Saint Alphonsus Medical Center - Nampa et al v St Luke's Health System Ltd

Filing 217

MEMORANDUM DECISION AND ORDER RE ADDITIONAL AEO DESIGNATIONS. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
IN THE DISTRICT OF IDAHO
SAINT ALPHONSUS MEDICAL CENTER NAMPA, INC., TREASURE VALLEY
HOSPITAL LIMITED PARTNERSHIP,
Case No. 1:12-CV-00560-BLW
SAINT ALPHONSUS HEALTH SYSTEM,
(Lead Case)
INC., AND SAINT ALPHONSUS
REGIONAL MEDICAL CENTER, INC.
MEMORANDUM DECISION AND
ORDER RE ADDITIONAL AEO
Plaintiffs,
DESIGNATIONS
v.
ST. LUKE’S HEALTH SYSTEM, LTD.
Defendant.
FEDERAL TRADE COMMISSION; STATE
OF IDAHO

Case No. 1:13-CV-00116-BLW

Plaintiffs,
v.
ST. LUKE’S HEALTH SYSTEM, LTD.;
SALTZER MEDICAL GROUP, P.A.
Defendants.

MEMORANDUM DECISION
In the Court’s Pretrial Order, the Court approved three categories of documents
and testimony to be designated as Attorney Eyes Only (AEO), and reserved an issue
concerning two additional categories proposed by the parties. This decision will resolve
that reserved issue.

Memorandum Decision & Order -- 1

Before addressing the specific disputes, the Court will review the scope and
consequences of an AEO designation. When AEO material is being discussed at trial, the
proceedings will be closed to the public. Because of the presumption against closing trial
proceedings, as discussed in the Pretrial Order, the AEO designation must be narrow and
necessary to achieve a compelling objective. Consequently, the AEO designation is
reserved for highly sensitive trade secrets, the disclosure of which would result in
demonstrable harm to one of the parties, or to a third party.
With that standard in mind, the Court turns to the first dispute. St Luke’s proposes
to designate as AEO the following:
Current (within the last four years) contracts with physicians or facilities
and the terms of recent (within the last four years) physician practice or
facility acquisitions or affiliations.
This definition would include, for example, the salary St. Luke’s pays its affiliated
physicians. It would also include the prices paid by St Luke’s when acquiring the
practices of physicians.
The plaintiffs claim that this definition is overbroad and would sweep much of the
case within the AEO designation. Plaintiffs suggest a narrower definition that would
protect the most sensitive items: (1) the acquisition-related compensation agreements,
and (2) the physician contracts themselves.
The problem with the plaintiffs’ suggestion is that it would make publically
available the terms of recent acquisitions, other than the compensation agreements. The
disclosure of these terms could cause demonstrable harm. For example, public
knowledge of St Luke’s acquisition terms might give competitors an advantage in a
Memorandum Decision & Order -- 2

future bidding war over other practices. For these reasons, the Court will approve St
Luke’s definition of AEO set out above.
The second dispute concerns plaintiffs’ proposed AEO category: “Documents and
testimony discussing specific patient care issues.” Plaintiffs explain their proposal as
follows: “This language was designed to address certain specific documents (not the
general quality evidence issues that are appropriately part of the case in light of St.
Luke’s alleged “quality” defense), which St. Luke’s has inappropriately included in its
exhibit list, see Attachment B.” The documents listed in Exhibit B are defendants’ Trial
Exhibit Nos. 2032, 2033, 2034, 2035, and 2045.
After reviewing those documents, the Court finds that providing them to the public
may cause demonstrable harm to plaintiff St. Al’s. Because plaintiffs’ definition is
designed to apply only to these documents, and because the consequence of designating
this material as AEO is the closure of the courtroom when this material is discussed, the
Court will narrow the definition to include only these five specific exhibits.
The Court has also decided not to seal this decision. The AEO material was not
discussed with any specificity and the public deserves to know generally what is being
designated as AEO.
The Court will set forth below, in the Order section of this decision, all five of the
categories of documents and testimony that are designed as AEO – the three categories
discussed in the Pretrial Order and the two categories discussed here.
ORDER
In accordance with the Memorandum Decision set forth above,
Memorandum Decision & Order -- 3

NOW THEREFORE IT IS HEREBY ORDERED, that the following categories of
documents – and any testimony concerning the documents or subject matter of these
designations – shall be designated as Attorney Eyes Only (AEO):
1. Current (within the last four years) documents referring to prices, costs,
reimbursement rates, wages, compensation, budgets, projections or other financial
information, not including documents that have been made public.
2. Current (within the last four years) documents discussing or referring to planning.
3. Current (within the last four years) documents referring to or discussing payor,
employer, provider or network negotiations, negotiation strengths or weaknesses,
bargaining power, or negotiation strategies or methodologies.
4. Current (within the last four years) contracts with physicians or facilities and the
terms of recent (within the last four years) physician practice or facility
acquisitions or affiliations.
5. Defendants’ Trial Exhibit Nos. 2032, 2033, 2034, 2035, and 2045.

DATED: September 18, 2013

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

Memorandum Decision & Order -- 4