PHOENIX (LN) — U.S. District Judge Stephen B. McNamee denied MiMedx Group Incorporated’s motion to quash the deposition of its CEO, Joseph Capper, ruling that he has personal knowledge of the company’s reimbursement strategy and lobbying efforts that impact the damages theory infringement case.
Surgenex LLC argued that Capper has personal knowledge central to MiMedx’s damages theory. Surgenex stated that MiMedx’s alleged damages flow directly from Q code reimbursement rates, which drive placental allograft sales, and that Capper signed the third-party agreements related to those rates. Surgenex added that Capper approved, oversaw, and articulated MiMedx’s reimbursement strategy to influence and lower Centers for Medicare & Medicaid Services (CMS) reimbursement rates. Surgenex pointed to earnings calls where Capper detailed MiMedx’s take on high CMS rates and a press release where he discussed the company’s commitment to reforming overpriced reimbursement rates.
MiMedx responded that its Q code and reimbursement strategy is only tangentially related to the case. MiMedx explained that the primary driver of its damages is Surgenex’s pricing, average sales price practices, and sales of accused products. MiMedx also contended that Capper’s statements and comments do not demonstrate first-hand knowledge of the facts of this case because they only evidence industry-wide reform efforts, not exact pricing specific to MiMedx’s and Surgenex’s products.
However, MiMedx conceded that the new regulation scheme, which Capper lobbied for, impacts product pricing. MiMedx argued that although the scheme drastically decreased Surgenex’s pricing, it did not have the same proportional impact on MiMedx’s lower-priced products. MiMedx accepted that Capper participated in lobbying for the new regulations and that such regulations impacted the pricing of both parties’ products. The court concluded that Capper therefore has first-hand knowledge of relevant facts.
The court denied MiMedx’s request to quash Capper’s deposition and granted Surgenex’s request to compel it, subject to limitations. The court agreed with MiMedx that four hours was unnecessary and permitted Surgenex to depose Capper for no more than two hours.
The court also addressed Surgenex’s CEO, Abel Bullock. Surgenex did not dispute that MiMedx could depose Bullock but argued the deposition should be limited to four hours rather than the seven hours permitted by Federal Rule of Civil Procedure 30 as requested by MiMedx. The court agreed that seven hours was unnecessary. However, because Bullock’s testimony goes to both infringement and damages, the court found a discrepancy in time between the two CEOs appropriate. The court ordered that MiMedx may depose Bullock for no more than four hours.
The order resolves a discovery dispute in which both parties sought to depose the other’s CEO while arguing the reciprocal demand was improper under the apex deposition doctrine.