United States of America et al v. Bluewave Healthcare Consultants Inc et al

Filing 573

ORDER AND OPINION denying 518 BlueWave Defendants' Motion to Reconsider Signed by Honorable Richard M Gergel on 8/9/2017.(sshe, )

IN THE UNITED STATES DISTRICT €00:wJo
DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION 20ll AUG

United States of America, et al.,
Plaintiffs,

ex rel. Scarlett Lutz, et al.,
Plaintiffs-Relators,
V.

Berkeley Heartlab, Inc., et al.,

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ORDER and OPINION

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Defendants.

This matter is before the Court on a Motion to Reconsider (Dkt. No. 518) filed by
BlueWave Healthcare Consultants, Inc., Floyd Calhoun Dent, III, and Robert Bradford Johnson
(collectively, "the BlueWave Defendants"), asking this Court to reconsider its Order (Dkt. No.
507) excluding the proffered expert testimony of Daniel Mulholland. The Government has filed a
response in opposition. (Dkt. No. 524.) For the reasons set forth below, the BlueWave
Defendants' Motion for Reconsideration (Dkt. No. 518) is denied.
I.

Background

On June 29, 2017, this Court issued an order excluding the proffered testimony of Daniel
Mulholland, an expert the Blue Wave Defendants engaged to opine on whether certain guidance
documents issued by the Government would have put the Defendants and/or their attorneys on
notice that process and handling fees paid by a laboratory implicated or violated the AntiKickback Statute, 42 U.S.C. § 1320a-7b(b) ("AKS"). (Dkt. No. 507 at 2.) This Court determined

that Mulholland's proffered testimony was inappropriate expert testimony because it would
usurp the role of the Court to instruct on the law and the role of the jury to apply the law to the
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facts. The Court also found that Mulholland's proffered testimony was not based on a reliable
methodology because Mulholland limited his review to only a selection of documents instead of
the full range of sources from which the Blue Wave defendants could have acquired knowledge
about the legality of the relevant practices. (Dkt. No. 507 at 5-7.)

II.

Legal Standard
In the Fourth Circuit, motions to reconsider are granted under a narrow set of

circumstances: "(l) to accommodate an intervening change in controlling law; (2) to account for
new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest
injustice." Hill v. Braxton, 277 F.3d 701, 708 (4th Cir. 2002).

III.

Discussion
In their Motion to Reconsider (Dkt. No. 518), the BlueWave Defendants essentially argue

that the AKS issues to be presented at trial are so complex that the jury needs the benefit of Mr.
Mulholland's expertise to navigate them. This Court considers motions to reconsider that draw
its attention to an intervening change in the law, new evidence not available at trial, a clear error
of law, or a manifest injustice. The Blue Wave Defendants' Motion to Reconsider does none of
these things. Instead, it contains pages of argument culminating with the claim that "the line
between permissible reimbursement and illegal kickbacks was [ ... ] complicated" and is relevant
to scienter in this case. (Dkt. No. 518 at 9.)
The BlueWave defendants argue that Mulholland's methodology is reliable because he
only intends to testify about the impact of government guidance on Defendants' knowledge.
Defendants did not even attempt to grapple with the Court's decision that this methodology is
insufficient when Mulholland intends to testify about the Defendants' scienter, an ultimate issue
in this case. Testimony about a Defendant's scienter that relies on a limited universe of

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documents would be unacceptably confusing to a jury because it would ask them to consider a
hypothetical reality in which Defendants had access to only certain information.
Defendants also cite to the Fourth Circuit's decisions in United States v. Offill, 666 F.3d
168 (4th Cir. 2011), and United States v. Barile, 286 F.3d 749, 762 (4th Cir. 2002), where expert
testimony was held to be appropriate to describe how securities markets work and to provide an
opinion on the reasonableness of certain disclosures made under the Federal Food, Drug, and
Cosmetic Act. The Court sees no clear analogy between the expert testimony discussed in those
cases and the expert testimony Defendants seek to provide here: an attorney's opinion about
whether certain government guidance was sufficient to give Defendants the requisite scienter to
violate the AKS.
IV.

Conclusion

For the reasons set forth above and in this Court's previous order (Dkt. No. 507), the
BlueWave Defendants' Motion to Reconsider (Dkt. No. 518) is denied.
AND IT IS SO ORDERED.

United States District Court Judge

August _i_, 2017
Charleston, South Carolina

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