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

Background

The court considered three evidentiary issues during the trial: (1) the defendants’ objection to the plaintiffs’ proposed use of deposition testimony from James Tiffany; (2) the plaintiffs’ objection to 25 witnesses the defendants intended to call; and (3) the plaintiffs’ request to use leading questions during direct examination of Jitendra Swarup, Brendan Shiel, and Pete Gosz.

Tiffany’s deposition

Tiffany invoked his Fifth Amendment right against self-incrimination throughout his deposition and refused to answer substantive questions from any party’s counsel. The court held that the fact of his refusal was relevant because a reasonable factfinder could conclude that it made it more likely that Tiffany participated in activities described in other trial testimony. That conduct could, in turn, provide one factual basis for finding that the defendants violated the False Claims Act.

The court also rejected the defendants’ argument that admitting the invocation would be unfairly prejudicial. It reasoned that any adverse inference against the defendants would depend on whether the jury associated Tiffany’s conduct and interests with theirs. The court found that issue appropriately belonged to the jury and stated that evidence of Tiffany’s refusal helped address the evidentiary gap created by his absence from trial.

The court nevertheless limited the amount of deposition testimony. It sustained in part and overruled in part the defendants’ objection. The plaintiffs could designate no more than 50 lines from the transcript, and the lines did not need to be consecutive. If the plaintiffs designated any portion, the defendants could counter-designate pages 30:2 through 30:25, during which Tiffany also refused to answer a question from the defendants.

Defense witnesses

The plaintiffs objected to 25 proposed defense witnesses, arguing that the defendants had not adequately disclosed them during discovery and that their testimony would likely be irrelevant. The court overruled the objection as to 23 witnesses who appeared on the plaintiffs’ current list of alleged kickbacks for which the plaintiffs continued to seek recovery. The court found that the defendants had met their discovery obligations and could reasonably be expected to call people whose alleged receipt of kickbacks remained part of the case. The plaintiffs could still object during examination if testimony became irrelevant or otherwise inadmissible.

The court did not sustain or overrule the objection to Lisa Graham and John Berdahl at that time. Because the plaintiffs no longer sought recovery for alleged kickbacks related to those witnesses, the court stated that the witnesses would not be permitted to testify unless the defendants made a further showing that their testimony was likely to be relevant, probative, and otherwise admissible.

Leading questions

Under the evidence rules, leading questions generally are not used on direct examination except when necessary to develop testimony, but they ordinarily may be used when a party calls a hostile witness, an opposing party, or someone identified with an opposing party.

The court permitted the plaintiffs to use leading questions with Swarup because he had shown enough hostility toward the plaintiffs to suggest that he would likely do so again at trial. It also permitted leading questions with Shiel because the plaintiffs represented that Shiel shared counsel with the defendants, and the defendants did not dispute that representation. The court found no adequate basis at that time to permit leading questions with Gosz, who had not shown sufficient hostility and was not represented by the defendants’ counsel. The plaintiffs could renew that request if circumstances changed during Gosz’s testimony.

Disposition and classification

Judge Wilhelmina M. Wright sustained in part and overruled in part the defendants’ objection concerning Tiffany’s deposition; overruled in part the plaintiffs’ objection to the 25 witnesses, with the 23 specified objections overruled and the objections to Graham and Berdahl left unresolved; and permitted leading questions during direct examination of Swarup and Shiel. This was a procedural order addressing trial evidence rather than a decision on the merits of the False Claims Act allegations.