HealthOne of Denver, Inc. et al v. UnitedHealth Group Incorporated
Filing
151
ORDER Affirming and Adopting Recommendation of United States Magistrate Judge. Defendant's Objection to Magistrate Judge's Denial of Its 116 Motion for Protective Order is OVERRULED, and the 109 Order of Magistrate Judge Boland is AFFIRMED. Defendant's 141 Motion to the District Judge for Stay of Plaintiffs' Optum-Related Discovery Pending Appeal to the District Judge is DENIED AS MOOT, by Chief Judge Wiley Y. Daniel on 12/21/2011.(wjc, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Wiley Y. Daniel
Civil Action No. 10-cv-01633-WYD-BNB
HEALTHONE OF DENVER, IND., a Colorado corporation;
HCA-HEALTHONE LLC, a Colorado limited liability company,
Plaintiffs,
v.
UNITEDHEALTH GROUP INCORPORATED, a Minnesota corporation,
Defendant.
___________________________________________________________________
ORDER AFFIRMING AND ADOPTING RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
____________________________________________________________________
This matter is before the Court on Defendant’s Objection to the Magistrate
Judge’s Denial of Its Motion for Protective Order filed October 13, 2011. Defendant
UnitedHealth Group, Inc [“UnitedHealth”] objects to Magistrate Judge Boland’s Order of
September 22, 2011 (ECF No. 109), which denied UnitedHealth’s Motion for Protective
Order (ECF No. 91). That motion sought an order prohibiting Plaintiffs from pursuing
discovery related to UnitedHealth’s “Optum” lines of business. A response to
UnitedHealth’s Objection was filed on October 31, 2011, and a reply was filed on
November 14, 2011.
I also note that on November 14, 2011, after being denied a stay of the discovery
related to the OptumHealth discovery by Magistrate Judge Boland, UnitedHealth filed a
Motion to the District Judge for Stay of Plaintiffs’ Optum-Related Discovery Pending
Appeal to the District Judge. That motion is denied as moot since this Order addresses
the merits of the Objection.
Turning back to UnitedHealth’s Objection, I must review Magistrate Judge
Boland’s Order to determine whether it is "clearly erroneous or contrary to law" since
the nature of the matter is nondispositive. Fed. R. Civ. P. 72(a). “The clearly erroneous
standard. . . requires that the reviewing court affirm unless it ‘on the entire evidence is
left with the firm and definite conviction that a mistake has been committed.’” Ocelot Oil
Corp. v. Sparrow Indus., 847 F.2d 1458, 1464 (10th Cir. 1988) (quotation omitted).
Under this standard, the magistrate judge’s findings should not be rejected merely
because the court would have decided the matter differently. Sedillos v. Bd. of
Education of School Dist. No. 1, No. 03CV01626, 2005 WL 2086008, at *33 (D. Colo.
2005) (citing Anderson v. City of Bessmer, 470 U.S. 564, 573 (1985)).
As support for its objection, UnitedHealth asserts that the Complaint alleges
infringement of a single mark, “HealthONE,” by a single UnitedHealth mark,
“UnitedHealthOne” which is used in connection with hospitals and outpatient care
facilities located exclusively in Colorado. The “UnitedHealthOne” mark is not, according
to UnitedHealth, used to identify hospitals and outpatient clinics, and “HealthONE” is not
used to sell insurance.
UnitedHealth argues that the central issue in the case is whether consumers are
likely to confuse UnitedHealth’s “UnitedHealthOne” trademark with the Plaintiffs’
“HealthONE” mark, and it is this issue that must frame the scope of discovery. It further
argues that Plaintiffs’ discovery goes far afield from this scope, as they seek discovery
into the activities of certain UnitedHealth subsidiaries, primarily UnitedHealth’s “Optum”-2-
branded businesses, that do not sell any products and services under the
“UnitedHealthOne” mark or anything remotely close to it. Discovery as to these
businesses [hereinafter referred to as “the Optum discovery”] is thus argued not to be
relevant to the issue of competition because there is no similarity between the marks
used by the Optum businesses and Plaintiff’s mark, even though certain marketing
materials sometimes contain both the terms “Optum” and “UnitedHealthOne”. In other
words, UnitedHealth argues that absent a similarity between the marks which Plaintiffs
have not shown, the fact that the services compete is irrelevant in the context of a
trademark claim.
UnitedHealth thus asserts that the Magistrate Judge’s ruling was clearly
erroneous as it allowed discovery regarding UnitedHealth subsidiaries and third-party
businesses whose operations are not relevant to the claims pleaded by Plaintiffs. It
further asserts that Plaintiffs should be prohibited from pursuing this irrelevant,
harassing and competitively sensitive discovery, and from using their mark to assert
some exclusive right to provide patient services irrespective of the use of any mark
accused of infringement. Moreover, to the extent that the discovery has any relevance,
UnitedHealth asserts that it is easily outweighed by the burden involved in collecting and
producing the required information.
In response, Plaintiffs state that they are not attempting to assert any type of
trademark claim against the Optum businesses. Instead, UnitedHealth has steadfastly
argued throughout this dispute that it is a health insurance company and not a provider
of direct patient care like HealthONE. Plaintiffs assert that they learned during the
pendency of this case that UnitedHealth is not merely an insurance company but is now
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providing patient care through certain businesses branded under the name “Optum.”
Plaintiffs argue that this development became critical to their claims when they learned
that UnitedHealth jointly markets the Optum businesses with its UnitedHealthOne
products and services, deliberately presenting an intertwined package of products and
services to its customers.
It is contended by Plaintiffs that the extent to which UnitedHealth provides patient
care is directly relevant and necessary to HealthONE’s trademark infringement claim
because the similarity of the parties’ products and services is one of the six enumerated
factors used to analyze likelihood of confusion between a registered trademark and an
infringing mark. In other words, it is argued that the Optum discovery is relevant for two
reasons—to determine the extent to which HealthONE and UnitedHealth’s products and
services are related, and to rebut UnitedHealth’s argument that it is just a health
insurance company and not in a field related to that of Plaintiffs.
Plaintiffs further assert that Magistrate Judge Boland agreed with the above
analysis when he denied UnitedHealth’s Motion for Entry of a Protective Order and
rejected many of the same arguments it now presents to this Court. He specifically
found that HealthONE’s narrow discovery requests regarding Optum are reasonably
calculated to lead to the discovery of admissible evidence and that they are not overly
burdensome to United. Plaintiffs contends that this ruling is not clearly erroneous or
contrary to law, and that UnitedHealth’s Objection should be overruled.
I agree with Plaintiffs that UnitedHealth’s Objection should be overruled, as I find
that it has not shown that Magistrate Judge Boland’s ruling was clearly erroneous or
contrary to law. First, I find no error with the Magistrate Judge’s ruling that the Optum
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discovery sought by Plaintiffs is relevant. Fed. R. Civ. P. 26(b)(1) relating to discovery
“has been construed broadly to encompass any matter that bears on, or could
reasonably could lead to another matter that could bear on, any issue that is or may be
in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978).
Magistrate Judge Boland found that the Optum discovery is relevant to Plaintiffs’
trademark infringement claim on the likelihood of confusion issue because Plaintiffs
presented evidence that UnitedHealth may be moving into or is in the business of health
care through its Optum lines of businesses, and is jointly marketing and intertwining the
UnitedHealth name and mark with the OptumHealth name. (Hearing Transcript of
September 22, 2011 Motions Hearing [“Hearing Transcript”] at 21-22, ECF No. 115.) I
agree with Magistrate Judge Boland that since UnitedHealth has argued that there is no
likelihood of confusion in this case because it is an insurance provider and HealthOne is
a health care services provider, evidence that UnitedHealth acquired physicians and
medical practices across the county that directly provide care to patients is relevant to
refute that argument. The fact that UnitedHealth may, through subsidiaries, now be
providing patient care services means that the parties’ products and services would be
directly related. The products only need to be “related” in order to prove trademark
infringement, the parties’ products and services do not need to be directly competitive.
Team Tires Plus Ltd. v. Tires Plus Ltd., 394 F.3d 831, 834-35 (10th Cir. 2005). Based
on the foregoing, I certainly cannot find that Magistrate Judge Boland’s ruling on
relevance is clearly erroneous or contrary to law.
While UnitedHealth argues that the discovery is not relevant because the
HealthOne and OptumHealth marks are not even remotely similar, that is not the issue.
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Plaintiffs are not suing the Optum businesses for trademark infringement and the Optum
discovery is not sought for that purpose. Instead, I agree with Magistrate Judge Boland
that the services offered by UnitedHealth under the Optum lines of business, which he
found were jointly marketed by UnitedHealth and Optum with an intertwining of its
brands are relevant to establish that consumers will associate United’s patient care
services with its insurance services. This renders UnitedHealth’s products and services
more similar to HealthONE’s.1
I further find that UnitedHealth has not shown that Magistrate Judge Boland’s
rejection of its argument that the discovery is overly broad is clearly erroneous or
contrary to law. As Magistrate Judge Boland explained in his oral ruling at the
September 22, 2011 hearing, Plaintiffs’ inquiries regarding Optum relate only to two
narrow issues: (1) whether UnitedHealth provides direct patient care services to
patients, in response to UnitedHealth’s defense that it is an insurance company; and (2)
the likelihood that consumers may associate the services provided by UnitedHealthOne
with those provided by Optum due to United’s joint marketing of those brands. (Hearing
Transcript at 22-23.) I also agree with Plaintiffs’ argument that UnitedHealth did not
meet its burden of demonstrating “good cause” why HealthONE’s deposition notice and
1
Plaintiffs assert that so far, UnitedHealth has produced more than 500 pages of marketing
materials for UnitedHealthOne consumers that also promote Optum services or products. Magistrate
Judge Boland emphasized the potential confusion of the joint marketing and specifically rejected
UnitedHealth’s argument that the joint marketing materials referenced Optum the same as any other third
party. Magistrate Judge Boland stated to UnitedHealth, “I heard you just say that OptumHealth doesn’t
practice at all under the [UnitedHealthOne] mark, but [the advertisement at] Exhibit D is exactly that.
You’ve got OptumHealth, an ad for OptumHealth, and above it is the UnitedHealthOne mark, which is the
mark that’s in dispute here.” (Hearing Transcript at 6.) Magistrate Judge Boland rejected United’s
argument that it was not intertwining the UnitedHealthOne and Optum marks to its advantage, finding that
the joint advertising of the Optum and UnitedHealthOne products and services “could cause confusion.”
(Id. at 22.)
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written discovery requests are so inappropriate or oppressive as to require entry of a
protective order. Instead, it is simply rehashing arguments presented to, and properly
rejected by, Magistrate Judge Boland. Again, at the very least, I find that Magistrate
Judge Boland’s ruling on this issue was not clearly appropriate or contrary to law.
To the extent UnitedHealth argues that Plaintiffs have not provided any authority
for their assertion that the Optum discovery is relevant, I note that the converse is also
true. UnitedHealth has not provided any authority which shows that the discovery
sought is not relevant or not subject to production. Given the broad scope of discovery
as well as the fact that it is UnitedHealth’s burden to show that the ruling of Magistrate
Judge Boland is clearly erroneous or contrary to law, I reject that argument as a basis to
sustain UnitedHealth’s objection. Further, to the extent UnitedHealth argues that
Plaintiffs misrepresented when they found out about its non-insurance business, I do
not find that is a basis to deny the Optum discovery as this discovery was sought before
the discovery cut-off period. In other words, as noted by Magistrate Judge Boland, the
discovery is timely, regardless of when Plaintiffs learned about this issue. (Hearing
Transcript at 17.)
Moreover, I agree with Plaintiffs that although UnitedHealth continues to claim
that HealthONE’s discovery requests are too burdensome, Magistrate Judge Boland
expressly disagreed and UnitedHealth has not presented any new supporting evidence
in its Objection. Again, I find that Magistrate Judge Boland’s findings on this issue are
not clearly erroneous or contrary to law. Finally, to the extent UnitedHealth complains
about the sensitive nature of the material sought, the court-ordered Protective Order in
place in this case (ECF No. 46) prohibits both parties from using discovery outside of
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this litigation and UnitedHealth has not shown that this is inadequate to protect it in
connection with such material.
Based upon the foregoing, it is
ORDERED that Defendant’s Objection to Magistrate Judge’s Denial of Its Motion
for Protective Order filed October 13, 2011. (ECF No 116) is OVERRULED, and the
September 22, 2011 Order of Magistrate Judge Boland (ECF No. 109) is AFFIRMED. It
is
FURTHER ORDERED that Defendant’s Motion to the District Judge for Stay of
Plaintiffs’ Optum-Related Discovery Pending Appeal to the District Judge (ECF No.141)
is DENIED AS MOOT.
Dated: December 21, 2011
BY THE COURT:
s/ Wiley Y. Daniel
Wiley Y. Daniel
Chief United States District Judge
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