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United States v. SuperValu, Inc.

United States District Court, C.D. Illinois, Springfield Division

December 31, 2019

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 and Relators,
v.
SUPERVALU, INC., SUPERVALU HOLDINGS, INC., FF ACQUISITIONS, LLC, FOODARAMA, LLC, SHOPPERS FOOD WAREHOUSE CORP., SUPERVALU PHARMACIES, INC., ALBERTSON'S LLC, JEWEL OSCO SOUTHWEST LLC, NEW ALBERTSON'S INC., AMERICAN DRUG STORES, LLC, ACME MARKETS, INC., SHAW'S SUPERMARKET, INC., STAR MARKET COMPANY. INC., JEWEL FOOD STORES, INC., and AB ACQUISITION LLC, Defendants.

          OPINION

          RICHARD MILLS, U.S. District Judge:

         Pending is the Defendants' Motion to Compel Government Agency to Allow Former Government Employee to Testify in accordance with Trial Subpoena or, in the alternative, Defendants' Motion for Adverse-Inference Instruction.

         Pending also is Non-Party Witness Dr. Cynthia Tudor's Motion to Quash Trial Subpoena.

         I.

         The Defendants seek review of what they claim was an arbitrary and capricious decision by a Government agency that refused to permit trial testimony from a former government employee who they allege wrote and issued an official, nationwide memorandum relied upon by the Relators.

         In a thorough and well-reasoned Opinion and Order in the related case of United States ex rel. Proctor v. Safeway, Inc., No. 3:11-cv-3406, United States Magistrate Judge Tom Schanzle-Haskins denied Defendant Safeway's motion to compel the Government Agency to allow former Government employee to testify in accordance with the subpoena. Safeway appealed the magistrate judge's decision. This Court denied the appeal, affirming and adopting the magistrate judge's Opinion.

         The Defendants here ask the Court to grant their motion to compel the Centers for Medicare and Medicaid Services (CMS) to permit the testimony of a former employee, Cynthia Tudor, Ph.D, on certain narrow topics relevant to this litigation. Dr. Tudor is a former Director of CMS and former Director of the Medicare Drug Benefit and C&D Data Group. Federal regulations require agency authorization before an employee or former employee of CMS may testify concerning information acquired in the course of performing official duties. See 45 C.F.R. §§ 2.1-2.6 (“Touhy regulations”).[1] No. former employee may provide testimony “unless authorized by the Agency head pursuant to this part based on a determination by the Agency head, after consultation with the Office of the General Counsel, that compliance with the request would promote the objectives of the Department.” Id. § 2.3.

         The Defendants' Touhy request provided that Dr. Tudor was expected to testify on the following topics:

1. Memorandum, dated October 11, 2006, from Cynthia Tudor to All Part D Sponsors, regarding the HPMS Q & A- Lower Cash Price Policy (See Attachment A); and
2. Medicare Part D's “Lower Cash Price Policy, ” including but not limited to CMS's objectives for the Policy (see Attachment A; see also Medicare Prescription Drug Benefit Manual, Ch. 14, 50.4.2 - Beneficiary Cash Purchases (Rev. 12, 03/19/2010) and (Rev. 17, 08/23/2010)).

See Doc. No. 279-4.

         On March 27, 2019, CMS denied the Defendants' request to obtain trial testimony from Dr. Tudor. CMS stated that authorizing Dr. Tudor to testify would not promote the objectives of the Department of Health and Human Services (“the Department”) for three reasons: (1) CMS representatives talked to employees who worked most closely with Dr. Tudor and determined that she may lack personal knowledge about the topics on which Safeway wanted her to testify; (2) the specific topics seemed calculated to elicit Dr. Tudor's opinions rather than facts based on personal knowledge; and (3) testimony on the proposed topics posed a risk of disclosure of information protected by the deliberative process privilege or the attorney-client privilege.

         The Defendants claim that Dr. Tudor has personal knowledge of the Memo she wrote and for which CMS continues to hold her out as the author on its website. Moreover, Dr. Tudor would be testifying as a fact witness based on her personal knowledge, not as an expert witness. The Defendants further contend that CMS has not provided any reason why the narrow topics in Defendants' Tou ...


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