Ameritox, LTD. v. Millennium Laboratories, Inc.

Filing 703

ORDER denying 696 Motion to stay enforcement of costs or to amend the Magistrate Judge's cost determination. The Magistrate Judge's Order on costs 693 is adopted and incorporated by reference in this Order of the Court. Millennium's Motion for a Temporary Stay 697 is GRANTED, and Millennium must post a supersedeas bond for the costs award within 14 days of this Order. Signed by Judge Susan C Bucklew on 3/13/2015. (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 to stay
enforcement of costs or to amend the magistrate judge’s cost determination (Doc. No. 696),
which Ameritox opposes (Doc. No. 700); and (2) Millennium’s Motion for a Temporary Stay
(Doc. No. 697), which Ameritox opposes (Doc. No. 702). 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 trial: (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) violation of the New Hampshire Consumer Protection Act
(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

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The parties entered into a consent order resolving Ameritox’s Lanham Act claim (Count
I) prior to trial. (Doc. No. 561).
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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 $2,755,000 in compensatory 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.
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The jury also awarded Ameritox $12,000,000 in punitive damages for these claims, which the
Court reduced to $8,505,000. (Doc. No. 620, 684).
Thereafter, Ameritox filed a motion and proposed Bill of Costs, in which it sought an
award of $1,043,744.28 in costs. (Doc. No. 663, 664). The Magistrate Judge considered
Ameritox’s motion for costs and Millennium’s response, and the Magistrate Judge issued an
Order in which he determined that Ameritox should be awarded $239,922.64 in costs. (Doc. No.
693).
II. Motion to Stay Enforcement of or to Amend the Cost Determination
In response to the Magistrate Judge’s order, Millennium filed the instant motion for
alternative relief. Specifically, Millennium asks that the Court either: (1) stay enforcement of the
Magistrate Judge’s order pending a resolution of the appeal; or (2) amend the Magistrate Judge’s
order regarding the amount of costs to be awarded. As explained below, the Court denies both
requests for relief.
A. Enforcement of Costs
Millennium first requests that the Court stay enforcement of the Magistrate Judge’s order
pending a resolution of the appeal in this case, because if Millennium is successful and obtains a
reversal, the costs motion would be mooted. This Court has discretion to stay the taxation of
costs pending an appeal. See King Cole Condominium Association, Inc. v. QBE Ins. Corp.,
2010 WL 3212091, at *2 (S.D. Fla. Aug. 12, 2010). However, the Court declines to exercise
such discretion in this case.
In making this determination, the Court has considered: (1) whether Millennium is likely
to prevail on the merits of its appeal; (2) whether Millennium will suffer irreparable harm absent

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a stay; (3) whether Ameritox will suffer substantial harm if the stay is issued; and (4) whether
the stay is adverse to public interest. See Breedlove v. Hartford Life & Accident Ins. Co., 2013
WL 361825, at *1 (M.D. Fla. Jan. 30, 2013). The Court concludes that Millennium is not likely
to prevail on appeal and has not shown that it will suffer irreparable harm absent a stay. As
such, its request that enforcement of the costs order be stayed pending appeal is denied.
Next, Millennium argues that its prior supersedeas bond should be sufficient and it
should not be required to post further bond, because it has the financial ability to cover a cost
award. Ameritox opposes this request and asks that Millennium be required to post a bond to
cover the cost award, because the prior bond only covers the damages award. The Court agrees
that Millennium must post a bond to secure the cost award, and as such, the Court denies
Millennium’s request to not post further bond.
B. Amount of Costs
Next, Millennium contends that this Court should amend the amount of costs awarded to
Ameritox. Millennium makes several arguments in support of this contention, and the Court
addresses each argument in turn.
1. Magistrate Judge’s Authority
First, Millennium argues that a magistrate judge does not have the authority to rule on a
post-trial motion for costs, as 28 U.S.C. § 636 only allows a magistrate judge to rule on pretrial
matters. Even if the Court accepts Millennium’s argument that a magistrate judge does not have
the authority to issue a final order on a motion for costs (absent the parties’ consent), the Court
concludes that the Magistrate Judge in this case had the authority to issue a Report and
Recommendation on the amount of costs to be awarded. See Fharmacy Records v. Nassar, 465

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Fed. Appx. 448, 455 (6th Cir. 2012)(stating that a magistrate judge has the authority to issue a
Report and Recommendation regarding post-trial matters of attorneys’ fees and costs, pursuant
to § 636(b)(3)’s additional duties provision).
Accordingly, this Court will deem the Magistrate Judge’s order on costs to be a Report
and Recommendation, to which Millennium has filed an objection. The Court has conducted a
de novo review of those portions of the Magistrate Judge’s order to which Millennium has
objected, and as such, there can be no prejudice to Millennium by the Court’s referral of the
motion to tax costs to the Magistrate Judge.
2. Specific Objections
Millennium argues that the Magistrate Judge erred in his award of $156,919.24 in costs
related to copies of electronic discovery (for which Ameritox sought $753,718.32). Specifically,
Millennium argues that no electronic discovery costs should be awarded in this case, or
alternatively, the maximum amount awarded for such costs should be $15,914.70. The Court has
reviewed the underlying motion for costs and the response, as well as the Magistrate Judge’s
order, Millennium’s objection, Ameritox’s response, and the relevant case law, and the Court
concludes that the Magistrate Judge’s recommendation of an award of $156,919.24 in costs
related to copies of electronic discovery should be adopted. Accordingly, the Court overrules
Millennium’s objection on this issue.
Next, Millennium argues that the Magistrate Judge erred by not reducing the overall cost
award based on Ameritox’s limited overall success in this case. The Court rejects this argument.
While Ameritox did not win on every claim and theory of unfair competitive conduct in every
state at issue, the jury returned an actual damages award of $2,755,000 and a punitive damages

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award of $12,000,000 (which the Court reduced to $8,505,000). In addition, the jury found for
Ameritox on its claims that the provision of free POCT cups violated the AKS and Stark Law.
To say that Ameritox obtained limited overall success is not accurate, and the Court concludes
that this requested reduction in costs must be denied. Accordingly, the Court adopts the
Magistrate Judge’s order on costs (Doc. No. 693) in its entirety.
III. Motion for a Temporary Stay
Finally, Millennium moves for a 14-day temporary stay of this Order on costs so that it
has sufficient time to post a supersedeas bond. Ameritox responds that a 14-day stay is
unnecessary, and any stay should be limited to five days. The Court finds that Millennium’s 14day stay request will not harm Ameritox, and as such, the Court grants Millennium’s motion on
this issue.
IV. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that:
(1)

Millennium’s motion to stay enforcement of costs or to amend the Magistrate
Judge’s cost determination (Doc. No. 696) is DENIED.

(2)

The Magistrate Judge's Order on costs (Doc. No. 693) is adopted and incorporated
by reference in this Order of the Court

(3)

Millennium’s Motion for a Temporary Stay (Doc. No. 697) is GRANTED, and
Millennium must post a supersedeas bond for the costs award within 14 days of
this Order.

DONE AND ORDERED at Tampa, Florida, this 13th day of March, 2015.

Copies to:
All parties and Counsel of Record
The Honorable Thomas B. McCoun III

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