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

Filing 387

MEMORANDUM AND ORDER: Upon review of the record and following the final pretrial conference in this case held on the record on October 23, 2017, and for the reasons stated more fully on the open record, the Court sets forth its rulings on the parties ' motions in limine re: 318 MOTION in Limine Regardingthe False Claims Act Materiality Requirement filed by Plaintiff United States of America, 315 MOTION in Limine Regarding Witness Statements filed by Plaintiff Unite d States of America, 320 MOTION in Limine to Exclude Reference to False Claims Act Damages, Penalties, or Collateral Consequences filed by Plaintiff United States of America, 316 MOTION in Limine Regarding A Civil Settlement Agr eement With Saint Francis Medical Center filed by Plaintiff United States of America, 329 Joint MOTION in Limine to Calculate Damages Based on the Government's Actual Losses filed by Defendant Deborah Seeger, Defendant D.S. M edical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 311 Joint MOTION in Limine to Exclude Allusion or Reference to Defendnant Sonjay Fonn's Purported "Abusive" Nature as Suggested by the Government fi led by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 330 Joint MOTION in Limine to Exclude from any Damage Calculation Expenses Unrelated to Surgeries filed by Defe ndant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 324 Joint MOTION in Limine to Exclude the Government's Proffered 404(b) Evidence Regarding Defendant Sonjay Fonn's S tatements to the Ohio Medical Board filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 309 Joint MOTION in Limine Regarding Medicare Funding and Tax Dollars filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 334 Joint MOTION in Limine Regarding Lay Witness Testimony which Properly Falls Under Rule 702 filed by Defe ndant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 331 Joint MOTION in Limine to Exclude Evidence of Illegal Remunerations which the Government Failed to Disclose or Supplement in Responding to Contention Interrogatories filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 314 MOTION in Limine to Permit Leading Questions By the United S tates of Defendants and Witnesses Identified With Defendants filed by Plaintiff United States of America, 326 Joint MOTION in Limine to Exclude Evidence that Defendant Sonjay Fonn is not Board Certified filed by Defendant Deborah Se eger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 312 Joint MOTION in Limine to Exclude Evidence Regarding the Statutory Purpose of the Anti-Kickback Statute filed by Defendant Deborah See ger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 319 MOTION in Limine Regarding Damages filed by Plaintiff United States of America, 323 Joint MOTION in Limine to Exclude the Gove rnment's Proffered 404(b) Evidence Regarding Defendant Sonjay Fonn's Amedica Stock Purchase and the Corresponding Conflict of Interest Form filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defend ant Midwest Neurosurgeons, LLC, 328 Joint MOTION in Limine to Exclude Evidence of Thompson Coburn's Drafts and Potential Legal Advice Never Actually Provided to Defendants filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 310 Joint MOTION in Limine to Exclude Evidence of Defendants' Charitable Contributions filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant S onjay Fonn, Defendant Midwest Neurosurgeons, LLC, 308 Joint MOTION in Limine to Exclude Advisory Opinions and Other Publications Issued by the Office of the Inspector General and Related Testimony filed by Defendant Deborah Seeger, Def endant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 325 Joint MOTION in Limine Regarding Evidence Related to Patients Covered by Blue Cross Blue Shield filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 332 Joint MOTION in Limine to Exclude Evidence for the Government's Failure to Disclose it in Discovery filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 335 Joint MOTION in Limine Regarding Testimony from Medicare Employees or Agents (or Medicaid Employees) filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC, 321 MOTION in Limine to Exclude Reference to Previously Undisclosed Evidence filed by Plaintiff United States of America, 322 Joint MOTION in Limine to Exclude Evidence of Websites Purportedly Establishing Certification of AKS Compliance by Saint Francis Medical Center filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LL C, 317 MOTION in Limine to Exclude Any Reference to Defendants' Criminal Indictment or its Dismissal without Prejudice filed by Plaintiff United States of America, 313 MOTION in Limine to Exclude Reference to the Withdrawin g of, or Lack of, Certain Expert Witnesses filed by Plaintiff United States of America, 333 Joint MOTION in Limine as to the Government's Spreadsheets Reflecting Alleged Claims Filed by and Payments to Either Midwest Neurosurgeons o r Saint Francis Medical Center filed by Defendant Deborah Seeger, Defendant D.S. Medical LLC, Defendant Sonjay Fonn, Defendant Midwest Neurosurgeons, LLC. SEE ORDER FOR WRITTEN RULINGS ON ALL MOTIONS IN LIMINE. IT IS FURTHER ORDERED that Defendants' oral motion for the Court to reconsider its prior ruling that the preponderance of evidence standard will apply to all aspects of this civil case is DENIED. Signed by District Judge Audrey G. Fleissig on 10/24/17. (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
Upon review of the record and following the final pretrial conference in this case
held on the record on October 23, 2017, and for the reasons stated more fully on the
open record, the Court sets forth its rulings on the parties’ motions in limine, as
follows:
Plaintiff’s Motions in Limine
Motion to Exclude Reference to the Withdrawing of, or Lack of, Certain Expert
Witnesses is DENIED in part and GRANTED in part. Mary Kitely will be
permitted to testify as a fact witness for Defendants regarding her review of claims data,
but no reference shall be made to the fact that she had been retained and then
withdrawn as an expert witness in this case by Plaintiff. The parties will have until
Monday October 30, 2017, at 9:00 a.m. to submit any written argument and/or
authority on whether to permit Kitely to testify by video deposition, as opposed to in
person. The motion is granted with respect to evidence that Plaintiff anticipated calling
an expert witness on the issue of lack of medical necessity, but ultimately elected not to
do so. (ECF No. 313.)
Motion to Permit Leading Questions by Plaintiff of Defendants and Witnesses
Identified with Defendants is DENIED in part and GRANTED in part. Plaintiff
may call Defendants and James Fogel as witnesses in its case-in-chief and ask them
leading questions. Whether Defendants will be permitted to ask leading questions on

cross-examination will depend on the scope of the testimony elicited from these
witnesses by Plaintiff. The parties are directed to confer and attempt to reach
agreement on the order and presentation of these witnesses. (EFC No. 314.)
Motion Regarding Witness Statements (Reports of Interviews) is
SUBSTANTIALLY DENIED. The motion is denied as moot with respect to the
Reports themselves, and denied to the extent that Defendants may ask the preparer of a
Report about a witness’s prior inconsistent statement contained therein if the witness
denies a statement attributed to him in a Report, provided Defendants first show the
statement to the witness and ask the witness if he made the statement. However,
Defendants may not unnecessarily emphasize that the statement was to an agent. (EFC
No. 315.)
Motion Regarding the Civil Settlement Agreement with Saint Francis Medical
Center is DENIED in part and GRANTED in part. The motion is denied as moot as
to the fact of the settlement, and granted as to the amount of the settlement, unless
Defendants open the door to such evidence. (EFC No. 316.)
Motion to Exclude Any Reference to Defendants’ Criminal Indictment or its
Dismissal without Prejudice is DENIED as moot, unless Defendants open the door to
such evidence. (EFC No. 317.)
Motion Regarding the False Claims Act Materiality Requirement (to preclude
Defendants from presenting evidence or arguing that a violation of the AntiKickback Statute is not material) is DENIED. Plaintiff shall have the burden of
establishing materiality, especially as to claims made prior to March 23, 2010.
Defendants may then seek to challenge materiality if they have a good faith basis for
doing so, and with the understanding that this would open the door to Plaintiff
presenting evidence about the purposes of the statutes at issue. (EFC No. 318.)
Motion Regarding Damages is SUBSTANTIALLY GRANTED. The measure of
damages in the case shall generally be the full amount Plaintiff/state paid for each
Medicare/Medicaid claim tainted by a kickback, without regard to the fair market value
of the goods and services provided. This ruling is subject to further consideration of
“outlier payments” and amounts paid due to “comorbidity,” depending upon the
evidence presented at trial. (EFC No. 319.)
Motion to Exclude Reference to False Claims Act Damages, Penalties, or
Collateral Consequences is SUBSTANTIALLY GRANTED. The probative value of
this evidence is outweighed by the danger of unfair prejudice. Defendants, however,
may cross-exam any Relators who testify, challenging their possible bias due to the fact
that they stand to recover a percentage or “millions” if Plaintiff prevails. Defendants
may also challenge Relators’ bias as competitors. (EFC No. 320.)
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Motion to Exclude Reference to Previously Undisclosed Evidence is DENIED in
part and GRANTED in part. Plaintiff may introduce evidence of what the individual
Defendants may not have told their counsel, as this would be relevant to an advice-ofcounsel or lack of intent defense. Plaintiff can also use this evidence affirmatively as it
is relevant to Defendants’ state of mind. Counsel may be asked whether knowing
undisclosed information would have changed his mind on advice he offered, but he may
not offer an explanation as to why. Dr. Fonn will be permitted to testify about treating
decision he made to counter evidence by the government regarding comparative
utilization of implant devices. Other aspects of the motion are denied as moot, based
on Defendants’ representations that they did not intend to introduce the evidence at
issue. (EFC No. 321.)

Defendants’ Motions in Limine
Motion to Exclude Advisory Opinions and Other Publications Issued by the Office
of the Inspector General and Related Testimony is GRANTED. This evidence is
largely irrelevant and has the potential to be unfairly prejudicial to Defendants. If
during trial, Plaintiff believes the door was opened to such evidence, it may approach
the bench and advise the Court of what it seeks to offer and its purpose. (ECF No.
308.)
Motion Regarding Medicare Funding and Tax Dollars is DENIED as moot. It is
understood that as a practical matter, Plaintiff may mention that Medicare and Medicaid
are funded by public tax dollars, but it may not appeal to the jurors’ pecuniary interests.
(ECF No. 309.)
Motion to Exclude Evidence of Defendants’ (Inadequate) Charitable
Contributions is DENIED as moot. (ECF No. 310.)
Motion to Exclude Allusion or Reference to Defendant Sonjay Fonn’s Purported
Abusive Nature is DENIED as moot. (ECF No. 311.)
Motion to Exclude Evidence Regarding the Statutory Purpose of the AntiKickback Statute is DENIED. Plaintiff may present some background information as
to how the Anti-Kickback Statute operates (but not its purpose of protecting taxpayers’
money). The parties should consider drafting a joint background instruction for the
Court to read to the jury on this matter. (EFC No. 312.)
Motion to Exclude Evidence of Websites Purportedly Establishing Certification of
AKS Compliance by Saint Francis Medical Center is DENIED. Plaintiff did not fail
properly to disclose the information, and should be permitted to establish its relevance
at trial. (EFC No. 322.)
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Motion to Exclude Plaintiff’s Proffered Rule 404(b) Evidence Regarding
Defendant Dr. Fonn’s Amedica Stock Purchase and the Corresponding Conflictof- Interest Form is DENIED. This evidence is relevant to issues including Dr.
Fonn’s knowledge of the provisions of the Anti-Kickback Statute, and the probative
value of the evidence is not outweighed by the danger of unfair prejudice. (EFC No.
323.)
Motion to Exclude Plaintiff’s Proffered 404(b) Evidence Regarding Defendant Dr.
Fonn’s Statements to the Ohio Medical Board is SUBSTANTIALLY GRANTED.
This evidence is largely irrelevant and has the potential to be unfairly prejudicial to
Defendants in Plaintiff’s case-in-chief. If during trial, Plaintiff believes the door was
opened to such evidence, it may approach the bench and advise the Court of what it
seeks to offer and its purpose. However, the evidence could potentially be admissible
in cross-examination of Dr. Fonn. (EFC No. 324.)
Motion Regarding Evidence Related to Patients Covered by Blue Cross Blue
Shield is DEFFERED pending submission by the government of documents at issue
and the Court’s review of the documents. (ECF No. 325.)
Motion to Exclude Evidence that Defendant Dr. Fonn is not Board Certified is
GRANTED. This evidence is largely irrelevant and has the potential to be unfairly
prejudicial to Defendants. If during trial, Plaintiff believes the door was opened to such
evidence, it may approach the bench and advise the Court of what it seeks to offer and
its purpose. (EFC No. 326.)
Motion to Exclude Evidence of Defendants’ Possible Bad Debt is DENIED in part
and GRANTED in part. Evidence that the individual Defendants jointly hired a
landscaper, jointly directed the work, and were jointly invoiced is relevant and
admissible. Evidence that the landscaper sued the individual Defendants for money
owed him is not relevant and will not be admitted. Evidence of inventory disputes Dr.
Fonn had with spinal implant manufacturers will be admissible, to the extent relevant to
the facts or to such issues as Dr. Fonn’s knowledge and intent. (EFC No. 327.)
Motion to Exclude Evidence of Thompson Coburn’s Drafts and Potential Legal
Advice Never Actually Provided to Defendants is SUBSTANTIALLY GRANTED.
Generally, draft opinions that were not provided to Defendants are not relevant. They
can come in, however, to the extent they reflect information that was provided to
Defendants and is thus probative of their knowledge and intent, or to the extent they
reflect information provided by Defendants to counsel. (ECF No. 328.)
Motion to Calculate Damages Based on Plaintiff’s Actual Losses is DENIED. See
Court’s ruling on ECF No. 319. (EFC No. 329.)
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Motion to Exclude from any Damage Calculation Expenses Unrelated to Surgeries
is DEFFERED. The Court will rule on whether damages can include “outlier
payments” and amounts paid due to “comorbidity,” depending upon the evidence
presented at trial. See Court’s ruling on ECF No. 319. (EFC No. 330.)
Motion to Exclude Evidence of Illegal Remunerations which Plaintiff Failed to
Disclose or Supplement in Responding to Contention Interrogatories is DENIED.
The alleged illegal remunerations at issue were sufficiently disclosed, and Defendants
have not shown any unfair surprise or prejudice. Further, Seeger doing unpaid work
for Dr. Fonn is relevant to other issues. (EFC No. 331.)
Motion to Exclude Evidence for Plaintiff’s Failure to Disclose it in Discovery is
DENIED. The matters at issue were sufficiently disclosed, and Defendants have not
shown any unfair surprise or prejudice. (EFC No. 332.)
Motion as to Plaintiff’s Spreadsheets Reflecting Alleged Claims Filed by and
Payments Motion to Either Midwest Neurosurgeons, LLC, or Saint Francis
Medical Center is DEFFERED. Plaintiff shall be permitted to attempt to lay a proper
foundation for admission of claims data extracted from a database maintained by
Plaintiff. Defendants will be permitted to challenge admission of this evidence as not
being trustworthy or lacking a proper foundation. Plaintiff shall make its witness
Mark Hogle available to Defendants for deposition and/or interview. (EFC No.
333.)
Motion Regarding Lay Witness Testimony (about “comparative usage”) that
Properly Falls Under Rule 702 is DENIED, with the proviso that Plaintiff must
approach the bench before evidence of “comparative usage” is introduced, and advise
the Court of what it seeks to offer, to assure that evidence of lack of medical necessity
is not admitted. Defendants may submit a limiting instruction. (EFC No. 334.)
Motion Regarding Testimony from Medicare Employees or Agents (or Medicaid
Employees) is DENIED, in light of the topics of testimony identified by Plaintiff.
(EFC No. 335.)
IT IS FURTHER ORDERED that Defendants’ oral motion for the Court to
reconsider its prior ruling that the preponderance of evidence standard will apply to all

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aspects of this civil case is DENIED.

AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 24th day of October, 2017.

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