United States of America v. Crescendo Bioscience, Inc.

Background

The parties filed joint letter briefs concerning four discovery disputes. The court held a hearing on September 2, 2021, and issued this order.

Jake Orville issues—ECF Nos. 119 and 128

The defendants asked the court to require the relator to provide the dates of Jake Orville’s alleged membership in STF, rule that any privilege claim concerning a March 16, 2016 meeting had been waived, and allow a deposition of the relator about that meeting. The court treated the request as a motion to compel discovery and asked the parties to address whether Civil Local Rule 37-3 made it untimely.

The court concluded that the motion was untimely. Although the deadline could be extended for issues arising from a deposition taken after fact discovery closed, the defendants waited 16 days after Orville’s May 4, 2021 deposition to raise the issues during discussions between the parties and 116 days to file the motion. The court also found that this dispute was unrelated to an earlier, timely motion to compel.

The court distinguished enforcement of a party’s duty to supplement discovery responses under Federal Rule of Civil Procedure 26(e) from an untimely motion to compel. But it concluded that the defendants had not timely sought information about whether Orville had been an STF member before the lawsuit was filed. The court therefore held that the relator had no current duty to supplement its response with that information and denied the defendants’ motion to compel as untimely.

Michael Handrigan—ECF No. 120

The defendants moved to strike the relator’s designation of Dr. Michael Handrigan as an expert witness because they argued he was required to provide a written report under Federal Rule of Civil Procedure 26(a)(2)(B) and had not done so.

The court explained that a witness who forms opinions through direct involvement in events, such as a treating physician, generally does not need the report required of a retained expert for those opinions. By contrast, a person who comes to the case without prior involvement and forms opinions from information supplied for litigation is treated as specially employed and must provide a report.

The court concluded that Dr. Handrigan was specially employed to provide expert testimony. He had no direct involvement in the facts of the case, and the relator’s counsel found him and obtained his agreement to testify. His expected testimony concerned Medicare’s provider-enrollment process, providers’ attestations, Medicare’s reliance on those attestations, and Medicare’s treatment of blood-specimen processing. The court ordered the relator to provide a written report. Because it was not clear that a report was required, the court found the failure to provide one harmless rather than excluding the witness. The defendants could designate a rebuttal witness, and the parties were ordered to discuss deadlines for the report, rebuttal report, depositions, and related schedule changes.

Settlement discovery—ECF No. 122

The relator sought to reopen fact discovery for one deposition and additional documents concerning a redacted settlement agreement. Fact discovery had closed on March 15, 2021, and the deadline for motions to compel was March 22, 2021. Under Rule 16(b)(4), reopening discovery required good cause.

The court denied the request. Although good cause might have existed earlier, the relator first raised the issue in an August 13, 2021 email, about five months after fact discovery closed. The court viewed that delay as a lack of diligence.

Sale of VectraDA to LabCorp

The relator also sought documents concerning an agreement under which Myriad sold certain Crescendo assets, including the VectraDA business, to LabCorp for $150 million. The relator argued that Crescendo had to provide those documents under Federal Rule of Civil Procedure 26(e), which requires correction or supplementation of a discovery response that is materially incomplete or incorrect.

The court rejected that argument and denied the relator’s motion to compel. It found that Crescendo had agreed to produce documents responsive to the relevant requests only through September 8, 2020, and that the relator understood and accepted that end date during discovery. The court held that the relator was attempting to renegotiate the agreed discovery limits after fact discovery had ended, rather than supplementing an incomplete or incorrect response. Rule 26(e) therefore did not require Crescendo to produce documents from after September 8, 2020.

Disposition

The court denied the defendants’ motion to compel concerning Orville as untimely; ordered the relator to provide Dr. Handrigan’s written report and allowed the defendants to designate a rebuttal witness; denied the relator’s request to reopen discovery concerning the redacted settlement; and denied the relator’s motion to compel documents concerning the LabCorp transaction.