BNSF Railway Company et al v. The Center for Asbestos Related Disease, Inc.

Filing 192

ORDER: The Court will allow voir dire of future witnesses in order to determine which evidence will be allowed, consistent with this order. Under no circumstances will witnesses offer hearsay statements or testimony otherwise inadmissible under the Federal Rules of Evidence. CARD's Offer of Proof 188 is DENIED. The proffered trial perpetuation deposition testimony of Senator Max Baucus may not be admitted. Signed by Judge Dana L. Christensen on 6/25/2023. (ASG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION
BNSF RAILWAY COMPANY,
on behalf of THE UNITED STATES
OF AMERICA,

CV 19–40–M–DLC

ORDER

Plaintiff,
vs.
CENTER FOR ASBESTOS RELATED
DISEASE, INC.,
Defendant.

Before the Court is Defendant Center for Asbestos Related Disease, Inc.’s
(“CARD”) Offer of Proof. (Doc. 188.) CARD requests that this Court reconsider
its ruling on the admissibility of U.S. Senator Max Baucus’s trial perpetuation
deposition testimony in this matter. (Id. at 1.) For the reasons discussed below,
the Court denies CARD’s request.
BACKGROUND
Plaintiff BNSF Railway Company (“BNSF”) first moved to strike Senator
Baucus’s testimony on the basis that it was improperly disclosed, insufficient to
show legislative history, and more prejudicial than probative. (Doc. 85 at 9–11.)
CARD explained that Senator Baucus would offer opinions on “public health, the
role of public policy related thereto, the customary efforts of Congresspersons to
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work cooperatively with . . . other officials on key legislation . . . , and cooperation
of public officials to utilize available public resources to address public health
issues,” which is “highly probative of the core issue: CARD’s intent relative to the
[ACA’s] applicability to CARD’s work.” (Doc. 100 at 4–5, 8.) The Court denied
the motion to strike but allowed BNSF to depose Senator Baucus and reserved
ruling on the admissibility of the testimony at trial. (Doc. 132 at 8.)
On the first day of trial, after reviewing the transcripts of Senator Baucus’s
depositions, the Court excluded the testimony of Senator Baucus, in its entirety.
The Court explained that Senator Baucus’s opinion on what constitutes a diagnosis
for asbestos related disease under the Affordable Care Act (“ACA”) lacked
foundation, is more prejudicial than probative, and invades the province of the
Court to determine, as a matter of law, what constitutes a diagnosis in this case.
CARD has now filed an Offer of Proof, again seeking to admit Senator
Baucus’s trial perpetuation deposition testimony.
DISCUSSION
Under the False Claims Act (“FCA”), BNSF must prove by a preponderance
of the evidence that CARD acted “knowingly” when it presented, or caused to be
presented, materially false claims for payment. See 31 U.S.C. § 3729(a)(1)(A); see
also Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176,
187 (2016). The statute defines “knowingly” as acting with (1) actual knowledge
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of the truth or falsity of the information; (2) deliberate ignorance of the truth or
falsity of the information; or (3) reckless disregard of the truth or falsity of the
information. 31 U.S.C. § 3729(b)(1). Innocent mistake or mere negligence do not
suffice. United States ex rel. Hagood v. Sonoma Cty. Water Agency, 929 F.2d
1416, 1421 (9th Cir. 1991). Moreover, the scienter requirement “refers to [the
defendant’s] knowledge and subjective beliefs—not what an objectively
reasonable person may have known or believed.” United States ex rel. Schutte v.
SuperValu Inc., 143 S. Ct. 1391, 1399 (2023). Thus, a defendant who relies on “a
good faith interpretation of a regulation is not subject to liability” under the FCA,
even if that interpretation is objectively unreasonable. United States ex rel. Oliver
v. Parsons Co., 195 F.3d 457, 464 (9th Cir. 1999).
CARD argues that “Senator Baucus’s testimony is directly relevant and
probative” of whether CARD acted knowingly because “[t]he evidence goes
directly to CARD’s ‘good faith interpretation’ of the [ACA].” (Doc. 188 at 2.)
CARD claims that Senator Baucus and his staff worked closely with CARD
personnel when drafting provisions of the ACA, now codified under 42 U.S.C. §
1395rr-1 (“EHH Medicare”), related to individuals in and around Libby, Montana,
who have been diagnosed with an asbestos related disease. (Id.) CARD also
claims that, because of those conversations, the ACA was drafted “so that
individuals affected by asbestos in Libby would qualify for Medicare if a B-reader
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interpreted evidence of disease in a chest x-ray or if qualified outside readers or the
CARD Clinic determined an individual had an asbestos related disease after review
of a CT scan.” (Id.)
CARD’s characterization of Senator Baucus’s testimony is not consistent
with the testimony itself and the proffered testimony is not relevant to CARD’s
scienter. Senator Baucus stated he “spent a lot of time in Libby, [and] visited
Libby many, many times on [the] issue [of asbestos related disease in Libby],”
(Doc. 188-2 at 8:13–14), and has “had an infinite number of conversations with Dr.
Black with many people in Libby with many government officials [sic],” (Doc.
188-1 at 12:12–14). Senator Baucus also testified that it was his intent to allow
“various ways” for an individual to qualify for EHH Medicare, and that he “meant
the statute to be read in an inclusive way,” such that “not only a diagnosis
determined by the CARD clinic, but also if a B Reader were to find a positive
indication of asbestos-related disease, that would be enough to allow that person to
be covered under Medicare.” (Doc. 188-2 at 20:4, 23:12–16.) However, Senator
Baucus did not testify that he discussed the language of the EHH Medicare
provision with CARD or any CARD personnel, nor did he testify that he instructed
CARD that it was acceptable to submit patients for EHH Medicare based on a BRead alone without an actual diagnosis. Thus, there is not a sufficient basis to
connect Senator Baucus’s statements to the question of whether CARD acted under
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a good faith interpretation of the statute.
Additionally, as this Court explained in its initial ruling from the bench on
this issue, Senator Baucus’s opinion on what constitutes a diagnosis for asbestos
related disease under the ACA lacks foundation, is more prejudicial than probative,
and invades the province of the Court to determine issues of law. Thus, even
assuming, arguendo, that Senator Baucus’s testimony is relevant to CARD’s
scienter under the FCA, the testimony is inadmissible for these reasons.
The Court has ordered that no mention of Senator Baucus be made in order
to avoid reversible error. Having now reviewed CARD’s Offer of Proof, the Court
can envision that some testimony regarding CARD’s involvement with Senator
Baucus’s staff or Senator Baucus himself may be admissible. For example, during
trial on Friday, June 23, one of CARD’s witnesses offered testimony regarding
conversations she had with the state delegation involved in drafting the relevant
statutory language. The Court will allow voir dire of future witnesses in order to
determine which evidence will be allowed, consistent with this order. Under no
circumstances will witnesses offer hearsay statements or testimony otherwise
inadmissible under the Federal Rules of Evidence.
Accordingly, IT IS ORDERED that CARD’s Offer of Proof (Doc. 188) is
DENIED. The proffered trial perpetuation deposition testimony of Senator Max
Baucus may not be admitted.
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DATED this 25th day of June, 2023.

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