PAIN CENTER OF SE INDIANA, LLC et al v. ORIGIN HEALTHCARE SOLUTIONS LLC et al

Filing 216

ORDER OVERRULING Plaintiffs' 146 Appeal of/Objection to Magistrate Judge Decision 134 to District Court. Signed by Judge Richard L. Young on 3/12/2015. (TMD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

PAIN CENTER OF SE INDIANA, LLC;
INDIANA PAIN MEDICINE AND
REHABILITATION CENTER, P.C.; and
ANTHONY ALEXANDER, M.D.,

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

Plaintiffs,
vs.
ORIGIN HEALTHCARE SOLUTIONS
LLC,
SSIMED (d/b/a SSIMED Holding, LLC);
ORIGIN HOLDINGS, INC., a Delaware
Corporation; JOHN DOES (1–50)
inclusive; and JOHN DOES (1–100)
inclusive,
Defendants.

1:13-cv-00133-RLY-DKL

ENTRY ON PLAINTIFFS’ OBJECTION TO MAGISTRATE JUDGE LARUE’S
OCTOBER 17, 2014 ENTRY
Plaintiffs, the Pain Center of SE Indiana, LLC, the Indiana Pain Medicine and
Rehabilitation Center, P.C., and Anthony Alexander, M.D., object to the Magistrate
Judge’s October 17, 2014 Entry (Filing No. 134) denying Plaintiffs’ Motion for Sanctions
against Defendants, SSIMED, d/b/a SSIMED Holding, LLC, Origin Healthcare
Solutions, LLC, and Origin Holdings, Inc. For the reasons set forth below, the court
OVERRULES Plaintiffs’ Objection and AFFIRMS the Magistrate Judge’s ruling.
Plaintiffs’ Motion for Sanctions arose from the parties’ prolonged dispute
regarding certain requests for production, which the parties describe as “alter ego”
1

discovery. The parties have quarreled over the discoverability of such requests for some
time. The court therefore refers the reader to prior entries for more detailed accounts of
the procedural background of this case. (See, e.g., Filing No. 154; Filing No. 158).
Plaintiffs argued that Defendants purposefully and in bad faith obstructed
Plaintiffs’ efforts to conduct discovery. The dispute boiled over when, on August 28,
2014, Defendants filed a belated Objection (Filing No. 112) to the Magistrate Judge’s
July 25, 2014 Entry (Filing No. 107). (See Filing No. 154 at 6). The July 25 Entry
ordered Defendants to respond to alter ego requests but did not specify a deadline for
production. On August 22, the Magistrate Judge ordered Defendants to comply with the
July 25 Entry by August 28, the day Defendants filed their Objection. Plaintiffs filed the
Motion for Sanctions (Filing No. 116) approximately one week later and months before
the court ruled on Defendants’ Objection. In its ruling, the court observed Defendants’
noncompliance with Rule 72’s fourteen-day deadline but ultimately overruled the
Objection on substantive grounds. (Filing No. 154 at 5–6). Notably, the court made no
finding as to whether Defendants acted in bad faith or whether their late Objection
prejudiced Plaintiffs. (See id.).
Before the Magistrate Judge, Plaintiffs requested sanctions for Defendants’ alleged
“willful and repeated failure to comply with discovery orders.” (Filing No. 116 at 6).
They colorfully described Defendants’ conduct as “sandbagging” and “playing by their
own discovery rules” and “hiding behind the guise of an [objection].” (Id.). Plaintiffs
then concluded that Defendants’ conduct “robbed Plaintiffs of time, resources, and
documents [they] should have long since had . . . .” (Id.).
2

Denying Plaintiffs’ Motion, the Magistrate Judge concluded that “[t]here is no
indication in Plaintiffs’ recitation of the facts that Defendants failed to meet response
deadlines in bad faith or as part of a campaign of obstruction and delay.” (Filing No. 134
at 2). The only disputable failure to obey a discovery order occurred on August 28, when
Defendants filed their Objection rather than produce documents in accordance with the
July 25 and August 22 entries. On this point, the Magistrate Judge simply disagreed with
Plaintiffs’ description of events. Having worked closely with the parties throughout the
discovery process, she found no bad faith or intentional obstructionism. 1 (See Filing No.
134 at 4–5). Moreover, she noted that because the issue of timeliness—and therefore
potentially sanctionable conduct—was before the court on Defendants’ Objection,
Plaintiffs’ Motion for Sanctions was premature. (Id. at 4). Accordingly, and quite
sensibly, the Magistrate Judge denied the Motion.
Federal Rule of Civil Procedure 37(b)(2)(A) authorizes the court to sanction
parties who fail to obey discovery orders. Because the Magistrate Judge has a firsthand
perspective on the parties’ conduct during the discovery process, she enjoys especially
broad discretion when deciding whether to impose Rule 37 sanctions. See Shine v.
Owens-Illinois, Inc., 979 F.2d 93, 96 (7th Cir. 1992) (citations omitted); Fed. R. Civ. P.
37(b)(2)(A) (“If a party . . . fails to obey an order to provide or permit discovery, . . . the

1

The Magistrate Judge appeared to accept that the lack of a production deadline in
the July 25 Entry created some ambiguity. Although the court determined that
Defendants’ filed an untimely objection, (See Filing No. 154 at 6), this fact did not
preclude the Magistrate Judge from finding sanctions to be unwarranted.
3

court . . . may issue further just orders.” (emphasis added)). The district court reviews the
non-dispositive discovery decisions of a magistrate judge for clear error. Domanus v.
Lewicki, 742 F.3d 290, 295 (7th Cir. 2014) (citation omitted); Fed. R. Civ. P. 72(a). In
other words, the court will not upset a magistrate judge’s decision unless it runs contrary
to law or leaves the court with a definite and firm conviction that the magistrate judge
made a mistake. Weeks v. Samsung Heavy Indus. Co., 126 F.3d 926, 943 (7th Cir. 1997).
Plaintiffs do not attempt to show that the Magistrate Judge’s decision runs
contrary to law. 2 Instead, Plaintiffs assert that she committed clear error. Their
Objection boils down to one complaint: the Magistrate Judge based her decision on issues
not mentioned in Defendants’ responsive brief. (See Filing No. 146 at 4–7). For
example, Plaintiffs protest the Magistrate Judge’s reference to Defendants’ two
unopposed motions for extensions to respond to requests for production, which soften
Plaintiffs’ claim to have endured “a nearly 1.5 year period of delay.” (Id. at 4–5). They
also object to her stated skepticism of any claimed prejudice that Defendants caused with
respect to the September 15 deposition, given that the parties had already agreed to
reserve the alter ego topics for a subsequent deposition. Plaintiffs argue that the
Magistrate Judge clearly erred because she based her decision on issues that she raised on
Defendants’ behalf. 3

2

Aside from the court’s standard of review, Plaintiffs’ brief contains not a single
legal citation.
3

With respect to the September 15, Rule 30(b)(6) deposition, Plaintiffs also argue
that the Magistrate Judge did not adequately weigh the fact that alter ego discovery is
relevant to all of Plaintiffs’ claims, not just veil piercing. First, this wholly fails to
4

The court reads the decision differently. The Magistrate Judge did not buttress her
decision with arguments not raised by the parties; rather, she highlighted superfluous
reasons why she would not, in her discretion, grant Plaintiffs’ Motion. In the first
instance, Plaintiffs bore the burden of showing that Defendants’ conduct warranted Rule
37 sanctions. They cited Defendants’ failure to respond to the discovery requests by
August 28 as the sanctionable offense. Defendants then responded that their Objection,
filed in lieu of producing documents, constituted a valid and timely appeal of the
Magistrate Judge’s July 25 Entry. The Magistrate Judge, exercising her broad discretion,
cited Plaintiffs’ own recitation of the facts and concluded that sanctions were not
warranted. (See, e.g., Filing No. 116 at 2, 4 (stating that Plaintiffs did not oppose
Defendants’ first two requests for extensions to file responses to the requests for
production; noting that the July 25 Entry did not contain a production deadline); Filing
No. 134 at 3, 4–5 (citing the same)). Plaintiffs, the moving party, cannot now complain
that the Magistrate Judge made improper findings based on Plaintiffs’ description of
events. Nor can Plaintiffs fault the Magistrate Judge for deeming the Motion for
Sanctions premature and thus avoiding the potentially awkward situation where her
ruling on Plaintiffs’ Motion contradicts the court’s ruling on Defendants’ Objection. In
sum, Plaintiffs have failed to show that the Magistrate Judge committed clear error.

explain how Plaintiffs will incur additional expense when the parties already intended to
conduct another deposition. Second, in light of the debacle that occurred at the
September 15 deposition, (see Filing No. 155 (overruling Plaintiffs’ Objection to the
Magistrate Judge’s September 15 Entry)), any claim of prejudice is now moot.
5

For the foregoing reasons, the court OVERRULES Plaintiffs’ Objection to the
Magistrate Judge’s October 17 Entry (Filing No. 146) and AFFIRMS the Magistrate
Judge’s ruling.

SO ORDERED this 12th day of March 2015.

_________________________________
RICHARD L. YOUNG, CHIEF JUDGE
United States District Court
Southern District of Indiana

Distributed Electronically to Registered Counsel of Record.

6