Ameritox, LTD. v. Millennium Laboratories, Inc.

Filing 684

ORDER denying 654 Motion for Judgment as a Matter of Law; granting in part and denying in part 655 Motion for New Trial or Reduce Punitive Damages. The Clerk is directed to enter a second amended judgment that reduces the punitive damages award from $12,000,000 to $8,505,000. Signed by Judge Susan C Bucklew on 9/12/2014. (JD)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
AMERITOX, LTD.,
Plaintiff,
v.

Case No.: 8:11-cv-775-T-24-TBM

MILLENNIUM LABORATORIES, INC.,
Defendant.
_________________________________/
ORDER
This cause comes before the Court on two motions: (1) Millennium’s Motion for
Judgment as a Matter of Law (Doc. No. 654), which Ameritox opposes (Doc. No. 658); and (2)
Millennium’s Motion for a New Trial, or to Set Aside, Reduce, or Remit Punitive Damages
(Doc. No. 655), which Ameritox opposes (Doc. No. 659). Accordingly, the Court will address
each motion.
I. Background
Ameritox and Millennium are clinical laboratories that screen urine specimens for the
presence of drugs. They are competitors in the industry and have been engaged in extensive
litigation for several years.
Ameritox asserted six claims against Millennium that went to trial:1 (1) violation of

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Millennium asserted five counterclaims against Ameritox that also went to trail: (1)
violation of Florida's Deceptive and Unfair Trade Practices Act (Count I); (2) violation of
California's Unfair Competition Law (Count II); (3) violation of New York's Consumer
Protection from Deceptive Acts and Practices Law (Count V); (4) common law unfair
competition in Florida, Texas and Washington (Count VI); and (5) common law tortious
interference with business relationships in Florida, California, New York, Tennessee, Texas,
Washington, and Oregon (Count VII). During the trial, Millennium withdrew its request for
damages for these claims and only sought injunctive relief. The jury found in favor of Ameritox
on all of Millennium’s counterclaims. (Doc. No. 620).

Florida’s Deceptive and Unfair Trade Practices Act (Counts II and III), (2) unfair competition
under California law (Count IV), (3) unfair competition under New Hampshire law (Count V),
(4) common law tortious interference with business relationships in Arizona, Florida, California,
New Hampshire, Tennessee, and Texas (Count VI), and (5) common law unfair competition in
Arizona, Florida, New Hampshire, and Texas (Count VII).2 (Doc. No. 429). The jury found in
favor of Ameritox on the following claims: (1) common law tortious interference with business
relationships in Florida, Tennessee, and Texas (Count VI), and (2) common law unfair
competition in Florida and Texas (Count VII). (Doc. No. 620). The jury or the Court found in
favor of Millennium on all of Ameritox’s other claims, including the claims of common law
tortious interference with business relationships in Arizona, California, and New Hampshire, as
well as the claims of common law unfair competition in Arizona and New Hampshire.3 (Doc.
No. 620, 667).
Ameritox’s unfair competition and tortious interference claims were based, in a large
part, on the theory that Millennium unlawfully obtained referrals through: (1) the provision of
free POCT cups under cup agreements, (2) the facilitation of below-market-value prices for
chemical analyzers and supplies from third-parties, and (3) the provision of free billing advice.
The jury rejected Ameritox’s contention that Millennium engaged in unfair competition and

2

The parties entered into a consent order resolving Ameritox’s Lanham Act claim (Count
I) prior to trial. (Doc. No. 561).
3

The Court found in favor of Millennium on Count II (Ameritox’s claim for injunctive
relief under Florida’s Deceptive and Unfair Trade Practices Act) and Count IV (Ameritox’s
claim under the California Business and Professions Code). (Doc. No. 667). Both of these
claims sought injunctive relief, and as such, these claims were not specifically considered by the
jury.
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tortious interference by facilitating below-market-value prices for chemical analyzers and
supplies from third-parties and by providing free billing advice. (Doc. No. 620). The jury found
in favor of Ameritox on Ameritox’s contention that Millennium violated the Anti-Kickback
Statute (“AKS”) and Stark Law by providing free POCT cups under cup agreements in exchange
for referrals. (Doc. No. 620).
At trial, Ameritox presented evidence that Millennium created its free cup program as a
means by which it could provide something of value to its customers in order to induce referrals.
The free cup program consisted of Millennium entering into cup agreements with customers,
under which Millennium provided the customers with free POCT cups that the doctors used to
collect urine specimens and that had to be returned to Millennium for confirmatory testing.
Pursuant to the terms of the cup agreements, the doctors had to agree not to bill patients for the
immediate POC testing results that the free POCT cups provided.
The jury rejected Millennium’s argument that the free POCT cups were not an improper
inducement for referrals. Instead, the jury credited the evidence that Ameritox presented that
many of the doctors with cup agreements could not bill for the POC testing,4 so those doctors
were not giving up anything in exchange for the free POCT cups. Ameritox showed, and the
jury accepted, that Millennium’s provision of free POCT cups was simply an improper way to
induce referrals, as it was a violation of the AKS and Stark Law. As a result, the jury found that
such conduct amounted to unfair competition and tortious interference in Florida, Tennessee, and
Texas, and the jury awarded Ameritox the following damages (Doc. No. 620):

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There were various reasons why a doctor could not bill for the POC testing, such as the
doctor also tested the urine sample using a chemical analyzer or the patient’s insurance would
not cover POC testing.
3

Claim

State

Compensatory
Damages

Punitive/Exemplary
Damages

Tortious Interference
and Unfair Competition

Florida

$1,625,000

$7,080,000

Tortious Interference

Tennessee

$555,000

$2,400,000

Tortious Interference
and Unfair Competition

Texas

$575,000

$2,520,000

$2,755,000

$12,000,000

TOTAL

II. Motion for Judgment as a Matter of Law
Millennium filed a renewed motion for judgment as a matter of law under Rule 50(b). In
support of its motion, Millennium makes three arguments: (1) Ameritox did not present
sufficient evidence of damages; (2) Ameritox failed to prove causation; and (3) Ameritox did not
establish a violation of the AKS. As explained below, the Court rejects these arguments and
denies Millennium’s motion for judgment as a matter of law.
A. Standard of Review
A court may enter judgment as a matter of law on a claim if the court determines that a
reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that
claim. Fed. R. Civ. P. 50. As explained by one court:
[T]he question before the district court is, whether the evidence is
legally sufficient to find for the party on that issue. . . . [I]n ruling on
a party's renewed motion under Rule 50(b) after the jury has rendered
a verdict, a court's sole consideration of the jury verdict is to assess
whether that verdict is supported by sufficient evidence. [T]he court
must evaluate all the evidence, together with any logical inferences,
in the light most favorable to the non-moving party. [I]t is not the
function of the Court to make credibility or factual determinations;
and if there are conflicting inferences that can be drawn from that
evidence, it is not the [c]ourt's role to pick the better one. It is the
jury's task-not [the court's]-to weigh conflicting evidence and
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inferences, and determine the credibility of the witnesses.
A party seeking judgment as a matter of law under Rule 50 based on
the sufficiency of the evidence has a heavy burden to carry. The
motion may be granted only when the facts and inferences . . . point
so strongly and overwhelmingly in favor of one party that the Court
believes that reasonable men could not arrive at a contrary verdict.
The Court must affirm the jury verdict unless there is no legal basis
upon which the jury could have found for [the prevailing party].
Conversely, if there is substantial evidence opposed to the motion
such that reasonable people, in the exercise of impartial judgment,
might reach differing conclusions, the jury's verdict must be left
intact. Simply stated, a Rule 50 motion must be denied if there is any
evidence from which the jury reasonably could have resolved the
matter the way it did.
McGinnis v. American Home Mortgage Servicing, Inc., 2014 WL 2949216, at *2-3 (M.D. Ga.
June 30, 2014)(internal quotation marks, footnotes, and citations omitted).
B. Damages
Millennium first argues that it is entitled to judgment as a matter of law because
Ameritox did not present sufficient evidence of damages. Specifically, Millennium argues that
the only evidence of damages was Dr. Cantor’s expert opinion, and Dr. Cantor’s damages
opinion was based, in part, on conduct that the jury did not find to be unlawful.
Dr. Cantor opined that Ameritox suffered approximately $18.9 million in damages from
three types of challenged conduct: (1) Millennium’s revenue model that encouraged doctors to
perform revenue-based testing; (2) Millennium’s marketing of chemical analyzers at belowmarket pricing; and (3) Millennium’s provision of free POCT cups under cup agreements. The
jury, however, only found that Millennium’s provision of free POCT cups under cup agreements
violated the AKS and Stark Law, and thus, the provision of free POCT cups was the only viable
basis for Ameritox’s tortious interference and unfair competition claims. Given that the jury

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rejected Ameritox’s contention that Ameritox was harmed by two of the three types of
challenged conduct, Millennium argues that Dr. Cantor’s opinion cannot support an award of
damages. As explained below, the Court rejects this argument.
While Dr. Cantor did testify that damages resulted from the three types of challenged
conduct, Dr. Cantor did not provide the only evidence of damages. Dr. Cantor opined that
Ameritox’s average revenue generated per sample tested was $236. (PX-73, p. 45). Dr. Miller
testified that he is a Florida doctor at Coastal Spine and Pain Centers, and his practice had a cup
agreement with Millennium. (Doc. No. 632, p. 1006, 1014, 1020). Additionally, Ameritox
presented evidence that Coastal Spine and Pain Centers submitted 8,356 specimens to be tested
by Millennium. (JX-410). This evidence was sufficient for the jury to conclude that Ameritox
lost profits equal to $1,972,016 (8,356 specimens x $236 in revenue per specimen). The jury
awarded Ameritox $1,625,000 in damages for tortious interference and unfair competition in
Florida. Based on the above, there was sufficient evidence to support the Florida compensatory
damages award.
Ameritox used an internal database called SalesForce.com to track customers that left
Ameritox and their reasons for leaving. The SalesForce.com database provided evidence that
Comprehensive Pain Specialists in Nashville, Tennessee was a customer of Ameritox through
November 10, 2011. (JX-406). Additionally, Ameritox presented evidence that Comprehensive
Pain Specialists became Millennium’s customer in November of 2011 and had a cup agreement.
(JX-410). Ameritox presented further evidence that Comprehensive Pain Specialists submitted
15,008 specimens to be tested by Millennium. (JX-410). This evidence was sufficient for the
jury to conclude that Ameritox lost profits equal to $3,541,888 (15,008 specimens x $236 in

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revenue per specimen). The jury awarded Ameritox $555,000 in damages for tortious
interference in Tennessee. Based on the above, there was sufficient evidence to support the
Tennessee compensatory damages award.
Jodie Strain, a former Millennium employee, testified regarding four customers of
Millennium in Texas that had cup agreements: Porter Family Medical Center, Beaumont Medical
Clinic, Dr. Nicholas Xydas Women’s Center, and Kingwood Urgent Care and Special Clinic.
(Doc. No. 630, p. 410-11, 442-45). Additionally, Ameritox presented evidence that these four
practices submitted 2,301 specimens to be tested by Millennium. (JX-410). At $236 per
specimen, this was sufficient evidence for the jury to award Ameritox lost profits of $543,036 in
Texas. While the jury awarded Ameritox $575,000 in damages for tortious interference and
unfair competition in Texas, Ameritox also presented evidence that there were eight additional
Texas medical practices identified as having cup agreements, and these additional practices5
easily provide evidence of more than $31,964 in lost profits. (JX-410). As such, there was
sufficient evidence to support the Texas compensatory damages award.
C. Causation
Next, Millennium argues that it is entitled to judgment as a matter of law because
Ameritox failed to prove causation. Specifically, Millennium contends that Ameritox did not
prove that Millennium’s free cup agreements caused customers to leave Ameritox and/or choose
Millennium. Millennium argues that the evidence shows that customers left Ameritox and/or

5

The eight additional Texas practices are: (1) El Paso Orthopaedic Surgery Group, (2)
Pain Specialists of Texas LP, (3) Greater Houston Interventional Pain Associates, (4) Texas
Medical Rehab & Pain Center, (5)Texas Pain Consultants- Dr Chang, (6) North Texas
Emergency Physicians PA, (7) North Texas OBGYN Associates, and (8) North Texas Precision
Pain Care. These practices submitted 4,899 specimens to be tested by Millennium.
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chose Millennium because of Ameritox’s deficiencies and Millennium’s competitive advantages.
While there was certainly evidence of Ameritox’s deficiencies6 and Millennium’s competitive
advantages7, there was also evidence that this was a market where doctors were revenueoriented, and the cup agreements were a way to provide a financial benefit for the doctors in
exchange for referrals.8
Furthermore, with respect to the deficiencies and obstacles that Ameritox faced, if those
were the real cause for the loss of its customers, one would expect to see a decrease in
Ameritox’s business in both its standard urine drug testing and its point-of-care drug testing.
However, Dr. Cantor testified that there was only a decline in Ameritox’s point-of-care drug
testing, which she attributed to Millennium’s free cup agreements. (Doc. No. 672, p. 713-722).
Dr. Cantor opined that the cup agreements were a substantial factor in customers’ decisions to
choose Millennium over Ameritox, and the jury could have credited her opinion in arriving at
their verdict.
Additionally, Alun Malone, Millennium’s Regional Director (whose region included
Florida and Texas), stated in an email to Millennium’s president, Howard Appel, and others that

6

Millennium offered evidence that Ameritox faced several obstacles, including: (1)
customers being dissatisfied with Ameritox’s service (turnaround time and billing issues); (2)
Ameritox’s loss of customers in Florida when it removed specimen processors in Florida; (3)
Ameritox’s $16.3 million payment to settle a healthcare fraud claim that received widespread
press; and (4) a false advertising claim that Ameritox lost regarding one of its products.
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Millennium offered evidence that its competitive advantages included its cutting edge
technology, its faster turn-around times, and its superior customer service.
8

This is true even when the doctors did not bill for the POC testing. The evidence
showed that sometimes doctors could not bill for POC testing, and those doctors who wanted the
immediate test results that POC testing provides would have had to buy POCT cups if they did
not receive the POCT cups for free under Millennium’s cup agreements.
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Millennium’s free cup program was a huge advantage for Millennium in the marketplace. (Doc.
No. 671, p. 503, 517-18). Jodie Strain and Kelley Nelson, former Millennium employees,
testified about how they successfully pitched Millennium’s free cup program in order to obtain
customers. (Doc. No. 630, p. 443; Doc. No. 670, p. 232-35 ).
Thus, based on the above, the Court concludes that there was sufficient evidence of
causation. As such, the Court rejects Millennium’s argument that it is entitled to judgment as a
matter of law because Ameritox failed to prove causation.
D. Violation of the AKS
Next, Millennium argues that it is entitled to judgment as a matter of law because
Ameritox did not establish a violation of the AKS. The Court instructed the jury that in order to
find a violation of the AKS, Ameritox had to prove three things: (1) that Millennium offered or
paid remuneration to a doctor; (2) that Millennium did so knowingly and willfully; and (3) that
Millennium did so in order to induce the doctor to refer to the provider as a quid pro quo a
patient for a service covered by Medicare or Medicaid. (Doc. No. 622). Additionally, the Court
instructed the jury that good faith is a defense to a violation of the AKS. (Doc. No. 622).
Millennium argues that there was no evidence of willfulness by Millennium, and instead,
the evidence showed that it acted in good faith. Even assuming that Millennium is correct that
there was no evidence of willfulness, the jury found that Millennium also violated the Stark Law,
which does not require a willful violation and does not contain a good faith defense.9 A

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The Court gave the following instruction regarding the Stark Law: “The Stark Law
prohibits doctors from referring their Medicare and Medicaid patients to business entities with
which the doctors have a financial relationship, such as a compensation arrangement.
Accordingly, with certain exceptions, the Stark Law prohibits doctors who have a compensation
arrangement with an entity from making referrals of Medicare or Medicaid patients for clinical
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violation of the Stark Law alone is sufficient to support Ameritox’s tortious interference and
unfair competition claims, and there was sufficient evidence for the jury to find that Millennium
violated the Stark Law. Accordingly, the Court rejects Millennium’s argument that it is entitled
to judgment as a matter of law because Ameritox did not establish a violation of the AKS.
E. Additional Objections
Millennium also makes various additional arguments regarding: (1) the Court’s
instruction that the elements of a violation of the AKS had to be proven by a preponderance of
the evidence (rather than beyond a reasonable doubt); (2) special interrogatory question 4A
being surplusage; and (3) the Court’s prohibition of evidence of Millennium’s reliance on advice
of counsel regarding the legality of its free cup program, based on Millennium’s failure to plead
it as an affirmative defense. All of these arguments were previously made and rejected by the
Court prior to and/or during trial. The Court now adopts its previous rulings, and there is no
need to address these objections any further.
III. Motion for a New Trial, or to Set Aside, Reduce, or Remit Punitive Damages
Millennium moves for a new trial, or alternatively, to set aside, reduce, or remit the
punitive damages awards. Accordingly, the Court will analyze each argument.
A. New Trial
Pursuant to Federal Rule of Civil Procedure 59(a)(1)(A), a “court may, on motion, grant a
new trial on all or some of the issues . . . after a jury trial, for any reason for which a new trial
has heretofore been granted in an action at law in federal court.” A “motion for a new trial may

laboratory services to that entity. It does not matter whether a doctor or entity intended to violate
the Stark Law.” (Doc. No. 622).
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invoke the discretion of the court in so far as it is bottomed on the claim that the verdict is
against the weight of the evidence, that the damages are excessive, or that, for other reasons, the
trial was not fair to the party moving; and may raise questions of law arising out of alleged
substantial errors in admission or rejection of evidence or instructions to the jury.” Montgomery
Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940).
1. Passion and Prejudice
Millennium argues that a new trial on all issues is warranted because the jury was swayed
by passion and prejudice. In support of this contention, Millennium points to Ameritox’s
introduction of allegedly inflammatory evidence in the form of a PowerPoint presentation that
Millennium gave to its employees where there were video slides of competitors and individuals
in body bags with toe tags displayed while audio of gun shots played in the background.
Additionally, Millennium points to the allegedly inflammatory testimony of former Millennium
employees, Jodie Strain and Kelly Nelson, who testified about their personal litigation with
Millennium. The Court addressed Millennium’s objections to this evidence during trial, and the
Court concludes that the admission of this evidence is not a sufficient basis for a new trial.
The PowerPoint presentation evidence was admitted after Millennium called its witnesses
to the stand; Ameritox did not attempt to introduce this evidence during its case-in-chief.
Ameritox used this evidence to show how Millennium treated its former employees who were no
longer part of the Millennium “family,” and thus to show how Millennium “fights” those who
are “against” Millennium. As such, this evidence is relevant to Millennium’s state of mind and
that it encouraged a culture of employees remaining silent regarding Millennium’s conduct.
Likewise, Strain and Nelson’s testimony about their personal litigation with Millennium also

11

showed how Millennium “fights” those who are “against” Millennium in order to silence them
about Millennium’s conduct. Additionally, Ameritox asked Millennium employee, Elizabeth
Peacock, about the reasons for Strain’s termination in an attempt to show that Strain was
terminated for discussing the PowerPoint presentation with Ed Zicari (a former Millennium
employee that was shown in the PowerPoint presentation as being in a body bag with a toe tag).
Accordingly, this evidence was not unfairly prejudicial to Millennium, and the Court
concludes that this evidence did not cause the jury to be swayed by passion and prejudice.
Therefore, this evidence is not a sufficient basis for a new trial.
2. Exclusion of Evidence
Next, Millennium argues that it is entitled to a new trial due to the Court’s exclusion of
certain evidence, which prejudiced Millennium. “[A] new trial is warranted only where the error
has caused a substantial prejudice to the affected party . . . .” Peat, Inc. v. Vanguard Research,
Inc., 378 F.3d 1154, 1162 (11th Cir. 2004). Thus, the inquiry is “how much of an effect did the
improperly . . . excluded evidence have on the verdict?” Id.
Millennium points to two types of evidence that it argues were improperly excluded: (1)
evidence that Millennium relied on the advice of counsel prior to implementing its free cup
program, and (2) evidence that it fully disclosed its free cup program to Florida’s Agency for
Health Care Administration (“AHCA”) in June of 2012, and as of the date of the trial, no adverse
action had been taken against Millennium in response. As explained below, the Court concludes
that a new trial based on either of these grounds is not warranted.
a. Advice of Counsel
Millennium contends that it was prejudiced by the exclusion of evidence that it relied on

12

the advice of counsel prior to implementing its free cup program. Prior to trial, Ameritox moved
in limine to exclude this evidence, arguing that Millennium had waived the advice of counsel
affirmative defense by failing to plead it. (Doc. No. 439). Additionally, Ameritox pointed out
that Millennium blocked Ameritox’s attempts to discover whether Millennium provided counsel
with all material facts relating to its provision of free POCT cups. (Doc. No. 439).
Millennium’s response to Ameritox’s motion in limine was vague and confusing. (Doc.
No. 472). Specifically, Millennium was not clear regarding whether it was raising an advice of
counsel defense.10 As a result, the Court excluded this evidence because Millennium had not
pled advice of counsel as an affirmative defense. In excluding this evidence, the Court relied on
United States v. Vernon, 723 F.3d 1234, 1269 (11th Cir. 2013). The Court concluded that advice
of counsel is an affirmative defense with respect to a claim for a violation of the AKS, and
Millennium’s failure to plead this affirmative defense resulted in a waiver of the defense. (Doc.
No. 509, p. 2).
Furthermore, the Court concludes that any error resulting from the exclusion of this
evidence is harmless with respect to the jury’s finding of liability on the tortious interference and
unfair competition claims, because Millennium’s reliance on the advice of counsel defense
would not alleviate Millennium’s liability under the Stark Law. The Stark Law does not contain

10

Millennium avoiding directly answering whether it intended to assert an advice of
counsel defense, making such vague remarks as the following in its response to Ameritox’s
motion in limine: (1) “[t]hat a non-privileged document might include legal analysis does
not mean that the party who received that analysis is relying on an advice of counsel defense or
has waived privilege”; (2) “[e]ven if Millennium were asserting an advice of counsel defense
here . . .”; and (3) “whether or not the actual opinions are offered into evidence . . .”. (Doc. No.
472, p. 3-5).
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a good faith defense, and as such, Millennium’s alleged reliance on counsel would not insulate it
from liability.
Additionally, the Court notes that Millennium failed to specifically argue in its pretrial
response to Ameritox’s motion in limine that its alleged reliance on advice of counsel might be
relevant to the issue of Ameritox’s claim for punitive damages. (Doc. No. 472). It was
Millennium’s responsibility to bring this argument to the Court’s attention, so Millennium
cannot fault the Court for failing to recognize the possible merits of an argument that was not
specifically raised.
Every issue in this case was hotly contested within the parties’ voluminous filings before
and during trial. However, the parties often failed to focus on the actual evidence and how the
Court’s rulings would affect the trial of this case. For example, the parties’ claims and
counterclaims in this case were constantly changing, so much so that the Court repeatedly had to
ask the parties to file notices identifying their claims and the legal theories that they were
asserting in support. (Doc. No. 414, 422, 429, 423, 430, 502, 523, 524, 541, 549, 560, 561, 612,
615). Given Millennium’s failure to properly bring to the Court’s attention the relevance of the
advice of counsel defense to Ameritox’s claim for punitive damages, and given Millennium’s
failure to plead an advice of counsel affirmative defense, the Court concludes that any error that
may have resulted from the exclusion of this evidence was brought upon by Millennium’s own
conduct. Accordingly, the Court concludes that the exclusion of this evidence does not warrant a
new trial.
Furthermore, the Court notes that Millennium blocked Ameritox’s attempted discovery
regarding an advice of counsel defense. In order for the advice of counsel evidence to be

14

relevant, the jury would need to know not only the advice that was rendered, but also the specific
facts that were disclosed to counsel and the specific advice that was sought. While Millennium
contends that it sought advice regarding the legality of its free cup program, it is not clear that
Millennium disclosed that doctors could be agreeing to forgo billing patients for POC testing
under the cup agreement even though they could not bill for the POC testing for reasons
unrelated to the cup agreement. If counsel was not presented with this information, and there is
no evidence that counsel was so advised, counsel’s advice regarding the legality of Millennium’s
cup program would not be helpful for the jury. Thus, this is an additional reason that the
exclusion of the advice of counsel evidence does not warrant a new trial.
b. Florida AHCA Evidence
Next, Millennium contends that it was prejudiced by the exclusion of evidence that it
fully disclosed its free cup program to Florida’s AHCA in June of 2012, and as of the date of the
trial, no adverse action had been taken against Millennium in response. Millennium apparently
wanted to argue to the jury that the failure of AHCA to take any adverse action meant that
AHCA found nothing wrong with Millennium’s free POCT cup program. In the order on
Ameritox’s motion for partial summary judgment, the Court rejected Millennium’s argument
that the AHCA evidence was relevant to the issue of liability. (Doc. No. 446). Specifically, in
its May 5, 2014 order, the Court stated the following:
. . . Florida’s Agency for Health Care Administration (“AHCA”)
contacted Millennium in June of 2012 regarding its provision of free
POCT cups and asserted that the free POCT cups were a kickback for
patient referrals. (Doc No. 328-36). Millennium responded to
AHCA in June of 2012 with its Plan of Correction, stating that the
provision of free POCT cups was not a kickback, because the doctors
could not bill for the POC testing. (Doc. No. 328-36). Additionally,
Millennium asserted that the free POCT cups are used solely for the
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purpose of collecting, processing, storing and transporting specimens
to the laboratory as permitted by AHCA rule 59A-7.020(14)(c).11
(Doc. No. 328-36). It has been almost two years, and AHCA has not
responded to Millennium’s Plan of Correction. (Doc. No. 328-36).
. . . [However,] it appears from the AHCA file that AHCA has not
determined whether Millennium’s Plan of Correction is acceptable,
and instead, on July 23, 2012, AHCA forwarded the case file to the
Florida Attorney General for review. (Doc. No. 388). There is no
evidence before the Court regarding whether the Florida Attorney
General is going to respond to Millennium’s provision of free POCT
cups in any way. Given the state of the AHCA proceedings, it is
impossible to determine whether an investigation is ongoing or
whether the matter is closed. As such, the Court finds that the AHCA
evidence does not weigh for or against the argument that
Millennium’s provision of free POCT cups falls within the exception
to the definition of remuneration.
(Doc. No. 446, p. 8-9).
To the extent that Millennium now argues that this evidence bears directly on the issue of
whether Millennium was guilty of intentional misconduct or gross negligence, which would have
allowed the jury to award punitive damages, the Court rejects this argument. Millennium never
specifically raised the argument before or during trial that the AHCA evidence had any bearing
on the issue of punitive damages. However, had Millennium raised that issue, the Court would
have rejected the argument because there is no evidence that Millennium fully disclosed all of
the relevant details of its free POCT cup program to Florida’s AHCA; specifically, Millennium
did not disclose that many of the doctors that had free cup agreements could not bill their
patients for the POC testing (regardless of the cup agreement). Without evidence that
Millennium fully disclosed all relevant details to Florida’s AHCA, the fact that no adverse action

11

Pursuant to AHCA rule 59A-7.020(14)(c), AHCA recognizes an exception to the
definition of a kickback for “items, devices or supplies that are for the sole purpose of” (1)
“[c]ollecting, processing, storing and transporting specimens to the laboratory;” or (2)
“communicating laboratory tests or results . . . between the physician . . . and the laboratory.”
16

has been taken by AHCA or the Florida Attorney General in response is not evidence relevant to
the Florida punitive damages award. Stated differently, the fact that no adverse action has been
taken by AHCA or the Florida Attorney General in response to Millennium’s limited disclosure
regarding its free POCT cup program does not show that Millennium lacked the requisite intent
for the jury to award punitive damages for its conduct in Florida. Accordingly, the Court
concludes that Millennium has not shown that the exclusion of the AHCA evidence caused it
substantial prejudice such that a new trial would be warranted.
B. Reduction of Punitive Damages Under State Law
Millennium argues that the punitive damages awards should be reduced as excessive, or
alternatively, should be reduced under each state’s punitive damages cap. As explained below,
the Court agrees with Millennium that a reduction is warranted under Florida and Tennessee law,
but the Court rejects Millennium’s argument that a reduction is warranted under Texas law.
1. Florida
The jury awarded Ameritox $1,625,000 in compensatory damages and $7,080,000 in
punitive damages for its tortious interference and unfair competition claims under Florida law.
Pursuant to Florida Statute § 768.73(1)(a), punitive damages cannot exceed the greater of: (1)
three times the amount of compensatory damages, or (2) $500,000. However, there is an
exception to this cap if the jury determines that at the time of the injury, Millennium had a
specific intent to harm Ameritox and that Millennium’s conduct did in fact harm Ameritox. Fla.
Stat. § 768.73(1)(c).
Ameritox argues that the exception to the punitive damages cap applies. However, the
jury was not specifically asked whether Millennium had a specific intent to harm Ameritox with

17

respect to its conduct in Florida. Instead, the jury instructions allowed the jury to find in favor of
Ameritox on its Florida tortious interference claim upon a finding that Millennium used illegal
conduct when competing with Ameritox. (Doc. No. 622, p. 38-39). The jury concluded that
Millennium violated the AKS and Stark Law, and thus, they could have concluded that such
illegal conduct was sufficient to support Ameritox’s tortious interference claim under Florida
law. Thus, the jury may not have considered whether Millennium also had the specific intent to
harm Ameritox when it interfered with Ameritox’s customers. Likewise, the jury instructions
relating to Ameritox’s unfair competition claim under Florida law did not require the jury to
specifically find that Millennium had the specific intent to harm Ameritox when it engaged in
unfair competition. (Doc. No. 622, p. 43). For these reasons, the Court concludes that the cap
on punitive damages applies, and the Florida punitive damages award must be reduced to
$4,875,000. See Myers v. Central Florida Investments, Inc., 592 F.3d 1201, 1216-17 (11th Cir.
2010)(considering the verdict form and jury instructions when determining whether the jury
made the requisite findings in order to avoid the cap on punitive damages).
Next, Millennium argues that the punitive damages award is otherwise excessive and
should be remitted under Florida law. Florida Statute § 768.74 provides that upon a proper
motion, the trial court must scrutinize the damages award to determine if it is excessive in light
of the facts and circumstances presented to the jury. Upon review, the Court concludes that the
reduced Florida punitive damages award of $4,875,000 is not excessive under the facts of this
case.
This is a case where Millennium created a free cup program that the jury found violated
both the AKS and Stark Law by providing free POCT cups in order to induce referrals. The

18

evidence showed that the program lasted several years and that Millennium’s improper
inducements in exchange for referrals in violation of the AKS and Stark Law tainted the
healthcare system. As such, the jury could have found this conduct to be fairly reprehensible.
Furthermore, a punitive award of three times the amount of compensatory damages in this case is
significant enough to send a message and deter future conduct, while the amount is not so large
as to bankrupt Millennium. The Court concludes that the punitive damages award is reasonable
under the facts of this case. Therefore, the Court denies Millennium’s request to further reduce
the Florida punitive damages award.
2. Tennessee
The jury awarded Ameritox $555,000 in compensatory damages and $2,400,000 in
punitive damages for its tortious interference claim under Tennessee law. Pursuant to 29-39-104
of Tennessee’s Code, punitive damages awards shall not exceed the greater of: (1) two times the
amount of compensatory damages, or (2) $500,000. Ameritox argues that this provision does not
apply to its Tennessee claim, because the provision specifically states that it applies to actions
that accrue on or after October 1, 2011. The Court rejects Ameritox’s argument.
It is unclear which specific customer(s) the jury found that Millennium tortiously
interfered with, and there is evidence of customers that left Ameritox both before and after
October 1, 2011. (PX-47). Given the ambiguity regarding which customer(s) the jury found that
Millennium tortiously interfered with, the Court cannot conclude with any confidence that the
punitive damages were awarded for an interference that occurred prior to October 1, 2011.
Therefore, the Court concludes that the cap of two times the amount of compensatory damages
should be applied to the Tennessee punitive damages award. As such, the Tennessee punitive

19

damages award is reduced to $1,110,000.
Next, Millennium argues that the punitive damages award is otherwise excessive and
should be remitted under Tennessee law. The Tennessee Supreme Court requires a trial court to
“review the jury’s award of punitive damages and ‘clearly set forth the reasons for decreasing or
approving all punitive awards in findings of fact and conclusions on law demonstrating a
consideration of all factors on which the jury is instructed.’” Culbreath v. First Tennessee Bank
National Association, 44 S.W. 3d 518, 528 (Tenn. 2001)(quoting Hodges v. S.C. Toof & Co.,
833 S.W.2d 896, 902 (Tenn. 1992)).
The jury was instructed to consider the following nine factors before awarding punitive
damages: (1) Millennium's net worth and financial condition; (2) the objectionable nature of
Millennium's wrongdoing, the impact of Millennium's conduct on Ameritox, and the relationship
of the parties; (3) Millennium's awareness of the amount of harm being caused and Millennium's
motivation in causing the harm; (4) the duration of Millennium's misconduct and whether
Millennium attempted to conceal the conduct; (5) the amount of money Ameritox has spent in
the attempt to recover the losses; (6) whether Millennium profited from the activity, and if so,
whether the punitive award should be in excess of the profit in order to deter similar future
behavior; (7) the number and amount of previous punitive damage awards against Millennium
based upon the same wrongful act; (8) whether, once the misconduct became known to
Millennium, Millennium tried to remedy the situation or offered a prompt and fair settlement for
the actual harm caused; and (9) any other circumstances shown by the evidence that bear on
determining the proper amount of the punitive award. (Doc. No. 622). As explained below, the
evidence supports the reduced punitive damages award.

20

The evidence presented shows that Millennium has a substantial net worth and strong
financial condition, and the reduced $1,110,000 punitive damages award will not bankrupt
Millennium, but it is sufficiently large to punish Millennium. Millennium’s conduct was
egregious in that it harmed not only its competitors, including Ameritox, but also the public at
large because it compromised the health care system by tainting it with improper inducements in
exchange for referrals. Millennium’s conduct, which the evidence showed extended over several
years, was motivated by a desire to make more money and gain a competitive advantage in the
urine drug testing market. While Millennium did not attempt to conceal its conduct, it did not
stop its conduct once this lawsuit was filed, and Ameritox has spent significant money pursuing
this litigation. Millennium profited from its conduct, and the punitive damages award should be
in excess of Millennium’s improperly obtained profits in order to deter similar future behavior.
Furthermore, when the lawsuit was filed against Millennium, Millennium did not try to remedy
the situation or offer to settle this case for the actual harm caused; in fact, it continued its free
cup program until the Court ruled on its unlawfulness. Based on this, the Court concludes that
the evidence supports the $1,110,000 reduced punitive damages award.12
3. Texas
The jury awarded Ameritox $575,000 in compensatory damages and $2,520,000 in
exemplary damages for its tortious interference and unfair competition claims under Texas law.
Pursuant to the relevant portion of § 41.008(b) of the Texas Civil Practice and Remedies Code,
exemplary damages cannot exceed the greater of: (1) two times the amount of economic

12

There is no evidence that any previous punitive damage awards have been entered
against Millennium based upon the same wrongful conduct.
21

damages, or (2) $200,000. Ameritox argues that this cap does not apply, because § 41.008(c)(9)
provides an exception. Section 41.008(c)(9) provides that the cap “does not apply to a cause of
action against a defendant . . . based on conduct described as a felony in . . . [section 32.43
(commercial bribery)] of the Penal Code if . . . the conduct was committed knowingly or
intentionally.”
Section 32.43(b) of the Penal Code states that a person who is a fiduciary commits
commercial bribery when the fiduciary, “without the consent of his beneficiary, . . . intentionally
or knowingly . . . accepts . . . any benefit from another person on agreement or understanding
that the benefit will influence the conduct of the fiduciary in relation to the affairs of his
beneficiary.” Likewise, § 32.43(c) states that a person commits commercial bribery when he
“confer[s] any benefit[,] the acceptance of which is an offense under Subsection (b).”
Section 32.43(a)(2)(C) defines a fiduciary to include a physician. Therefore, in order to
come within the commercial bribery exception to the cap on exemplary damages, the jury was
required to find that Millennium conferred a benefit (i.e., the free POCT cups) on a physician,
without the patient’s consent, on an agreement or understanding that the provision of free POCT
cups would influence the conduct of the physician in relation to the affairs of the patient (i.e.,
cause the physician to send the patient’s urine samples to Millennium for confirmatory testing).
The Court concludes that Millennium’s conduct of providing free POCT cups in
exchange for referrals can equate to commercial bribery. The jury concluded that Millennium’s
provision of free POCT cups in exchange for referrals violated the AKS, which required the jury
to find that Millennium acted knowingly and willfully. Accordingly, the Court concludes that
the jury found that Millennium knowingly committed conduct that equates to commercial

22

bribery, and as a result, the cap on exemplary damages does not apply.
Millennium also argues that the $2,520,000 exemplary damages award should be
remitted under Texas law. The Texas Supreme Court has stated the following regarding
exemplary damages:
Exemplary damages must be reasonably proportioned to actual
damages. There can be no set rule or ratio between the amount of
actual and exemplary damages which will be considered reasonable.
This determination must depend upon the facts of each particular
case. Factors to consider in determining whether an award of
exemplary damages is reasonable include (1) the nature of the wrong,
(2) the character of the conduct involved, (3) the degree of culpability
of the wrongdoer, (4) the situation and sensibilities of the parties
concerned, and (5) the extent to which such conduct offends a public
sense of justice and propriety.
Alamo National Bank v. Kraus, 616 S.W.2d 908, 910 (Tx. 1981)(internal citations omitted). As
explained below, the Court concludes that the evidence supports the $2,520,000 exemplary
damages award.
The jury found that Millennium tortiously interfered with Ameritox’s customers and
engaged in unfair competition by improperly inducing doctors by providing free POCT cups in
exchange for the doctors agreeing to send their urine samples to Millennium for confirmatory
testing. This conduct not only harmed Ameritox, but it harmed the public as well by tainting the
healthcare system with improper inducements in exchange for referrals. Millennium’s conduct
can be equated to commercial bribery, which is a felony under Texas law. The jury found that
the harm to Ameritox resulted from fraud, malice of gross negligence by Millennium.
Exemplary damages should be awarded because Millennium’s conduct offends a public sense of
justice and propriety. Accordingly, the Court finds that the $2,520,000 exemplary damages
award is reasonable under the facts of this case.
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C. Constitutionality of Punitive Award
Millennium also argues that the punitive damages awards are excessive under the Due
Process Clause and should be set aside or reduced. The Supreme Court provides the following
guidance:
While States possess discretion over the imposition of punitive
damages, it is well established that there are procedural and
substantive constitutional limitations on these awards. The Due
Process Clause of the Fourteenth Amendment prohibits the
imposition of grossly excessive or arbitrary punishments on a
tortfeasor. The reason is that “[e]lementary notions of fairness
enshrined in our constitutional jurisprudence dictate that a person
receive fair notice not only of the conduct that will subject him to
punishment, but also of the severity of the penalty that a State may
impose.” To the extent an award is grossly excessive, it furthers no
legitimate purpose and constitutes an arbitrary deprivation of
property.
*

*

*

In light of these concerns, . . . we instructed courts reviewing punitive
damages to consider three guideposts: (1) the degree of
reprehensibility of the defendant's misconduct; (2) the disparity
between the actual or potential harm suffered by the plaintiff and the
punitive damages award; and (3) the difference between the punitive
damages awarded by the jury and the civil penalties authorized or
imposed in comparable cases.
State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 416-18 (2003)(internal
citations omitted). Accordingly, this Court will analyze the awards of punitive damages under
this standard.
1. Texas Exemplary Damages Award
The jury awarded Ameritox $575,000 in compensatory damages and $2,520,000 in
exemplary damages for its tortious interference and unfair competition claims under Texas law.
The first guidepost that the Court considers is the degree of reprehensibility of Millennium’s

24

misconduct. In doing so, the Court is mindful of the following:
“[T]he most important indicium of the reasonableness of a punitive
damages award is the degree of reprehensibility of the defendant's
conduct.” . . . [C]ourts . . . [must] determine the reprehensibility of a
defendant by considering whether: the harm caused was physical as
opposed to economic; the tortious conduct evinced an indifference to
or a reckless disregard of the health or safety of others; the target of
the conduct had financial vulnerability; the conduct involved repeated
actions or was an isolated incident; and the harm was the result of
intentional malice, trickery, or deceit, or mere accident. The
existence of any one of these factors weighing in favor of a plaintiff
may not be sufficient to sustain a punitive damages award; and the
absence of all of them renders any award suspect. It should be
presumed a plaintiff has been made whole for his injuries by
compensatory damages, so punitive damages should only be awarded
if the defendant's culpability, after having paid compensatory
damages, is so reprehensible as to warrant the imposition of further
sanctions to achieve punishment or deterrence.
Id. at 419 (internal citations omitted).
In this case, three factors clearly weigh against a finding of reprehensibility. The harm
caused was purely economic, and Millennium’s conduct did not evince an indifference to or a
reckless disregard of the health or safety of others. Additionally, Ameritox is not a financially
vulnerable company; instead, Ameritox has a large market share in the urine drug testing
industry.
Millennium’s conduct involved a single decision (i.e., its free cup program) that was
executed over several years. Given the duration of the free cup program, this factor weighs in
favor of a finding of reprehensibility. Furthermore, Millennium’s conduct in Texas cannot be
described as an accident, but instead, it consisted of a program aimed at obtaining more
customers through the provision of improper inducements. Thus, Millennium’s conduct in

25

Texas can be characterized as fairly reprehensible.
The second guidepost that the Court considers is ratio between the Texas exemplary
damages awarded ($2,520,000) and the Texas compensatory damages awarded ($575,000). See
id. at 424. In this case, the ratio is 4.38. The Supreme Court has stated that “an award of more
than four times the amount of compensatory damages might be close to the line of constitutional
impropriety.” Id. at 425 (citation omitted). However, the Supreme Court has also stated:
When compensatory damages are substantial, then a lesser ratio,
perhaps only equal to compensatory damages, can reach the
outermost limit of the due process guarantee. The precise award in
any case, of course, must be based upon the facts and circumstances
of the defendant's conduct and the harm to the plaintiff. . . . [C]ourts
must ensure that the measure of punishment is both reasonable and
proportionate to the amount of harm to the plaintiff and to the general
damages recovered
Id. at 425-26.
In this case, the jury awarded exemplary damages that were 4.38 times the amount of
compensatory damages. While this amount may approach the line of constitutional impropriety,
this Court cannot conclude that the line has been crossed in this case.
The third guidepost that the Court considers is the difference between the exemplary
damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.
This guidepost is accorded the least weight in the excessiveness analysis. See Eastern Property
Development LLC v. Gill, 558 Fed. Appx. 882, 889 (11th Cir. 2014)(citations omitted). One
court has even stated that this guidepost is not generally applicable to civil economic tort cases.
See Slip-N-Slide Records, Inc. v. TVT Records, LLC, 2007 WL 3232274, at *30 (S.D. Fla. Oct.
31, 2007). Like the Slip-N-Slide court, this Court concludes that the application of this factor is
26

inconsequential in this case. See id.
Accordingly, the Court concludes that due to Millennium’s fairly reprehensible conduct
in Texas, the exemplary damages award of $2,520,000 does not violate the Due Process Clause.
Therefore, the Court denies Millennium’s request to reduce the Texas exemplary damages
award.
2. Tennessee Punitive Damages Award
The jury awarded Ameritox $555,000 in compensatory damages and $2,400,000 in
punitive damages for its tortious interference claim under Tennessee law. The Court reduced the
Tennessee punitive damages award to $1,110,000 based on the statutory cap. Now the Court
must review the reduced Tennessee punitive damages award to ensure that it complies with Due
Process. As explained below, it does.
The analysis of reprehensibility for Millennium’s conduct in Tennessee is the same as the
Court’s analysis regarding Millennium’s conduct in Texas, and the Court concludes that
Millennium’s conduct in Tennessee can be characterized as fairly reprehensible. The ratio of the
Tennessee punitive damages to Tennessee compensatory damages is 2:1—less than half of the
ratio for Texas. Accordingly, the Court concludes that the Tennessee punitive damages award of
$1,110,000 does not violate the Due Process Clause. Therefore, the Court denies Millennium’s
request to further reduce the Tennessee punitive damages award.
3. Florida Punitive Damages Award
The jury awarded Ameritox $1,625,000 in compensatory damages and $7,080,000 in
punitive damages for its tortious interference and unfair competition claims under Florida law.

27

The Court reduced the Florida punitive damages award to $4,875,000 based on the statutory cap.
Now the Court must review the reduced Florida punitive damages award to ensure that it
complies with Due Process. As explained below, it does.
The analysis of reprehensibility for Millennium’s conduct in Florida is the same as the
Court’s analysis regarding its conduct in Texas and Tennessee, and the Court concludes that
Millennium’s conduct was fairly reprehensible. The ratio of the Florida punitive damages to
Florida compensatory damages is 3:1—less than the ratio for Texas. Accordingly, the Court
concludes that the Florida punitive damages award of $4,875,000 does not violate the Due
Process Clause. Therefore, the Court denies Millennium’s request to further reduce the Florida
punitive damages award.
IV. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that:
(1)

Millennium’s Motion for Judgment as a Matter of Law (Doc. No. 654) is
DENIED.

(2)

Millennium’s Motion for a New Trial, or to Set Aside, Reduce, or Remit Punitive
Damages (Doc. No. 655) is GRANTED IN PART AND DENIED IN PART:
(a)

The Court grants Millennium’s motion to reduce the award of punitive
damages under Florida law to $4,875,000.

(b)

The Court grants Millennium’s motion to reduce the award of punitive
damages under Tennessee law to $1,110,000.

(c)

Otherwise, the motion is denied.
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(3)

The Clerk is directed to enter a second amended judgment that reduces the
punitive damages award from $12,000,000 to $8,505,000.

DONE AND ORDERED at Tampa, Florida, this 12th day of September, 2014.

Copies to: All parties and Counsel of Record

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