UNITED STATES DISTRICT COURT 

DISTRICT OF NEW JERSEY

 

 : 

UNITED STATES OF AMERICA, ex : 

rel. MARC SILVER, et al., : 

 : 

Relators, : No. 1:11-cv-1326-NLH-AMD 

 : 

v. : 

 : OPINION 

OMNICARE, INC., et al., : 

 : 

Defendants. : 

 : 

______________________________ : 

APPEARANCES: 

LISA J. RODRIGUEZ 

SCHNADER HARRISON SEGAL & LEWIS LLP 

WOODLAND FALLS CORPORATE PARK 

220 LAKE DRIVE EAST 

SUITE 200 

CHERRY HILL, NJ 08002-1165 

WILLIAM H. ELLERBE 

RUSSELL D. PAUL 

BERGER & MONTAGUE PC 

1818 MARKET STREET 

PHILADELPHIA, PA 19103 

DANIEL WILLIAM MEYLER 

U.S. ATTORNEY’S OFFICE 

DISTRICT OF NEW JERSEY 

970 BROAD STREET, SUITE 700 

NEWARK, NJ 07102 

Attorneys for Relators

JUDITH H. GERMANO 

GWEN M. SCHOENFELD 

GERMANO LAW LLC 

460 BLOOMFIELD AVENUE 

SUITE 200 

MONTCLAIR, NJ 07043 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 1 of 17 PageID: 20189
2 

MICHAEL MANTHEI (Pro Hac Vice) 

WILLIAM PEZZOLO (Pro Hac Vice) 

HOLLAND & KNIGHT LLP 

10 ST. JAMES AVENUE 

BOSTON, MA 02116 

PETER J. KOCORAS (PRO HAC VICE) 

THOMPSON HINE LLP 

20 NORTHT CLARK STREET, SUITE 800 

CHICAGO, IL 60602 

Attorneys for Defendant PharMerica Corp. 

HILLMAN, District Judge: 

 This matter is before the Court on Defendant PharMerica 

Corporation’s (“PharMerica”) Appeal of the September 22, 2021 

Order [Docket Number 580] issued by the Honorable Ann Marie 

Donio, United States Magistrate Judge, denying PharMerica’s 

request to take the deposition of a Center for Medicare and 

Medicaid Services (“CMS”) witness after the fact discovery 

deadline and granting Relator’s motion to quash PharMerica’s 

subpoena to CMS. Relator Marc Silver (“Relator”) filed 

opposition and the United States filed a letter to correct 

PharMerica’s misrepresentations. The Court has considered the 

submissions and decides this matter pursuant to Fed. R. Civ. P. 

78 and L. Civ. R. 78.1. For the reasons that follow, Judge 

Donio’s Order will be affirmed. 

I. FACTUAL AND PROCEDURAL HISTORY 

 As noted in the Court’s prior opinions, this case is a qui 

tam action for alleged violations of the False Claims Act, 31 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 2 of 17 PageID: 20190
3 

U.S.C. § 3729, et seq., and the federal Anti-Kickback Statute, 

42 U.S.C.A. § 1320a-7b, et seq. Relator claims PharMerica 

engaged in a scheme to offer nursing homes below market prices 

for drugs to patients insured by Medicare Part A in exchange for 

referrals of prescriptions for nursing home patients insured by 

Medicare Part D or by Medicaid. The Court assumes the parties’ 

familiarity with the Court’s earlier opinions in this matter and 

need not discuss the factual and procedural history of this 

action in further detail. Only those facts relevant to the 

instant appeal will be discussed here. 

 On December 3, 2014, the Court issued its first Scheduling 

Order, setting December 1, 2015, as the deadline for fact 

discovery. Then, after years of contentious pretrial litigation 

and numerous Orders, on February 28, 2020, the Court issued an 

Amended Scheduling Order [Dkt. No. 469], setting a pretrial 

discovery end date of June 30, 2020. On March 30, 2020, the 

Court issued another Amended Scheduling Order [Dkt. No. 478], 

adjusting the deadline for pretrial factual discovery to October 

20, 2020, based on the parties’ consent request. On July 22, 

2020, PharMerica moved for additional time to complete discovery 

and amend the Court’s deadlines, which the Court granted in an 

August 3, 2020 Order [Dkt. No. 498], setting a fact discovery 

deadline for February 26, 2021. 

Later that month, on August 26, 2020, PharMerica served a 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 3 of 17 PageID: 20191
4 

subpoena on CMS, a nonparty, requesting CMS produce documents 

and appear for a deposition. In September and December of 2020, 

CMS submitted written objections to the subpoena, refusing to 

appear for a deposition. Specifically, CMS advised PharMerica 

in December of 2020 that its document searches uncovered no 

responsive documents, thus CMS denied the request for testimony 

as premature given the lack of responsive documents. Despite 

its opposition, CMS committed to continuing to meet and confer 

on the subpoena requests. 

PharMerica then moved for additional time to complete 

discovery, which the Court granted in its November 6, 2020 

Amended Scheduling Order [Dkt. No. 509], setting March 19, 2021 

as the discovery deadline. On January 12, 2021, the Court 

issued another Amended Scheduling Order [Dkt. No. 524], again 

adjusting the fact discovery deadline, this time to May 19, 2021 

at the request of Relator. 

On March 25, 2021, three months after CMS stated it had no 

responsive documents, PharMerica emailed CMS asking to schedule 

a deposition in late April or early May. In early April of 

2021, the parties met and conferred over the subpoena request, 

to which CMS reiterated that it would not produce a witness for 

testimony but suggested that the parties could remain open to 

narrowing the scope of the subpoena. On April 26, 2021, upon 

the joint request of the parties, the Court issued an Amended 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 4 of 17 PageID: 20192
5 

Scheduling Order [Dkt. No. 550] setting a new fact discovery 

deadline of August 19, 2021. 

Another three months passed without any developments 

regarding the subpoena, until July 7, 2021, when PharMerica 

requested a meet and confer with CMS to discuss the possibility 

of narrowing the scope of the request for testimony. On July 

20, 2021, CMS and PharMerica met and conferred regarding the 

deposition request. During this meeting, PharMerica provided 

further details on the topics for deposition testimony, and, on 

July 29, 2021, PharMerica sent CMS a five-page list of 

approximately fifty proposed deposition topics and subtopics. 

CMS and PharMerica continued to meet and confer regarding the 

list of topics and scope. 

On the morning of August 3, 2021, CMS informed PharMerica 

it would not consent to providing a witness to testify at a 

deposition. Later that day, at a discovery conference with the 

Court, PharMerica recited this position and stated it would file 

a motion to compel CMS’s testimony. Relator objected to 

PharMerica’s request to compel CMS’s deposition, noting that 

this was the first time Relator had ever heard that PharMerica 

was actually moving forward with deposing CMS. Transcript of 

August 3, 2021 Discovery Conference [Dkt. No. 585], 5:3-6:21. 

On August 6, 2021, PharMerica submitted a letter [Dkt. No. 

563] updating the Court on a change in the subpoena dispute. 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 5 of 17 PageID: 20193
6 

PharMerica’s letter noted that a witness from CMS would be 

available for a deposition prior to September 13, 2021, and that 

the parties are still conferring over dates. Based on these 

developments, PharMerica informed the Court that it may request 

another extension of the deadline for fact discovery. 

On August 9, 2021, Relator filed a Motion to Quash 

PharMerica’s Subpoena to depose CMS outside of the Court-ordered 

period for fact discovery. Motion to Quash [Dkt. No. 564]. 

Relator’s Motion noted that despite serving the subpoena 

thirteen months ago, PharMerica waited until just days before 

the end of fact discovery to attempt to actually take the 

deposition of a CMS’s employee. Accordingly, Relator argued the 

Court should quash the subpoena based on PharMerica’s extreme 

delay, prejudice to Relator, and disruption to the case 

schedule.

On August 10, 2021, CMS submitted a letter [Dkt. No. 565] 

to the Court, noting that “CMS has identified a witness to 

testify, however, the Government is still in the process of 

negotiating with Pharmerica the scope of testimony that the 

agency may authorize. Absent an order by the Court directing 

otherwise, we expect that the witness’s testimony will occur 

before September 13, 2021.” 

Ultimately, PharMerica and CMS were unable to reach 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 6 of 17 PageID: 20194
7 

agreement on the scope of the deposition,1 prompting PharMerica 

to file a Motion to Allow the Deposition of CMS after the Fact 

Discovery Cut-off and Opposition to Relator’s Motion to Quash on 

August 16, 2021 – a mere three days prior to the discovery end 

date. PhaMerica’s Discovery Motion [Dkt. No. 566]. PharMerica 

noted that additional time for fact discovery was necessary “to 

accommodate resolution of the motion to compel,” after which, 

and assuming it was successful, PharMerica would then need time 

to depose CMS. Brief in support of PhaMerica’s Discovery Motion 

[Dkt. No. 566-2], at 4. In short, after letting the subpoena 

issue fester for nearly a year, PharMerica essentially requested 

that the Court suspend the case schedule for an unknown period 

of time pending a ruling by the District Court for the District 

of Columbia on PharMerica’s Motion to Compel CMS’s compliance 

with the subpoena. 

On September 9, 2021, the Court held a hearing on the two 

motions and afforded the parties the opportunity to present oral 

arguments. On September 22, 2021, the Court issued an Order 

[Dkt. No. 580] granting Relator’s Motion to Quash [Dkt. No. 564] 

1 On August 16, 2021, CMS wrote PharMerica regarding concerns about 

PharMerica’s proposed deposition topics. While CMS agreed to 

consider producing a witness to testify about the issue of 

materiality in Anti-Kickback Statute cases, PharMerica rejected 

the offer, opting instead to file a Motion to Compel CMS’s 

testimony in the United States District Court for the District of 

Columbia on August 17, 2021. 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 7 of 17 PageID: 20195
8 

and denying Defendant’s Motion to Take the Deposition of a CMS 

Witness after the Fact Discovery Deadline [Dkt. No. 566]. 

Transcript of September 22, 2021 Discovery Conference (“Op. 

Tr.”) [Dkt. No. 587] at 7:20-25. In reaching her ruling, Judge 

Donio issued an oral opinion [Dkt. No. 587] that adroitly 

recites the relevant case history and provides a thorough 

analysis. 

Judge Donio noted that, “this case has had an extensive 

procedural history,” presenting a record of “lengthy and 

complicated” discovery, to which “[b]oth parties have moved on 

multiple occasions for extensions of time to complete 

discovery,” and “[t]he prior Magistrate Judge handling this 

matter expressed a clear desire to finalize discovery nearly two 

years ago.” Id. at 8:2-13. The opinion notes the subpoena was 

issued in August of 2020, to which CMS responded, denying the 

deposition request in September 2021 and the deposition and 

document requests in December 2021. Id. at 9:25-11:1. The 

opinion further notes that although counsel for PharMerica 

claims to have actively sought to obtain the CMS witness 

deposition after CMS’s rejection in December, “[t]he record ... 

is devoid of evidence demonstrating immediate efforts to obtain 

the deposition.” Id. at 11:5-6. Indeed, it was not until 

“March 25, 2021, more than three months after CMS confirmed it 

had no documents,” that PharMerica emailed CMS seeking “to 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 8 of 17 PageID: 20196
9 

schedule the deposition in late April or early May.” Id. at 

11:8-11. The opinion notes the next developments on this issue 

occurred on April 5, 2021, when PharMerica emailed CMS 

requesting to schedule the deposition, and on April, 6, 2021, 

when CMS informed PharMerica that it was willing to meet and 

confer with Defendant regarding the production of discovery to 

narrow the scope of the subpoena. Id. at 11:13-18. Reviewing 

the subsequent case history, Judge Donio found “the record 

contains no evidence of efforts during the now next [sic] threeand-a-half months by Defendant to meet and confer with CMS 

regarding the scope of the subpoena and deposition topics. 

Rather it was not until July 29, 2021, that Defendant wrote to 

CMS with a list of proposed deposition topics[, and o]n August 

3, 2021, Defendant advised the court that CMS was willing to 

produce a witness to testify, but the deposition could not occur 

before the discovery end date of August 19, 2021.” Id. at 

11:19-12:7. The opinion further notes that CMS informed 

PharMerica and the Court that it refused to produce a witness on 

any of the proposed deposition topics, which in turn resulted in 

PharMerica’s discovery motion and all subsequent developments on 

this issue. Id. at 12:7-16. 

Against this record, Judge Donio examined PharMerica’s 

efforts to obtain the CMS deposition against the Court’s 

discovery deadlines. Id. at 12:21-25. Judge Donio noted the 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 9 of 17 PageID: 20197
10 

Court afforded the parties numerous extensions of discovery 

deadlines between November 2020 and April 2021. Id. at 12:23-

14:22. All of these extensions were based on either the 

parties’ joint requests or requests for additional time to 

review document productions. Ibid. None of the prior requests 

for additional time concerned the CMS deposition. Rather, the 

first time the Court so much as heard that PharMerica might need 

more time to depose a CMS witness was August 3, 2021. 

Accordingly, Judge Donio concluded that “as each discovery 

deadline approached, [PharMerica] made some effort to obtain the 

deposition of a CMS witness, but once the discovery period was 

extended, [PharMerica] did not continue to pursue the 

deposition[, and, I]nstead, [PharMerica] waited until the new 

discovery end date approached before revisiting the CMS 

deposition issue.” Id. at 14:23-15:4. 

Applying the Rule 16 good cause standard, Judge Donio found 

the record did not demonstrate PharMerica exercised diligence in 

pursuing the subpoena to justify amending the Court’s scheduling 

order. By failing to actively pursue the CMS deposition each 

time deadlines were extended and instead “chos[ing] to wait 

until July 29th with only three weeks remaining in the discovery 

period to follow up with CMS,” PharMerica created a situation 

“in which discovery could not have been completed within the 

discovery time period.” Id. at 16:7-13. Judge Donio further 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 10 of 17 PageID: 20198
11 

emphasized that PharMerica “is represented by competent counsel 

with several attorneys working on this case,” thus “the Court 

sees no reason why [PharMerica] could not have simultaneously 

pursued discovery from CMS while also conducting other discovery 

in this matter.” Id. at 16:16-20. 

PharMerica’s appeal of Judge Donio’s ruling followed, to 

which Relator filed opposition and CMS submitted a letter to 

correct PharMerica’s misstatements of the record. 

II. ANALYSIS

 Pursuant to 28 U.S.C. § 636(b)(1)(A), a United States 

Magistrate Judge may “hear and determine any pretrial matter 

pending before the court[.]” 28 U.S.C. § 636(b)(1)(A). A 

district court judge will only reverse a magistrate judge’s 

order on pretrial matters if it is “clearly erroneous or 

contrary to law.” Id.; see also Fed. R. Civ. P. 72(a) 

(recognizing that a district judge can “modify or set aside any 

part of the [magistrate judge’s] order that is clearly erroneous 

or is contrary to law.”); L. Civ. R. 72.1(c)(1)(A) (noting that 

the district judge “shall consider the appeal ... and set aside 

any portion of the Magistrate Judge’s order found to be clearly 

erroneous or contrary to law.”). 

 Under this standard, “‘[a] finding is clearly erroneous 

when although there is evidence to support it, the reviewing 

court on the entire evidence is left with the definite and firm 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 11 of 17 PageID: 20199
12 

conviction that a mistake has been committed.’” Wyeth v. Abbott 

Labs, 692 F. Supp. 2d 453, 455 (D.N.J. 2010) (quoting Marks v. 

Struble, 347 F. Supp. 2d 136, 149 (D.N.J. 2004)). “A district 

judge’s simple disagreement with the magistrate judge’s findings 

is insufficient to meet the clearly erroneous standard of 

review.” Andrews v. Goodyear Tire & Rubber Co., 191 F.R.D. 59, 

68 (D.N.J. 2000). Moreover, a finding is “contrary to law if 

the magistrate has misinterpreted or misapplied applicable law.” 

Gunter v. Ridgewood Energy Corp., 32 F. Supp. 2d 162, 164 

(D.N.J. 1998). “The burden is on the moving party to 

demonstrate that the magistrate judge’s finding is clearly 

erroneous or contrary to law.” Exxon Corp. v. Halcon Shipping 

Co., 156 F.R.D. 589, 591 (D.N.J. 1994). 

 Ultimately, Magistrate Judges’ legal conclusions are 

subject to a de novo review. Haines v. Liggett Grp. Inc., 975 

F.2d 81, 91 (3d Cir. 1992). However, where the appeal seeks 

review of a matter within the exclusive authority of the 

Magistrate Judge, such as a discovery dispute, the District 

Court Judge will apply an even more deferential standard, the 

abuse of discretion standard. Sabinsa Corp. v. Herbakraft, 

Inc., No. 14-4738 (RBK/KMW), 2021 WL 5449087, at *4 (D.N.J. Nov. 

22, 2021). 

 Here, PharMerica argues it was both clearly erroneous and 

an abuse of discretion for the Court to find a lack of good 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 12 of 17 PageID: 20200
13 

cause to modify the discovery schedule to allow PharMerica to 

depose a CMS witness. Put another way, PharMerica claims the 

record demonstrates it exercised reasonable diligence in 

pursuing the deposition and that CMS’s delay tactics created 

this issue. The Court disagrees. 

Federal Rule of Civil Procedure 16 vests a court with broad 

discretion to control and manage discovery. See Newton v. A.C. 

& Sons, Inc., 918 F.2d 1121, 1126 (3d Cir. 1990). Under Rule 

16(b)(3)(A), the Court is required to “limit the time to join 

other parties, amend the pleadings, complete discovery, and file 

motions.” Fed. R. Civ. P. 16(b)(3)(A). Pursuant to Rule 

16(b)(4), a scheduling order “may be modified only for good 

cause and with the judge’s consent.” Fed. R. Civ. P. 16(b)(4). 

To establish the requisite good cause, the party seeking an 

extension must demonstrate that the deadlines in the scheduling 

order “cannot reasonably be met despite the diligence of the 

party seeking the extension.” Harrison Beverage Co. v. Dribeck 

Importers, Inc., 133 F.R.D. 463, 469 (D.N.J. 1990). PharMerica 

failed to demonstrate good cause to extend discovery before 

Judge Donio and has not demonstrated good cause to this Court 

either. 

As described in greater detail above, and as was determined 

by Judge Donio, the record demonstrates that PharMerica was not 

diligent in pursuing the CMS deposition. PharMerica served the 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 13 of 17 PageID: 20201
14 

subpoena in August of 2020. CMS responded in September and 

December that it had no responsive documents and that it refused 

the request for deposition testimony. Nonetheless, CMS agreed 

to continue to meet and confer over the subpoeina. PharMerica 

then did nothing to pursue the issue until late March of 2021, 

when it contacted CMS requesting to schedule a deposition in 

late April or early May. CMS again refused the deposition 

request and agreed to continue to meet and confer to narrow the 

scope of the subpoena. Another three months passed by before 

PharMerica reached out to CMS in July of 2021 to confer on the 

scope of the subpoena. Then, at the end of July, PharMerica 

emailed CMS a list of fifty proposed deposition topics and 

subtopics. CMS again refused the deposition request, prompting 

PharMerica, for the first time, to inform the Court and Relator 

of the issue. None of these events escaped Judge Donio’s 

careful consideration, as she correctly summarized: 

In January 2021, discovery was extended to 

May 19, 2021, yet defendant waited until 

March 25, 2021 to contact CMS. The record 

demonstrates no efforts made by defendant in 

January, February, or the beginning of March 

2021 to pursue the deposition. 

Once the discovery end date was again 

extended on April 26, 2021 to August 19, 

2021, the record again demonstrates no 

efforts made by defendant to obtain 

discovery from CMS until July 29, 2021 with 

less than three weeks remaining in the 

discovery period. 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 14 of 17 PageID: 20202
15 

The defendant did not utilize the additional 

time granted by each discovery extension to 

resolve the discovery issue with CMS or 

bring to the Court’s attention any problems 

it had in obtaining discovery from CMS. 

[Op. Tr. at 15:5-18.] 

Accordingly, Judge Donio’s ruling that PharMerica was not 

diligent is justified because “the record demonstrates several 

spans of time in which nothing was done by defendant to further 

the process of obtaining discovery from CMS.” Op. Tr. at 15:21-

25. 

Rather than focus on the record, PharMerica urges the Court 

to instead focus on CMS’s conduct. Specifically, PharMerica 

claims it was diligent because CMS agreed to the deposition. 

Likewise, because CMS reneged on its promise, PharMerica avers 

CMS is at fault for creating the discovery issue and Judge Donio 

erred in holding that “PharMerica was not diligent because it 

failed to anticipate the government’s sandbagging.” Brief in 

support of PhaMerica’s Discovery Motion [Dkt. No. 566-2], at 8. 

Although they are imaginative, these claims are not supported in 

the record. 

At the most fundamental level, CMS never agreed to produce 

a witness for a deposition as CMS and PharMerica failed to reach 

an agreement on the scope of the deposition. Instead, CMS 

merely identified a potential witness for a deposition. Thus, 

PharMerica’s primary contention that Judge Donio ignored this 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 15 of 17 PageID: 20203
16 

so-called “most salient fact” is not supported by the record. 

Moreover, even if PharMerica had secured CMS’s consent to a 

deposition in the eleventh hour before the close of discovery, 

as PharMerica claims, said deposition would have taken place 

after the close of discovery and PharMerica did not provided a 

basis as to why the discovery deadline could not have been 

reasonably met if PharMerica had pursued the deposition issue 

prior to mere days before the discovery end date. Analysis of 

CMS’s conduct therefore does not support PharMerica’s argument 

for good cause. 

This is not to say that CMS’s conduct was not duly consider 

by Judge Donio. Indeed, Judge Donio held that because 

PharMerica admittedly knew it is “never simple and often 

requires significant negotiations” to subpoena information from 

the government, PharMerica “should have been more proactive in 

seeking this discovery in an effort to obtain the requested 

information including whatever motions would need to have been 

filed within the discovery period.” Id. at 16:3-13. 

In sum, the Court finds that Judge Donio’s ruling is 

entirely supported by the record. PharMerica failed to 

demonstrate that the discovery deadline could not have been met 

despite its efforts to complete discovery within the discovery 

period. Thus, Judge Donio’s determination that PharMerica 

failed to show good cause for an extension of the discovery 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 16 of 17 PageID: 20204
17 

schedule was not in error. 

III. CONCLUSION

 For the foregoing reasons, the Court will affirm Magistrate 

Judge Donio’s September 22, 2021 Order [Docket Number 580] and 

deny Defendant PharMerica Corporation’s appeal. The Court 

agrees with Judge Donio that PharMerica did not demonstrate good 

cause to extend discovery and that the motion to quash should 

have been denied. Accordingly, PharMerica has not met its 

burden of demonstrating that Judge Donio’s ruling was clearly 

erroneous or contrary to law. 

An Order consistent with this Opinion will follow. 

 

Date: September 20, 2022 s/ Noel L. Hillman 

At Camden, New Jersey NOEL L. HILLMAN, U.S.D.J. 

Case 1:11-cv-01326-NLH-AMD Document 677 Filed 09/20/22 Page 17 of 17 PageID: 20205