United States District Court, N.D. Ohio, Eastern Division
IN RE NATIONAL PRESCRIPTION OPIATE LITIGATION THIS DOCUMENT RELATES TO: Track One Cases
OPINION AND ORDER REGARDING DEFENDANTS' MOTIONS
TO EXCLUDE OPINIONS OF JAMES RAFALSKI AND CRAIG
AARON POLSTER UNITED STATES DISTRICT JUDGE
the Court are two related Daubert motions filed by
Defendants: (1) a Motion to Exclude the Opinions Offered by
James Rafalski (Doc. #: 1900); and (2) a
Motion to Exclude the Opinions and Testimony of Craig McCann
(Doc. #: 1906). For the reasons stated
below, the Court GRANTS IN AND DENIES IN
PART the Motion to Exclude Rafalski (Doc. #:
1900) and DENIES the Motion to
Exclude McCann (Doc. #: 1906).
a former Drug Enforcement Administration (“DEA”)
investigator, offers opinions about, inter alia, the
effectiveness of Defendants' efforts to prevent the
diversion of controlled substances into illegitimate
channels. Rafalski identified five methods that a Distributor
could use to identify potentially suspicious orders. In turn,
McCann, a data expert, applied Rafalki's methods to the
DEA's Automation of Reports and Consolidation Orders
System (“ARCOS”) data and Defendants'
transactional data to identify transactions that meet the
specified criteria of each methodology. Taken together,
Rafalski and McCann provide opinions, as to specific
Defendants, regarding the number of orders to the Track
One Counties that each method would have flagged as
ask the Court to exclude both opinions for a number of
reasons, including unreliability, flawed assumptions, and
lack of “fit” with issues in the case. Also, as
to four of Rafalski's opinions, Defendants assert
Rafalski has not disclosed the basis for the opinions and may
not testify as to legal conclusions. The Court agrees
Rafalski must disclose the basis for his opinions, and he may
not opine as to what the law requires or whether
Defendants' conduct violated the law. As to
Rafalski's remaining opinions, the Court finds
Defendants' attacks are unfounded. The Court's
reasoning is set forth below.
Credentials and Experience.
received an undergraduate degree in public administration
from Eastern Michigan University in 1999. Rafalski Rpt, at
ECF p. 4 (Doc. #: 1999-21). In 2004, after 26 years as a law
enforcement officer, Rafalski began work for the DEA as a
Diversion Investigator in the Detroit Divisional Office,
where he worked until June of 2017. Id. Diversion
Investigators are responsible for conducting regulatory,
state, civil, administrative, and criminal investigations.
Id. From 2011 to 2017, Rafalski was primarily
responsible for conducting administrative, civil, and
regulatory investigations of DEA registrants. Id. In
this capacity, he investigated the criminal conduct of
individual physicians regarding improper opioid prescriptions
and conducted regulatory investigations involving, inter
alia, Distributors' compliance with DEA requirements
regarding suspicious order monitoring systems
(“SOMS”). Id. at ECF pp. 4-5.
example, in 2006, Rafalski conducted an accountability audit,
record-keeping review, and security investigation of a
Walgreens in Ohio to ensure compliance with controlled
substances regulations and record keeping. Id. at
ECF p. 5. This investigation resulted in the DEA issuing a
letter of admonition for the maintenance of an inadequate
2010 to 2013, Rafalski conducted an administrative
investigation of The Harvard Drug Group to identify unusual
patterns of distribution of oxycodone to Florida pain
clinics. Id. at ECF p. 6. His work included the
review of company records and policies, as well as the
DEA's ARCOS data. Id. This investigation
resulted in the DEA issuing an order to show cause for,
inter alia, developing a work-around to avoid
triggering the company's SOMS. Id.
from 2010 to 2013, Rafalski conducted an administrative
investigation of Masters Pharmaceutical, reviewing company
files regarding customer due diligence, including
questionnaires, on-site investigation reports, and SOMS
information. This investigation resulted in the DEA revoking
the company's registration to manufacture and/or
distribute controlled substances. Id.; see Masters
Pharm., Inc. v. DEA, 861 F.3d 206 (D.C. Cir. 2017).
2010 to 2017, Rafalski conducted an administrative
investigation of Mallinckrodt in which he reviewed chargeback
that revealed some pharmacies and/or practitioners were
utilizing multiple Distributors to purchase the same product
in large quantities. Id. at ECF pp. 6- 7. As a
result of this investigation, the DEA and Mallinckrodt
entered into a three-year Memorandum of Agreement.
do not challenge Rafalski's qualifications as an expert.
expresses opinions about the compliance requirements for
Manufacturers and Distributors to: (1) maintain effective
controls to prevent diversion of controlled substances into
illegitimate channels; (2) design and operate a system to
identify suspicious orders (SOMS); and (3) report suspicious
orders “when discovered.” Rafalski Rpt. at ECF p. 10
(Doc. #: 1999-21). His opinions address four main categories:
(1) what the law and DEA regulations require regarding the
duties of Manufacturers and Distributors to maintain
effective control against the diversion of controlled
substances, id. at ECF pp. 9-21;
(2) key components and characteristics that make SOMS and due
diligence programs effective, id. at ECF pp. 36-40;
(3) five methodologies that, as calculated by Craig McCann
(discussed below), identify “suspicious orders”
that Defendants should not have shipped without conducting
due diligence to dispel the suspicion of diversion,
id. at ECF pp. 40-46; and
(4) the SOMS and due diligence practices of various
Defendants and how they failed to comply with statutory and
regulatory duties to maintain effective control against
diversion, id. at ECF pp. 46-187.
examined in detail the SOMS and due diligence procedures of
six Distributors, concluding each violated its duty to
maintain effective control against diversion, including
duties to identify, report and/or stop shipment of suspicious
orders. See Rafalski Rpt. at ECF pp. 9,
54-55, 68-69, 77-81, 91-93, 104-105, 120-121, 142-144 (Doc.
#: 1999-21). Rafalski opines that these SOMS failures
“directly led to massive quantities of pills being
shipped to buyers who had placed suspicious orders of
controlled substances” that should never have been
shipped “until after the suspicion of diversion was
dispelled.” Id. at 40.
addition, Rafalski examined the SOMS and due diligence
procedures of seven Manufacturers, concluding each failed to
meet its obligation to maintain effective controls against
diversion. Rafalski opines that, to comply with their
duty to maintain effective control, Manufacturers must use
all relevant prescribing and chargeback data. Id. at
ECF pp. 145-187.
ask the Court to exclude Rafalski's testimony because:
(1) he refused to disclose the basis for four of his
opinions; (2) his methodology is based on faulty assumptions;
and (3) he has no basis to conclude that all flagged orders
were diverted for illicit use. See Defs. Mem. on
Rafalski at 1 (Doc. #: 1900-1). The Court addresses each
Refusal to Disclose the Basis for Four Opinions.
urge the Court to exclude the following opinions because
Rafalski has not disclosed the basis for them:
(1) the law required Defendants to halt all shipments after
identifying an initial suspicious order;
(2) DEA regulations require certain “key
components” regarding SOMS and due diligence systems;
(3) the Controlled Substance Act (“CSA”) and its
implementing regulations require Manufacturers to consider
prescription and chargeback data; and
(4) DEA registrants must document and permanently retain
suspicious order reports and due diligence records.
See Defs. Mem. on Rafalski at 8 (Doc. #: 1900-1).
Defendants also assert these opinions constitute
impermissible legal conclusions. Id. at 8 n.3.
these four opinions, Defendants seek exclusion because
Rafalski has refused to disclose the “legal
guidance” he received from DEA attorneys that forms, at
least in part, the basis for his opinions. Id. at
7-9. In deposition, Rafalski stated that, in forming these
opinions, in addition to his training and experience, he
applied “legal guidance” that he received from
the DEA's attorneys during his tenure there. Defs. Mtn.
to Excl. Rafalski, Ex. 2 at 694:8 to 695:21 (“Rafalski
Depo.”) (Doc. #: 1900-3). Citing Touhy
regulations,  however, Rafalski refused to disclose this
legal guidance. See Id. at 842:1-19. In light of
this refusal, Rafalski may not testify as to these opinions.
See Fed. R. Civ. P. 26(a)(2)(B) (expert report must
contain a complete statement of all opinions the witness will
express and the basis and reasons therefor); Fed.R.Civ.P.
37(c) (if a party fails to provide information as required by
Rule 26(a), the party may not use the information at trial
“unless the failure was substantially justified or is
these same opinions constitute legal conclusions. It is the
Court's role to instruct the jury as to applicable
principles of the law. Shahid v. City of Detroit,
889 F.2d 1543, 1547-1548 (6th Cir. 1989) (quoting United
States v. Zipkin, 729 F.2d 384, 387 (6th Cir. 1984) (it
is for the judge, not witness, to instruct the jury as to
applicable principles of the law). Although Rule 704(a) of
the Federal Rules of Evidence does not preclude an opinion
“just because it embraces an ultimate issue, ”
Fed.R.Evid. 704(a), the ultimate issue must be a factual one.
See Berry v. City of Detroit, 25 F.3d 1342, 1353
(6th Cir. 1994). In other words, an expert generally may not
opine as to what ...