The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
THE UNITED STATES OF )
AMERICA and THE STATES OF )
CALIFORNIA, DELAWARE, )
ILLINOIS, INDIANA, )
MASSACHUSETTS, MINNESOTA, )
MONTANA, NEVADA, )
NEW JERSEY, NORTH CAROLINA, )
RHODE ISLAND, VIRGINIA, )
ex rel. TRACY SCHUTTE and )
MICHAEL YARBERRY, )
)
Plaintiffs, )
)
v. ) Case No. 11-CV-3290
)
SUPERVALU, INC., SUPERVALU )
HOLDINGS, INC., AB )
ACQUISITION LLC, )
ACME MARKETS, INC., )
ACME SAV-ON PHARMACY, )
ALBERTSON’S, LLC, )
ALBERTSON’S OSCO PHARMACY, )
ALBERTSON’S SAV-ON )
PHARMACY, AMERICAN DRUG )
STORES, LLC, BIGGS PHARMACY, )
CUB PHARMACY, FF )
ACQUISITIONS, LLC, FARM )
FRESH PHARMACY, )
FOODARAMA, LLC, JEWEL FOOD )
STORES, INC., JEWEL OSCO )
SOUTHWEST LLC, JEWEL )
PHARMACY, JEWEL-OSCO )
PHARMACY, NEW ALBERTSON’S, )
INC., SHAW’S SUPERMARKET, )
INC., SHAWS OSCO PHARMACY, )
SHOP N SAVE OSCO PHARMACY, )
SHOP N SAVE PHARMACY, )
SHOPPERS FOOD WAREHOUSE )
CORP., SHOPPERS PHARMACY, )
STAR MARKET COMPANY, INC., )
STAR OSCO PHARMACY, )
)
Defendants. )
OPINION AND ORDER
SUE E. MYERSCOUGH, U.S. DISTRICT JUDGE:
Before the Court are Defendants’ Motion to Exclude Expert
Testimony of Ian Dew, Relator’s Response and Defendants’ Motion
for Leave to File Reply. (d/e 408, 418, 420). Defendants’ Motion for
Leave to File Reply (d/e 420) is GRANTED. For the following reasons,
Defendants’ Motion to Exclude Expert Testimony (d/e 408) is
DENIED.
I. BACKGROUND
This matter is a False Claims Act case wherein the Relators
allege that Defendant pharmacies submitted false or fraudulent
claims to obtain federal funds from Government Healthcare Programs
to which Defendants were not entitled. The Relators allege this
occurred through the electronic submission of inflated usual and
customary charges to Government Healthcare Programs because
Defendants failed to report their cash price matches as their usual
and customary prices.
On May 21, 2018, SuperValu (“Defendants”) filed its First
Motion to Exclude Ian Dew and Memorandum in Support. (d/e 177,
178). Relators filed a Response in Opposition, and Defendants then
filed their Reply. (d/e 188, 234). On March 20, 2019, U.S. District
Court Judge Richard Mills entered an Order denying Defendants’
Motion and concluding that Mr. Dew’s expert testimony should not
be excluded based on methodology, reliability, or relevance. (d/e
276). Further, the Court noted that Mr. Dew’s testimony would be
admissible pursuant to Federal Rules of Evidence and applicable
case law.
On February 26, 2024, Defendants filed a Second Motion to
Exclude the Expert Testimony of Ian Dew. (d/e 408). Defendants
argue that this Court should not follow the prior ruling of Judge Mills
from 2019 because the ruling was incorrect considering the changes
to Federal Rule 702 and based on a supplemental report of Ian Dew.
In Response, Relators argue that this Court has already found Mr.
Dew to be an expert and his testimony should not be excluded as he
is qualified, reliable, and his testimony is relevant to a jury’s
understanding of the instant matters. (d/e 418). Further, Relators
note that Defendants’ motion advances arguments that were
previously considered and denied.
II. LEGAL STANDARD
Rule 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 113
U.S. 2786 (1993) govern the admissibility of expert testimony. Under
Rule 702, a witness may be qualified as an expert by knowledge, skill,
experience, training, or education. Fed. R. Evid. 702. The party
seeking to introduce the testimony must establish that it is more
likely than not that the testimony will assist the trier of fact to
understand the evidence or to determine a fact at issue, that the
testimony is based on sufficient facts or data, and that the testimony
is the product of reliable principles and methods applied to the facts
of the case. Fed. R. Civ. P. 702. Further, the Court acts as a
gatekeeper to ensure that the testimony rests on a reliable foundation
and is relevant to the task at hand. Kirk v. Clark Equip. Co., 991 F.3d
865, 872 (7th Cir. 2021).
Prior to admitting testimony, the Court engages in a three-step
inquiry before admitting testimony. Golpalratnam v. Hewlett-Packard
Co., 877 F.3d 771, 779 (7th Cir. 2017). The Court considers (1) the
expert’s qualifications; (2) the reliability of the expert’s methodology;
and (3) the relevance of the expert’s testimony. Id.
III. ANALYSIS
Defendants’ arguments are almost identical to those made in
early 2019 that the Court found to be unpersuasive. In essence,
Defendants ask this Court to reconsider its prior ruling on Mr. Dew’s
methodology and his application of this method in a more recent
report. Specifically, Defendants take issue with a new report issued
by Mr. Dew in December 2023. According to Defendants, this report,
which the Relators describe as using the same methodology but
filtered in a different way, is unreliable.
A. Mr. Dew’s Qualifications
An expert need not have particular academic credentials to be
qualified; “anyone with relevant expertise enabling him to offer
responsible opinion testimony helpful to judge or jury may qualify as
an expert witness.” Tuf Racing Prods., Inc. v. Am. Suzuki Motor Corp.,
223 F.3d 585, 591 (7th Cir. 2000). “The question [the court] must
ask is not whether an expert witness is qualified in general, but
whether his ‘qualifications provide a foundation for [him] to answer
a specific question.’” Gayton v. McCoy, 593 F.3d 610, 617 (7th Cir.
2010) (quoting Berry v. City of Detroit, 25 F.3d 1342, 1351 (6th Cir.
1994)).
Mr. Dew, although not a “pharmacy pricing expert,” is a data
expert whose expertise is data analysis. Mr. Dew has a bachelor’s
degree in mathematics and psychology, a Master of Engineering from
the University of Virginia, and a Master of Environmental Science
from Johns Hopkins. (d/e 276, p 4). He has worked on complex,
computer-assisted data analysis for more than 25 years, focusing on
complex healthcare litigation since 2004. Id. The Court has, in 2019,
discussed Mr. Dew’s qualifications at length and will not repeat each
of those points. The Court finds based on the knowledge, skill and
experience of Mr. Dew, that Mr. Dew is qualified to provide data-
analysis of large sets of electronic information.
B. Mr. Dew’s Methodology
Defendants’ Second Motion to Exclude testimony focuses
mainly on Mr. Dew’s methodology. Defendants specifically highlight
Mr. Dew’s per-state, per-month analysis as unreliable. Although
Defendants take issue with the way Mr. Dew organizes and groups
tens of millions of purchases, that alone is not enough to disqualify
his opinion.
Defendants argue the record in this case established that the
usual-and-customary price was determined based on a particular
store’s prices on a particular day. (d/e 408, p 7). Additionally,
Defendants rely on the fact that Mr. Dew has applied a per-store and
per-quarter methodology in other litigation and argue that his failure
to substantiate his current methodology taints any analysis he
provides.
Relators in their response to Defendants argue that this Court
should not revisit its prior ruling and that Defendants have no basis
to challenge Dew, as he was already found to be qualified, reliable,
and relevant. (d/e 418). Additionally, Relators argue that the
methodology that was previously found to be appropriate by the
Court is the same methodology that forms the basis of Mr. Dew’s
supplemental report, but filtered in a different way. Further, Relators
argue that Defendants have been able to conduct additional
discovery and have retained additional experts to combat the
testimony of Mr. Dew.
Relators initially instructed Mr. Dew to assume that lower price
matches that are widely available are the usual and customary prices
that Defendants should have charged Government Healthcare
Programs for their drugs. (d/e 276). Mr. Dew analyzed the massive
amounts of raw data provided by the Defendants and determined the
best way to group information that could be plugged into an
algorithm while excluding potential outliers. Id. at p. 12. This
methodology, in relying on information provided by others, including
counsel, is appropriate when rendering an opinion. Manpower, Inc.
v. Insurance Co. of Pennsylvania, 732 F.3d 796, 808 (7th Cir. 2013).
The specific methodology in calculating usual and customary
pricing by using the most frequently occurring discounted cash price
offered by month is a more conservative calculation according to Mr.
Dew. Further, Mr. Dew testified that his use of the most frequently
occurring price is recognized as a statistically valid method to find
the central tendency of a large data set. (d/e 276, p. 12). Additionally,
this type of analysis is properly within the professional discretion of
the data transaction analyst because the analysis falls within the
accepted methodology of large data set analysis. Id.
Defendants argue Mr. Dew ignored governing contracts and
controlling law and, therefore, his work is unreliable. However, Mr.
Dew’s work had a limited scope. He was asked to calculate the
difference between the two types of price points found within
Defendants’ data production: (1) discounted cash override prices and
(2) reimbursement based upon undiscounted reported usual and
customary prices.
Although Defendants take issue with Mr. Dew’s alleged refusal
to review government contracts for each of the Defendants and apply
such findings to his report, the Defendants can use this information
to contradict the findings of Mr. Dew at trial. Mr. Dew’s analysis also
eliminated outliers, when possible, in the substantial data set
provided.
Defendants’ arguments regarding Mr. Dew’s methodology are
largely the same as their arguments in their initial motion, and the
Court declines to reverse its earlier order regarding the exclusion of
Ian Dew’s testimony. Relators argue that, in the supplemental
support submitted by Mr. Dew, his methodology has remained
unchanged and that this fact alone defeats Defendants’ motion.
Specifically, Relators point to the testimony of Mr. Dew
regarding the filtering of results in the updated report. (d/e 418, pp.
4-5). This filtering involved whittling down numbers, by “applying
filters to identify a subset within the full set from my rebuttal report.”
(d/e 418, p. 5). Further, Relators note that the Actual Usual and
Customary Prices that were filed in the supplemental report are the
same prices and data as the first report just presented in a different
manner. (d/e 418, p. 4).
The Court is unpersuaded that Mr. Dew’s methodology has
changed in any significant manner, so the Court will not reverse its
prior ruling. Therefore, the Court cannot find that Mr. Dew’s expert
report, supplemental report, or his testimony as to either should be
excluded based on the methodology used.
C. Reliability
Mr. Dew’s expertise as a data analyst is based on knowledge,
skill, and training. The Supreme Court recognizes that “there are
many different kinds of experts, and many different kinds of
expertise." Kumho Tire v. Carmichael, 526 U.S. 137, 50 (1999).
Therefore, “Daubert's list of specific factors neither necessarily nor
exclusively applies to all experts or in every case.” Id. at 141 (quoting
Daubert, 509 U.S. at 594). In the end, ‘the gatekeeping inquiry must
be ‘tied to the facts’ of a particular ‘case’,’’ Kumho Tire, 526 U.S. at
150, and “the reliability analysis should be geared toward the precise
sort of testimony at issue and not any fixed evaluative factors,” Lees
v. Carthage College, 714 F.3d 516, 521 (7th 2013). “An expert who is
addressing non-scientific issues must still employ reliable methods
and principles in forming their opinions . . .” Skaggs v. Ferrellgas,
Inc., Case No. 21-cv-02406, 2023 U.S. Dist. LEXIS 224429, 2023 WL
8711898, at *3 (S.D. Ind. Dec. 18, 2023).
Mr. Dew’s qualifications include working on complex,
computer-assisted data analysis for more than 25 years focusing on
complex healthcare litigation since 2004. (d/e 276, p 4). His
experience has also included work on False Claims Act cases
performed at the request of the United States Department of Justice
and the Attorneys General for various states. Id.
Defendants take issue with Mr. Dew’s per-state, per-month
analysis, arguing that a per-store, per-day analysis is more
appropriate. Further, Defendants argue that Mr. Dew’s lack of
justification as to why he utilized a per-state, per-month analysis
further supports Defendants position. Mr. Dew’s failure to review
Pharmacy Benefit Manager contracts and failure to utilize geographic
and time parameters specified by state Medicaid are two additional
factors Defendants believe should have been considered. Lastly,
Defendants point to the fact that Mr. Dew has indeed calculated
hypothetical usual and customary prices using a per-store, per-
quarter methodology. (d/e 408, pp 6-7).
However, Mr. Dew has testified as to his rationale for his
analysis and his use of an alternate method in the past does not
disqualify his conclusions in the present matter. Further, Mr. Dew
has provided what is generally accepted in the data analytics field,
including that he is using a more conservative methodology in this
matter than others he has conducted in the past. See Dew Report, p.
3.
As this Court has discussed, district judges have considerable
leeway in deciding in a particular case how to go about determining
whether particular expert testimony is reliable. Kumho Tire Co., 526
at 152. The Court finds that Mr. Dew’s opinions and reports
quantifying alleged overcharges regarding usual and customary price
reflect a reliable application of his principles and methods. Further,
the Court finds that Mr. Dew’s opinions and reports are an
acceptable, reliable application of his methodology pursuant to
Federal Rule 702.
D. Relevance
This Court has previously found Mr. Dew’s expert testimony is
sufficiently reliable to present to a jury and relevant to the extent that
it will “assist the trier of fact to understand the evidence or to
determine a fact in issue.” Ervin v. Johnson, 492 F.3d 901 94 (7th
Cir. 2007). Defendants argue that Mr. Dew’s methods are irrelevant
as they do not use the “relevant” unit of per-store, per-day usual and
customary pricing which reflects the record in this matter.
This Court disagrees. The jury in this matter will be tasked with
determining whether Defendants submitted false claims in reporting
their usual and customary price to various entities. Mr. Dew’s
testimony and reports provide the type of context and analysis that
would clearly assist a trier of facts in determining whether there were
overcharges to Government Healthcare Programs. This testimony
regarding how often these claims were submitted and the overages
claimed above the usual and customary prices may be helpful to
jurors as this subject matter is not within a juror’s usual scope of
knowledge.
Therefore, the Court finds Mr. Dew’s methodology is relevant
and potentially of assistance to the jury in understanding the
evidence.
IV. CONCLUSION
The Court has reviewed Defendants’ Motion to Exclude Expert
Testimony of Ian Dew, Relator’s Response and Defendants’ Motion
for Leave to File Reply. (d/e 408, 418, 420). Defendants’ Motion for
Leave to File Reply (d/e 420), is GRANTED and the Clerk is
DIRECTED to file the attached Reply.
The Court finds that Mr. Dew possesses the necessary
qualifications to be an expert witness. Further, his methodology is
reliable and relevant to the instant matter. Therefore, Defendants’
Motion to Exclude Expert Testimony (d/e 408) is DENIED.
IT IS SO ORDERED.
ENTERED: September 23, 2024.
FOR THE COURT
/s/ Sue E. Myerscough____________
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE