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

Filing 633

MEMORANDUM DECISION AND ORDER. NOW THEREFORE IT IS HEREBY ORDERED, that the motion to compel 624 is GRANTED. The defendants shall answer the interrogatories and requests for production within 7 days from the date of this Order, and shall make av ailable the person or persons necessary to comply with the Rule 30(b)(6) deposition notice within 21 days from the date of this Order. IT IS FURTHER ORDERED, that the motion for special master 623 is DENIED. 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 (Lead
SAINT ALPHONSUS HEALTH SYSTEM,
Case)
INC., AND SAINT ALPHONSUS
REGIONAL MEDICAL CENTER, INC.
MEMORANDUM DECISION AND
ORDER
Plaintiffs,
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.

INTRODUCTION
The Court has before it a motion to compel discovery filed by plaintiffs and a
motion to appoint a special master filed by defendants. The motions are fully briefed and
at issue. For the reasons explained below, the Court will grant the motion to compel and
deny the motion for a special master.
Memorandum Decision & Order – page 1

ANALYSIS
Motion to Compel
The plaintiffs have filed discovery requests on defendants to inquire into
defendants’ divestiture plan. Having received no answers, the plaintiffs filed the motion
to compel now before the Court.
When the plaintiffs filed their motion to compel, the defendants had not yet filed a
divestiture plan, but have since done so. Among other provisions, the plan proposes to
have the Court determine if St. Luke’s will be allowed (1) to retain some of Saltzer’s
physicians and staff, and (2) to take over operation of some lines of service that Saltzer
no longer desires to maintain. Obviously, defendants are contemplating something other
than a full divestiture, and plaintiffs object.
To justify their proposals, the defendants point out that after “serious discussions
with three separate potential buyers” for Saltzer were unsuccessful, Saltzer physicians
made an “independent” decision “for personal and professional reasons . . . to take back
certain assets that are not needed to practice medicine as they have determined to do.”
See Defendants’ Briefs (Dkt. No. 623) at p. 1 & (Dkt. No. 628) at p. 2. This defendants
offer this justification to explain their proposed divestiture plan.
But when plaintiffs seek to test this justification in discovery, defendants balk,
claiming the discovery is irrelevant and burdensome. The Court disagrees. The
defendants made inquiry into their justification relevant by offering it to explain their
proposed plan. Moreover, the expense of collecting the financial data requested by
plaintiffs is reduced because much of it is already on hand, having been collected by
Memorandum Decision & Order – page 2

Saltzer during preparation of its plan for future operation. See Letter From Saltzer
Counsel (Dkt. No. 624-7) at p. 1.
The defendants complain of the burden of preparing privilege logs. A protective
order is warranted if preparing privilege logs would result in an “unreasonable burden.”
See Advisory Committee Notes to 1993 Amendments to Rule 26(b). But privilege logs are
a common part of discovery, and defendants provide no specific data to back up their
claim that the burden of providing a log would be “unreasonable.” See Gulf Oil Co. v.
Bernard, 452 U.S. 89, 102 n. 16 (1981) (holding that to obtain a protective order “courts
have insisted on a particular and specific demonstration of fact, as distinguished from . . .
conclusory statements”).
Defendants counter that the discovery must be shielded from the private plaintiffs.
But the Court’s long experience with AEO in this case has convinced it that discovery so
designated will be kept confidential. Thus, the Court cannot find that confidentiality
concerns warrant excluding the private plaintiffs from the discovery.
For all of these reasons, the Court will grant the motion to compel, and will order
the expedited discovery sought by the plaintiffs.
Motion for a Special Master
Defendants ask the Court to appoint a special master “because what may have
seemed like a simple, straightforward process at the time that divestiture was ordered, has
proven not to be so.” See Defendants’ Brief (Dkt. No. 623) at p. 2. At the very beginning
of this litigation, defendants represented to the Court that if the merger was allowed to
proceed, the Court could take “some comfort” in their promise that “if the transaction is
Memorandum Decision & Order – page 3

unlawful, we will not oppose the divestiture” because “[h]ere it would be quite possible
to unscramble this egg.” See Transcript (Dkt. No. 49) at pp. 87-88. In refusing to enjoin
the transaction at the beginning of this litigation, the Court relied on this promise in
finding that “the Court will have no difficulty in ordering an immediate and complete
divestiture if that is the result compelled at trial.” See Memorandum Decision (Dkt. No.
47) at p. 8.
Because that key promise was made to – and relied upon by – this Court, the
divestiture issues should be resolved by this Court. The motion for a special master will
be denied.
ORDER
In accord with the Memorandum Decision set forth above,
NOW THEREFORE IT IS HEREBY ORDERED, that the motion to compel
(docket no. 624) is GRANTED. The defendants shall answer the interrogatories and
requests for production within seven (7) days from the date of this Order, and shall make
available the person or persons necessary to comply with the Rule 30(b)(6) deposition
notice within twenty-one (21) days from the date of this Order.
IT IS FURTHER ORDERED, that the motion for special master (docket no. 623)
is DENIED.

Memorandum Decision & Order – page 4

DATED: July 13, 2015

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

Memorandum Decision & Order – page 5