318 1 (February 3, 2016.) 2 THE COURT: 3 COUNSEL: 4 THE COURT: Good morning. Good morning. You may be seated. 5 has arrived so we are ready to go. 6 MR. PAULISSEN: Your Honor, while we wait, may I put 7 some exhibits up on the stand? 8 THE COURT: 9 MR. PAULISSEN: Sure. Thank you. 10 (Jury enters courtroom.) 11 THE COURT: 12 Our missing juror Good morning, ladies and gentlemen. may be seated. 13 The government may call your first witness. 14 MR. PAULISSEN: 15 Thank you, Your Honor. The United States calls Frederick Rooning. 16 17 You COURTROOM DEPUTY: Please raise your right hand to be sworn. 18 (Oath administered to the witness.) 19 COURTROOM DEPUTY: Thank you. 20 *-*-*-*-*-*-*-* 21 DIRECT EXAMINATION You may be seated. 22 BY MR. PAULISSEN: 23 Q. Good morning, sir. 24 A. Good morning. 25 Q. Would you try and pull that microphone close so that you Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 319 1 can be heard? 2 A. How is that? 3 Q. Okay. 4 and the Judge your name? 5 A. My name is Fred Rooning. 6 Q. How do you spell that, sir? 7 A. Last name is R-o-o-n-i-n-g. 8 Q. Mr. Rooning, where do you live? 9 A. In Minnetonka, Minnesota. 10 Q. Tell the members of the jury, please, what is your 11 education after high school? 12 A. 13 University, BA in history, and then I have a master's degree 14 from Johns Hopkins in international economics and studies. 15 Q. Where do you currently work now, Mr. Rooning? 16 A. I currently work for myself. 17 business and I teach at the University of Minnesota. 18 Q. What do you teach at the university? 19 A. I teach introduction to marketing. 20 Q. Did you work at Vascular Solutions at some point? 21 A. Yes. 22 Q. And you personally know defendant Howard Root, do you not? 23 A. Yes, I do. 24 Q. How long did you work at Vascular Solutions? 25 A. I worked there from July of 2005 until February of 2009. Thank you. Would you tell the members of the jury I have a four-year degree from Washington and Lee I have a small consulting Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 320 1 Q. What type of business do you know Vascular Solutions to be 2 in? 3 A. 4 cardiovascular products. 5 Q. And where are their headquarters? 6 A. In San Antonio, Texas. 7 Q. When you were first hired in July of 2005 at VSI -- can I 8 call them that? 9 A. Yes. 10 Q. When you were first hired at VSI, what was your position? 11 A. I was hired as vice president of marketing, but I spent 12 the first year, year and a half focusing primarily on the 13 Vari-Lase business. 14 Q. Okay. 15 A. The Vari-Lase business is a vein treatment product line 16 that is used for the treatment of varicose veins. 17 Q. Okay. 18 A. The primary technology utilized is laser energy to ablate 19 or burn the vein or -- away. 20 Q. 21 you predominantly focused on the Vari-Lase system? 22 A. Correct. 23 Q. For the first year, year and a half? 24 A. Uh-huh. 25 Q. What were your overarching other responsibilities as well Medical -- medical devices, medical technology, Sure. What is the Vari-Lase business? And how does it treat varicose veins? Mr. Rooning, as VP of marketing, you just testified that Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 321 1 during that first year and a half? 2 A. Tht was -- that was it. 3 Q. Do you recall the number of people that you oversaw or 4 supervised? 5 6 7 8 9 10 11 Q. At some point, did your position change from VP of 12 marketing? 13 A. 14 of marketing and I, at that point, had the entire marketing 15 staff reporting to me. 16 being Mr. Root was not pleased with my performance in that 17 role, so he moved me back to running the Vari-Lase business. 18 Q. Okay. 19 A. Yes. 20 Q. When was it that you were VP of Vari-Lase? 21 A. 2008 until I left in 2009. 22 Q. As VP of Vari-Lase, did your responsibilities change 23 significantly from what you had been doing immediately prior? 24 A. 25 marketing department to just being responsible for Vari-Lase. Well, I -- after a year and a half, I then became the VP Yes. And that lasted about a year. Then VP of Vari-Lase at that time? That's what it was at that time, yes. Because I went from being responsible for the entire Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 328 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Q. 17 a time frame when the Vari-Lase system, the concept came about 18 to develop a short kit. 19 A. 20 doctors -- to a need in the marketplace. 21 to treat these products -- these veins. 22 Q. 23 treat? 24 A. 25 short -- or -- for perforator veins. Let's talk about the time in the company. Please give us I believe it was in 2007, and it was in response to Doctors were wanting What type of veins were -- was the short kit designed to Well, the original design was for perforator veins or Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 332 1 Q. 2 throughout the country? 3 A. Yes. 4 Q. Was it divided by regions, such as this says Eastern 5 Region on it? 6 A. Correct. 7 Q. And do you know how many regions or do you recall how many 8 regions there were? 9 A. Is that how the company structured its sale force I think there may have been five. I can't recall 10 precisely. 11 Q. 12 worked under those managers throughout the country? 13 A. 14 time. 15 Q. 16 selling only VSI products or did they have the ability to sell 17 for other companies? 18 A. 19 were exclusive to us. 20 Q. 21 e-mail. 22 John, hello, everyone. 23 A. Uh-huh. 24 Q. Do you see that? 25 A. Yes. Okay. Do you recall approximately how many salespeople I think a total of 85, 90 salespeople, I believe, at the Were the salespeople who worked for VSI restricted to No. They worked for us. They were our employees. They Let me ask you to turn your attention to the body of this Go down, please, under Kathleen, where it says: Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 333 1 Q. 2 "Hello everyone"? 3 A. 4 bright tip fiber this morning. 5 like everyone previous, the fiber is very easily seen from the 6 US, ultrasound, and it does make positioning easier and 7 faster. 8 can show. 9 Q. Would you stop there? 10 A. Sure. 11 Q. Was Intermountain Vein Center a customer of the company? 12 A. Yes. 13 us. 14 Q. And do you recognize who Dr. Black is? 15 A. Yes. 16 Q. Tell the members of the jury who he is. 17 A. Dr. Black is an interventional radiologist working out of 18 Utah, the Salt Lake City area, and he does -- he has a vein 19 practice. 20 Q. 21 paragraph that begins, "Dr. Black." 22 us? 23 A. 24 excited to use it with perforator cases. 25 obstacles with perforator cases is seeing where your laser Would you read that -- the first two paragraphs following, The Intermountain Vein Center and Dr. Black used the The case went very well and, Certainly far superior to anything a bare tip fiber They bought -- they bought disposable products from Okay. Let me ask you to turn your attention to the next Would you read that for Dr. Black was quite impressed with the product and is very One of biggest Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 334 1 fiber is in the vein. 2 problem ten fold. 3 Q. 4 Dr. Black and perforator treatment? 5 A. Well -- oh, Danny McGaff. 6 Q. And below that is the name of somebody who -- is that the 7 originator of the e-mail, or is that man -- 8 A. 9 signature at the bottom, or his electronic signature. Thank you. Yes. This product will alleviate that Who is the sender of this e-mail about That is -- it is from John DeVito, and that is his 10 Q. Okay. Above the, "Hello everyone" is an addressee named 11 Kathleen. 12 A. Yes. 13 Q. Read that first sentence of that paragraph to Kathleen. 14 A. Kathleen, this is a sample of what is going on out there 15 in the field with the bright tip and perforators. 16 from the same site in Utah that I left contact info for you 17 today. 18 one-week follow-up with zero bruising due to the design. 19 Q. Do you recognize who that person Kathleen is? 20 A. I believe that she is a physician at a vein clinic in New 21 York. 22 Q. 23 e-mail. 24 A. Yes. 25 Q. And it is? Do you see that? This is We are also starting to get positive results on the And her address is on the to line in that level of the Do you see it? That is, does that say her full name? It says her full name. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 335 1 A. Kathleen Anduze. 2 Q. And this portion of the mail was forwarded to her from 3 whom? 4 A. From John DeVito. 5 Q. Who was John DeVito -- 6 A. John was a salesperson. 7 Q. Do you know what region John DeVito was associated -- 8 A. Upstate New York. 9 Q. And was John DeVito, you are saying, a salesperson for VSI 10 or for -- 11 A. For VSI. 12 Q. Now, the top of this is from an individual you mentioned 13 as Richard Steitzer? 14 A. Yes. 15 Q. Okay. 16 salespeople -- 17 A. Correct. 18 Q. -- in the eastern region? 19 A. Correct. 20 21 I believe you testified he was a supervisor of THE REPORTER: Sir, if you would be kind enough to allow him to finish his question -- 22 THE WITNESS: 23 THE REPORTER: 24 THE WITNESS: 25 THE REPORTER: Okay. Yes. -- before you answer. Sure. Thank you. Excuse me. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 336 1 BY THE REPORTER: 2 Q. Just catch your breath. 3 A. Uh-huh. 4 Q. Who is he sending it to? 5 A. He is sending it to his region, the people that work for 6 him. 7 Q. And who is he copying on this e-mail? 8 A. He copied Mark Valls, myself and Mr. Root. 9 Q. What does Mr. Steitzer say to his region? 10 A. East, an excellent follow-up by John to a large group. 11 This is a group who is Diomed trained but have started to give 12 John kit business. 13 doc wants to be sure the bright tip will work and is looking 14 for help info on perforators. 15 Q. 16 excellent follow-up by John to a large group. 17 large group is he referring to? 18 A. 19 company -- or a group practice. 20 Q. 21 trained"? 22 A. 23 how to do the procedure on their equipment. 24 Q. 25 frequency? They are a POT looking to expand and lead Well done, John. Let's break that down just a little bit. This is an What type of I think when he is saying "large group," it means a All right. What does it mean that "this group is Diomed Diomed is one of our competitors and Diomed trained them Was the competitor Diomed a radio frequency or laser Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 337 1 A. Laser. 2 Q. So they sold a laser console? 3 A. Correct. 4 Q. But they have started to give John kit business. 5 does that mean? 6 A. 7 source, so it wasn't a proprietary connector, so it meant you 8 could buy different companies' laser fibers and the procedure 9 kits. What The laser connector was sort of like, you would say open You didn't -- you weren't locked in to buying it from 10 the company that sold you the piece of laser equipment. 11 Q. 12 specifically of Vari-Lase? 13 A. 14 there that had the same connector, and we -- ours was the same 15 as Diomed, and I can't really remember if AngioDynamics was 16 the same or not. 17 Q. 18 devices at this time? 19 A. At that time, it was Diomed. 20 Q. And were they the lead in lasers or were they the lead in 21 laser and RF combined? 22 A. Only laser. 23 Q. Who is the lead in radio frequency? 24 A. VNUS was the brand name. 25 Q. Among all of the radio frequency and laser, who was the Now, was that universally true or was that true No. There were a number of different laser systems out Okay. It has been a while. Who was the leading marketer of vein ablation Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 338 1 leader? 2 A. 3 believe it was, radio frequency was like 55 percent and laser 4 was 45 percent, but it was pretty close. 5 Q. Would that be VNUS? 6 A. Yes. 7 Q. Okay. 8 mean in this context? 9 A. You know, I think it was -- it has been a while, but I He refers to this group as a "POT." What does that That is an acronym, sort of VSI speak for a potential 10 sales target to sell a laser to. 11 can't really remember what it stands for anymore, but it was 12 someone who was shopping for a laser system. 13 Q. 14 want -- the lead doc is looking for help on perforators. 15 you see that? 16 A. Yes. 17 Q. What does that mean in the context of your company, of 18 VSI? 19 A. 20 were also looking for information that we may have had, 21 clinical information that we had on perforator treatment. 22 Q. 23 marketing to -- ablation perforators? And it had -- it was -- I So it refers to them as a POT looking to expand and they Do That -- well, they were looking to buy a laser, and they In April of 2007, did VSI have an FDA clearance for 24 MR. RICHTER: 25 MR. LUNDQUIST: Objection. Objection. Foundation, Your Honor. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 339 1 THE COURT: 2 THE WITNESS: Overruled. No. 3 BY MR. PAULISSEN: 4 Q. 5 clearance to market for perforators? 6 A. No. 7 Q. Let me direct your attention to Exhibit 9, please. By April of 2007, do you know if VSI had applied for 8 9 THE COURT: I didn't understand the answer. don't know or -- 10 THE WITNESS: I realized that after I said it. 11 did not have it. 12 BY MR. PAULISSEN: 13 Q. 14 for identification and tabbed as 9. 15 A. Yes. 16 Q. Do you recognize that document? 17 A. Yes. 18 Q. How do you recognize it? 19 A. I wrote it. 20 Q. So it is an e-mail that you wrote? 21 A. Correct. 22 Q. What is date on it? 23 A. May 29th, 2007. 24 25 You We We did not have an indication. Let me direct your attention to the exhibit that is marked It is my e-mail. MR. PAULISSEN: Your Honor, the United States moves for admission of Government Exhibit 9. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 340 1 MR. LUNDQUIST: 2 MR. RICHTER: 3 THE COURT: No objection, Your Honor. No objection, Your Honor. Received. 4 BY MR. PAULISSEN: 5 Q. 6 contain a trail of other e-mails? 7 A. Yes, it does. 8 Q. Can you tell the members of the jury -- Mr. Rooning, this is not only your e-mail, but does it 9 MR. PAULISSEN: Let's publish it. Thank you. 10 BY MR. PAULISSEN: 11 Q. 12 e-mail and who you are sending it to. 13 A. 14 upstate New York, asked a clinical question on whether there 15 was any data on lasers being -- laser being used to treat 16 perforator veins, and I was responding with some clinical 17 studies that -- "studies" is a strong word -- some clinical 18 abstracts detailing the work of some doctors. 19 Q. Is a clinical abstract the equivalent of a clinical trial? 20 A. No. 21 Q. What is the distinction between an abstract and a trial? 22 A. An abstract is usually a short trial of -- a demonstration 23 of a clinical practice that a doctor wants his colleagues to 24 know about. 25 Q. Tell the members of the jury what you are doing with this Kathleen Anduze, who was a physician in the clinic in And do you mention in this e-mail to Dr. Anduze related to Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 341 1 perforator treatment with laser, do you mention -- do you 2 mention to her the name of the doctor whose abstract you are 3 sending? 4 A. Yes, I do. 5 Q. Who is that? 6 A. Thomas Proebstle. I think I spelled it wrong. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. PAULISSEN: Your Honor, the government moves for Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 349 1 2 3 4 5 6 7 8 9 10 11 12 13 Q. 14 knowledge, during your time with the company, the console or 15 any kit of Vari-Lase, the Vari-Lase product line of VSI, ever 16 approved for ablation perforators? Okay. So the Vari-Lase console, was it ever, to your 17 18 19 20 21 22 23 MR. LUNDQUIST: 24 MR. RICHTER: 25 Objection. Rule 602, Your Honor. Object, Your Honor, and lacks personal knowledge. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 350 1 THE COURT: 2 BY THE WITNESS: Overruled. As far as I know, no. 3 BY MR. PAULISSEN: 4 Q. Well, you were the vice president -- 5 A. Right. 6 Q. -- of the Vari-Lase system? 7 A. Correct. 8 Q. Okay. 9 had been approved? Would it have been important for you to know if it 10 A. Yes. 11 Q. Turn, please, to Exhibit 1 in your notebook. 12 recognize Exhibit 1? 13 A. Yes. 14 Q. Without telling us what it is, does it reflect something 15 that you personally attended or were involved in? 16 A. I attended it. 17 Q. All right. 18 A. I was involved. 19 20 MR. PAULISSEN: Your Honor, the government moves for admission of 1. 21 (Counsel conferring.) 22 MR. LUNDQUIST: 23 Do you If it is complete, no objection from Mr. Root. 24 THE COURT: 25 MR. RICHTER: Received. Same, Your Honor. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 351 1 2 MR. PAULISSEN: Your Honor, it is not complete. We have excerpted it and we have the entire -- 3 THE COURT: 4 MR. PAULISSEN: 5 been corrected. 6 complete. Proceed at the bench. Yes. Oh, I am sorry, Judge. I have I have been told by co-counsel that it is It is how it was produced. 7 MR. PAUZE: 8 (Bench conference, as follows:) 9 MR. RICHTER: May we approach? The world sales meeting -- it was a 10 two-day event, a very large -- we covered two days' worth of 11 presentations. 12 to see it in the full context. 13 are happy to have a full copy introduced. 14 but separate and apart, individually, I think it does not 15 complete the picture. This is one of those presentations, so we need If they have a full copy, we 16 THE COURT: 17 MR. FINLEY: 18 MR. PAULISSEN: 19 THE COURT: 20 MR. LUNDQUIST: 21 THE COURT: 22 MR. FINLEY: 23 (End of bench conference.) 24 THE COURT: Subject to that, This is day one? Yes. Yes. And there is a day two? If you want, I will offer this. It is received. Thank you. Government's 1 is received.) 25 Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 352 1 BY MR. PAULISSEN: 2 Q. 3 in front of you? 4 A. Yes. 5 Q. Okay. Do you have what has been admitted as Government Exhibit 1 6 Tell the members -MR. PAULISSEN: Publish it, please. I am going to 7 try to quit pointing. 8 BY MR. PAULISSEN: 9 Q. What does this represent? 10 A. It is the compendium of all of the slides presented at the 11 sales -- the world sales meeting in July of 2007. 12 Q. 13 meeting you attended? 14 A. No. 15 Q. Tell the members of the jury how often a world sales 16 meeting was held by VSI. 17 A. 18 world sales meeting. 19 Q. 20 VSI have an international sales force? 21 A. 22 with many distributors around the world. 23 Q. 24 meeting every year? 25 A. When you worked at VSI, was this the only world sales So we held two sales meetings every year. One was the One was just U.S. only. The world sales meeting, did that include people -- did We had a small international sales force, but we worked And did the worldwide distributors come to the world sales Yes. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 353 1 Q. Or at least they were included? 2 A. They were invited. 3 Q. Okay. 4 A. 2007. 5 Q. And I think you testified you were present? 6 A. Yes. 7 Q. Did you present or participate in this meeting beyond just 8 being a recipient of information? 9 A. I presented. 10 Q. Okay. 11 but what really is this? 12 is this PowerPoints or is this something else? 13 A. 14 presentations and then those presentations are duplicated; the 15 PowerPoints are then duplicated and provided to the sales 16 force. 17 Q. 18 world sales meeting or the national sales meeting, gets a copy 19 of every slide? 20 A. Correct. 21 Q. Did you participate in creating slides for some portion of 22 this sales meeting? 23 A. Yes. 24 Q. What portion would you have participated in creating, 25 without referencing the slides? This one, the date is what? We talk about this being the world sales meeting, Is this paper that was handed out; What this is is the PowerPoints that were used for So everybody who attends the sales meeting, either the Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 354 1 A. 2 Vari-Lase business slides. 3 Q. 4 present? 5 A. 6 parts. 7 doing, and things that we are doing on the console side, and I 8 handled that part, and Christine Snyder handled the 9 disposable, the kits part. The way it worked is I presented one section of the Without referencing it just now, what section did you I think -- well, we broke -- we always broke it into two One was an update on the competition, what they were 10 Q. 11 first at the world sales meeting and then at the national 12 sales meeting on another date, these slides were created. 13 created slides how many times? 14 meeting while you were there? 15 A. Yes. 16 Q. And did you have autonomy or were you under your own self 17 direction to create slides or did you have to seek permission 18 for your slides? 19 A. 20 regulatory, legal review and then also Mr. Root's review. 21 Q. 22 at the national sales meeting? 23 A. As far as I know, yes. 24 Q. And at the world sales meeting? 25 A. Yes. Okay. So with everybody in the sales force in attendance, You Did you do this every sales Every six months, we would create slides. All slides, once they were created, were submitted for So your testimony is that Howard Root reviewed every slide Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 355 1 Q. Let me direct your attention to page 70, the page that is 2 marked 70 here. 3 front of you? 4 A. Yes, I do. 5 Q. Okay. 6 is. 7 A. 8 presentation is going to be about, and the name of the 9 presenter is listed on it too. The top slide, please. Do you have 70 in Tell the members of the jury what that first slide It is a title slide describing what this section of the 10 Q. 11 presentation? 12 A. Yes. 13 Q. Let me ask you to give us the second slide on that page. 14 A. What is news in perforator kits. 15 Sorry. 16 Q. No. 17 A. What is new in procedure kits? 18 Q. Okay. 19 A. Bright tip fiber. 20 Welcome Shorty. 21 update, console selling tools and console -- and accessories 22 update. 23 Q. 24 typically introduced with a slide such as this? 25 A. Okay. So Christine Snidar was responsible for making this Oh. No. Check that. That's all right. Sheath specific fiber markings. Procedure kit selling tools and strategy So as a new topic or product was broached, were they Sure, yes. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 356 1 Q. Giving the audience a heads-up on what is coming next? 2 A. Correct. 3 Q. Okay. 4 presentation? 5 A. 6 the short kit. 7 Q. 8 you? 9 A. Yes, I do. 10 Q. Top slide. 11 A. It is -- again, it is the agenda, and it is just 12 documenting where you are. 13 the presentation. 14 Q. Okay. 15 A. Yes. 16 Q. Okay. 17 A. It relates to the short kit. 18 Q. And does it relate to -- is this to educate the sales 19 force on the new product? 20 A. Correct. 21 Q. And how -- does it also include -- or does it not include 22 advice on how to sell the product? 23 A. I mean, I can look at it, but, yes, it typically would. 24 Q. Okay. 25 meetings, was it the practice of VSI to also feature It's an agenda that you are going to talk about. What does the "Welcome Shorty" mean in Ms. Snidar's That is the section of the presentation that deals with Go to 78, page 78 please. Do you have that in front of What is that? It is documenting where you are in Was this a presentation by Ms. Snidar? And tell us what this relates to. In this exhibit, and in similar exhibits from sales Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 357 1 developments that the competition had come up with during the 2 intervening time? 3 A. As part of the competitive update, yes. 4 Q. So that you would be presented with information about the 5 different competitors, and specific here, in the vein ablation 6 business? 7 A. Correct. 8 Q. People who sold consoles, whether laser or RF? 9 A. Yes. 10 Q. Okay. 11 discussed at these meetings; is that right? 12 A. Yes. 13 Q. Okay. 14 you have that in front of you? 15 A. Yes. 16 Q. Tell us what this slide says. 17 A. I am sorry. 18 perforators. 19 Q. Read the next line and the one below. 20 A. Vari-Lase is currently not indicated for perforators. 21 Submission for indication in for FDA review. 22 Q. 23 the same as "clearance" by the FDA? 24 A. Yes. 25 Q. For a specific use? So VNUS, the radio frequency competitor, would be Let me direct you to the top slide on page 80. I am on 81. Excuse me. Do Vari-Lase use on Do you want me to read -- Is your testimony that, in this context, "indication" is Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 358 1 A. Yes. 2 Q. And in this case, it is not indicated or cleared for 3 perforators? 4 A. It is not indicated clear, yes. 5 Q. What is the next paragraph bullet point? 6 A. May need a clinical trial for approval. 7 for short vein segments. 8 Q. 9 to read it, but what is it about? Will only promote And what is the third bullet point about? You don't have 10 A. 11 you about var -- ask the salesperson about perforator 12 treatment. 13 Q. 14 Anduze mentioned in this slide? 15 A. No, it is not. 16 Q. Do you see a reference to an abstract by Black and 17 Proebstle? 18 A. Oh, no. 19 Q. Which one -- which, if either of those, did you refer 20 Kathleen Anduze to? 21 A. The Proebstle one. 22 Q. All right. 23 this slide deck. 24 A. 25 It is about providing information to physicians who ask Is the abstract that you had earlier sent to Kathleen I am sorry. Yes, it is. Let me direct your attention to page 87 of Okay. MR. PAULISSEN: May we have the top slide, please. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 359 1 BY MR. PAULISSEN: 2 Q. Do you have that in front of you? 3 A. Yes. 4 Q. All right. 5 how to sell the Vari-Lase console and kits? 6 A. Yes. 7 Q. Can you tell us what it -- specifically, read it to us. 8 Tell -- 9 A. Okay. What is this slide about? It says: Does this relate to Physician starting a vein practice, use 10 the 3 Ps. 11 learning how to treat. 12 treatment market is still severely underpenetrated. 13 lasers installed in the U.S. 14 International laser treatment is only beginning. 15 Q. 16 company at that time? 17 A. I was overall vice president of marketing at that point. 18 Q. Was it your understanding that the company was eager to 19 expand into the vein ablation market? 20 A. 21 it. 22 Q. 23 vein treatment market at the bottom of that slide? 24 A. Yes. 25 Q. Let me direct your attention to the second slide on page Patients, getting them to come. Procedures, Payment, getting reimbursed. This is July of 2007. The vein 2,000 Potential for 5,000. What was your position in the It was part of our business and we wanted to keep growing Okay. And that's why there is the reference about the Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 360 1 87. 2 A. Okay. 3 Q. What does this slide say? 4 A. Vari-Lase 2007 console strategy. 5 the whole thing? 6 Q. Just read the second bullet point in its entirety. 7 A. Use Vari-Lase business plan and the 3 Ps. 8 marketing to attract them. 9 and service. Do you want me to read Patients, Procedure, products and training Payments, reimbursement assistance. 10 Q. 11 marketing to attract them. 12 assisting physicians in gaining patients? 13 A. 14 their vein practice, ads, suggestions on how to grow their 15 practice. 16 Q. 17 their vein practice? 18 A. Correct. 19 Q. Let's look now -- then let's discuss procedure, products 20 and training and service. 21 the ablation console, the laser console, and the kit devices, 22 correct? 23 A. 24 accessories to the business. 25 Q. Let's break that down for just a moment. Patients, Did VSI have anything to do with We provided them with a kit of materials to use to market And we trained them as well. So you would provide them with sample ads to use to grow The products, I assume, would be Those, and we had some other products as well that were All right. What were those? Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 361 1 A. 2 pack that had everything you needed, gauze, drapes, things 3 like that. 4 also negotiating to have a relationship selling a pump that 5 was used to instill anesthesia on a patient. 6 Q. 7 subpart. 8 use their products or was that a component of what VSI 9 offered? Well, we also sold procedure packs. That would be like a We also -- I think, at that point in time, we were Let me ask you about the training component of this Was VSI in the business of training physicians to 10 A. Yes, it is. 11 Q. In that context, does the term "proctoring" have meaning? 12 A. Yes. 13 Q. What does "proctoring" mean in that context? 14 A. Well, we had two ways to do it. 15 would put on periodically. 16 you bought a console from us, you got automatically one person 17 to go to the class. 18 person, the physician would pay for it. 19 It was. We had a class that we When you bought a laser -- when If you wanted to send more than one The alternative, some physicians didn't want to 20 travel, so the alternative is, we would get them connected 21 with a local or regional training center where they would go 22 and visit the doctor for one day of training on how to do 23 laser frequency. 24 Q. Was there one regional training center or were there more? 25 A. There were many. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 362 1 Q. 2 by -- was Dr. Black ever a proctor? 3 A. To the best of my knowledge, he was not. 4 Q. Were there an effort on your part and others at VSI to get 5 Dr. Black, the doctor who was mentioned earlier? 6 A. Yes, there was an effort. 7 Q. What part did you play in that effort to -- and to 8 complete my thought -- to have him be a proctor? 9 what you were trying to get him to do? Let me ask you to -- if you would speak to the proctoring Was that 10 A. 11 want to be doing training where they are doing the most 12 procedures, because that's usually where they know how to do 13 it best. 14 Q. And this was in Salt Lake City? 15 A. Salt Lake City, yes. 16 Q. Okay. 17 accomplish with Dr. Black? 18 A. 19 and -- but one of the things, he couldn't train on other 20 people's equipment. 21 Q. He had to commit to using VSI equipment -- 22 A. Correct. 23 Q. -- for training? 24 A. Correct. 25 Q. And did the company have a salesman who had a prior Well, we saw him -- because it is a big vein center. You So what was the goal -- what did you hope to We hoped that we would strike up a relationship with him He had to use our equipment. Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 363 1 business relationship with Dr. Black? 2 A. Yes. 3 Q. Who was that? 4 A. Danny McGaff. 5 Q. Were you already employed and in the chain of the 6 marketing command when Danny McGaff was hired? 7 A. Yes. 8 Q. So Danny McGaff, you testified, had a prior relationship 9 with Dr. Black? Yes. 10 A. Yes. 11 Q. Before he came to work for VSI? 12 A. Yes. 13 Q. What did Danny McGaff -- what was Danny McIff's job at 14 VSI?A. 15 Q. Let me direct your attention to page 88, top slide. 16 A. Okay. 17 Q. Okay. 18 A. We need more POTS and console sales. 19 is only the beginning of your business. 20 stream from disposables. 21 buy Vari-Lase kits. 22 console owners buy Vari-Lase kits. 23 consoles to increase business. 24 leads, is key to the sale. 25 who's treating the veins? He worked for Dr. Black. He was a salesperson in Utah. Would you read that slide in its entirety? Laser console sale Continuing revenue Ninety percent of Vari-Lase consoles Less than ten percent of competitor We need to move more Qualified POTS, by generating Ask every account, every quarter, Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 364 1 Q. 2 beyond the console; get the sale of the console, then sell the 3 kits as well? Okay. Is this slide directing the sales force to sell 4 MR. LUNDQUIST: 5 THE COURT: 6 (Change of reporters.) 7 *-*-*-*-*-*-*-* Object. Leading. Sustained. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Karl H. Myers, CSR, RMR, CRR - (210) 244-5037 365 1 (Change of reporter) 2 BY MR. PAULISSEN: 4 A. 6 its consoles? 3 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. What is this slide directing the sales force to do? Q. Okay. Sell more consoles. And in addition to that, does it say stop selling A. It says that you get a continued stream of revenue using Q. Okay. A. Yeah. from the disposable sales. So razor, razor blade business. In this context you say it's like razors, selling razors and razor blades? Q. But what is the disposable that you say continues the sales? A. The -- the various different kits and accessories we're Q. The bottom slide of this page, please. A. Yes, I do. A. That's the Klein pump. talking about. in front of you, Mr. Rooning? Q. Do you have that Mr. Rooning, what does that refer to there? It was a product we were distributing, and it is a -- it's used to instill the -- the anesthesia into the patient before they do the procedure. Q. Is that one of the other things that you sold with the A. This is also a similar situation when you sell a pump, Vari-Lase console and kits? Chris Poage, RMR, CRR United States Court Reporter 366 1 then you sell the disposable kits. 3 veins? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Was the -- was the Klein pump used in the ablation of A. Yes. Q. All right. Let me ask you to refer to what's tabbed and marked for identification as Exhibit 2. front of you, sir? A. Yes. A. Yes. Q. Q. A. Do you have that in Do you recognize Exhibit 2? How is it that you recognize it? It's a document that -- that we created like we created for every sales product that we have an overview of how to sell it, what's in the products. Q. A. It's a training document. When you say "we created it," you mean VSI? VSI created it, so marketing wrote it with, again, input from other departments. Q. Does this document have a date that gives you an idea of A. Down in the lower right corner there's an ML number, which when it was created? would stand for marketing literature, indicating that it was in our quality system, had been reviewed. And it has a number and then 9 -- 09/07 which means it was written in September -- or approved in September 2007. Q. Okay. That's while you worked at VSI? Chris Poage, RMR, CRR United States Court Reporter 367 1 A. 3 Exhibit -- admission of Exhibit 2. 5 MR. LUNDQUIST: 2 4 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. PAULISSEN: MR. RICHTER: THE COURT: 6 7 Yes. Your Honor, the government moves for No objection. No objection. Received. (Government's Exhibit No. 2 admitted) BY MR. PAULISSEN: Q. A. Tell us what it is. It is an overview document -- it is a document that describes -- it's a training document that's for internal use to educate the sales force on the clinical aspects of the product, the technical aspects of the product and then also provide guidance or direction on selling. Q. It -- would it be provided to the sales force? Q. What's the product here that's the overview -- A. A. Q. Yes. Short kit. I'm not going to call it up, but there's a product description there, is there not? A. Q. Yes. And did you have input into the creation of this overview?A. I -- I believe that Ms. Snidar wrote our -- wrote the document. I'm sure I reviewed it, and then put into it the quality system for final review. Chris Poage, RMR, CRR United States Court Reporter 368 1 Q. 3 Mr. Rooning? 5 Q. 2 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. May we have Page 2? Would you refer to Page 2? Yes, I do. Do you have it, I'm sorry. What's the headline down there in the bold underlined on the bottom of Page 2? A. "How to Use the Fiber Marks." A. Yeah. Q. Q. A. Q. Okay. Page 3, please. Do you have Page 3 in front of you, sir? Yes, I do. What are the -- the paragraph topic headlines there? What's the first one? A. The underlined, you mean? A. "Using the Bright Tip Sheath" -- I'm sorry. Q. Yes, sir. Tip Sheath Specific Marked Fiber." Q. And the next one? Q. And the one after that? A. A. Q. "Clinical Information." "What are Perforators?" Let's look at 4, Page 4, please. front of you? A. Q. "Using Bright Do you have that in Yes. What's the underlined and emboldened part at the bottom of Chris Poage, RMR, CRR United States Court Reporter 369 1 4? 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. "Treating Perforators and the Great Saphenous Vein." A. Yes. Q. Let's look at 5, please. Page 5. So this is being distributed to the sales force at approximately the time of its creation; is that correct? A. Correct. A. "So while we cannot sell the Vari-Lase products for the Q. Please read out loud the second full paragraph on Page 5. treatment of perforators today, this is an area of great interest to us at VSI. We are currently conducting a clinical trial of our own at Lake Washington Vein Center in Seattle studying the treatment of perforators and the outcome on varicosities and the venous stasis ulcers. Our goal will be to submit this data to the FDA at a future date in hopes of receiving an indication at some point." Q. Tell the members of the jury, if you know, the name of the physician who conducted the clinical trial in Lake Washington Vein Center. A. It's Daniel Pepper. A. Yes. Q. Q. Did you have personal interaction with him? What was the nature of -- and it was professional interaction, correct? A. Correct. Chris Poage, RMR, CRR United States Court Reporter 370 1 Q. What was the nature of your interaction with him as the VP 3 A. I would -- well, he was a large customer, so I -- when I 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of marketing? saw -- when he was at meetings, I would see him at meetings. I rode with the salesperson -- rode -- I visited with him when I was the salesperson working in that area. And I also visited him during the trial -- during the trial, at the end of the trial, I think, just to see how things went. there during the trial, I believe. Q. All right. A. No, no, not at all. But I was not It wasn't your job to participate actively in the clinical trial? Q. Do you know if Dr. Pepper did this on a voluntary basis or whether he was paid? A. He was paid. A. Yes, it is. Q. Q. Okay. And that's common in the industry, right? It's nothing uncommon. I need to ask you to back up to Exhibit 1, briefly. look at Page 60 on Exhibit 1. A. Yes. A. Yes. Q. Q. A. And Do you have that in front of you? Can we have the middle slide, please? Tell the members of the jury what the RFS Stylet is. That's a device that the competitor VNUS created and -Chris Poage, RMR, CRR United States Court Reporter 371 1 and was marketing for the treatment of perforator veins. 3 whether it was understood that VNUS -- their perforator kit, 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Okay. Do you know whether -- would you have any knowledge the RFS Stylet, was FDA cleared? A. I -- yes, it was FDA cleared. A. I guess I would say I know it because that's what the Q. How would you know that? indication said it had the clearance for. Q. So you -- did you see some of their marketing materials A. Yeah. that indicated that? Q. Yeah, I saw the marketing materials. Was it generally accepted in discussion at VSI that the VNUS perforator kit had been cleared? A. Q. Yes. What is the date that's referenced here for the introduction of the RFS Stylet kit? A. Q. June 2006. Is this or is it not the -- did -- did the clearance and introduction of this kit motivate VSI to treat perforators or get clearance for treatment of perforators? A. Yes, it did, but also it was the physicians requesting the Q. Okay. product as well. By this date, 2006, and then the time that VSI began developing the short kit, was the -- was the market big for perforator treatment or was it -- Chris Poage, RMR, CRR United States Court Reporter 372 1 A. It was pretty small. 3 A. That was a point of debate. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 Q. Did you assume that it was going to remain small or grow? We weren't sure whether it was going to remain small or grow, but we wanted to make sure that we had a product and meet the customer's need. Q. Let me ask you about -- about meeting the customer's need. A small market you're not sure if the perforator, an ablation market, is going to grow. What would be the competitive effect on VSI if the Vari-Lase -- in particularly the Vari-Lase system if VNUS, the radio frequency company, had clearance to sell for perforator ablation and Vari-Lase did not? A. Well, if it -- MR. LUNDQUIST: speculation. THE COURT: Object, Your Honor. Overruled. THE WITNESS: It seeks Overruled. Well, the -- it would slow down our 17 sales of consoles because physicians would have to take -- 19 perforator treatment or not, and it's a skill of our 18 20 21 22 23 24 25 would take the time to evaluate whether it was worth pursuing a salesperson to work with them on it. BY MR. PAULISSEN: Q. Did you have discussions with Mr. Root about the impact of A. I don't recall if I did or didn't. having a clearance for perforator treatment or not? Q. And this was -- this was all during the time that you were Chris Poage, RMR, CRR United States Court Reporter 383 1 A. October 25th, 2007. 3 A. Yes. 2 4 5 6 7 8 9 Q. Q. Would this be representative of the style and formatting of email that you received as a VSI employee? A. Yes. MR. PAULISSEN: Your Honor, the government moves for MR. LUNDQUIST: No objection. admission of 48. THE COURT: 10 11 Are you copied on this email? (Government's Exhibit No. 48 admitted) 12 BY MR. PAULISSEN: 14 A. 13 15 16 17 18 19 20 21 Q. The subject matter, it's called "A short kit, limited Q. Mr. Rooning, who wrote this email that's entitled "Short A. Christine Snidar. kit limited launch"? Q. And the date on it? Q. You're copied on it. A. to? 24 Q. 25 What's the subject of Exhibit 48? launch." 22 23 Received. October 25th, 2007. Who else is -- who's this being sent A. Members of the sales force. A. I am; Jill Eisenzimmer, who was a marketing manager; Susan And who's copied on it? Chris Poage, RMR, CRR United States Court Reporter 384 1 Christian; Mark Valls; Tina Walters; Dick Steitzer; Charles 3 managers. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 Judas; Kip Theno; and Dave Cepek. They're all regional Q. Let me direct your attention to the first paragraph, A. Uh-huh. please. Q. So you've just read the names of a limited number of the sales force members. please? A. "Hi, folks. Would you read the first paragraph, If you are receiving this message, it's because you have expressed an interest in Vari-Lase short kit for short vein segments. It is currently available on a limited basis and you are able to order the product for your customers." Q. Stop there. Thank you. Would you bring up the entire third paragraph? 17 have." 19 A. Okay. A. "We've had -- have had a couple of cases done with 18 20 21 22 23 24 25 May I direct your attention to the paragraph that "We begins "We have"? Q. Would you read that to the jury, please? Vari-Lase short kit as parts of our clinical trial in Washington with Dr. Pepper, and thanks for his feedback, we're able to leave you with some tips for better success." Do you want me to read all the bullets? Chris Poage, RMR, CRR United States Court Reporter 385 1 Q. No. Read the first one, though, just the first full 3 A. "1: If it's at all possible to enter the short veins 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sentence of the first one. segment at 90 degrees so the micro-introducer is not kinked entering the segment, that is best. Q. Stop. Q. Thank you. A. Sure. Please stop. please. A. Thank you. There is a chance" -- Read the -- read the third point there, "When your customers order the short kit, also recommend ordering a 10-pack of micro-introducers. This way if you do poke through one there is a backup or if you are planning to do multiple perforators, more micros may be desired." Q. So what does the short kit limited launch represent in A. It was a limited launch of product to a very small Q. Okay. October of 2007? customer base to get feedback on a product. And by October 25, 2007, the date of this email, was the Vari-Lase system and the short kit approved for use in ablating perforator veins? A. Q. Not to my knowledge. Well, as the head of marketing -- VP of marketing, would you expect to have known? A. Q. Yes. Let me direct your attention to what's marked and tabbed Chris Poage, RMR, CRR United States Court Reporter 388 1 Q. Okay. 3 A. On Page 3? Q. Okay. Q. Does this refresh you on when the perforator trial was 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Do you recall -- does reading this refresh you on when the -- the perforator trial began? the -A. Okay. I'm not seeing any reference to the start of Oh, turn to Page 15, please. initiated? A. Yes. A. On October 4th. Q. Q. And what's the date? Okay. please. Now, let me direct your attention to Exhibit 3, Do you have 3 in front of you? A. Yes, I do now. A. Yes, I recognize it. Q. Q. A. When did it commence? Do you recognize this document? How do you recognize it? It's the national sales meeting slides, and I attended that meeting. Q. A. And what's the date on this national sales meeting? January 15th to 18th of 2008. MR. PAULISSEN: Your Honor, the government moves to MR. LUNDQUIST: Are these excerpts, Mr. Paulissen? admit Exhibit 3. MR. PAULISSEN: They appear to be excerpts. Chris Poage, RMR, CRR United States Court Reporter This 389 1 2 would be 3A. MR. LUNDQUIST: 3 THE COURT: 4 5 MR. RICHTER: BY MR. PAULISSEN: 8 A. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3A is received. (Government's Exhibit No. 3A admitted) 6 7 No objection, Your Honor. No objection. Q. Do you have it in front of you? Q. You attended the national sales meeting on that day? A. Q. Yes, I do. Yes. Okay. Yes, I did. Not -- identical but similar format, discussion of competitors' products and developments and discussion of VSI products and developments? A. Q. Correct. All right. this document. A. Okay. A. Yes. Q. Q. A. Q. A. Q. A. Let me ask you to turn, please, to Page 85 of You have it in front of you? Let's look at the bottom slide on Page 85. Yes. Do you have that in front of you now? Yes. Would you read the slide for us, please? "Vari-Lase 4 French versus 5 French short kit." Chris Poage, RMR, CRR United States Court Reporter 390 1 Q. 3 catheter. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. And what is "French" in this context? French is a measurement out for the exterior diameter of a Q. All right. A. "Short micro-introducers are also available in 10-packs. Q. What's the next one? say? So what's the rest of the body of the slide 7282 equals 5 French." A. kit. "Have accounts purchase at least one 10-pack with short Treat multiple perforators with one short kit, backup needle, wire and sheath." Q. By January 15th of 2008, to your knowledge did VSI have an indication or a clearance for ablating perforator veins with the short kit and the console? A. Q. No. Let me direct your attention to Page 87 of this document. And the bottom slide is the one I want you to look at, please. A. Yes. A. Selling the -- "Vari-Lase: Q. Q. A. Tell us what that -- what that slide says. Okay. Q. A. What's the first bullet point? "Target experienced MDs. beginners." Selling the Short Kit." Perforators are not for What does that mean in this context? This was not a simple procedure to do, so you want to have Chris Poage, RMR, CRR United States Court Reporter 414 1 waiting for FDA clearance for perforators. 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 short kit has perforator indication." A. EU equals Vari-Lase What's the meaning of the U.S. and EU statements? It was a world -- world meeting, so we had people from Europe and other countries as well as the U.S. sales force, so we reported on information relating to both markets. Q. Let me ask you to turn to what's tabbed and marked for A. Yes, I do. A. Yes. identification as 50. Q. Q. A. Do you have that in front of you? Do you recognize 50? How do you recognize it? It's -- my picture is on it. It's a training document put together for a group of rep salespeople who came in for a special Vari-Lase training. Q. Did you assist in completing this document or putting it A. Yes. A. Yes. together? Q. All right. Is it a VSI internal document? MR. PAULISSEN: Your Honor, the government moves for MR. LUNDQUIST: No objection. admission of Government's Exhibit 50. MR. RICHTER: THE COURT: No objection. Received. Chris Poage, RMR, CRR United States Court Reporter 415 1 2 3 4 (Government's Exhibit No. 50 admitted) BY MR. PAULISSEN: Q. Would you publish it? What is the exhibit that's in evidence as 50? What 5 is it? 7 session that we put on for the sales force, this special sales 6 8 9 10 11 12 13 A. It's a -- it's the documentation from this training force group. Q. Okay. A. Yes. Let's look at the second page. front of you? Q. Can you pull up the chart, please? So is this for the entire sales force or a select 14 group, or do you know? 16 Q. 15 17 18 19 20 21 22 23 24 25 A. It's a select group. Okay. know? Why would these folks have been brought in, if you A. I -- I don't recall -- A. -- right now exactly why. Q. Q. A. Q. Do you have that in Okay. But it was -- this was a subset of the entire sales force? Yes. All right. And let me ask you to turn in this document, "Camp Vari-Lase," to Page 23, middle slide. A. Yeah. Chris Poage, RMR, CRR United States Court Reporter 416 1 Q. What's the middle slide about? 3 Q. And you're referencing two abstracts there, correct? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. A. Q. What's it say? It says "Laser treatment of short vein segments." Correct. Are those the same two abstracts referenced in earlier slides about laser ablation of perforators? A. Yes. A. "Both concluded laser, under ultrasound guidance, is Q. Okay. And what's the second full bullet point? feasible and safe to treat perforators." Q. Let's look at the third slide, the bottom slide on that, A. Okay. A. "Vari-Lase use on perforators." on that page. Q. Q. A. Q. What's the title of the slide? And what does it say in the first bullet? "Vari-Lase is not currently indicated for perforators." Do you recall, again, the date on the front of this document? A. Yeah. A. Oh, okay. Q. Q. A. Q. It was summer 2008. Turn, please, to 116. July, I think. Let me know, do you have it? I have it. Thank you. Chris Poage, RMR, CRR United States Court Reporter 417 1 A. 3 that you've seen before as an employee of VSI? 2 4 5 6 7 8 9 10 11 12 Q. Okay. A. Yes. A. Yes. Q. Q. A. Is 116 a format of a document -- a document format Is it dated on a date when you worked at VSI? Do you recognize the group email that it's been Yes. MR. PAULISSEN: admission of 116. MR. RICHTER: THE COURT: BY MR. PAULISSEN: 18 A. 20 21 22 No objection, Your Honor. Received. (Government's Exhibit No. 116 admitted) 16 19 Your Honor, the government moves for No objection. MR. LUNDQUIST: 14 17 Now I'm on 116. distributed to in part and the distributor of it? 13 15 I went to 117, sorry. Q. What is 116? It's a follow-up -- it's an email from Amy Welch, who was a regional manager, to her region reiterating some information that I sent out and pointing out some highlights for them. Q. All right. May we have all of the bottom half that begins with 23 "From Fred Rooning." 25 being transmitted by Ms. Welch, the bottom of this first page. 24 Let me direct your attention to your email that's Chris Poage, RMR, CRR United States Court Reporter 418 1 Do you see it? 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 A. Yes. A. "VNUS is out and about spreading its propaganda and I All right. Would you read that first paragraph? thought it would be helpful to reiterate some of the information we discussed at the sales meeting to help you in your dealings with them. sheaths, but without guide wires, needles or laser fibers to laser accounts. see. I've attached the sales literature for you to The literature also contains the latest materials on RFS Stylet product for use in treating perforators. information to use in dealing with VNUS." Q. Below there it says "Here's the key points," correct? Q. Let me direct your attention to the paragraph that's in A. Yes. bold that says "RF is." Would you pull that up, please? What does that paragraph say? A. 22 peer-reviewed journal. 23 24 25 I'm sending a preliminary version of the latest ELRN, which has important 20 21 And they have started marketing "RF is just as good as laser. That was their assertion. This still has not been proven in a published paper in a Longterm data on closure still favors laser over RF, 92 percent for laser to 84 percent for RF. ClosureFast is associated with DVTs and PE's according to the FDA's MAUDE database." Chris Poage, RMR, CRR United States Court Reporter 419 1 Q. 3 competitor's success rates or failure rates? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Would that be the type of thing that VSI was looking into that -- looking at the FDA's MAUDE database for their A. Q. Yes. And did you anticipate that your competitors would be looking in the FDA's MAUDE database for similar information about your products? A. Q. Yes. What department at VSI would be looking in those databases for competitor's failures or successes? A. Q. Probably would have been marketing. Let me ask you about the paragraph that begins "The RF stylet" and ask you to read it to us. A. "The RF stylet is difficult to use on perforators. We have completed a successful clinical trial on using laser for perforators, 91 percent closure, and are just waiting for FDA clearance to market the short kit for laser treatment of perforators. The results of this trial will be presented at ACP in November." Q. What's the ACP? Q. Let's turn to the next page, please. A. American College of Phlebology. Would you pull up the paragraph that's emboldened "What will VNUS do?" Mr. Rooning, would you refer to that paragraph, Chris Poage, RMR, CRR United States Court Reporter 420 1 please? 3 Q. 2 4 5 6 7 8 9 10 11 A. Yeah. No. A. "First and foremost, doctors running vein practices act and think like small business owners. prices." Q. All right. Q. 17 18 19 20 21 22 23 24 25 And then would you pull up the paragraph that's emboldened that says "Laser is more"? 14 16 They count every penny. We know that from our experience in negotiating kit and console sentence. 15 I'd like you to just read toward the bottom where it says "First and foremost." 12 13 You want me to read it? Do you see that, Mr. Rooning? Oh, I see it. It's just one A. Oh. Yeah. A. "Laser is more readily reimbursed on first time than RF Would you read that to us? equals easier to get your money. the data." Again, reference the ERLN for Q. So it refers to a document called the "ERLN." A. Yeah. properly the ELRN? Q. Okay. Is that It was a typo. Let me ask you to turn a handful of pages back and see if you see a document that's entitled "ELRN." A. Q. In the binder? Yes, sir. It's just few pages back from where you were reading now in Exhibit 116 that's in evidence. Chris Poage, RMR, CRR United States Court Reporter 421 1 2 3 A. Q. Okay. Okay. I found it. Would you -- okay. You've got it up. What is this document? What is the ELRN that's 4 attached to your email? 6 inform our customers, and actually it ended up being more than 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. It's a document that we published as Vascular Solutions to our customers subscribed to it, about reimbursement -- reimbursement and how it impacted the laser and RF business. Q. Okay. Q. All right. A. Yeah. So you circulated this to your sales force? Let me ask you to turn to what's tabbed and marked as Government's Exhibit 45. A. Yes. A. Yes. Q. Q. A. Q. A. Q. Do you have that in front of you? What is -- do you recognize 45? Yes. How is it that you recognize it? It's a sales brochure we created at VSI for short kit. Is this a domestic issue or a European, or used in all parts of the world? A. it. I -- I can't -- well, it's only the U.S. information is on The EC information, European information is not on it, so I assume based on that it's a U.S.-only document. MR. PAULISSEN: Your Honor, the United States moves Chris Poage, RMR, CRR United States Court Reporter 422 1 2 for admission of 45. MR. LUNDQUIST: 3 MR. RICHTER: 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: No objection. No objection, Your Honor. Received. (Government's Exhibit No. 45 admitted) BY MR. PAULISSEN: Q. Would you publish it? What's the purpose of this document? created by VSI? Why was it A. It's sales literature for the reps to go in and present Q. In the U.S.? Q. Let me ask you -- so it relates to the Vari-Lase short product to doctors. A. In the U.S. kit, correct? A. Q. Correct. All right. Let me ask you to turn what's marked and numbered for identification as Government's Exhibit 46. A. Yes. A. Yeah. Q. Q. A. Q. A. Do you have that in front of you? Do you recognize this document? Yes. And how do you recognize it? It was a sales literature created by VSI for selling Chris Poage, RMR, CRR United States Court Reporter 423 1 the -- the short kit in the European market. 3 admission of 46. 5 marketed in Europe. 2 4 6 7 8 9 14 15 MR. LUNDQUIST: I'll object as irrelevant what is MR. PAULISSEN: Your Honor, this is -- An objection also? Let me see if there is another objection. MR. RICHTER: THE COURT: 11 13 Your Honor, the government moves for THE COURT: 10 12 MR. PAULISSEN: Yes, Your Honor. Overruled. MR. PAULISSEN: It's received. Thank you. (Government's Exhibit No. 46 admitted) BY MR. PAULISSEN: Q. Would you publish 46, please? Now, how do you know that this is the brochure for 16 the short kit for the European market? 18 CE mark on it, and indicates that's a European. 17 19 20 A. On the back page the EC rep is listed. Q. Can you bring up the back page, please? Okay. So the notations in the bottom right-hand 21 corner tell you that? 23 Q. 22 24 25 A. Correct. All right. And it also has a Let's look at the front of the short kit literature for the European market, please. The first portion of the body on the front page describes what this short kit is Chris Poage, RMR, CRR United States Court Reporter 424 1 specifically designed for. 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Correct. A. Treatment -- specifically -- designed specifically for the What's it designed for per this document? treatment of perforator veins. Q. 45? Let's compare 46 and 45. Okay. Would you analyze 46 and Just put them side by side or you can look on the screen. I'm going to ask you to tell the members of the jury what the -- what the differences are in the two documents. A. The only difference is one says "perforator veins," the Q. Which says "perforator veins"? Q. And the U.S. says? other says "short vein segments." A. A. Q. European. "Short vein segments." Is that the only distinction other than the European markings on the back right-hand corner? A. Product codes are different. A. Yes. Q. Q. Okay. Otherwise, they're near identical? Let me direct your attention to what's tabbed and marked as 94. We'll get those back in the binder. A. Which is the tab again, 94? A. Okay. Q. 94, yes, sir. Chris Poage, RMR, CRR United States Court Reporter 441 1 A. What's your number on the bottom of that? 3 A. Okay. 2 4 5 6 7 8 9 Q. Q. A. Q. 305. It's the one -Oh, yeah. Okay. piece? Okay. Can you pull up just, say, the first third of this Thank you. Mr. Rooning, what is this document? A. This is my bonus document, the MBOs that I was to achieve Q. What did you call them? 10 in order to make my bonus for the year. 12 A. 11 13 14 15 16 17 18 19 20 21 22 23 24 25 MBOs, management -- they're objectives, my management objectives. Q. Okay. Q. And, essentially, is it a list of things that you're A. 2008. So what year does this relate to? required to accomplish in order to get a full bonus? A. Q. Correct. Is it broken down into individual components that will pay partly, or is it all contingent upon meeting every one? A. Q. It's individual components. All right. Let me direct your attention to the back of this document, the second page, 202. A. Q. Yes. I'm going to wait for you to pull up that back page, Chris Poage, RMR, CRR United States Court Reporter 442 1 please. 3 what is the top objective, that is, the next one on this back 5 A. 2 4 6 7 8 9 10 11 12 13 14 15 Q. Did you understand that objective when it was presented to A. Yes, I did. you? Q. 22 23 24 25 Did you understand it to mean meaningful revenue related to the short kit or related to other products as well? A. Short kit only. A. Yes. Q. A. 21 "Launch the new perforator indication for Vari-Lase short second half of 2008". 18 20 Mr. Rooning -- and, please, blow it up -- what is -- kit by July 1st, 2008 and achieve meaningful revenue in the Q. 19 Thank you. page? 16 17 The next page. Okay. This is short kit specific? And some portion of your prospective bonus for 2008 was contingent upon that? Q. Yes, it was. All right. huge? A. Q. Was it a huge sum of money to you or not so Not so huge. Did you launch the new perforator indication for the short kit by July? A. Q. No. Let's look at 160, please. Do you recognize 160? Chris Poage, RMR, CRR United States Court Reporter 443 1 A. Yes. 3 A. Yes. 2 4 5 6 7 8 Q. Q. A. Did you have a hand in creating 160? Was it a VSI document that you worked on? Yes. Your Honor, the government moves for MR. LUNDQUIST: No objection. admission of 160. 9 MR. RICHTER: 10 11 MR. PAULISSEN: THE COURT: No objection. Received. (Government's Exhibit No. 160 admitted) 12 BY MR. PAULISSEN: 14 top of the first page, please, for a moment. 13 15 Q. Would you publish it, please? Just -- please blow up the What is 160? 16 A. 18 directors that you referred to earlier? 17 19 20 21 22 23 24 25 Q. Board report for January 2008. Is it similar in format to the report to the board of A. Yes. A. Yes. Q. Q. A. Q. A. And that's in evidence now? Who did you prepare this with? Mr. Root. Did you make a presentation with him or did you not? "Presentation" is a little more than we -- we didn't do a Chris Poage, RMR, CRR United States Court Reporter 444 1 presentation. 3 Q. Okay. Q. For which quarter did this relate to if it was dated 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 document. A. We met with the board and talked through the So you walked the board of directors through -- -- my section of the document. January 2008? A. Q. Fourth quarter 2007. All right. the bottom. Turn, please, to the page that's numbered 3 at A. Yes. A. Vein products. Q. Q. A. What is the topic in paragraph 3? Okay. Read the first two sentences of this paragraph. "Vein products had a very strong quarter. Worldwide vein product sales were $2,664,148, which was a 25-percent increase over the third quarter and established a new sales record by more than $500,000." Q. A. What's the next sentence say? "Vari-Lase disposable sales were $2,069,909, a 28-percent growth over Q3 and the first time quarterly disposable sales exceeded $2 million." Q. Let's look at the last paragraph on this vein products itemization. A. Can you pull that up? Okay. What does that last paragraph relate to? The short kit. Chris Poage, RMR, CRR United States Court Reporter 445 1 Q. 3 kit, which has a micro-introducer with a unique guide wire and 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Read it, please. "In the first quarter we are launching the Vari-Lase short Bright Tip fiber. This procedure kit is designed for the treatment of short vein segments. In February we will" submit FDA data -- "submit to the FDA the data from our RELIEVE clinical trial completed January 2008 on the use of endovenous laser therapy to treat short perforator veins in order to gain the perforator indication for this kit. Physicians have been asking for a fiber and a sheath system to treat perforator, and the short kit is our response to this request. Late in Q1 we also expect to launch a low-cost procedure pack to expand our accessory business." Q. After this report to the board of directors, did VSI A. Well, based on the documents we looked at earlier, we submit data from the RELIEVE clinical trial to the FDA? failed to do that -- or we did it and it wasn't received, and we then didn't follow up. Q. All right. You told the board of directors it was A. It was not my area. Q. But you remember reading that from the report? Q. All right. misplaced by the FDA? to talk about. A. Yes. That would have been Deborah's area And to your knowledge there was no Chris Poage, RMR, CRR United States Court Reporter 446 1 resubmission? 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 A. Not while I was at the company as far as I knew. A. February 2009. Q. Let me direct your attention to what's marked and tabbed as Government's Exhibit 159. A. Yeah. A. Yes. Q. Q. Are you there, sir? Do you recognize the formatting of 159? And is it the type of document that you routinely received or saw while working at VSI? A. Q. VSI? A. Yes. Was it -- was this dated during the time you worked at Yes. MR. PAULISSEN: Your Honor, the government moves MR. LUNDQUIST: No objection. admission of 159. MR. RICHTER: 19 THE COURT: 20 No objection. Received. (Government's Exhibit No. 159 admitted) 21 22 And you left when? MR. PAULISSEN: Let's publish it. 23 so that we can see what it says. 25 Q. 24 BY MR. PAULISSEN: What is this, Mr. Rooning? Chris Poage, RMR, CRR United States Court Reporter Bring up the top 447 1 A. This is a -- the report -- a typical report that a 3 Q. And who's the creator of this field trip report? 5 Q. A few more questions about the nature of field trip 7 required? 2 4 6 8 salesman would make on his or her activities during the week. A. reports. Required. A. I believe they were, yes. Q. 11 Q. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Were they optional for the salespeople, or were they A. 9 10 Danny McGaff. Did you say they were weekly created and submitted? All right. Well, it refers to the week ending and then there's a blank that's been filled in, correct? A. Yes. A. Yeah, it refreshes my memory. Q. Q. Yes. Does that refresh your memory or -Okay. It was weekly. So these mandatory weekly reports, who were they submitted to by the salespeople? A. They were put into a big Excel database, I think, and then Q. Okay. A. Yes. A. The marketing staff, the sales management staff and we were -- you know, then it was read by management. every week? Q. Were you a recipient of these field trip reports And who else were recipients of these? Mr. Root. Chris Poage, RMR, CRR United States Court Reporter 448 1 Q. Okay. 3 A. He would refer to them, so I -- 2 4 5 6 Do you know from firsthand experience that he received these field trip reports? Q. All right. Let me direct your attention to the second page of this field trip report. This is the week of February -- the week ending February 29, 2008. 7 your attention to Friday's report. 9 Q. 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Yeah. A. Uh-huh. Q. Let me direct The last thing filled in there? Now, before we actually read that, let me ask you some more detail briefly about the field trip reports. A. Q. Yes. What's the purpose of filling out a field trip report and submitting it every week? A. Well, it's for management to track the rep's activities to make sure that they are doing their job. And the other part of it is, it's one of the primary ways we got good intelligence as to what was going on in the marketplace. Q. Well, how would you get good intelligence from the A. Because they were telling us what was being said by salesmen filling out reports? customers. They told us what they were doing with customers. Q. Let's look at the Friday report for Danny McGaff. So it was a way to communicate with them. Okay. Chris Poage, RMR, CRR United States Court Reporter 449 1 You've already testified that he was a salesman in the Utah 3 A. 2 4 5 6 7 8 9 area? Q. Correct. All right. Center in Provo? A. What does he report for Intermountain Vein That Dr. Black has trialed the -- used the Diomed kit for perforators, and Danny -- and see if they -- Danny went to go see if they used it, to get information back from them. Dr. McGaff -- Dr. Black said that he didn't like it and he 10 preferred our short kit. 12 A. 11 13 14 15 16 17 18 19 20 21 22 23 24 25 And Q. Okay. Q. What does he say about that? A. Q. A. Right. And he makes a comparison and a judgment of -Correct. The part in quotes? Yes, sir. "The VSI kit is better in regards to everything, easier to see, easier to use, maintains its integrity and presence in the perforator better, et cetera." Q. Would you read the next-to-last sentence that begins A. "Dr. Black continues to be impressed with this kit and "Dr. Black"? VSI's insistence on being at the forefront of the perforator world." Q. Let me direct your attention to what's tabbed and marked as 164. Chris Poage, RMR, CRR United States Court Reporter 468 1 MR. PAULISSEN: 2 questions. 4 BY MR. RICHTER: 3 5 Q. 7 Q. 9 few minutes. 6 8 10 A. Your Honor, I have no further CROSS-EXAMINATION Good afternoon, Mr. Rooning. Good. Thanks. Let's -- we've been going for a little while. You received a target letter, you told us on direct, in November of 2013, right? 13 Q. 14 15 16 17 18 19 20 21 22 23 24 25 Let's start kind of close to where we finished on direct, if we can, for a 11 12 How are you? A. Correct. And you understood that this meant that these folks over here (indicating) were threatening you with federal crimes? A. Q. Correct. All right. And they threatened you -- threatened to charge you with conspiracy to misbrand a device? A. Q. Correct. And they threatened to charge you with misbranding of a device? A. Correct. A. Yes. Q. Q. A. And certainly that scared you, right? You were very scared? Yes. Chris Poage, RMR, CRR United States Court Reporter 469 1 Q. Got a wife and family? 3 Q. And you didn't think you'd done anything wrong at that 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Yes. time, did you? A. Yes. A. Yes. Q. Q. Correct. I didn't think I had done anything wrong. You thought you were innocent? In fact, at no point in time prior to the government starting to accuse you, had you ever thought you had been involved in any criminal activity? A. Q. That is actually a correct statement. And besides receiving just this target letter that the government referred to on direct, that wasn't the only thing that you and your counsel received. indictment, didn't they? A. Yes. A. Briefly, yes. Q. Q. A. Q. Right? They also sent you a draft And you went over that with your counsel? But you understood the nature of those charges? Yes, I did. You understood the full weight of the consequences that could come from those charges? A. Yes. A. Yes. Q. But you also believed those charges were false? Chris Poage, RMR, CRR United States Court Reporter 470 1 Q. You didn't want to be charged? 3 Q. You didn't want your career to be ruined? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. A. Q. No, I didn't want to be charged. No, I didn't want my career ruined. And your wife is also -- is a pretty important person, isn't she, besides being your wife? A. Yes. A. Correct. Q. Q. Yes. Right. She's a former mayor of Minnetonka, Minnesota? Currently the chairperson of the Hennepin County Commission? A. Q. Correct. And Hennepin County is larger than all of Minneapolis, right? A. Correct. A. Yes. Q. Q. A. Q. A. Q. Big county? Largest county in Minnesota? Yes. Both in -- population-wise? Yes. So being the chairperson, that's a pretty powerful position? A. Q. Yes. Be pretty tough for an elected -- that's an elected Chris Poage, RMR, CRR United States Court Reporter 471 1 position? 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Yes. Tough for an elected official's husband to be charged with a crime, would you say? A. Q. Yes. Now, as you testified on direct, there came a time in which shortly after receiving both this target letter and this draft indictment that you had to come down and participate in an interview in which Mr. Paulissen and Mr. Finley and Agent Scavdis were present, correct? A. Yes. A. Yes. Q. Q. And Dan Scott was present? Now, this took place -- this interview took place over two days, right? A. Q. Yes. And fair to say that you thought going into this that you'd be, initially when you got down, asked questions and be shown documents to look at and then answer those questions? A. Q. Yes. Okay. That's the expectation my lawyer Dan Scott said. And you -- and you -- and so that was your expectation going in, too? A. Q. Exactly. But, in fact, isn't it the case that when that interview began, the first two-plus hours did not involve asking you any Chris Poage, RMR, CRR United States Court Reporter 472 1 questions whatsoever, did it? 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. No. It involved simply Mr. Finley telling you in no uncertain terms what he thought about the case, right? A. Correct. A. Yes. Q. Q. A. Q. His theories about the case? His interpretations about the case? Yes. Fair to say that the tone that Mr. Paulissen used in asking you questions here in the courtroom was very different than the tone that Mr. Finley was using with you in that interview? A. Yes. A. More aggressive and wanting to make his point. Q. Q. How would you describe the tone that Mr. Finley used? Well, he didn't just want to make his point, right? time you disagreed with him -A. We had arguments. A. Yes. Q. Q. A. Q. You had arguments? He was very insistent about his views, right? Yes. And any time you had a different view, he remained insistent? Chris Poage, RMR, CRR United States Court Reporter Any 473 1 A. 3 had views that were different than yours? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. A. Q. Yes. Right? And you knew at that time that he had a view -- he Yes. And those different views, nonetheless, you knew put you at risk of them making a decision that could -- that could harm you in the future? A. Yes. A. Yes. Q. Q. That could harm your family in the future? So you certainly wanted to do everything you could to please them in that interview within reason? A. Q. Within reason, yes. So fair to say that whenever you disagreed with Mr. Finley, he wasn't happy? A. Q. Yes. And when you disagreed with something, were there times where they tried to make you stop talking? A. Q. I can't recall. Were there times where they told you that's not what happened? A. I don't know if it was not what happened, but that was Q. Okay. information that was irrelevant to their line of argument. And they were really only interested in the information that they thought was relevant to their line of Chris Poage, RMR, CRR United States Court Reporter 474 1 argument? 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Yes. Now, were there times where during that -- over that two days of interview where you had to take a break because of the way -- and because of the arguing going back and forth and disagreement about what -A. Q. Yes. And were there times where the prosecutors tried to put words in your mouth? A. Q. Yes. And did there come a time during this -- over this two-day interview session in which they made it clear that the target letter might be -- might go away if you signed a statement? A. Q. Yes. And on the -- on the second day, though, the prosecutor -- of your interview, the prosecutors prepared a statement, right? A. Correct. A. Correct. Q. Q. A. Q. A. Q. A. They wrote it? You didn't ever write it? I did not write it. Now, you reviewed the document, correct? Yes. And there were a number of drafts? Yes. Chris Poage, RMR, CRR United States Court Reporter 475 1 Q. And you disagreed with numerous things that they were 3 A. Yes, yes. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 saying to you in some of those drafts? Q. Right? those -A. Yes. A. Yes. Q. Q. And so you went back and tried to make changes to -- to the document? Fair to say that when you offered changes to the document that would have given more of an explanation, that they didn't accept those changes? A. Yes. A. Yes. Q. Q. Prosecutors didn't seem to care too much about context? So there were sentences that you might say were technically correct but left out the rest of the story? A. Q. Yes. And they wouldn't give you a copy of that statement after you signed it, would they? A. No, they did not. A. Correct. Q. Q. And they told you not to tell anyone about it? And soon after you -- you had given that interview and signed that statement, they withdrew the target letter? A. It took till June. Chris Poage, RMR, CRR United States Court Reporter 476 1 Q. Couple of months, a month or two, right? 3 Q. Now, we've had an opportunity to meet before, correct? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. A. Q. A. Q. Yeah. Correct. And we met first I think in January of 2014? That's right. And with me was Mr. Lundquist who represents Mr. Root, right? A. Q. Yes. And when we got together, did I spend two-plus hours telling you what I thought about the case? A. Q. No. Did Mr. Lundquist spend two-plus hours telling you what he thought about the case? A. Q. No. Was -- did I act like the bad cop and Mr. Lundquist act like the good cop? A. No. A. No. Q. Q. A. Q. A. Q. Did anyone pressure you in to meeting with us? You did so voluntarily? Yes. You weren't afraid when you were in the meeting, right? No. We didn't get mad at you? Chris Poage, RMR, CRR United States Court Reporter 477 1 A. No. 3 A. No. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Q. A. Q. We didn't threaten your livelihood? We didn't bully you? No. And we made it clear that all we wanted to do was hear the truth from you, correct? A. Q. Yes, that's right. And if we asked you something, we didn't try to get you to agree with us; we -- we accepted the answer that you gave us? A. Q. That's my recollection of what happened, yes. Now, before meeting with the government, you never thought -- you thought you were innocent? A. Q. That's correct. And you -- before meeting with the government, you never thought Howard Root had done anything wrong? A. No. A. Correct, yes. Q. Q. That's correct? Sorry. And you didn't think Vascular Solutions, VSI, had ever done anything wrong? A. No. A. I'm sorry. Q. Q. That's correct, you thought -Yes. Yes. That's correct. So what you mean by that is before meeting with the Chris Poage, RMR, CRR United States Court Reporter 478 1 government, you did not think VSI had done anything wrong, 3 A. 2 4 5 6 7 8 9 10 11 12 correct? Q. Yes, that's a correct statement. Didn't think you -- you or anyone else was a member of a conspiracy? A. No. A. No. Q. Q. A. Q. Didn't think anyone had withheld information from the FDA? Didn't think anyone had buried information from the FDA? No. All right. Let's turn now to the scope of the indication. When you worked at VSI, you -- you started in July of 13 2005 and you left in February of 2009, right? 15 Q. 14 16 17 18 19 20 21 22 23 24 25 A. That's correct. And you had worked prior to that in marketing for quite a number of years? A. That's correct. A. Correct. Q. Q. And so you were hired to do marketing at VSI? And so you held a couple of different titles during your tenure, right? A. Q. Correct. You were VP of marketing and you were also the VP of Vari-Lase? A. Correct. Chris Poage, RMR, CRR United States Court Reporter 479 1 Q. And during your tenure of VP of marketing, you were 3 A. That's right. 2 4 5 6 7 8 9 10 11 12 13 14 15 responsible for all of the company's products? Q. And fair to say that the company -- you thought the company had a lot of great products? A. Q. Yes. Very briefly, tell us about some of the products that you worked with and that you were familiar with other than Vari-Lase when you were the -- a VP of marketing. A. We had the two lead products other than Vari-Lase were Pronto extraction catheter, which is a cardiovascular device that's used to take -- to extract clot and things out of the -out of the arteries. And it was a very popular catheter and very well received product. And we had a hemostasis product line, which was 16 basically a -- make it simple, a bandage that had a substance 18 especially after vascular procedures that required a stick into 17 19 20 21 22 23 24 25 called thrombin in it which was used to stop bleeding, the veins. Q. Good product in your mind? Q. What were some of the other products that you recall? A. A. Very good product. Yeah. Oh, we had something called the Langston, which was a product that was used -- another catheter used to measure injection fractions, I believe, in -- in the heart. Chris Poage, RMR, CRR United States Court Reporter It was for 480 1 measuring of blood flow. 3 to start procedures. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 And then we also had a line of micro-introducers, which are wires and sheaths and needles used Q. And these are all these kind of procedures where you're essentially inserting a tube and gaining access to a vessel -a blood vessel of some sort? A. Correct. A. Yes. Q. Q. That's pretty common in medicine these days, right? And that's accessing arteries, right? accessing veins? A. Q. As well as Correct. Now, in terms of the Vari-Lase line, when you were the VP of marketing, the Vari-Lase was certainly not the biggest product that VSI had, right? A. Q. No, it was not. And, in fact, it wasn't really -- it certainly wasn't the golden child within the company, right? A. Q. No, it was not. Fair to say? But you thought it was -- you still thought it was a great product from a medical point of view, correct? A. Q. Yeah, yes. Doctors were having great success with patients with Vari-Lase? A. Yes. Chris Poage, RMR, CRR United States Court Reporter 481 1 Q. Were you familiar -- you were familiar with the procedures 3 A. Yes. A. Yes. 2 4 5 6 7 8 9 10 that predate laser ablation and RF ablation, right? Q. Q. A. Q. They were things called "vein stripping"? And "ligation"? Yes. And vein stripping was? MR. PAULISSEN: THE COURT: Overruled. 11 BY MR. RICHTER: 13 surgical purpose, right? 12 14 15 16 17 18 19 20 21 22 23 24 25 Objection, Your Honor, relevance. Q. Vein stripping was a procedure in which -- it was a A. Correct. Q. The surgeon would cut open a leg in some fashion and either rip out the vein, or cut out a portion of the vein, correct? A. Q. That is correct. And ligation was actually making incisions into the leg and tying off the vein? A. Q. That's correct. Fair to say it was a far more barbaric and brutal procedure than an endovenous ablation of veins? A. Q. Yes. And, in fact, it was -- usually had to be done in a Chris Poage, RMR, CRR United States Court Reporter 482 1 hospital because it was a surgical procedure, and so the 3 A. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 patient certainly was laid up for days? Q. Yes. And surgery obviously and being present in a hospital, greater complication risks in that setting than in an outpatient setting, correct? A. Q. Yes. Now, laser ablation is done and so is RF ablation is done in an outpatient setting usually, isn't it? A. Yes. A. Yes. Q. Q. So the patients go home the same day that they're treated? Maybe an hour or two long to do the -- do the entire procedure? A. Q. Yes. That's accurate. And when you came to VSI, Vari-Lase was already on the market, right? A. Yes, it was. A. Yes. Q. Q. A. Q. FDA had already cleared this device? Approved to be sold in the United States? Yes. And you knew, as you testified on direct, that it was approved for the treatment of varicose veins? A. Correct. Chris Poage, RMR, CRR United States Court Reporter 483 1 Q. Now, varicose veins, that's a pretty general term, right? 3 Q. Right? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. A. Q. A. Q. A. Q. Yeah. Yes. I mean, there's many different types of veins -Yes. -- that can be varicose veins? Yes. Fair? And when it says varicose veins, it's not mentioning some specific vein, right? A. Correct. A. Yes. Q. Q. A. Q. Right. So you've got general as a concept, right? And you've got specific as a concept, right? Yes, correct. And the indication for use statement you were shown that on direct, too, right? A. Yes. A. No. Q. Q. It doesn't say superficial veins only, right? Nowhere does it say on the indication for use statement, "Vari-Lase device is approved for the treatment of superficial veins only." A. Q. No. Those words aren't there, right? There's no "only." Right? It does have the word "superficial" in it? Chris Poage, RMR, CRR United States Court Reporter 484 1 A. 3 statement, right? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. A. Q. Yes. It's got a lot of words in it. It's a pretty lengthy Yes. But the first portion of that statement says "Varicose, for the treatment of varicose veins"? A. Q. I have to look to be sure, but yes. Okay. And "varicose" means dilated, right? It means when a vein had become dilated, meaning that the valves no longer are able to work together, right? A. Q. Correct. And dilated veins, this could happen to all kinds of different kinds of veins in the leg, right? A. Q. Yes. And that would include, obviously, the great saphenous vein? A. Yes. A. Yes. Q. Q. A. Q. A. Q. A. It can include the short saphenous vein? It can include tributary veins? Yes. It could include perforator veins? Yes. Perforators can be diluted? Yes. Chris Poage, RMR, CRR United States Court Reporter 485 1 Q. Dilated. 3 Q. And that means they're varicose? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. A. Q. Yes. Excuse me. Yes. And "perforator" is certainly a more specific term than the term "varicose vein"? A. Q. Yes. And you'd also agree, would you not, that when it comes to varicosities -- that's a fancy medical word for varicose veins, right? A. Q. Yep. That when it comes to varicosities, they are often associated with one another? because -A. Q. Oh, okay. Right. Right, they're associated I see what you're saying. Yes, yes, yes. Meaning that if you have a varicose vein in one vein, many times you're going to have a varicose vein adjoining -- associating with that other vein, right? A. Q. Yeah. Because it's a giant circulatory system. interconnected, right? A. Q. Yes. And so if one part breaks, it has downstream or upstream effects, right? A. It's all Yes. Yes, it does. Chris Poage, RMR, CRR United States Court Reporter 486 1 Q. And based on your work -- obviously, you're not a medical 3 A. No, I am not. 2 4 5 6 7 8 9 10 11 12 13 doctor, right? Q. But as a -- in marketing, you had to have some basic understanding of the anatomy? A. Q. Yes. And so in terms of the basic understanding of anatomy, obviously, in particular in this case the venous anatomy, the anatomy of veins, particularly in the leg -A. Q. Yes. If I could -- let me have Defendants' Exhibit 1538, please. Let me show you what's been marked now as 14 Defendants' 1538. 16 A. Yes. A. Yes. 15 17 18 19 20 21 22 23 24 25 This is an illustration, is it not, of veins that you might see in the leg, from one view? Q. Q. A. Q. A. Q. A. Q. And it illustrates superficial veins? And it illustrates the deep veins? Yes. And it illustrates the perforating vein, right? Yes. And it illustrates a communicating vein, right? Yes. Does this -- from your experience and working at -- with Chris Poage, RMR, CRR United States Court Reporter 487 1 the Vari-Lase device and your familiarity with venous anatomy, 3 in one instance, the relationship between superficial veins and 2 4 5 6 7 8 does this fairly and accurately represent and depict, at least the deep -- and the deep vein? A. Yeah, it's a good model. MR. RICHTER: Okay. Your Honor, we'd move Defendants' Exhibit 1538 into evidence. MR. PAULISSEN: THE COURT: 9 10 Yeah. No objection. Received. (Defendants' Exhibit No. 1538 admitted) 11 BY MR. RICHTER: 13 Defendants' 1538, this is -- this middle pink area that's shown 12 14 15 16 17 18 19 20 21 22 23 24 25 Q. Now, the -- when we're looking at this, Mr. Rooning, in on the screen is the muscle fascia, right? A. Q. That's what it says it is, yes. Right. And the muscle fascia is a thick membrane. separates basically the outer layers of the skin from the It deeper muscle area and obviously below which then is bone. A. Q. Yeah. Right. That's what the fascia does. And so the vessels, the veins that are shown here on the top of the muscle fascia, those are the superficial veins? A. Correct. A. Yes. Q. Right? They're above the muscle fascia? Chris Poage, RMR, CRR United States Court Reporter 488 1 Q. Meaning they are superficial to the muscle fascia? 3 Q. And then down below is the deep vein? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. A. Q. A. Q. Yes. Yep. Right? Yes. And that's below the muscle fascia, right? So if we're looking at someone's leg, dare look at mine for a second, right, if -- this side of the leg here -A. Q. Yep. -- is going to be essentially where the superficial veins are, right? A. Q. Okay. Yeah. And great saphenous vein runs from the groin basically all the way down almost to the foot, right? A. Q. Correct. And that's superficial. And there's other superficial veins on the outside of the leg? A. Q. Correct. Right? But -- and they're all -- those north-south veins are all -- are all superficial to the muscle fascia? A. Q. Yes. And then deep inside where my femur is and all the leg bones, right? A. Q. Yeah. That's closer to those, is where the deep vein will lie, Chris Poage, RMR, CRR United States Court Reporter 489 1 right? 3 Q. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Yes. And then in between, there are also smaller vessels that connect. A. Correct. A. Correct. Q. Q. Larger vessels, right? So it shows here, it shows communicating veins. So this is -- this is a vein that's running from one superficial vein to another superficial vein, right? A. Q. Yeah. Right? things. A. Q. And some of them have fancy names and all kind of There's a lot of them, obviously, right? Yes. And then we also have connecting, right, perforating veins? A. Q. Yeah. Right? Perforators, perforating. But they're called perforating or perforators because they literally start in the superficial system, right, and they perforate the muscle fascia and connect to the deep vein, right? A. Q. Yes. And so when they are on this side of the muscle fascia, they are superficial -- they are in the superficial side of the house, if you will. Chris Poage, RMR, CRR United States Court Reporter 490 1 A. 3 deep side of the house, right? 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. A. Q. Yes. Right? And then when they're down here, they're in the Yes. Now, when it comes to treating -- I'm sorry. leave that up? Leave that up. Could you Leave that up for a moment. When it comes to treating -- referring you again to Defendants' 1538, when it comes to treating perforators, you're well aware, are you not, that doctors approach it in numerous ways? A. Q. Correct. Right? And now first and foremost, you understand that perforators are not usually the first vein that a doctor needs to treat for most patients, right? A. Yes. A. Yes. Q. Q. A. Q. Correct, yes. Relatively rare patient that has to --- has to have a perforator treated, right? Yes. Often associated with people who have more advanced cases of varicose veins? A. Q. I'm not sure of that, but -Okay. But in terms -- when it comes to treating -- treating varicose veins and in particularly treating a varicose perforated vein, there are at least two different ways that you Chris Poage, RMR, CRR United States Court Reporter 491 1 know of, right, that doctors treat those veins, ablate those 3 A. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 veins? Q. Yes. So, first, they often will treat the great saphenous vein, right? A. Q. Right. Or the short saphenous vein, right? And that's the one that's running essentially above the muscle fascia the entire time, right? A. Q. Yes. And often when they do that, they find it helpful as they move the ablation device, the tip of that device along the vein, pulling it back to pull it out, that they will pause at this intersection, the intersection between this vein right here, this superficial vein, whether it's the short saphenous or great saphenous veins, and the superficial part of this perforated vein, right? A. Q. Yes. And that's because -- because of the effectiveness of the laser device, the heat from that device not only ablates and burns the inside of the vein here, but it will burn the -- a portion of the perforated vein, right? A. Correct. A. Correct. Q. And that helps to close that off? Chris Poage, RMR, CRR United States Court Reporter 492 1 Q. Correct? 3 Q. And presumably that's based on a judgment by the doctor 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A. Yes. that that's what's in the best interest of the patient? A. Yes. A. Yes. Q. Q. A. Q. A. Q. The doctors make the decisions here, right? So that is sort of what I call an indirect method, right? Yes. Of treating perforator vein? Yes. Right? You're accessing the superficial vein that -- the great saphenous vein or short saphenous vein, and then you're treating the perforator as you move it along that vein? A. Q. Yes. Right? And the other way is by referring again to Defendants' 1538, by directly accessing this perforator vein, right? A. Q. Correct. And so they make a small essentially insertion, fancy medical term percutaneous, right? it? A. Q. That's the fancy word for Yes. So they make a percutaneous essentially incision, and it's like a stick, right? Chris Poage, RMR, CRR United States Court Reporter 493 1 A. Yes. 3 A. Yes. 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Q. It's similar to when you get your blood drawn, right? And so they put that little essentially straw, small straw and they access. And that's true either way, right? They put that straw in and then they run the laser fiber in to that -to the portion of the vein they want to treat, right? A. Q. Yeah. Okay. Now, you understood throughout this time when you were at Vascular Solutions that doctors had different preferences and made different choices of when they needed to treat whichever vein in the leg they needed to treat to help a patient's varicose veins? A. Q. Yes. And you wanted -- you certainly wanted to get into -- wanted to be in the medical device industry because ultimately you wanted to help people, right? A. Q. Yeah. Yes. You wanted the devices that you used to work well for patients, right? A. Yes. A. Yes. Q. Q. To help doctors do a great job with patients? And you thought that the devices that you were marketing at Vascular Solutions were doing just that, didn't you? Chris Poage, RMR, CRR United States Court Reporter 494 1 A. 3 Solutions, you were the marketing guy, right? 2 4 5 6 Q. Yes, I was the marketing guy. A. I was not regulatory guy. Q. Q. 9 Q. 10 11 12 13 14 A. A. Q. 21 22 23 24 25 And she's -- I think she previously may have gone by Yes. Yes. Same person. Yeah. A. No, I did not. Q. 20 Correct, yes. A. 17 19 The regulatory person was a lady named Deb Smalls, right? We'll probably hear her referred to as Smalls mostly during this trial, right? Q. 18 You were not the regulatory guy? Deborah Smalls, right? 15 16 Now, in terms of the regulatory work at Vascular A. 7 8 Yes, I did. You didn't ever interact directly with the FDA, right? And, in fact, you wouldn't profess any particular FDA expertise, right? A. No. A. No. Q. Q. No legal expertise either, right? And so you haven't reviewed -- you never reviewed any of the FDA clearances that the company received, right? A. Q. Reviewed, you mean prior to sending them in? I mean -- I mean the premarket notification files. Chris Poage, RMR, CRR United States Court Reporter 495 1 A. No. 3 A. I might have looked at the initial clearance -- the 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q. Did you ever review any of these? clearance letter, and that's a...
Purchase answer to see full attachment