1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 UNITED STATES OF AMERICA, Case No. 14-cv-04100-KAW

8 Plaintiffs, PRETRIAL CONFERENCE 9 v. TENTATIVE RULINGS

10 SUTTER HEALTH, et al., 11 Defendants.

12 13 I. MOTIONS IN LIMINE 14 Relevant evidence is any evidence that has any tendency to make a fact that is of 15 consequence to the determination of the action more or less probable than it would be without the 16 evidence. Fed. R. Evid. 401. The Court has discretion to “exclude relevant evidence if its 17 probative value is substantially outweighed by a danger of . . . unfair prejudice, confusing the 18 issue, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative 19 evidence.” 20 21 MIL Motion Ruling Reason/Explanation 22 The Court will not permit evidence of 23 the settlements in this case because the prejudice from a jury inferring liability 24 based on the settlements outweighs Allow or exclude GRANT IN concerns that a jury might speculate 25 R1, D1A evidence of prior PART, DENY about the absence of certain claims or settlements in this case. IN PART parties as Defendants. The Court notes 26 that it is not inclined to permit argument 27 that the Department of Justice investigated Relator’s allegations but before the Court. 1 The Court will permit evidence of 2 conduct from the Settlement Period because it is relevant to claims made in 3 October and November 2014. It is also 4 relevant to demonstrating an ongoing pattern or scheme, including the routine 5 approval of inadequate medical director time records, Sutter Health’s 6 compliance processes, and knowledge. 7 There is a factual dispute as to whether Ms. DeMario’s inclusion of all claims 8 that include a Physician Group doctor Exclude damages 9 constitute a referral. Thus, Dr. Salve’s R2 testimony of Michael DENY opinion is relevant to the calculation of Salve, PhD. 10 damages if Relator is unable to provide evidence in support of Ms. DeMario’s 11 approach. 12 The OIG Self-Disclosure is relevant to Allow evidence of 13 R3 Sutter Health’s OIG GRANT coS mu ptt ee nr sH ate ia nl gth p’ hs yk sn ico iw anle sd bg ae s t eh da ot n Self-Disclosure. 14 inadequate time sheets was improper. 15 Exclude evidence 16 R4 related to 30(b)(6) DENY Untimely discovery dispute. testimony. 17 Whether a service is medically 18 necessary is not relevant to whether the Exclude argument, Government suffered harm or the 19 testimony, or evidence amount of damages. This ruling does that the Government not preclude Defendants from arguing 20 R5 was not harmed GRANT that medical director contracts or other because the billed 21 services were challenged compensation arrangements were FMV or commercially reasonable medically necessary. 22 because the services provided were necessary. 23 Characterizing Relator’s acquisition of 24 Exclude argument, documents as improper, theft, or testimony, or evidence 25 that Relator stealing is contrary to whistleblower R6 improperly obtained GRANT protections and the requirement that 26 whistleblowers produce evidence to the documents from Sutter government when bringing a qui tam 27 Health. action. 1 Defendants may state that Sutter Health is a non-profit entity because it is basic Exclude argument, 2 identifying information. Defendants evidence, or testimony GRANT IN may not make any arguments based on 3 that Sutter Health is a R7 non-profit and/or PART, DENY Sutter Health’s non-profit status or 4 engages in charitable IN PART charitable works because it disclaimed any intent to make arguments at trial activities. 5 based on its lack of profit motive during discovery. 6 Limit Relator’s 7 testimony to facts of Relator states she will not testify to facts D1B which she has personal GRANT outside her personal knowledge. 8 knowledge. 9 Mr. Sokolove is not making an improper 10 legal opinion when he opines that CMS would not have reimbursed claims, as he 11 is not opining that the claims violated Exclude testimony of 12 D2 Stanley Sokolove. DENY the AKS or Stark Law. Rather, he is basing his opinion on improper billing 13 practices. Further, Mr. Sokolove’s opinions are not dependent on the 14 “Incident To” guidance. 15 Evidence of executive compensation may be relevant if the methodology of 16 Exclude evidence of compensation is affected by the volume 17 D3 executive DEFER of referrals. Relator has not explained compensation. that this is the case. Absent such a 18 showing, executive compensation will be excluded. 19 The prejudicial effect of referring to 20 potential criminal violations or liability 21 Exclude reference to substantially outweighs the limited D4 criminal statutes. GRANT probative value of using criminal 22 penalties to demonstrate scienter. This ruling does not preclude Relator from 23 using the term “incriminating.” 24 Relator’s burden of Relator agrees not to misstate the burden 25 D5 proof in False Claims GRANT of proof. Act claims. 26 Exclude evidence of GRANT IN As discussed above in R3, the OIG Self- 27 D6 unrelated litigation, PART, DENY Disclosure is admissible evidence. The settlement agreements. settlement agreements. 1 2 Exclude evidence of Claims submitted to Government 3 D7 Gc ol va eim rns m su enb tm Mit ate nd a gto e d DENY matM eria an l a tg oe td h eC ga ore v eO rr ng man eniz ta ’sti do en cs i sa ir oe n to 4 Care organizations. pay the claims. 5 II. EVIDENTIARY ISSUES 6 A. Relator’s Witness Objections 7 8 Witness Ruling Reason/Explanation 9 These doctors are other physicians who East 10 Bay Cardiac asserts assisted in call coverage staffing. These witnesses were not identified 11 until Dr. Stanten’s declaration in support of Defendants’ motion for summary judgment was 12 Dr. George Allman, Dr. filed in May 2024, after the fact discovery Peter Anastassiou, Dr. 13 Leigh Iverson, Dr. Keith cutoff. (See Defs.’ Resp. to Witness Obj. at 4, SUSTAIN Dkt. No. 426; Dkt. No. 271 (extending fact Korver, Dr. Raveendra 14 discovery deadline to March 15, 2024).) Thus, Nadaraja, Dr. Alex Yap, Defendants’ assertion that Relator could have 15 Dr. Ed Yee sought additional discovery in response to Dr. Stanten’s declaration is incorrect. Further, Dr. 16 Khan’s reference to other doctors assisting with 17 call coverage does not put Relator on notice that those doctors would be called as witnesses. 18 Although Dr. Salve’s September 19, 2024 19 supplemental report was supposed to respond to Ms. DeMario’s May 10, 2024 supplemental 20 report, Dr. Salve included a new opinion 21 regarding whether Ms. DeMario improperly included claims for “designated health 22 Michael Salve, Ph.D. services.” (Rel.’s Witness Obj. at 2, Dkt. No. opinions regarding 400.) Ms. DeMario’s May 10, 2024 23 “designated health SUSTAIN supplemental report did not include any new 24 services” opinions regarding “designated health services,” but included updated damages calculations 25 reflecting Sutter Health’s list of government and non-government payors and a damages 26 calculation specific to managed care payors. Dr. Salve’s opinion regarding “designated 27 health services” is therefore outside the scope of Salve to respond to Ms. DeMario’s May 10, 1 2024 supplemental report. (Dkt. No. 360 at 1.) 2 Relator “conditionally” objects to these 3 witnesses (despite including most of them on her witness list) because Defendants may use 4 these witnesses to present finalized FMV reports. (Rel.’s Witness Obj. at 3.) Relator 5 objects to the extent they testify or present 6 evidence as to finalized FMV reports without an FMV Appraisers OVERRULE opportunity to introduce draft reports and 7 communications. This is a separate issue from whether the FMV appraisers may be called as 8 witnesses. 9 Further, Relator fails to demonstrate prejudice from the failure to disclose, given Relator 10 admits that she had an opportunity to subpoena them. (See Dkt. No. 435 n.1.) 11 12 B. Defendants’ Witness Objections 13 14 Witness Ruling Reason/Explanation 15 While Relator has not identified the specific custodians, this appears to be a product of 16 Sutter Health’s objection to at least 400 internal 17 “Sutter Health records produced by Sutter Health during discovery. As Relator points out, this creates a Document OVERRULE 18 situation where Relator is unable to determine Custodian(s)” which documents require a document custodian. 19 Accordingly, the Court finds that there is good cause for Relator not to identify these witnesses 20 with more specificity. 21 Relator agrees to withdraw Ms. Brill. 22 First, the Court finds that Ms. Arceo and Ms. Ham are not being called to testify as to 23 attorney-client privileged information. Rather, SUSTAIN IN 24 Relator explains that Ms. Arceo and Ms. Ham Brenna Arceo, Sarah PART, are being called to testify about their Ham, Bettina Brill OVERRULE 25 involvement in Sutter Health’s obtaining of IN PART FMV appraisals as to financial arrangements 26 with Sac Cardio, including changes that Ms. Arceo requested in the final version. The Court 27 previously found that the draft FMV reports are No. 277 at 2-3.) Relator also seeks to have Ms. 1 Arceo and Ms. Ham testify about e-mails and 2 communications with or forwarded to individuals outside of Sutter Health. It is 3 unclear how such communications would be attorney-client privileged. 4 Second, the testimony sought does not violate 5 the September 19, 2024 order, which states: “Sutter Health is precluded from introducing 6 any evidence at trial that its ‘rigorous process’ included working or consulting with Sutter’s 7 legal team.” (Dkt. No. 376 at 4.) This does not 8 affect Relator. Further, the evidence at issue does not concern the “rigorous process” or 9 Sutter Health’s internal review of the FMV; Relator is seeking to introduce communications 10 between Ms. Arceo and the third-party FMV appraisers. 11 Finally, the Shelton test is inapplicable because 12 it “was intend[ed] to protect against the ills of deposing opposing counsel in a pending case 13 which could potentially lead to the disclosure of 14 the attorney’s litigation strategy.” Pamida, Inc. v. E.S. Originals, Inc.,

(8th 15 Cir. 2002). Here, Ms. Arceo and Ms. Ham are not counsel of record, but are fact witnesses 16 who are being asked to testify about events that occurred before these litigation proceedings. 17 18 Laurie Hanvey OVERRULE Relator may testify as to settled conduct. See R1 and D1A. 19 Defendants object “to the extent” they would 20 Kathleen McNamara, testify as to opinions excluded by the Court. Jerry Pratt, and Stanley OVERRULE Relator states she does not intend to elicit any 21 Sokolove such testimony, and the Court will not assume otherwise. Thus, this objection is unnecessary. 22 23 III. VOIR DIRE 24 The parties jointly propose 46 oral voir dire questions, and Relator proposes an additional 25 19 questions (all of which Defendants objects to). (Dkt. No. 389.) Given that trial is set for three 26 weeks -- including jury selection -- it is impractical to expect the Court to ask over 40 questions of 27 every juror, which does not take into account the questioning by counsel. Additionally, many of 1 experiences or treatment at Sutter Health, which could conceivably be consolidated to a single 2 question of: “Please describe any experiences you or your close family and friends have had with 3 Sutter Health.” 4 Accordingly, the Court directs the parties to meet and confer as to the voir dire questions, 5 and to jointly propose no more than fifteen oral voir dire questions by October 29, 2024. The 6 proposed questions should not be duplicative of those asked on the electronic questionnaire, 7 including the Northern District of California’s standard questions and those already proposed by 8 the parties. 9 IV. JURY INSTRUCTIONS 10 The Court provides the following tentative rulings as to the preliminary instructions and 11 instructions in the course of trial (as needed). The Court notes that it does not give jury 12 instructions regarding types of evidence or stipulations of fact during trial; rather, the Court gives 13 such instructions in its preliminary instructions. The Court will provide further rulings as to final 14 jury instructions after the pretrial conference. 15 A. Disputed Instruction 1A: Duty of Jury (9th Circuit Model Instruction 1.3) 16 Relator has no objections to the language (which is unchanged from the Model 17 Instruction), but asserts that “reading the entirety of the jury instructions at the outset of the trial 18 will confuse the jury[.]” (Joint Jury Instructions at 4, Dkt. No. 413.) Defendants, in turn, argue 19 that the Court should read all of the jury instructions at the beginning of trial. (Id. at 5.) 20 The Court will not read all of the jury instructions at the beginning of trial. The Court will 21 give the standard preliminary instructions (including Model Instruction 1.3), including instructions 22 on the types of evidence, and will give the remaining instructions at the end of trial. 23 B. Disputed Instruction 1: Claims and Defenses 24 The parties provide competing versions of the jury instruction summarizing the claims and 25 defenses. (Joint Jury Instructions at 6-9.) As an initial matter, the Court does not find it 26 appropriate to use this instruction to explain the law to the jury. Rather, this instruction should 27 provide a concise overview of the case. With that said, the Court considers each of the parties’ 1 First, Relator objects to Defendants’ inclusion of language concerning the Government’s 2 decision not to intervene. (Joint Jury Instructions at 10.) The Court agrees that such language 3 must be removed because the decision to or not to intervene is irrelevant and prejudicial. See 4 United States ex rel. Kiro v. Jiaherb, Inc., No. CV 14-2484-RSWL-PLAx,

111680, at *7 (C.D. Cal. July 3, 2019) (evidence of the Government’s decision regarding 6 intervention “is irrelevant and would be highly prejudicial in that it could allow the jury to draw 7 the inference that Relator’s claim is substantively weak”). 8 Second, the parties dispute whether the jury instruction should be discussing the law, with 9 Defendants seeking to include legal burdens, the elements of a False Claims Act (“FCA”) (i.e., 10 scienter, materiality, and presentment), and an explanation of the interplay between the Anti- 11 Kickback Statute (“AKS”), Stark Law, FCA, and California FCA. (Joint Jury Instructions at 10, 12 11.) Again, the Court does not believe such instructions on the law are appropriate in this 13 instruction. Such instructions will come at the end of the trial. 14 Third, the parties dispute how materiality is shown. (Joint Jury Instructions at 10, 11.) 15 Relator argues violations of the Stark Law and AKS are inherently material, while Defendants 16 argue that it is not. (Id.) Again, such information is not appropriate in this instruction. To assist 17 the parties on other instructions, however, the Court again reiterates that “courts have repeatedly 18 held violations of the AKS and Stark Law to be material often as a matter of law.” (3/17/21 19 Dismissal Order at 33-34, Dkt. No. 131 (collecting cases); Summ. J. Order at 8, Dkt. No. 368.) 20 While Defendants cite Universal Health Servs., Inc. v. United States (Escobar),

(2016), to argue that materiality is a “demanding” element, Defendants cite no authority specific to 22 the AKS or Stark Law. Contrast with United States ex rel. Longo v. Wheeling Hosp., Inc., Civil 23 Action No. 5:19-CV-192,

, at *24 (N.D. W.Va. Sept. 18, 2019) 24 (“courts have repeatedly held that alleged violations of the Stark Law and AKS were material, 25 including after Escobar”). 26 The Court ORDERS the parties to meet and confer, and to jointly draft an appropriate jury 27 instruction no later than October 28, 2024. Given the Court’s rulings on the parties’ objections, 1 C. Stipulated Instruction 5: Questions to Witnesses by Jurors During Trial 2 The Court will not give this instruction, as the Court does not permit questions to witnesses 3 by jurors. 4 D. Disputed Instruction 11: Expert – State of Mind Offered by Defendants 5 Defendants propose an instruction stating that expert witnesses cannot offer opinions about 6 an individual or corporation’s intent, motives, or state of mind, and that the jury should disregard 7 any such testimony. (Joint Jury Instructions at 21.) Relator objects that the instruction is 8 unnecessary and likely to confuse a jury, explaining: “the Court has already addressed this very 9 issue in its order on Daubert motions, and the parties will adhere to this limitation.” (Id. at 22.) 10 Because the instruction is unnecessary, the Court will not give this instruction. If 11 Defendants believe an expert witness is providing improper opinions, they should object. 12 E. Disputed Instruction 12: Statistical Evidence 13 Defendants propose an instruction regarding how to weigh statistical evidence or an 14 expert’s opinion about statistical evidence. (Joint Jury Instructions at 23.) Defendants assert that 15 this is necessary because “the jury will be presented with purportedly statistical evidence from 16 Relator’s expert Ms. Marianne DeMario.” (Id. at 23 n.16.) Relator correctly points out that 17 Defendants fail to define what “statistical evidence” is, and it is unclear how Ms. DeMario’s report 18 constitutes statistical evidence. Ms. DeMario considered data about the claims submitted by 19 Sutter Health to calculate damages. Contrast with Int’l Bhd. of Teamsters v. United States, 431

, 337-38 (1977) (considering the use of statistics regarding the number of minority 21 employees at a company and the percentage of those employees who had lower paying jobs 22 compared to nonminority employees in determining whether there was evidence of systemwide 23 discrimination). Thus, Defendants have not demonstrated that this instruction is necessary. 24 Moreover, the jury instruction regarding expert testimony generally appears sufficient to explain 25 that expert testimony can be accepted or rejected like any other testimony, with the jury needing to 26 consider the witness’s specialized knowledge, skill, experience, training, or education, as well as 27 the reasons given for the opinion and all other evidence in the case. The Court will therefore not 1 F. Stipulated Instruction 15: Evidence in Electronic Format 2 The Court does not provide technicians or computers, projectors, and printers to the jurors. 3 The parties will need to be responsible for providing such equipment and technical support, and 4 should modify the instruction accordingly. It is also not clear to the Court why any evidence 5 would need to be provided in electronic format; the parties should address whether there are any 6 || electronic exhibits that have not been provided to the Court. 7 V. ADMINISTRATIVE MATTERS 8 The Court intends to impose time limits on each party at trial. The parties must be 9 || prepared to discuss the projected duration of their case, particularly in light of the Court’s tentative 10 || rulings. These estimates should be realistic, not padded. The Court will not extend the duration of 11 this trial; the parties will have three weeks to conduct voir dire and present their case, and the case 12 || will go to the jury no later than November 25, 2024. As trial is scheduled to go from 9:00 a.m. to 13 3:00 p.m., the Court estimates that there will be approximately five hours of trial time per day after 14 accounting for breaks. Thus, assuming one day for voir dire and time for jury instructions, the 3 15 parties should assume they have 65 hours in total to present their case, or 32.5 hours per side. 16 The parties should be prepared to discuss their technology requirements. The parties are 3 17 generally required to provide all necessary courtroom technology, such as a projector screen and a 18 || projector. The parties should also be prepared to come to the Court before the trial to test 19 technology. 20 VI. HEALTH PRECAUTIONS 21 In light of the ongoing respiratory virus season, the Court is committed to keeping the 22 || parties, counsel, witnesses, and court staff as safe as possible. Anyone experiencing any 23 symptoms of COVID-19 or other respiratory viruses, including fever or cold-like symptoms, are 24 || directed to notify the courtroom deputy at kawcrd @cand.uscourts. gov. 25 IT IS SO ORDERED. 26 || Dated: October 21, 2024

28 United States Magistrate Judge