United States v. Abbott Laboratories

District Court, S.D. California·Decided June 27, 2025·No. 3:20-cv-00286·Unknown

Opinion

2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, et al. ex rel. Case No.: 20cv286-W (MSB) Everest Principals, LLC, 12 ORDER DENYING PLAINTIFF-RELATOR’S Plaintiffs, 13 MOTION FOR PROTECTIVE ORDER v. REGARDING DEFENDANTS’ 14 SUPPLEMENTAL 30(b)(6) NOTICE ABBOTT LABORATORIES, et al., 15 Defendants. [ECF NO. 170] 16

17 18 This is a qui tam case, wherein Plaintiff-Relator, Everest Principals, LLC (“Relator”) 19 maintains causes of action against Defendants Abbott Laboratories, Abbott Laboratories 20 Inc., Abbott Cardiovascular Systems Inc., and Abbott Vascular Inc. (collectively referred 21 to as “Defendants” or “Abbott”) on behalf of the United States of America and several 22 states for violations of the federal False Claims Act (“FCA”) and analogous state laws. 23 (ECF No. 85 at 6.) 24 The instant discovery dispute concerns Relator’s Motion for a Protective Order 25 (“Motion”), seeking protection from Defendants’ May 21, 2025, Supplemental Notice of 26 30(b)(6) Deposition (“Supplemental Notice”). (See generally ECF No. 170.) The 27 Supplemental Notice provides that Defendants will take the continued 30(b)(6) 2 for a protective order, arguing, among other things, that the Supplemental Notice seeks 3 duplicative testimony and unduly burdens Relator. (ECF No. 170). After reviewing 4 informal letter briefs lodged by the parties, the Court held an informal Discovery 5 Conference on June 5, 2025. (ECF No. 167.) The Court indicated it would require the 6 deposition to go forward; however, the witness could choose to split the deposition 7 between two days. Following the conference, Relator requested an opportunity for 8 formal briefing, and the instant Motion and Defendants’ Opposition to Relator’s Motion 9 for Protective Order (“Opposition”) followed. (ECF Nos. 170 & 173.) For the reasons 10 explained below, the Court DENIES Relator’s Motion. 11 I. BACKGROUND 12 A. Factual Background 13 Relator is a limited liability company whose sole member was employed by 14 Defendants as a Therapy Development Specialist in its Structural Heart Division from 15 August 2015 to April 2017. (ECF No. 85 at 7.) Defendants are involved in the 16 manufacturing and sale of medical devices, instruments, medications, and other health 17 care products. (Id. at 8.) In the operative Third Amended Complaint (“Operative 18 Complaint”), Relator summarizes its allegations as follows: “Defendants engaged in an 19 unlawful, systematic, and nationwide scheme of paying kickbacks to physicians and 20 hospitals in the form of, inter alia, patient referrals, patient practice building, free 21 patient marketing service, honoraria for sham speaker programs, rewards in the form of 22 clinical trial opportunities, marketing events and consulting services, free lavish meals, 23 and cocktail parties, to induce physicians and hospitals to use Abbott’s [cardiac medical 24 device] for medical procedures performed on cardiac patients covered by [federal and 25 state] healthcare programs, in violation of the FCA, [Anti-Kickback Statute (“AKS”)], and 26 analogous state laws and statutes.” (Id. at 6–7.)

27 / / 2 Relator filed the original Complaint on February 14, 2020. (ECF No. 1.) After the 3 United States reported that all named government entities declined to intervene in the 4 litigation [ECF No. 8], Defendants filed their first Motion to Dismiss on July 29, 2021. 5 (ECF No. 30.) Relator filed a First Amended Complaint (“FAC”) on August 19, 2021, 6 alleging causes of action on behalf of the United States and twenty-seven states, plus 7 the District of Columbia. (ECF No. 35 at 6.) Defendants again moved to dismiss, arguing 8 Relator failed to adequately allege presentment of a false claim, inducement of a false 9 claim, causation with particularity, illegal kickbacks, and scienter related to the federal 10 claims, and that the state law claims should be dismissed. (ECF No. 45 at 13–32.) The 11 District Court found Relator’s allegations sufficient for its federal claims, but dismissed 12 the state law claims for failure to allege “with particularity how any false claims were 13 submitted to each state identified in the FAC.” (ECF No. 56 at 16.) 14 Relator filed a Second Amended Complaint (“SAC”) on September 22, 2022, 15 maintaining the federal claims and state law claims on behalf of twenty-five states and 16 the District of Columbia. (ECF No. 57 at 6.) Defendants moved to dismiss the state law 17 claims in the SAC, arguing Relator failed to state claims on which relief could be granted 18 due to a lack of particularity. (ECF No. 59 at 12–21.) The District Court dismissed all 19 state law FCA claims except for those pertaining to four states: California, Florida, 20 Georgia, and New York. (ECF No. 62 at 4–9.) The District Court found Relator had 21 sufficiently pleaded FCA claims in violation of these four states’ laws. (Id.) Finally, 22 Plaintiffs filed the operative Third Amended Complaint on May 23, 2023. (ECF No. 85.) 23 Since issuing the original Scheduling Order in April 2023, the Court has granted four 24 extensions on (1) November 17, 2023; (2) April 23, 2024; (3) October 4, 2024; and (4) 25 January 22, 2025. (ECF Nos. 77, 120, 132, 137, 147.) In total, the fact discovery deadline 26 was continued 500 days, from January 2, 2024, to May 16, 2025, and the expert

27 discovery deadline has been continued 528 days, from May 14, 2024, to October 24, 2 A. April 24, 2025, Discovery Order 3 In April 2025, this Court addressed a dispute related to Defendants’ Interrogatory 4 No. 3, which asked Relator to: “[i]dentify each alleged false claim (as that term is used in 5 the Complaint) that You allege Abbott presented or caused to be presented to either a 6 federal or state government.” (ECF No. 154-5 at 3.) Defendants sought a complete, 7 unqualified response to Interrogatory No. 3 during fact discovery. (ECF No. 154-1.) 8 Relator opposed this, arguing it should not be required to identify all allegedly false 9 claims without the benefit of expert analysis. (ECF No. 155.) Following an informal 10 Discovery Conference and formal briefing, on April 24, 2025, the Court issued a written 11 Order requiring Relator to supplement its response to Interrogatory No. 3 by producing 12 a complete list of allegedly false claims no later than May 16, 2025—the cutoff of fact 13 discovery. (ECF No. 159.) The Court also permitted Defendants to “conduct fact 14 discovery on any newly identified false claims by June 16, 2025.” (Id. at 11.) 15 In reaching this conclusion, the Court found that the information requested in 16 Interrogatory No. 3 was relevant under Federal Rule of Civil Procedure 26(b)(1). (Id. at 17 7–8.) Additionally, the Court found that the list of allegedly false claims was “factual 18 information that should be produced during fact discovery.” (Id. at 8.) Regarding 19 Relator’s argument that expertise was needed to identify this information, the Court 20 found Relator did not adequately explain why its experts had not made sufficient 21 progress on this work, “considering it began receiving claims data in August 2024” and 22 received numerous extensions to the discovery schedule. (Id. at 8–11.) Thus, the Court 23 concluded Relator had not met its burden to resist the requested discovery, and it 24 ordered Relator to produce a complete list of allegedly false claims by May 16, 2025. 25 (Id. at 11.) 26 B. Relator’s Newly Identified Claims and Defendants’ Supplemental Notice

27 Pursuant to the April Discovery Order, on May 16, 2025, Relator served a 2 2025, Defendants served a Supplemental Notice of 30(b)(6) Deposition, stating: 3 “[Abbott] will take the continued deposition upon oral examination of [Relator] as to 4 Topic Nos.

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