United States District Court, W.D. North Carolina, Statesville Division
UNITED STATES EX REL. LIUBOV SKIBO, Plaintiffs,
GREER LABORATORIES, INC., ET AL., Defendants.
Cogburn, United States District Judge.
MATTER is before the court on Defendant Greer's
Motion to Strike the Supplemental Expert Report of
Christopher L. Haney, (Doc. No. 114).
action, filed on August 2, 2013, is brought under the False
Claims Act, 31 U.S.C. § 3729 et seq., alleging that
Defendant Greer Laboratories, a business based in Lenoir,
North Carolina, submitted false claims and/or caused false
claims to be submitted to the federal and/or state
governments with regard to allergenic extracts that were
either billed directly to the federal government and/or paid
by Medicare, Medicaid, TRICARE, and other government health
care programs after being sold to medical providers.
Specifically, Defendant Greer Laboratories is alleged to have
manufactured and sold unapproved biological products and/or
new drugs, misbranded drugs, and/or adulterated drugs that
were ultimately paid for by Medicare, Medicaid, TRICARE, and
other government health care program payors.
parties have engaged in discovery and both parties have filed
expert reports. The Court restates the procedural history of
this case relevant to Greer's motion to strike a
supplemental expert report by Christopher L. Haney. On
December 14, 2018, Relators served Mr. Haney's original
Expert Report. On December 28, 2018, Relators served Mr.
Haney's December 28 Report, which incorporated
“additional information produced in discovery by
Greer's customer Allergy Clinic of Tulsa” and
“revised data and calculations for that
customer.” (Relators' Ex. A at 3 ¶ 1). The
December 28 Report also stated that “fact discovery is
still underway” and “additional documentation and
information have been requested by Counsel that may be
relevant to my opinions . . . .” (Id. at
¶ 4). Mr. Haney also “reserve[d] the right to
update, supplement or revise my opinions if and when
additional information or data becomes available” and
noted that “[a]ny additional information obtained in
discovery could require supplementation or revision.”
(Id. at ¶ 5). Mr. Haney further noted that
“[i]f additional discovery is produced with sufficient
customer purchase data to estimate the Paid Amount further in
this period, it is anticipated that the Paid Amount will
increase materially beyond what is reflected in this
report.” (Id. at ¶ 77).
January 3, 2019, Relators filed a Motion for Limited
Modification of the Pretrial Order and Case Management Plan
for Leave to Take Four Additional Depositions for Use at
Trial. (Doc. No. 83). In their motion, Relators asked that
“the Court permit these four brief telephonic non-party
fact depositions” because “Defendants have taken
the position that Relators will be unable to prove
damages” and “the importance of [that] issue to
the case . . . .” (Id. at 5). Greer did not
oppose Relator's Motion, and on January 7 the Court
granted the motion. (Doc. Nos. 85-86). On January 8, 2019,
Greer's counsel took Mr. Haney's deposition, at which
he testified that “if the facts of the case change . .
. the things that directly contribute to my damages
methodology, I will certainly consider them. And they may or
may not change my damages calculation.” (Doc. No. 116-3
January 11, 2019, Relators received documents and
correspondence from Tottori Allergy & Asthma Associates,
containing new data regarding Tottori Allergy's
reimbursements from Medicare, Medicaid, and Tricare for
immunotherapy involving Greer's unlicensed custom mixes.
(Relators' Ex. B). On January 14, 2019, Greer served the
Expert Report of Crystal Pike (the “Pike
Report”). The Pike Report cited a document designated
only as “GRLI-00172646” (the “January 26
Excel spreadsheet”), which neither Relators nor Mr.
Haney had received previously. Between January 14 and
February 12, 2019, Relators took six depositions of
Greer's customers, resulting in hundreds of pages of
testimony regarding those customers' purchases of
unlicensed custom mixes and receipt from government
healthcare payors of millions of dollars of reimbursements
for the preparation and injection of allergy immunotherapy
involving Greer's unlicensed products. (Relators' Ex.
C (Supp. Rpt.) at App'x C at 4-14 (excerpts of customer
deposition testimony)). Greer's counsel and several
members of Ms. Pike's staff attended each deposition.
January 22, 2019, Greer responded to Relators' First Set
of Requests for Admission by admitting for the first time to
Greer's yearly sales of custom mixes. (Relators' Ex.
D). Also on January 22, 2019, Relators received more than 560
pages of business records from East Tennessee Ear, Nose &
Throat Specialists, PC (“ET ENT”), which Relators
produced to Greer on January 24, 2019. (Relators' Ex. E).
On January 25, 2019, after searching for and not locating the
January 26 Excel spreadsheet, Relators' counsel asked
Greer's counsel to produce the spreadsheet, which they
produced on January 26, 2019, revealing the document to be a
341-page Excel spreadsheet containing detailed
customer-specific data regarding Greer's custom-mix sales
for four customers. (Relators' Ex. F).
February 7, 2019, Relators received more than 670 pages from
ET ENT, (Relators' Ex. G), which Relators produced to
Greer the next day. (Relators' Ex. H, Feb. 8, 2019
Production Letter). On February 15, 2019, Greer served on
Relators the “Supplemental Materials Considered”
by Ms. Pike, which listed many of the same new information
and materials that Relators now seek to incorporate into Mr.
Haney's damages calculation. (Relators' Ex. I, Feb.
15 email attaching Ms. Pike's “Supplemental
Materials Considered”). On February 19, 2019, Relators
took Crystal Pike's deposition. Ms. Pike testified that
none of the customer depositions or new materials that she
supplemented on February 15 had changed any of her opinions.
(Relators' Ex. J (Pike Tr.) at 79:22-80:12).
February 25, 2019, Relators also received the Declaration of
Chris Baker, Practice Manager of ET ENT. (Relators' Ex.
K; see also Relators' Ex. C (Supp. Rpt.) at App'x C
at 14 n.51 (citing Ex. Relators' K)). On February 26,
2019, Relators filed their Motion to Compel Production of
Custom-Mix Sales Data, Doc. No. 94, in which Relators sought
to compel Greer to produce the same custom-mix sales data in
the January 26 Excel spreadsheet (referenced in Ms.
Pike's report and produced on January 26) but for all
customers (not merely four). In that motion, Relators noted
that “[i]f additional discovery is produced . . . it is
anticipated that the Paid Amount [i.e., estimated damages]
will increase materially beyond what is reflected in [Mr.
Haney's December 28] report.” (Doc. No. 94 at 4
(quoting December 28 Report at ¶ 77)).
February 28, 2019, Relators served the Supplemental Report,
which “incorporate[d] additional information which was
produced or became known after the date of [the] original
report, ” and which “more accurately
reflects” Mr. Haney's “analysis and
findings.” (Relators' Ex. C (Supp. Rpt.) at 3
¶ 1). Specifically, the Supplemental Report incorporates
“information produced in discovery by [Greer]
quantifying limited amounts of its Custom-Mixed sales volume,
as well as sworn testimony and additional information
produced by certain of Greer's customers.”
(Id.). Mr. Haney “revised [his] data and
calculations based on this additional information, ”
which “increased [his] estimated damages by
approximately $4.5 million” from $52.9 million to $57.4
million, and decreased his estimated number of
“allegedly false claims” from at least 601, 518
to at least 179, 000. (Compare Relators' Ex. C (Supp.
Rpt.) at ¶¶ 1, 12 with Relators' Ex. A (Dec. 28
Rpt.) at ¶¶ 1, 12).
Relators served the Supplemental Report on February 28,
Relators asked Greer's counsel to “please let us
know as soon as possible if Defendants wish to hold a further
deposition of Mr. Haney.” Greer did not respond, and on
April 8, 2019, the magistrate judge denied the motion to
compel. (Doc. No. 124).
March 7, 2019, Greer filed its Motion for Summary Judgment.
(Doc. No. 95). On March 20, 2019, Greer asked Relators to
tell them, by March 22, whether they would withdraw the
Supplemental Report, which Relators declined to do.
(Relators' Ex. L). On March 25, 2019, Greer filed the
pending Motion to Strike the Supplemental Expert Report of
Christopher L. Haney. On April 5, 2019, Relators filed their
memorandum in opposition to the motion to strike. On April
12, 2019, Greer filed a Reply. Greer corrected the Reply on
April 16, 2019.
motion to strike, Greer argues that the Supplemental Report
is not a “proper” “supplement” under
Rule 26 of the Federal Rules of Civil Procedure because it
does not merely “correct inadvertent errors or
omissions in the original report” and instead is
“replete with new opinions.” (Doc. No. 115 at 1,
9). In response, Relators argue that the Supplemental
Report's sole purpose, consistent with Rule 26(e), is to
incorporate new data and testimony that Relators received
from Greer and its customers since December 28 into the same
damages model, using the same methodology, that Mr. Haney
established in his original report in order to update and
ensure the accuracy of Mr. Haney's only opinion:
“Opinion #1.” Relators argue, therefore, that the
only changes to “Opinion # 1, ” which is
otherwise a verbatim copy of Mr. Haney's previous
“Opinion #1, ” include (1) a change from $601,
518 to $179, 000, in referring to reimbursements from the