Schmuckley et al v. Rite Aid Corporation

Filing 401

ORDER signed by Chief District Judge Kimberly J. Mueller on 4/6/2021 GRANTING IN PART AND DENYING IN PART 329 Motion for Reconsideration. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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ORDER
Plaintiffs,

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No. 2:12-cv-01699-KJM-EFB

United States of America et al., ex rel. Loyd F.
Schmuckley, Jr.,

v.
Rite Aid Corporation,
Defendant.

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State of California ex rel. Loyd F. Schmuckley,
Jr.,

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Plaintiff,

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v.
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Rite Aid Corporation,
Defendant.

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Rite Aid moves for reconsideration of an order denying its previous motion to strike

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expert opinions. See Mot. Correct, ECF No. 329; Prev. Order, ECF No. 319. The plaintiffs

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oppose the motion, which is fully briefed. See Opp’n, ECF No. 354; Reply, ECF No. 358. As

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explained in this order, the motion is granted in part and denied in part.
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The plaintiffs allege in this action that Rite Aid submitted false reimbursement claims for

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prescription drug sales. As explained in the court’s previous order, because the universe of

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reimbursement claims is so large, the plaintiffs proposed to use a statistical sampling method and

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extrapolation to prove, for example, how many false claims were actually submitted and for what

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amounts. See Prev. Order at 2–7. Rite Aid challenged the proposed sampling method and argued

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essentially that it was unreliable. See id. at 7–8.

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One of the parties’ reliability disputes concerned the relevance of several sources of

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information external to the claims themselves, such as patient medical records and claims

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histories. The plaintiffs’ proposed sampling method, a stratified random sample, would not

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analyze this other information when determining whether a particular claim was false. See Prev.

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Order at 18. The plaintiffs proposed instead to determine falsity by investigating only whether

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Rite Aid associates complied with certain procedures and regulatory limits. See id. This proposal

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differed from others the plaintiffs had made before. In a previous status report, for example, the

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plaintiffs had claimed their experts would rely on medical records. See Joint Status Rep. at 4–5,

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ECF No. 119. Rite Aid argued the plaintiffs’ sampling method was unreliable because patient

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records, previous claims, and other information might show a claim was not actually “false.” See

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Prev. Order at 18. Records might prove, for instance, that a patient had an approved medical

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condition. See id. Rite Aid therefore contended that a cluster sampling method was necessary to

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incorporate a broader universe of data and claims. See id. The court disagreed with Rite Aid’s

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contention that the plaintiffs’ sampling method was inadmissible; it was impeachable, perhaps,

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but not scientifically unreliable. See id. at 18–19. The court thus denied the motion to exclude.

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Rite Aid now moves to correct a typographical error in the court’s previous order and for

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reconsideration of what it claims was “clear error” in the court’s analysis of the plaintiffs’

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sampling method. See Mot. Correct, ECF No. 329.

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A district court has inherent authority to reconsider its interlocutory orders. See Fed. R.

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Civ. P. 54(b); City of Los Angeles, Harbor Div. v. Santa Monica Baykeeper, 254 F.3d 882, 885

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(9th Cir. 2001). Reconsideration is ordinarily appropriate only when controlling law has

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changed, if new evidence has become available, or when necessary to correct a clear error or
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prevent manifest injustice. See Cachil Dehe Band of Wintun Indians of Colusa Indian Cmty. v.

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California, 649 F. Supp. 2d 1063, 1069 (E.D. Cal. 2009). “In the absence of new evidence or a

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change in the law, a party may not use a motion for reconsideration to raise arguments or present

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new evidence for the first time when it could reasonably have been raised earlier in the litigation.”

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Id. This District’s local rules also require a party requesting reconsideration to explain “what new

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or different facts or circumstances are claimed to exist which did not exist or were not shown” or

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“what other grounds exist for the motion” and “why the facts of circumstances were not shown at

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the time of the prior motion.” E.D. Cal. L.R. 230(j).

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Rite Aid’s motion is granted in part. The court revises lines 20–23 on page 19 of its
previous order to read as follows (new text shown in bold):
Even if, as Rite Aid contends, plaintiffs’ methodology presupposes what constitutes
a “false” Code 1 claim, either under the applicable regulatory provisions, see Cal.
Code. Regs, tit. 22, section 51476(c), or otherwise, that is a key factual
determination requiring resolution by the factfinder. See Life Care I, 114 F. Supp.
3d at 560.

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The balance of Rite Aid’s motion is denied. Rite Aid identifies no new facts, no new law, no

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clear error, and no manifest injustice. Its motion instead calls out the shifting nature of the

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plaintiffs’ theories in this case. These inconsistencies are no reason to reconsider. The court

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recognized them in its order; its discussion of the most recent proposal was not inadvertent.

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Rite Aid also emphasizes again the importance of medical records and other similar

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information. But reconsideration is not appropriate to recognize Rite Aid’s interests in this

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evidence. It may very well be that a cluster sampling method would more accurately detect false

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claims, and medical records may prove essential to the fact-finder, but nothing prevents Rite Aid

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from emphasizing that and other faults to jurors. See id. Prev. Order at 19. Expert opinion is not

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inadmissible or unreliable simply because it is impeachable. See City of Pomona v. SQM N. Am.

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Corp., 750 F.3d 1036, 1044 (9th Cir. 2014). It might also be true that the plaintiffs’ stratified

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sampling method cannot prove falsity from a legal perspective. See Prev. Order at 19–20. But

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that is a decision for another day. See id. at 19–20 (“At this stage in the litigation, . . . the court’s

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role is to assess the scientific reliability of plaintiffs’ chosen methodology, not determine whether

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that methodology can or will satisfy the legal elements of plaintiffs’ case.”).
Finally, the court’s previous order does not, as Rite Aid contends, relieve the plaintiffs of

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their burden to prove falsity. It remains the plaintiffs’ burden to prove that Rite Aid submitted

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false claims. If plaintiffs’ statistics fail in that task or if the jury credits Rite Aid’s evidence

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instead, then Rite Aid will prevail. Nothing prevented Rite Aid from advancing this argument in

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previous filings. Reconsideration is thus denied.

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This order resolves ECF No. 329.

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IT IS SO ORDERED.

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DATED: April 6, 2021.

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