United States of America ex rel. et al v. D.S. Medical LLC et al

Filing 290

MEMORANDUM AND ORDER re: 282 Joint MOTION for Reconsideration re 277 Memorandum & Order, Joint Motion for Reconsideration Regarding the Application of the "Primary Purpose" Standard Based on New Eighth Circuit Decision fil ed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC. IT IS HEREBY ORDERED that Defendants' joint motion for reconsideration of the standard to be applied to the inducement element of an AKS violation is DENIED. ECF No. 282. Signed by District Judge Audrey G. Fleissig on 9/22/17. (CSG)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISOURI
SOUTHEASTERN DIVISION

UNITED STATES OF AMERICA,
ex rel. PAUL CAIRNS, et al.,
Plaintiff,
vs.
D.S. MEDICAL, L.L.C., et al.,
Defendants.

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Case No. 1:12CV00004 AGF

MEMORANDUM AND ORDER
This qui tam action under the False Claims Act is premised on Defendants’
alleged violation of the federal criminal Anti-Kickback Statute (“AKS”). In denying
Defendants’ motion for summary judgment, the Court concluded that there were triable
issues on whether “one purpose” of certain remuneration received by Defendant Dr.
Sonjay Fonn was to induce him to take actions that would violate the AKS. ECF No.
277 at 9. The case is now before the Court on Defendants’ joint motion for
reconsideration by the Court regarding the “one purpose” standard. Defendants argue,
as they did in support of their motion for summary judgment, that the correct standard
is whether a “primary purpose” of the remuneration was to induce the relevant conduct.
As noted in the Court’s Memorandum and Order denying Defendants’ motion
for summary judgment, five federal Circuits have adopted the “one purpose” standard.
See United States v. McClatchey, 217 F.3d 823, 835 (10th Cir. 2000) (noting that every
circuit to consider this issue has adopted the “one purpose” test); United States v. Davis,

132 F.3d 1092, 1094 (5th Cir.1998) (holding that the AKS is violated whenever the
benefits extended were partially to induce patient referrals). The Court believes that if
the Eighth Circuit were to directly address the question, it too would conclude that this
is the correct standard to apply. Defendants’ reliance on the fact that in past cases, the
government was the proponent of jury instructions using the “primary purpose”
standard, or on the fact that the Eighth Circuit affirmed such cases, is unavailing, as
those cases did not directly raise the question at issue.
Accordingly,
IT IS HEREBY ORDERED that Defendants’ joint motion for reconsideration
of the standard to be applied to the inducement element of an AKS violation is
DENIED. ECF No. 282.

AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 22nd day of September, 2017.

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