community sumter south carolina a two hundred thirty seven million dollars judgment and art against me in this case is not only stayed at least lot as a legal matter but it was bankrupting the hospital as an initial matter there never should have been a second this even though all agreed follow that rule sixty one requires a finding of prejudice before a new trial order can be granted that findings was literally never made and it can yes and so the new the prejudice finding that would be a sum szell any rule sixty one ions is impossible even to make now by this court because the seventeen pages of mr martin's deposition testimony out of the fifty thousand pages of documents and evidence the government submitted in this case was relatively insignificant and humility of other evidence that had already been submitted  you as to what he had actually excluded it was certainly the martin's testimony and then there was confusion as well about whether it was only the seventeen pages or the entire martin submission but was very clear judge when and the record shows us that july thirteenth hearing shows that miss that judge perry stood by his ruling on mcenaney he said i am not concerned about back can we please counsel turned to the one i am concerned and it's never had been raised to this court in a proper procedural posture and so what we are reviewing is judge perry ruling on the new trial based on martin that was seventeen pages even if there was error was simply not prejudicial and the ultimate result it's important to remember the practical consequences here show me one that had a zero dollars verdict also claims that that new trial order opened the door to a two hundred thirty seven million dollar judgment that is go provides an adequate remedy at law the fact that the government did and when it's false claims act based doesn't mean that that's not an adequate remedy but there but there is no remedy for s actually never supposed to being court or supposed to be in front of the agency for a violation of the stark law but getting back to your question justin and another reason why that little plane shouldn't be available and remain and is that the government would at least have to be put through its paces of showing the elements of those claims let's consider for instance their mistake of fact counts by the state a fact has particular traditional elements under state law for instance a government would have to show that it actually continued paying our invoices and it was actually under the mistaken belief that they complied with the stark law we think that's impossible to show after two thousand and eight when the united states filed its complaint and this very case so whether you agree with that or not the point is there are elements of these claims that need to be shown consistent with due process those were never presented your honor on the verdict that we are now on appeal on no that case was only about the fall of claims act the equitable claims were held in abeyance handing the new trial and our trip up to this or  no your honor as i said to judge doug and we would ask this court to reverse on this black letter rule sixty one error and thereby avoid all i don't agree with you though as i was saying we would actually ask this court to reach out and preemptively address this question of what becomes of the ecuador enmities to avoid even future further confusion in this case which has suffered from a fair amount of confusion but if you're not willing to do that is a pure question of law whether the applicable remedies and somehow be automatically granted to the government on a remount when it's not actually proven the elements of that case it's within the sports power as you did and to me that and the government importantly in this case didn't even submit a single a single claim that we submitted that there's not even actual claim in evidence here so it was difficult to understand who even the referring physician supposedly are and you would think burden of proving liability for a false claim and the eighth circuit in the constructor case said in a similar situation the government has not put in evidence of one claim to the extent they're going to rely on the ubi forms has not put in evidence of correct judgment although we don't think we made a violation the government is prosecuting this case under the false claims act which is an extreme remedy for a start law file ation the primary remedy is supposed to be administrative and if the government wants a refund were the actual that's what the statute actually requires is that a doctor with a financial relationship makes a referral the ultimate problem on the stark black and white in my limited time is that the jury never got the instruction th to make clear nothing else was as the court said the intent all along is not sufficient because judge seymour never even tracked language of to me once she gave the same instruction that judge perry gave it is getting too judged and can they do see evidence of intent it is some other evidence and they brought forward some other theories when we have a general verdict that's based on multiple theories of liability and one theory is legally your second to going to your point judge time to start law expressly permits a productivity bonus that is based on the doctor's own collections for their personally perform services fees and if we look at the language of actual contracts here at joint appendix forty one seventy two they say that the salary shall be adjusted based upon since the doctor's collections that is explicitly permissible under the statute itself thirteen ninety five double and each says a productivity bonus based on the services provided by the doctor him or herself is not just not r of we think the evidence does not support that luzhin but even if you felt that there was sufficient evidence for star club violation the government still have major problems under its false claims act theory there which are two fold there is no false statement here within the meaning of circuit precedent brown and root judge will consent to have a false statement have something be false it has to be a statement of fact that can be adjudged true or false and apparently verifiable way we think there is no false statement here is a difference in interpretation arising out of a disputed legal question notably judge perry gave us that instruction the first time around and judge seymour refused to do it she left out an entire strand of th stands directly in their way harrison to says that under the false claims act damages means damages injure actual loss and the arguments are relative or made there it was that because the contract was worried ave she else the contractor had not complied with coordinating eligibility requirements they should get back every dollar that the government paid judge shed writing for this court said no the government has to show that they paid more to that contractor than they would have paid to somebody else violation as a core requirement of a case of alleged fraud on the united states under the false claims act suffice to say that brown and root is i think a major impediment to the characterization of this even as properly brought under the false claims act and again judge perry gave us an instruction judge seymour refused to do so we also think i was getting to the supreme damages is inconsistent with harrison to thank you ron or made peace accord on tracy home on behalf of the united states your honor this case is about sweetheart deals that benefited to me hospitals and nine hundred select doctors at the expense of the medicare program and thousands beneficiaries who had to pay more for medical services because they had nowhere else in town to go now that type of deal is exactly what the stark call was directed to prevent and to me refuse to accept responsibility that's why we're here abuses its abuse of discretion and furthermore in everhart this court said that that the decision of a judge a district court judge to grant or deny a new trial should not be reviewed except in the most exceptional judge perry concluded that those seventeen pages were material enough to have prejudiced the government's case that he required a new trial and i want to  hearings the first hearing was on the post trial motions on june fourth of twenty ten and then on june thirteenth we reconvene to talk about the text of the order and it is absolutely true that two news lawyer kept raising and from we played those seventeen pages your honor we played them as a videotaped deposition and their effect on the jury was considerable obviously that doesn't convey in the rafters but we sat there and watched it and judge seymour had a front your honor it told it told the jury for seven yes it told the jury that mr martin knew what mr mcenaney had said knew of his warnings i mean i've read trial and also testimony from dr draper to tourney greg smith who participated in the call with mr mcenaney he was not allowed to testify about what mr mcnamee had set the rule sixty one and when did you make that a case arrows also that were made normally that's the only way he gets to respectfully your honor i'm not sure we had that ability we we won the motion for a new trial we won the second trial how do we get to the issues that  i would be more than happy to supply the court with any authority i do want to point out that these are issues that we raised in docket five sixteen which was our motion for a new trial after the first trial of claims act and we raised all of these points your honor and argued for them and then judge judge perry i would like to point this out because i think that to me hasn't been fair to judge perry he did make a ruling on harmless error is very clear and i would draw the court's attention to the june fourth hearing its it joined appendix twelve ninety five to twelve ninety six and mr lewis who was to me counsel at that time came right out and said and this is under rule sixty one which talks about it being a harmless error inquiry at its core the harmless error increase ask whether the trial error could or did affect the outcome of the case to the substantial disadvantage of the losing party and mr lewis argue that the seventeen pages into that and the court said on twelve ninety six this is judge perry well you are aware i'm very concerned over the ruling that excluded mr martin's deficits and frankly i'm astounded i've got a problem with that one i do recognize that in the defendant's view even so the government suffered no prejudice but i think the exclusion of mr martin's testimony was a substantial error i think that satisfie well i think your honor if the videotape were watched and mr martin's demeanor observed that would also have an impact because it seemed to us that mr martin was being had been very coach and i think the jury saw that too and obviously that kind of a question whether whether the demeanor of the witness ways plays on to their credibility is a fundamental question for the jury but what i will say your honor is that we were never allowed in the first trial to tell the jury exactly what to me knew mr mcenaney had said through any of these devices it came out in the second trial that mr houston whose notes were also included in the second trial had conveyed all of this more detailed information to to to mr martin in that phone call so as those  that this matter went to to miss knowledge and should be admitted they had an advice of counsel defense mr mcenaney was one of their counsel so it was critical that we be allowed to show what to me knew about what come up is that the only issue before the court on the first trial was the question whether judge perry's judgement on the painted by mistake and unjust enrichment claims was proper the the other issue whether the new trial should have been granted at all was on the subject of a proposed interlocutory appeal which the court rejected because it didn't  was a principal author of the starr regulations and commentary that we've been discussing over these two appeals he had recently left the government was in private whereas with the hospital where someone was what they wanted to persuade dr dre for dr draper's lawyer felt that the contracts raise a lot of problems the very ones that we're talking about and they wanted dr dre for to enter into an arrangement nonetheless t dr drake first attorney and to me is attorney had different views about the legality of this arrangement yes and instead of going to the office of inspector general for a of an opinion from them and  which would have been binding yes they decided to go to mr machinating who previously had been the one who gave those advisory opinion and they asked him to give advice about whether the arrangements it was a joint representation they asked him to give advice about whether what the risks would be of going forward with these arrangements and his testimony which is a matter of record is clear what  i want to first dispose of a couple of simple questions that i think came up before that delve into the merits here first of all we presented claims we presented twenty seven thousand or more claims to the jury in the form of seven summary evidence pursuant to federal rule of evidence one thousand six hundred yes well every single court has addressed this issue and we cited them has said that the attending an operating physician at least as a factual matter falls within the statutory and regulatory definition of referring physician judge seymour covered all the bases she gave them the definition of attending an operating from the c m s form with  the sense by the way they agreed that she could take judicial notice of that and she gave them she read them the definition of referral in referring physician and she left it to the jury to make that decision you know in rogan it was decided to be a question of law we thought it could be resolved it's a question of law because it's statutory interpretation so that's one issue under the stark law that we can immediately move past and i want to say one of the reasons we didn't put those claims in front of the jury is that they c tain personal health information of medicare beneficiaries and what would the jury do with the spreadsheet anyway that showed twenty seven thousand claims that's why we did the summary the way we did they had the claims the a claims for three years before that trial so anything they want to say about it they could to get down to the heart of this matter here did these contracts violate the stark law your honor we argued before you last time we thought you could make that decision as a matter of law this court felt that a jury trial was needed in fact both district judges have also denied a summary judgment and felt that a jury trial was needed well let's talk about what what evidence there was let me first address the takes into account pran because this court spent so much time talking about that your honor i have to say that i read the on their face phrase in exactly the way that you just described it that it was a comment upon what village things had not found that this court felt at least warranted exploration as a factual matter on free trial and that it wasn't  positive of all the ways in which the contract violates the saarc law because the definition of remuneration is broad and includes over and covert she did yes i would like to sling first of all she gave the jury the statutory definition of remuneration which says that remuneration is any remuneration direct or indirect overt or covert in cash or kind that covers on its face the other thing i really feel empowered to point out here your honor is immediately after this discussion which follows from the comment on phillip saying is footnote twenty six were this court says for clarification we emphasize that are holding in part three is limited to the issues we specifically richard addressed on remand a jury must determine in light of our holdings whether the aggregate compensation received by the decisions under the contract vary with or took into account the bong or value of the facility component referrals if the so farming's the jury must further determine whether the aggregate compensation received by the physicians is nevertheless lawful so there's that is the instruction that judge seymour gave that's the one she saw as the complete instruction not sort of the partial comment about one case that had addressed one issue sorry i apologize your honor if i may just briefly conclude we believe the jury got it right and had substantial evidence for its verdict we believe the court properly entered judgment in this case we respectfully request that this court affirm that judgment thank you prejudice in this writer to revive you have the discretion to certainly reach the issue and would ask you to undertake that analysis we don't think it's possible rationally find to find that the martin exclusion of the martin evidence board meeting minutes on extended conversation other board meetings about the map and any concerns the government itself on page eighty three in this brief had to quote language that wasn't even in the seventeen pages of the martin deposition parking right and my point my point is that no matter what you think about the cross appeal they have not advanced that argument you clearly get their beliefs cross i'm not sure we need to get too hung up on the necessity of a cross appeal because they clearly didn't argue it to the court and it's their burden certainly in a case or controversy to bring that issue to the courts but and i focus on the substance of that alternate ground this court would be bending over backwards to affirm of layton's rule sixty one violations the from mcenaney who's not even before you and to do that you'd have to find the judge perry a difference of opinion about a legal question not a false statement that's what we got the first time around and didn't get the second time around we think that was probably be game changer but in terms of the government getting mcenaney in the second time judge duncan that shows how unfair all of this was because it was only a new trial based on any error with respect to martin so the government gets their new trial because a seventeen pages a don't show any prejudice and they get a total redo that lets them get in because they have a new district court judge a happen on remember if you disagree with us we think they still have big problems under the false claims act and they certainly have problems with with respect to damages the government did not if i could address one other point if you  opinion a alternative we would ask that you vacate the judgment and reinstate the first verdict based on the black letter will sixty one violation but at a minimum we would ask you to vacate your ward for recalculation of damages consistent with harrison appeals opinions you will not find one court of appeals that has embraced for instance the one to one correlation theory this case has been much lodged in the health care bar would be a controversial ruling you'd have to distinguish brown and root under the false claims act you have to two you have to adopt an applied certification theory you'd have to find there's not even a constitutional concern with a quarter of a billion dollar judgment that would put that false claims act defendant out of business and you have to find any error in excluding mr martin actually swayed