United States ex rel. Silver v. Omnicare, Inc.
| Decision Date | 31 March 2023 |
| Docket Number | 1:11-cv-01326-NLH-AMD |
| Parties | UNITED STATES OF AMERICA, ex rel. MARC SILVER, et al., Relators, v. OMNICARE, INC., et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
DANIEL WILLIAM MEYLER U.S. ATTORNEY'S OFFICE On behalf of Relators
JUDITH H. GERMANO GWEN M. SCHOENFELD GERMANO LAW LLCOn behalf of Defendant PharMerica Corporation
Pending before the Court are Relator Marc Silver's (“Relator”) motions to exclude the expert opinions of Louis F. Rossiter, Ph.D., (ECF 636), and Eric Hines, (ECF 639); Defendant PharMerica Corporation's (“PharMerica”) motions to exclude the expert opinions of Kenneth W. Schafermeyer, Ph.D., (ECF 641) Allison K. Hoffman, (ECF 642), and Israel Shaked, Ph.D., (ECF 656); and the parties' joint motion to seal, (ECF 675). For the reasons expressed below, Relator's motions will be denied, PharMerica's motions will be granted in part and the parties' joint motion to seal will be granted in part.
The facts and procedural history of this case have been recited in prior opinions of the Court and will not be reviewed in detail here. Sufficient for purposes of the pending motions, Relator filed a qui tam action against multiple defendants on behalf of the United States in March 2011, alleging violations of the False Claims Act (“FCA”). (ECF 131 at 2-3). Relator amended the complaint a fourth time as recently as April 2021. (ECF 548).
As Relator succinctly summarized in his briefing for the pending motions, Skilled Nursing Facilities (“SNFs”) contract with providers such as PharMerica to supply prescription drugs for patients, including those covered by Medicare Parts A and D and Medicaid. (ECF 640 at 1). Relator alleges that, from 2005 to 2014, PharMerica offered below-cost and commercially unreasonable pricing for the Part A patients of 174[1] SNFs in exchange for the right to service the facilities' higher volume of patients insured by more profitable Part D and Medicaid programs. (Id. at 1-2). Relator alleges that this “swapping” scheme violated the Anti-Kickback Statute (“AKS”) and FCA. (Id.)
On April 14, 2022, the Court granted PharMerica's motion to bifurcate the parties' Daubert and summary judgment motions. (ECF 627). The parties thereafter filed motions, (ECF 636; ECF 639; ECF 641; ECF 642; ECF 644; ECF 656), and related oppositions and replies to exclude one another's expert opinions and testimony. The relevant substance of these expert opinions will be discussed below.
The Court possesses original jurisdiction over Relator's claims stemming from the FCA and AKS. See 28 U.S.C. § 1331. It has supplemental jurisdiction over Relator's state-law claims.
See 28 U.S.C. § 1367(a).
An individual who knowingly presents or causes to be presented a false or fraudulent claim for payment or approval or knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim is liable to the United States under the FCA. See 31 U.S.C. § 3729(a)(1)(A)-(B). The FCA is intended “to reach all types of fraud . . . that might result in financial loss to the Government.” United States ex rel. Petratos v. Genentech Inc., 855 F.3d 481, 486 (3d Cir. 2017) (omission in original) (quoting Cook Cnty. v. United States ex rel. Chandler, 538 U.S. 119, 129 (2003)). “A claim is legally false when it does not comply ‘with a statute or regulation the compliance with which is a condition for Government payment.'” Id. (quoting United States ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d 295, 305 (3d Cir. 2011)).
This Court has acknowledged that compliance with the AKS is a precondition of payment for Medicare and Medicaid claims. See United States ex rel. Silver v. Omnicare, Inc., No. 11-1326, 2021 WL 9848445, at *8 (D.N.J. Apr. 13, 2021) (collecting cases). The AKS establishes criminal penalties for the knowing or willful direct or indirect offer or payment of remuneration to induce referral for the furnishing or arrangement of furnishing of an item or service that may be paid in whole or in part under a federal healthcare program or the purchase, lease, order, or recommendation thereof of a good, facility, service, or item which may be paid in whole or in part under a federal healthcare program. 42 U.S.C. § 1320a-7b(b)(2); see also 42 U.S.C. § 1320a-7a(a)(7) ().
“Federal Rule of Evidence 702 imposes an obligation upon a district court to ensure that expert testimony is relevant and reliable.” In re Johnson & Johnson Derivative Litig., 900 F.Supp.2d 467, 493 (D.N.J. Oct. 26, 2012) (citing ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 291-92 (3d Cir. 2012)). Pursuant to the Rule, “[a] witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify” if their “scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue”; their testimony is based on sufficient facts or data and reliable principles and methods; and the expert has reliably applied those principles and methods to the facts of the case. Fed.R.Evid. 702. District courts exercise considerable discretion in admitting or excluding expert opinion and testimony. See Pineda v. Ford Motor Co., 520 F.3d 237, 243 (3d Cir. 2008) ().
The Third Circuit Court of Appeals has imposed a “trilogy of restrictions on expert testimony: qualification, reliability and fit.” Langbord v. U.S. Dep't of Treasury, 832 F.3d 170, 194 (3d Cir. 2016) (quoting Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404 (3d Cir. 2003)). Qualification requires that the witness possess specialized knowledge, skills, training, or expertise. Krys v. Aaron, 112 F.Supp.3d 181, 189 (D.N.J. June 12, 2015) (citing Schneider, 320 F.3d at 404). Reliability demands “that the testimony be based upon ‘the “methods and procedures of science” rather than on “subjective belief or unsupported speculation”' and that the expert have ‘“good grounds” for his or her belief.'” Id. ). Finally, fit is a “‘helpfulness' standard” that refers to the testimony's relevance and ability to assist the factfinder. Id. at 190 (citing Schneider, 320 F.3d at 404). The proponent of the expert testimony bears the burden of establishing each requirement by a preponderance of the evidence. Ford v. Ford Motor Co., 311 F.Supp.3d 667, 673 (D.N.J. Oct. 27, 2017).
An expert's opinion may be based on facts or data that the expert personally observed or was made aware of, and such facts and data need not be admissible in order to be relied upon, though otherwise inadmissible facts or data may not be disclosed to the jury unless their probative value substantially outweighs their prejudicial effect. Fed.R.Evid. 703. Further, an expert opinion is not objectionable merely “because it embraces an ultimate issue,” Fed.R.Evid. 704, particularly if a proper foundation and explanation has been set and the factfinder may otherwise “be left hanging if the witness cannot cap off the testimony with a conclusion about the ultimate issue to which the expert is testifying,” Krys, 112 F.Supp.3d at 192 (quoting 3 STEPHEN A. SALTZBURG, MICHAEL M. MARTIN & DANIEL J. CAPRA, FEDERAL RULES OF EVIDENCE MANUAL § 704.02[1] (9th ed. 2006)). Courts have, however, struck expert opinions when they have impermissibly concluded whether a legal standard has been met. See City of Millville v. Rock, 683 F.Supp.2d 319, 329 (D.N.J. Jan. 12, 2010) (collecting cases).
Expert opinions, despite specialized rules and standards, are still evaluated by the same relevance and prejudice standards as other evidence. “[O]ne of the fundamental requirements of expert testimony is ‘relevance,' which should be evaluated under the standard expressed in” Federal Rule of Evidence 401, Argush v. LPL Fin., LLC, Nos. 13-7821, 14-955, 14956, 2017 WL 349378, at *2 (D.N.J. Jan. 23, 2017) (citing United States v. Ford, 481 F.3d 215, 218 (3d Cir. 2007)), which itself states that evidence is relevant if it has any tendency to make a fact of consequence more or less probable, Fed.R.Evid. 401. Similarly, district courts must ensure that expert testimony satisfies the standard of Federal Rule of Evidence 403, see United States v. Williams, 974 F.3d 320, 358 (3d Cir. 2020), which permits the exclusion of relevant evidence if its probative value is substantially outweighed by the risk of unfair prejudice, confusing issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence, Fed.R.Evid. 403.
A. Relator's Motion to Exclude the Opinions of Rossiter (ECF 636)
Relator challenges two opinions offered by Rossiter. First, Relator seeks to exclude Rossiter's opinion regarding fair market value within the long-term care (“LTC”) industry. (ECF 637 at 6-16). Second, Relator asserts that Rossiter's opinion concerning the impact, or lack thereof, of Part A pricing on Part D is contrary to law and therefore unreliable. (Id. at 16-31). The Court rejects both challenges.
In Opinion 1 of his report, and preceding summary thereof Rossiter discusses the highly competitive nature of the LTC market, the high number of participants and low barrier to entry, the sophistication of participants, and the inability...
To continue reading
Request your trial