need to tell us that definitively and we'll move on.” Defendants stated their position that, if the United States is relying on any factual basis for its causation or taint-period determinations, those facts should be made known to Defendants. And if the United States is not relying on any as-yet undisclosed facts, the United States should be required to confirm that to foreclose the use of such evidence at the dispositive-motion or trial stages of this case.

         At the end of the September 12, 2019 hearing, the magistrate judge issued the following ruling with respect to the third topic in Defendants' deposition notice:

         On topic number three I am going to order the government to provide a clear, written statement that addresses the following two matters:

[1] Is the government aware of any evidence of actual causation of additional surgeries or use of the defendant's products that is separate and apart from any deposition testimony taken to date? In other words, clearly state whether you have evidence that there's such causation and if you do, then I'm going to allow a deposition about that topic.
[2] In addition, the government will provide a statement of why it has chosen a taint period of one year and what factors it relies on when it finds the taint ...

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