United States of America, ex rel. v. Sightpath Medical, Inc.

Background

The underlying case is a False Claims Act lawsuit brought by Kipp Fesenmaier and the United States concerning alleged illegal financial relationships between the defendants and referral sources, which allegedly caused false claims to be submitted to federally funded health care programs. Dr. Jitendra Swarup was previously named as a defendant, entered into a settlement agreement with Fesenmaier and the United States, and was dismissed from the lawsuit with prejudice in March 2018. Under the settlement, he agreed to cooperate fully and truthfully with the United States’ investigation of people and entities not released by the agreement.

Before Dr. Swarup’s 2019 deposition, the United States reserved the right to call him as a trial witness. Dr. Swarup’s lawyer said he would not voluntarily produce Dr. Swarup at trial and told the parties to treat the deposition as a trial deposition. The United States later issued a trial subpoena requiring Dr. Swarup to appear and testify. Dr. Swarup moved to quash, meaning cancel, or modify the subpoena. The remaining defendants did not otherwise oppose the motion, while the United States asked the court to enforce the subpoena.

Nationwide subpoena power

Federal Rule of Civil Procedure 45 generally limits a trial subpoena for a non-party to a location within 100 miles of where the person lives, works, or regularly conducts in-person business. The rule also requires a court to quash or modify a subpoena that requires compliance beyond those geographic limits.

The court held that 31 U.S.C. § 3731(a), part of the False Claims Act, creates an exception to that limitation. Section 3731(a) provides that a subpoena requiring a witness to attend a False Claims Act trial or hearing may be served anywhere in the United States. The court concluded that this language authorizes nationwide subpoena power, including the power to compel attendance outside Rule 45’s 100-mile radius. The court also concluded that the statute and Rule 45 do not irreconcilably conflict, so the Rules Enabling Act did not require a different result.

Undue burden

Even when a subpoena is geographically valid, Rule 45 requires the court to consider whether compliance would impose an undue burden. Courts balance the relevance of the requested testimony and the requesting party’s need against the hardship imposed on the person subpoenaed. The person opposing the subpoena bears the burden of proving that it is undue.

The court recognized that Dr. Swarup’s appearance would impose a significant burden. He is an ophthalmologist surgeon who treats elderly and financially disadvantaged patients in areas of North Carolina and Virginia where ophthalmologists are limited. The subpoena would require him to travel more than 1,000 miles and would likely affect his treatment and surgery schedule.

The court nevertheless found that the burden was not undue. The United States said Dr. Swarup’s testimony concerned payments from a “secret slush fund” and was directly relevant to proving the defendants’ knowledge and willfulness. The court agreed that the importance of the testimony and the United States’ need for it outweighed the burden on Dr. Swarup.

The court also rejected the argument that Dr. Swarup’s prior deposition was an adequate substitute for live testimony. It stated that depositions are generally treated as a second-best substitute and that courts prefer live testimony. The court likewise found no sufficient basis to modify the subpoena to permit remote testimony.

Disposition

The court declined to quash or modify the United States’ subpoena and ordered that Dr. Swarup’s motion to quash or modify the subpoena to appear and testify at trial is DENIED. Because the court recognized the substantial burden on Dr. Swarup and his patients, it encouraged the parties to confer about an arrangement that would limit the inconvenience as much as possible.