Fitzer v. Allergan, Inc. et al

Filing 297

MEMORANDUM OPINION. Signed by Judge Stephanie A. Gallagher on 3/18/2024. (kb3s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
UNITED STATES OF AMERICA, et al.,
ex rel. MATTHEW A. FITZER, M.D.,
Plaintiffs,

v.

ALLERGAN, INC., et al.
Defendants.
*

*

*

*

*

*
*
*
*
*
*
*
*
*
*
*

Civil Case No. 1:17-cv-00668-SAG

*
*
*
*
MEMORANDUM OPINION

*

*

*

*

*

Relator Matthew A. Fitzer (“Relator”) filed this case against Defendant Allergan, Inc.
(“Allergan”), alleging that Allergan conducted an unlawful kickback scheme in violation of the
False Claims Act (“FCA”), 31 U.S.C. § 3729, et seq., by maintaining a surgeon locator on the
website for its LAP-BAND product. ECF 1. At this post-discovery stage of the case, the parties
have filed myriad motions, including motions to exclude expert testimony. This opinion
adjudicates one such motion: Allergan’s Motion to Exclude the Opinions of Christopher L. Haney,
Relator’s damages expert, ECF 201. This Court has considered the motion, Relator’s opposition,
ECF 235, and Allergan’s reply, ECF 250, along with the exhibits thereto. After considering the
parties’ positions, Allergan’s motion to exclude Haney’s testimony will be GRANTED IN PART
and DENIED IN PART. 1

In his opposition and in other motions, Relator makes an argument evidencing a misunderstanding
of a portion of this Court’s scheduling order. See ECF 235 at 7–8. This Court noted that Daubert
motions relating only to trial testimony could be filed with motions in limine, but that any such
motions also seeking to exclude an expert’s testimony from consideration at the summary
judgment stage needed to be filed with the dispositive motions. ECF 185. Allergan filed three
expert disclosure motions on the earlier timetable, ECF 200, 201, 202, and Relator has responded,
in part, that the motions are premature. In this Court’s view, there is no such thing as a premature
Daubert motion, as they can be filed at any time prior to the Court’s scheduling deadline. And to
1

I.

RELEVANT BACKGROUND
Relator’s damages expert, Christopher Haney, is a certified public accountant and certified

fraud examiner, who also holds a certification in healthcare compliance. ECF 235-1 at 5. 2 He has
almost twenty years of experience in those areas. Id. Relator retained Haney to calculate the
government’s financial damages relating to Allergan’s locator. Id. at 4.
A cursory summary of Haney’s damages calculations follows: Haney assumes, for
purposes of his analysis, that any initial operations reimbursed by Medicare involving a LAPBAND from 2008-2013 were “inducement-tainted.” 3 Id. at 16, 18. He posits, therefore, that the
government would not have made any payments for those operations had it known the claims were
the result of violative conduct. Id. at 18. In an effort to determine the number of LAP-BAND initial
operations installed by surgeons during times they appeared on the locator, he reviewed
spreadsheets maintained by Allergan, which he acknowledges “only provide reliable data for
certain timeframes during the relevant period.” Id. at 20. In other words, Haney had no records
establishing exactly when any particular surgeon was added to or removed from the locator. He
acknowledges that, at various times, Allergan removed significant numbers of surgeons from its
locator. Id. at 25–26. Haney then compiled a list of the surgeons and the time frames when he
believes they were on the locator, erring conservatively by including a particular surgeon only

the extent this Court finds that all or part of a witness’s testimony should be excluded under the
relevant standards, that ruling applies both at the summary judgment stage and at trial.
In referring to various exhibits, this Court cites to the “ECF” page numbers at the header of the
page and not to the actual page numbers on the underlying document. In the case of Haney’s report,
the ECF page number is generally one number greater than the report’s own page number.
2

3

“Inducement-tainted” means reimbursement claims that violated the Anti-Kickback Statute
(“AKS”) and/or FCA.
2

when the surgeon had been included in the locator spreadsheets immediately preceding and
immediately following the date of a surgery. Id. at 27.
To determine whether a procedure was reimbursed by the government, Haney reviewed
Centers for Medicare and Medicaid Services (“CMS”) data for over 40,000 patients and over
84,000 claims associated with CPT code 43770, indicating gastric banding surgery. Id. at 21.
Haney recognizes that CMS reimbursement data do not distinguish between LAP-BAND and
REALIZE band (a competitor brand) operations.
In an effort to determine the number of “inducement-tainted Lap-Band devices,” Haney
matched Allergan’s locator spreadsheets and CMS’s procedure data with Business Reply Card
(“BRC”) data Allergan solicited from patients implanted with LAP-BANDs from 2008-2014. Id.
at 20–21. There were BRCs for 43,920 patients in that time frame, although Allergan’s sales and
shipping records showed over 294,000 LAP-BANDs shipped. Id. Through his process, Haney
identified 1,584 procedures performed by surgeons he identified as listed on the locator (1,271
inpatient and 313 outpatient). Id. at 27–28. However, because this matching exercise captured only
those procedures reflected in BRC data, Haney then compared just the locator spreadsheets and
CMS procedure data to identify remaining Medicare claims relating to LAP-BAND
implementations. Id. at 28–29. Haney also weighed LAP-BAND’s share of the gastric banding
market during the relevant time frame by looking at Allergan’s internal marketing information,
shipment records, records of product sales from Allergan and the manufacturer of the REALIZE
band, and by analyzing LAP-BAND’s sales data as compared to the number of gastric banding
surgeries each year. Id. at 24. Because those sources yielded roughly comparable numbers, Haney
came up with a market share percentage to subtract to account for REALIZE band surgeries. Id. at

3

24, 28. The locator spreadsheets reflected 95,459 operations during the relevant time period,
resulting in 5,623 additional operations. Id. at 30–31.
Haney then undertook de-duplication efforts to ensure he did not double count the 1,584
operations from the BRC data. Id. at 31. After that effort, Haney reduced the number of additional
operations to 4,736, for a total of 6,320. Id. He then tried to estimate how many were inpatient and
outpatient using the Place of Service Code in the CMS data. Id. Ultimately, Haney concluded that
6,320 surgeries had been reimbursed by Medicare (4,946 inpatient and 1,374 outpatient). Id. at 32.
Having opined as to the number of claims, Haney next endeavored to determine the
Medicare reimbursement amount for an inpatient or outpatient initial operation. With respect to
outpatient surgeries, Haney used the physician and facility fee reimbursement schedules from
Medicare itself to estimate the amount to be reimbursed for outpatient operations. Id. at 32–33.
With respect to inpatient surgeries, Haney used $12,345, a figure he obtained from Ibrahim, A.M.
et al., Reoperation and Medicare Expenditures After Laparoscopic Gastric Band Surgery, 152(9)
JAMA SURGERY 835–42 (2017). ECF 201-6. That article evaluated reimbursements for 25,042
Medicare beneficiaries who received a gastric band between 2006 and 2013 to determine the
average amount for an inpatient operation. Id. Haney noted that the figure is less than that found
in three other studies evaluating gastric banding costs. ECF 235-1 at 32. 4
Haney then multiplied the number of claims he found by the estimated claim value for each
category of surgeries (inpatient and outpatient) to arrive at his total damages figure in Opinion 1.
Id. at 33.

Haney did not cite, and the parties have not provided, Medicare’s physician fee schedules or
reimbursement rates for inpatient gastric banding surgeries.
4

4

As to Opinion 2, Haney calculated what he believed to be the government’s payment of
Medicare claims associated with reoperations for inducement-tainted LAP-BAND devices. Id. at
35. Using the same JAMA Surgery article, Haney found that almost 20% of Medicare patients who
received gastric bands underwent reoperations, and those patients had an average of 3.8
reoperations each. Id. at 8–9, 35. Haney then multiplied his total initial operations (6,320) by
18.5% (to represent the percentage of persons who had reoperations) by the average total cost of a
reoperation from the article, $19,657, to arrive at a damages figure. Id. at 35–36.
Allergan challenges the admissibility of Haney’s opinions under Federal Rule of Evidence
702.
II.

LEGAL STANDARDS
Federal Rule of Evidence 702 governs the admissibility of expert witness testimony. A

qualified expert may give testimony if:
(a) the expert’s scientific, technical, or other specialized knowledge will help the
trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert’s opinion reflects a reliable application of the principles and methods
to the facts of the case.
FED. R. EVID. 702. In essence, the trial court must ensure the proposed expert testimony “both rests
on a reliable foundation and is relevant to the task at hand.” Daubert v. Merrell Dow Pharms., Inc.,
509 U.S. 579, 597 (1993). In Daubert, the Supreme Court provides five non-exhaustive factors a
court may weigh in making this assessment: (1) “whether a theory or technique . . . can be (and
has been) tested,” (2) “whether the theory or technique has been subjected to peer review and
publication,” (3) “the known or potential rate of error,” (4) “the existence and maintenance of
standards controlling the technique’s operation,” and (5) whether the technique or theory has
gained “general acceptance.” Id. at 593–94; Pugh v. Louisville Ladder, Inc., 361 F. App’x 448,
5

452 (4th Cir. 2010). However, ultimately, the inquiry is “a flexible one” and relevant factors can
vary with the needs of each case. Daubert, 509 U.S. at 594.
For the proffered evidence to be sufficiently reliable it “must be derived using scientific or
other valid methods” and not based on mere “belief or speculation.” Casey v. Geek Squad
Subsidiary Best Buy Stores, L.P., 823 F. Supp. 2d 334, 340 (D. Md. 2011) (quoting Oglesby v.
Gen. Motors Corp., 190 F.3d 244, 250 (4th Cir. 1999)). The court’s analysis focuses on experts’
methods, not their conclusions, but an expert opinion that relies on “assumptions which are
speculative and are not supported by the record,” is inadmissible. Tyger Const. Co. v. Pensacola
Const. Co., 29 F.3d 137, 142 (4th Cir. 1994); see also Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146
(1997) (“[N]othing in either Daubert or the Federal Rules of Evidence requires a district court to
admit opinion evidence that is connected to existing data only by the ipse dixit of the expert. A
court may conclude that there is simply too great an analytical gap between the data and the opinion
proffered.”). For the proffered opinion to be relevant, it “must be ‘sufficiently tied to the facts of
the case that it will aid the jury in resolving a factual dispute.’” Casey, 823 F. Supp. 2d at 341
(quoting Daubert, 509 U.S. at 591). Expert testimony “is presumed to be helpful unless it concerns
matters within the everyday knowledge and experience of a lay juror.” Anderson v. Home Depot
U.S.A., Inc., Civ. No. GJH-14-2615, 2017 WL 2189508, at *4 (D. Md. May 16, 2017) (quoting
Kopf v. Skyrm, 993 F.2d 374, 377 (4th Cir. 1993)).
The proponent of the expert testimony bears the burden of establishing admissibility, or
“coming forward with evidence from which the trial court could determine that the evidence is
admissible under Daubert.” Id. at *3 (quoting Main St. Am. Grp. v. Sears, Roebuck, & Co., Civ.
No. JFM-08-3292, 2010 WL 956178, at *3 (D. Md. Mar. 11, 2010)); see also Casey, 823 F. Supp.

6

2d at 340; Daubert, 509 U.S. at 592 n.10 (explaining admissibility must be established by a
“preponderance of proof”).
In determining the admissibility of expert testimony, the court considers two “guiding, and
sometimes competing, principles.” Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261 (4th Cir.
1999). On the one hand, Rule 702 was “intended to liberalize the introduction of relevant expert
evidence,” and the court need not ensure the expert’s proposed testimony is “irrefutable or
certainly correct.” Id. (explaining that admissible expert testimony can still be vigorously tested
before the jury by “cross-examination, presentation of contrary evidence, and careful instruction
on the burden of proof” (quoting Daubert, 509 U.S. at 596)). On the other hand, “due to the
difficulty of evaluating their testimony, expert witnesses have the potential to ‘be both powerful
and quite misleading.’” Id. (quoting Daubert, 509 U.S. at 595). The court must determine whether
the disputed expert testimony “has a greater potential to mislead than to enlighten.” Id. If so, the
testimony should be excluded. Id.; see also Casey, 823 F. Supp. 2d at 341 (noting such testimony
would be barred by Federal Rule of Evidence 403).
III.

ANALYSIS
a. Number of “Inducement-Tainted” Initial Operations
Procedurally, this Court has ruled more than once, but most recently in August, 2022,

regarding the causation standard that will apply in this case, making clear that Relator must show
“that the surgeons who appeared on the locator were aware that they were listed and that, therefore,
they were aware that they were receiving the unlawful remuneration that allegedly violated the
AKS (i.e. free marketing).” ECF 140 at 23 n.8; see also ECF 118 at 20 (“[A]n AKS violation
cannot be causally related to a claim for reimbursement if the provider was never aware of the
alleged kickback in the first place.”); ECF 125 at 15–16 (“As the cases this Court discussed make

7

clear, the causation element requires something more than a showing that a claim was merely
‘tainted’ by an AKS violation but something less than a showing that the provider would not have
made the referral but for the kickback. At a minimum, this standard appears to require that the
relevant provider in an AKS-based FCA case was aware of the alleged kickback.”).
Relator unequivocally states, and Haney agrees, that he is not offering an opinion on legal
causation. ECF 235 at 13. Haney further concedes that he made no effort to ascertain whether any
surgeon was aware they were on the locator at the time of the surgery. ECF 235-1 at 16 n.36 (“The
term causation, as it is used in my report, is distinct from the legal elements of causation under the
FCA.” (emphasis in original)). In light of this Court’s causation rulings, that failure renders
Haney’s “number of claims” calculations unhelpful, in that they would have “greater potential to
mislead than to enlighten” the jury. Westberry, 178 F.3d at 261.
Indeed, with discovery concluded, Relator has offered no evidence to reasonably permit
such an inference to be made on a universal basis for all surgeons performing LAP-BAND
operations throughout the more than five-year period at issue. Instead, Relator has submitted
myriad emails between Allergan and some individual surgeons, along with certain
correspondences sent by Allergan to all surgeons who were listed on its locator at particular points
in time. Relator seems to contend that a factfinder could infer from those distinct pieces of evidence
(taken in their totality) that all surgeons were aware of their listing status throughout the duration
of the relevant window. Even viewing the evidence in the light most favorable to Relator, such an
inference is not reasonable, especially given Relator’s own unequivocal testimony that he himself
was unaware of his status on the locator at some relevant times. See ECF 210-13 at 11 (Dep. Tr.
of Matthew A. Fitzer at 156:3–20). With the regular addition and deletion of names to and from
the locator without notice, even periodic correspondences with a surgeon do not reflect that

8

surgeon’s continuous awareness of his listing status throughout the entire relevant period. While
this Court will address causation more comprehensively in deciding the parties’ competing
summary judgment motions, for the purposes of analyzing Haney’s opinion testimony, his failure
to account for that critical element of causation means that his blanket calculations regarding the
number of claims at issue are irrelevant and offer no value to the factfinder. Even assuming that
Haney’s calculations would have otherwise been reliable (setting aside the numerous other
assumptions and approximations Haney used to reach his totals), this Court will preclude Haney’s
“number of claims” opinions from being presented to the jury.
b. Reoperations
The same fatal deficiency, relating to a lack of evidence to establish every surgeon’s
awareness that the surgeon was on the locator at the time of the LAP-BAND prescription or
surgery, also requires this Court to disallow Haney’s testimony regarding the number of
reoperations that he deemed inducement-tainted. Using the premise that about 18.5% of patients
who have LAP-BAND operations later have reoperations, Haney simply took 18.5% of his
overbroad total initial operations figure, which did not consider surgeon awareness of the locator.
He then used what he calls a “conservative” methodology by accounting for only a single
reoperation per patient instead of using the average of 3.8 that are generally necessary for patients
who undergo reoperations. Just because an approach is conservative does not mean it is reliable.
The faulty premise regarding the number of initial operations means that the reoperations total is
equally flawed.
Additionally, as this Court will reiterate in its summary judgment ruling, this Court agrees
with Allergan that reoperations, as a general matter, constitute consequential damages not
recoverable under the FCA. Cook Cnty. v. United States ex rel. Chandler, 538 U.S. 119, 131 (2003)

9

(noting that the FCA does not “expressly provide for the consequential damages that typically
come with recovery for fraud” and that Congress adopted the treble damages provision as a
substitute for consequential damages). Consequential damages means “[l]osses that do not flow
directly and immediately from an injurious act but that result indirectly from the act.” BLACK’S
LAW DICTIONARY (11th ed. 2019). In fact, while not determinative, Haney specifically refers to
the reoperations as “consequential damages” in his opinion. ECF 235-1 at 35–36. It is clear that
reoperations are not an expected part of initial LAP-BAND surgery, given that less than 20% of
patients require reoperations at all. Moreover, the reasons for reoperations vary from patient to
patient. For example, some are simply a matter of patient preference. See ECF 201-6 at 9.
Reoperations resulting from an intervening cause are not direct damages caused by Allergan’s
alleged inducement. Thus, reoperation costs are consequential damages not recoverable under the
FCA.
c. Reimbursement Amount for Inpatient and Outpatient Procedures
Finally, Allergan argues that Haney should not be permitted to testify regarding his
proposed per-claim damage amount, even assuming Relator is able to establish liability as to some
number of claims. 5 Allergan protests that Haney derived his inpatient claim reimbursement
amount, $12,345, solely from the 2017 JAMA Surgery article and derived his outpatient claim
reimbursement amount from CMS’s publicly available physician and facility fee schedule, rather
than using CMS’s actual claim reimbursement data as produced in discovery. Relator (and Haney)

Clearly, this Court’s ruling on other pending motions, such as the summary judgment motions
and the argument regarding the public disclosure bar, could impact whether viable claims remain.
In this Court’s view, however, it will facilitate expeditious resolution of the parties’ myriad
motions to issue opinions as they are drafted rather than in an omnibus fashion.
5

10

counter that the CMS reimbursement data were provably incomplete and would not provide a
viable approximation of the claims the government paid.
While Haney’s per-claim calculations will be subject to obvious lines of crossexamination, they are not so unreasonable or so lacking in reliability as to be excludable under this
Court’s gatekeeping function. The article Haney relies upon is a peer-reviewed article from a wellknown medical journal, and it compiles and analyzes a large number of Medicare claims. See ECF
235-1 at 32–33; ECF 201-6. Similarly, use of the outpatient fee schedules from CMS itself
arguably provides a reasonable approximation of what the reimbursement amount would be. Thus,
this Court will permit Haney to testify (and, of course, be cross-examined) as to the appropriate
amount for reimbursement for inpatient and outpatient initial operations. This Court is not
persuaded that its exclusion of Haney’s “number of claims” testimony requires a blanket exclusion
of all of Haney’s opinions. 6
IV.

CONCLUSION
For the reasons set forth above, Allergan’s Motion to Exclude the Opinions of Christopher

L. Haney is GRANTED as to his calculations regarding the number of “inducement-tainted” initial
operations and as to his Opinion #2 in its entirety, and DENIED as to his opinions regarding the
appropriate amount of reimbursements for inpatient and outpatient initial operations, should
Relator be able to establish liability as to some number of procedures. A separate order follows.
Dated: March 18, 2024

/s/
Stephanie A. Gallagher
United States District Judge

While Haney also opined as to the appropriate amount for civil penalties, that is not an appropriate
topic for expert testimony and can be determined by the Court if warranted.
6

11