GIBSON v. INTERNATIONAL BUSINESS MACHINES CORPORATION
Filing
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ORDER denying 78 Motion to Stay. See Order. Signed by Magistrate Judge Debra McVicker Lynch on 9/22/2011. (LH)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
MELISSA GIBSON,
Plaintiff,
v.
INTERNATIONAL BUSINESS MACHINES
CORPORATION,
Defendant.
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CASE NO. 1:10-cv-00330-LJM-DML
Order on Defendant’s Motion to Stay Discovery
Defendant International Business Machines Corporation (“IBM”) has moved (Dkt. 78)
the court to stay merits discovery in this case because of a ruling governing discovery in another
case. In that other case—brought as a class action—the court has bifurcated class certification
and pure merits discovery pending the ruling on the plaintiffs’ motion for class certification.
See Bowman et al. v. IBM et al., Case No. 1:11-cv-0593 RLY-TAB (“Bowman”). The Bowman
plaintiffs claim IBM mishandled the administration of Indiana Medicaid benefits in ways similar,
although not identical, to the complaints by the plaintiffs in this case. The plaintiffs in this
case—Melissa Gibson, individually, and as next friend for her daughter Brittany Anderson
(“Brittany”)—are represented by the same counsel who represents the putative class in Bowman.
In addition, Mrs. Gibson is a named plaintiff in Bowman, solely in a representative capacity as
next friend of another of her daughters, Courtney Anderson, who is Brittany’s sister.
IBM’s sole ground for its request for a stay of discovery in this case is its concern that
counsel for Mrs. Gibson and Brittany will use this case improperly to gather discovery
appropriate only in the Bowman case and thus do an end-run around the court’s discovery
bifurcation order in Bowman.
The court finds that IBM has not shown good cause for a general stay of discovery in this
case, and its motion is therefore DENIED.
Factual Background for the Two Cases
Brittany Anderson’s Claims in this Case and Procedural History
Brittany and her mother filed this suit on February 26, 2010, in Marion Superior Court.
IBM removed it to this court on March 19, 2010. The plaintiffs allege that IBM mishandled
Brittany Anderson’s applications for Medicaid benefits and appeals of denials of benefits and
repeatedly misinformed Brittany’s mother (Mrs. Gibson) about the applications and appeals.
Brittany’s benefits were terminated on March 1, 2008, and were not reinstated until October
2009. Brittany claims that her benefits unlawfully were terminated when she turned 19 even
though she should have continued to receive benefits while she attempted to appeal the
termination, and even though she would have continued to qualify for Medicaid benefits as an
adult. She asserts that IBM’s conduct caused the alleged unlawful termination of her benefits,
and that IBM is liable to her under 42 U.S.C. § 1983 and under a state law negligence theory.
Brittany claims that, deprived of Medicaid benefits between March 2008 and October 2009, she
suffered an overall decline in her health, suffered from traumatic health events, sustained severe
and permanent personal injuries, incurred medical expenses she could not pay, and lost
educational opportunities. She seeks compensatory and punitive damages and attorneys’ fees.
On November 30, 2010, the court approved the parties’ proposed case management plan
and entered it as an order of the court. (Dkt. 38). That plan reflects the parties’ agreement to the
typical, ordinary provisions governing discovery deadlines included in this court’s uniform case
management plan. (See Dkt. 36). Later, on August 8, 2011, the parties submitted a joint
proposed amended case management plan and it too reflects their agreement to the typical,
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ordinary provisions setting discovery deadlines, including a deadline of March 30, 2012, for nonexpert witness discovery and July 16, 2012, for expert witness discovery. (Dkt. 76).1 Two
weeks later, IBM filed the present motion to stay merits discovery pending the class certification
ruling in the Bowman case and, if a class is certified, Brittany’s decision to opt out of the
Bowman class.
The Bowman Case and Its Procedural History
The Bowman case was filed in Marion Superior Court on April 1, 2011, more than a year
after this case, and was removed to this court on May 4, 2011. It seeks damages on behalf of a
putative class of thousands of Medicaid beneficiaries who the plaintiffs claim suffered unlawful
terminations of benefits because of policies or procedures implemented by IBM and the other
defendants while they—under contracts with the state of Indiana and among themselves—
administered portions of Indiana’s Medicaid program. The Bowman plaintiffs’ claims are
brought under 42 U.S.C. § 1983, state law negligence theory, and breach of contract. The
Bowman plaintiffs allege that (a) their due process rights were violated when their benefits were
terminated despite a timely request for an appeal from a decision to terminate benefits and (b)
when a Medicaid beneficiary became ineligible for the category of benefits he or she was
receiving, the defendants wrongfully terminated those benefits before investigating and
developing the evidence regarding the beneficiary’s eligibility for benefits under another
category.
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The court also notes that IBM agreed to this schedule after Magistrate Judge Baker had
issued his order in Bowman bifurcating class discovery and merits discovery. See Bowman Dkt.
59 (August 3, 2011).
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Analysis
Rule 26(c) allows the court, for good cause shown, to specify terms for discovery to
protect a party from “annoyance, embarrassment, oppression, or undue burden or expense. . . .”
See also Semien v. Life Ins. Co. of North America, 436 F.3d 805, 813 (7th Cir. 2006) (internal
citations omitted) (“‘well-settled that district courts enjoy broad discretion in controlling
discovery’”).
IBM has not met its burden of showing good cause for staying discovery. It does not
identify any specific discovery requests in this case that impose an undue burden or expense,
taking into account the discovery needs for this case, the amount in controversy, the importance
of the discovery to the issues in the case, or any other factor that would demonstrate to the court
that the burden of responding to any specific requests outweighs the likely benefit of the
discovery. See Rule 26(b)(2)(C). IBM has shown only that some of the same discovery
pertinent to the merits of Brittany’s claims also has been requested in the Bowman case and is
subject to the Bowman bifurcation order. That some discovery in the two cases may overlap
does not render Brittany’s discovery of her individual claims inappropriate or violative of the
Bowman order. Contrary to IBM’s characterization, it is not “heinous” for Brittany to seek and
obtain discovery relevant to her claims (and consistent with the Rule 26(b)(2)(C) factors).2
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The cases cited by IBM in support of its request for a stay to prevent an end-run around
the Bowman bifurcation order are readily distinguishable and thus not persuasive. Vagle v.
Spectranetics Corp., 2010 WL 3927813 (D. Colo. Oct. 6, 2010), involved federal securities fraud
claims that would be subject to the PSLRA’s Congressionally-imposed discovery stay upon the
filing of a dismissal motion (that defendants intended to file) and plaintiffs who had tried three
times to gain lead plaintiff status in the class case in which the court had enjoined all
prosecution, including discovery, pending settlement approval proceedings. The Vagle court
separately was determining whether the class action injunction was applicable to the plaintiffs
and decided that comity considerations counseled in favor of a temporary stay while the separate
motion to enforce the injunction was adjudicated. 2010 WL 3927813 at *2. All of these factors
convinced the court that a stay was appropriate. In re Ocwen Federal Bank FSB Mortgage
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This case is about one Medicaid beneficiary. The parties have not quantified the
potential monetary recovery at issue or discussed the discovery that reasonably may be
appropriate given the monetary stakes at issue and the legal issues in the case. The court is
equipped to address any real or perceived abuses of the discovery process by Brittany, including
imposing constraints where the burden or expense of requested discovery outweighs its likely
benefit to this case, or where it appears the discovery has been formulated primarily to
accomplish an end-run around Judge Baker’s order in Bowman. And in that regard, the court
notes that counsel have a significant number to issues to develop relating solely to Brittany’s
individual claims—how IBM processed her file, the alleged impact on her health, her alleged
resultant medical expenses, and other diminutions in the quality of her life. Thus, the court
encourages counsel to first direct their attention to these matters and cautions them that this court
stands ready to curb blatant attempts to evade the Bowman order.
Two other arguments by IBM merit comment. First, IBM has characterized the issue
presented by its motion as one of deference to Judge Baker’s bifurcation order. That is not
correct; nothing in Judge Baker’s order purports to address this case or any discovery relevant to
Brittany’s individual claims. And, as emphasized in this order, should particular discovery
requests served in this case stray from matters germane to Brittany’s claims or if they are
formulated to evade the Bowman bifurcation order, this court will address that question if and
when it arises.
Servicing Litigation, 397 F. Supp. 2d 957 (N.D. Ill. 2005), involved a court’s enjoining the
pursuit of cases in other forums that were similar to the class action claims it was adjudicating in
the context of multidistrict litigation, an order that likely would not survive the Supreme Court’s
decision last term in Smith v. Bayer Corp., 131 S. Ct. 2368 (2011).
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Second, IBM has attempted to convince the court that permitting merits discovery in this
case will create inefficiencies and duplication. That argument is overstated. IBM acknowledges
that under the Bowman bifurcation order, discovery that is pertinent to both certification issues
and merits issues will proceed in the first phase. Because the Bowman plaintiffs seek class
certification under Fed. R. Civ. P. 23(b)(3) and must therefore satisfy the predominance
requirement, there may be some significant overlaps between certification and merits discovery
in Bowman. For that reason, it is possible that discovery Brittany will seek in this case will be
appropriate phase I discovery in Bowman anyway. In addition, just as Judge Baker concluded
that dual purpose discovery should occur in phase I of Bowman, discovery in this case that serves
the dual purposes of addressing the merits of Brittany’s claims in this case as well as the
certification or merits issues in Bowman should likewise not be delayed.
Tying the timing of merits discovery available to Brittany to the stay imposed in Bowman
would require a change to the case management plan that was only recently agreed to by the
parties and approved by the court. Moreover, this case was filed in February 2010—over a year
before Bowman—and is brought by a disabled individual for whom, if she prevails on her
claims, a timely remedy is potentially critical. Her counsel represents that even if a class is
certified in Bowman, Brittany will opt out—and the court has no basis for doubting Brittany’s
intent, given the severity of the personal injuries she claims to have suffered.
Brittany is entitled to have her case treated individually and to have it move forward.
IBM must address any perceived discovery abuses or problems on an individual basis as well.
Conclusion
For the foregoing reasons, the court DENIES IBM’s motion (Dkt. 78) for a partial stay of
discovery.
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So ORDERED.
09/22/2011
Date: __________________
____________________________________
Debra McVicker Lynch
United States Magistrate Judge
Southern District of Indiana
Distribution:
Daniel K. Burke
HOOVER HULL LLP
dburke@hooverhull.com
Aaron D. Charfoos
KIRKLAND & ELLIS LLP
aaron.charfoos@kirkland.com
Wendy Netter Epstein
KIRKLAND & ELLIS LLP
300 North LaSalle
Chicago, IL 60654
Jason L. Fulk
HOOVER HULL LLP
jfulk@hooverhull.com
Zachary D. Holmstead
KIRKLAND & ELLIS
300 North LaSalle Street
Chicago, IL 60654
Anna May Howard
SEVERNS & STINSON LAW FIRM
amh@severns.com
Andrew W. Hull
HOOVER HULL LLP
awhull@hooverhull.com
Laurie E. Martin
HOOVER HULL LLP
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lmartin@hooverhull.com
Steven D. McCormick
KIRLAND & ELLIS LLP
smccormick@kirkland.com
Scott Richard Severns
SEVERNS & ASSOCIATES
sseverns@severns.com
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Anne M. Sidrys
KIRKLAND & ELLIS LLP
300 North LaSalle Street
Chicago, IL 60654
Richard A. Waples
WAPLES & HANGER
rwaples@wapleshanger.com
Diana M. Watral
KIRKLAND & ELLIS LLP
diana.watral@kirkland.com
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