United States of America v. Physicians Pain Specialists of Alabama, P.C. et al

Filing 143

Order affirming Magistrate Judge's order (Doc. 139), as set out. Doc. 142 MOTION to Stay Discovery filed by Castle Medical, LLC is denied as moot. Signed by District Judge William H. Steele on 09/22/2017. (nah)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
UNITED STATES OF AMERICA, ex rel. )
LORI L. CARVER,
)
)
Plaintiff,
)
)
v.
) CIVIL ACTION 13-0392-WS-N
)
PHYSICIANS’ PAIN SPECIALISTS OF )
ALABAMA, P.C., et al.,
)
)
Defendants.
)
ORDER
This matter is before the Court on the objection of defendant Castle
Medical, LLC (“Castle”) to a Magistrate Judge order. (Doc. 140). The Court has
reviewed the objection and accompanying brief and concludes that no further
briefing is required.
BACKGROUND
The order at issue denied Castle’s motion to stay discovery and granted the
plaintiff’s motion to compel discovery. (Doc. 139). The relevant timeline is as
follows:
• March 20, 2017

Castle is served with process

• April 10, 2017

Castle files its answer

• June 2, 2017

Parties file their Rule 26(f) report

• June 13, 2017

Plaintiff serves discovery requests on Castle

• August 2, 2017

Plaintiff files a motion to compel

• August 2, 2017

Castle files a motion for judgment on the
Pleadings (“JOP”)

Castle’s motion was based on its filing of a motion for JOP which, Castle

asserted, established good cause for a stay of discovery as required by Rule
26(c)(1). (Doc. 134). The Magistrate Judge denied the motion because Castle had
failed to demonstrate that its JOP is clearly meritorious, because the probability
the case would be dismissed in its entirety did not sufficiently outweigh the harm
of a delay in discovery, and because Castle had permitted discovery to continue
for two months before filing its motion for JOP. (Doc. 139).
A Magistrate Judge’s ruling on a non-dispositive matter must be affirmed
unless “it has been shown that [her] order is clearly erroneous or contrary to law.”
28 U.S.C. § 636(b)(1); accord Fed. R. Civ. P. 72(a). As this Court has observed
on repeated occasions, “[t]he ‘clearly erroneous or contrary to law’ standard of
review is extremely deferential. ... Relief is appropriate under the ‘clearly
erroneous’ prong of the test only if the district court finds that the Magistrate
Judge abused [her] discretion or, if after reviewing the record as a whole, the
Court is left with a definite and firm conviction that a mistake has been made. ...
With respect to the ‘contrary to law’ variant of the test, an order is contrary to law
when it fails to apply or misapplies relevant statutes, case law or rules of
procedure.” Wright Transportation, Inc. v. Pilot Corp., 2013 WL 5718997 at *1
(S.D. Ala. 2013) (internal quotes omitted).
DISCUSSION
Castle identifies three grounds for objection to the Magistrate Judge’s
denial of its motion to stay discovery: (1) the order misapplies the standard
applicable to such motions when they are grounded on the pendency of a casedispositive facial challenge to the complaint; (2) the order incorrectly relies on the
timing of the motion for JOP; and (3) the order contravenes the requirement that a
plaintiff satisfy Rule 9(b) before gaining access to discovery. (Doc. 140 at 1).

I. Misapplication of Governing Standard.
2

The standard identified by Castle is one of “balanc[ing] the harm produced
by a delay in discovery against the possibility that the motion will be granted and
entirely eliminate the need for such discovery.” (Doc. 141 at 5). “To this end, the
court must take a preliminary peek at the merits of the dispositive motion to see if
it appears to be clearly meritorious and truly case dispositive.” (Id.). The
Magistrate Judge identified this as the standard and applied it. (Doc. 139 at 4).
A. Preliminary Peek.
The Magistrate Judge first misapplied the standard, says Castle, by not
actually taking a “preliminary peek” and evaluating the merits of its motion for
JOP but instead simply noting: the motion’s length; the number of arguments
raised therein; the need for a close examination of the extensive allegations of the
complaint; the assignment of the motion to the undersigned for resolution rather
than to the Magistrate Judge; and Castle’s four-month delay in filing its motion for
JOP. (Doc. 141 at 5-6; Doc. 139 at 4-5).
There are several fatal flaws in Castle’s argument. First, Castle has not
demonstrated that Supreme Court or Eleventh Circuit precedent dictates that the
Magistrate Judge take a “preliminary peek” at the merits of the substantive
motion. As Castle notes, the Magistrate Judge simply borrowed this standard from
another Magistrate Judge. As Castle does not note, that Magistrate Judge
borrowed the standard from another Magistrate Judge, who borrowed it from yet
another Magistrate Judge, who cited no authority for the standard. Because Castle
has not shown that the Magistrate Judge was required by Congress or a higher
court to take a preliminary peek at the merits, it has not shown that any failure to
do so furnishes grounds for overruling her decision.
In a related vein, Castle has not shown that the standard as promulgated by
non-binding sources mandates a preliminary peek at the merits. On the contrary,
the progenitor of the standard said only that it “may be helpful to take a
preliminary peek at the merits of the allegedly dispositive motion.” Simpson v.
3

Specialty Retail Concepts, Inc., 121 F.R.D. 261, 263 (M.D.N.C. 1988) (emphasis
added). A number of lower courts in this Circuit have employed the permissive
“may.” E.g., Williams v. Educational Credit Management Corp., 2015 WL
493767 at *1 (M.D. Fla. 2015); Ameris Bank v. Russack, 2014 WL 2465203 at *1
(S.D. Ga. 2014); Arriaga-Zacarias v. Lewis Taylor Farms, Inc., 2008 WL
4544470 at *1 (M.D. Ga. 2008). Castle has thus failed to demonstrate that the
standard it espouses requires, rather than simply permits or encourages, a
preliminary peek at the merits of the substantive motion. The Magistrate Judge’s
ruling cannot be overturned because she failed to do something she was not
required to do.
Finally, Castle has not demonstrated that a preliminary peek at the merits,
even were it mandated by law, was not accomplished by the Magistrate Judge.
The peek, remember, is only “preliminary,” and to favor a stay it must show the
motion for JOP is apparently “clearly meritorious.” Castle has identified no
authority for the proposition that a preliminary peek requires a court – especially a
court not assigned to resolve the underlying motion – to expend considerable
judicial resources in analyzing myriad arguments ranging over hundreds of pages1
– unaided by the movant2 – before concluding the movant has not shown the
underlying motion to be not merely potentially meritorious but “clearly” so. In
1

Castle’s two briefs in support of its motion for JOP total some 40 pages and, as
the Magistrate Judge correctly noted, toss out many different arguments. (Docs. 125,
136). Castle also submitted over 110 pages of case law it presumably finds vital to the
success of its motion. (Docs. 125-1, 136-1). The plaintiff’s brief in opposition added
another 27 pages of argument. (Doc. 133). And the complaint against which all this
argument had to be measured is itself 56 pages long. (Doc. 29).
2

Castle’s principal brief in support of its motion to stay discovery simply
acknowledged the complaint and the underlying motion. (Doc. 134 at 4). Its reply brief
simply directed the Magistrate Judge to its briefs on the underlying motion. (Doc. 138 at
2). While Castle did cite to one six-page section of its reply brief on the underlying
motion, it did not identify this section as containing its best argument in support of JOP
but only as addressing a particular flaw in the complaint that the plaintiff’s pending
discovery requests sought to remedy. (Id. at 2-3).

4

such a situation, it may well be sufficient for a court to conclude from the volume
of material and arguments – not to mention the movant’s apparent lack of
confidence in the motion as reflected in its long delay before filing it – that the
movant has not met its burden. The Court need not decide if this is the law;
Castle’s failure to demonstrate it is not the law – indeed, its failure even to attempt
such a demonstration – means it has not met its stiff burden of showing grounds to
overturn the Magistrate Judge’s ruling.
B. Balancing.
Castle also argues the Magistrate Judge misapplied the governing standard
in her balancing of the harm resulting from a stay of discovery against the
possibility its motion for JOP will be granted in full (obviating all discovery) or in
part (narrowing the range of discovery). (Doc. 141 at 6-9). Castle argues the
Magistrate Judge identified no harm from a stay of discovery and, on the other
side of the scale, ignored both the possibility it will prevail in part on a specific
part of its motion for JOP and the harm it will incur without a stay (the time and
financial cost of discovery and the assistance such discovery could provide the
plaintiff in adequately repleading her claims).
Because Castle identifies no law identifying what does and does not
constitute harm from a stay of discovery, it has not shown the Magistrate Judge
erred by finding such harm. Because Castle did not argue to the Magistrate Judge
that its motion for JOP will likely, or even possibly, succeed in eliminating from
the action the time period during which the plaintiff was not employed by a codefendant, (Doc. 141 at 7), the Court will not consider it.3 And because Castle has
not attempted to show that harm to the party seeking a stay of discovery is part of

3

“[A] district judge has discretion to decline to consider a party’s argument when
that argument was not first presented to the magistrate judge.” Williams v. McNeil, 557
F.3d 1287, 1292 (11th Cir. 2009). This Court applies Williams. E.g., White v.
Thyssenkrupp Steel USA, LLC, 2010 WL 2042331 at *3 (S.D. Ala. 2010).
5

the balancing formula, it cannot place the Magistrate Judge in error for not
considering it.
II. Timing of the Motion for JOP.
Castle insists that its motion for JOP was not untimely under Rule 12(c).
(Doc. 141 at 9-13). This is correct, but it is also beside the point. A motion for
JOP tests the facial adequacy of the pleading. Castle admits that it could have
filed such a motion as soon as it filed its answer in April but did not do so only
because it failed to realize until much later that the complaint was subject to such a
challenge. (Id. at 12; Doc. 134 at 2). By attending a Rule 26(f) conference and
presenting a plan for discovery, Castle willingly triggered the commencement of
formal discovery pursuant to Rule 26(d)(1), and the plaintiff thereafter properly
submitted discovery requests. Even then, Castle did nothing, not filing its motion
for JOP until two full months after discovery opened.
The discovery rules protect those who seek their protection, and “motions
to stay discovery are disfavored.” Nece v. Quicken Loans, Inc., 2017 WL 2868408
at *4 (M.D. Fla. 2017); accord McMillan v. Department of Corrections, 2013 WL
11762140 (N.D. Fla. 2013); Iyamu v. Clarfield, Okon, Salomone & Pincus, P.L.,
2013 WL 11941573 at *1 (S.D. Fla. 2013); Massey v. Federal National Mortgage
Association, 2012 WL 3685959 at *1 (S.D. Ga. 2012). The Magistrate Judge
understandably concluded that Castle, by permitting discovery to proceed for two
months rather than filing a motion for JOP that was at all times available to it,
displayed such indifference to the conduct of discovery as to weigh against good
cause for a stay of discovery. Again, the Court need not resolve whether this
approach is legally proper, because Castle has failed to demonstrate that it is not.4
4

Castle relies solely on Chudasama v. Mazda Motor Corp., 123 F.3d 1353 (11th
Cir. 1997), which does not sustain its position. “Facial challenges to the legal sufficiency
of a claim … should … be resolved before discovery begins.” Id. at 1367. Fine, but that
places the onus on the defendant to make the challenge before discovery begins, which
Castle inexplicably failed to do. “[W]hen faced with a motion to dismiss a claim for
6

III. Rule 9(b) as a Barrier to Discovery.
Castle suggests that the Eleventh Circuit has squarely forbidden discovery
before a plaintiff satisfies Rule 9(b). (Doc. 141 at 13-14). Taken out of context,
some of Castle’s authorities may sound like they support that proposition. But
none of these cases say that a defendant can force a halt to ongoing discovery
(which it has cooperated in commencing through Rule 26(f)) whenever it wants by
the simple expedient of filing a motion raising Rule 9(b) objections. Castle has
again failed to demonstrate error justifying overruling the Magistrate Judge’s
decision.
CONCLUSION
Whatever might have happened had Castle filed its motion for JOP and
motion to stay discovery in April or May, it did not do so. Instead, it waited until
discovery was in full swing and it was in default of its discovery obligations.
Presumably, Castle had good reasons for this approach, but one consequence is
that it irreparably tarnished its claim to a stay of discovery. The threshold for
overturning a Magistrate Judge’s ruling on a non-dispostive matter is purposefully
high, and Castle has not come near to clearing it. For the reasons set forth above,
the Magistrate Judge’s order denying Castle’s motion to stay discovery and
granting the plaintiff’s motion to compel discovery is affirmed.5
DONE and ORDERED this 22nd day of September, 2017.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE
relief that significantly enlarges the scope of discovery, the district court should rule on
the motion before entering discovery orders, if possible.” Id. at 1368. Here that
approach is not possible, again thanks to Castle’s failure to pursue a motion for JOP until
long after it was in default of its discovery obligations.
5

Because this order resolves its objection, Castle’s request for guidance or, in the
alternative, motion to stay pending deadline, (Doc. 142), is denied as moot. Any relief
from the deadline established by the Magistrate Judge for responding to the plaintiff’s
discovery requests, (Doc. 139 at 6), must be sought from her.
7