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

Filing 221

ORDER granting in part and denying in part 203 Defendant's Motion to Compel. **SEE ORDER FOR FURTHER DETAILS**. Signed by Magistrate Judge Denise K. LaRue on 4/14/2015. (MGG)

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF INDIANA,
INDIANAPOLIS DIVISION

PAIN CENTER OF SE INDIANA, LLC, et
al.,
Plaintiffs,
CAUSE NO. 1:13-cv-133-RLY-DKL

vs.
ORIGIN HEALTHCARE SOLUTIONS,
LLC, et al.,
Defendants.

ENTRY and ORDER
Defendants’ Motion To Compel Plaintiffs To Respond to Requests for Production
[doc. 203]
Defendants move for an order compelling Plaintiffs to produce documents
responsive to requests 1 through 3, and 5 through 14, in their Defendants’ Second Set of
Request[s] for Production of Documents [doc. 203-1] (“R.F.P.”).1 Plaintiffs responded with
only objections.
Plaintiffs initially assert a general relevancy objection.

They argue that the

irrelevancy of the requested documents to the claims and defenses in this case is
confirmed by, first, the fact that Defendants did not request the documents early enough

1

Request no. 4 requests “[a]ll termination or separation documents for persons employed by
Plaintiffs between January 1, 2003 and December 31, 2012.” Plaintiffs responded with objections and the
statement that they “are not aware of possessing any of these documents not already within possession of
Defendants.” [Doc. 203-2.] Defendants do not seek to compel any additional response to this request.

1

to utilize them for Defendants’ depositions of Plaintiffs’ employees or Rule 30(b)(6)
depositions of the plaintiff entities and, second, “they repeatedly opposed Plaintiffs’
multiple requests to extend the case management deadlines in time for either party to
receive outstanding discovery.” (Plaintiffs’ Response to Defendants’ Motion To Compel
Plaintiffs To Respond to Requests for Production [doc. 210] (“Response”) at 1-2.)
First, contrary to Plaintiffs’ suggestion, whether a party’s discovery tactics were
well-designed or well-executed is not the measure of relevance. A party “may obtain
discovery regarding any nonprivileged matter that is relevant to any party’s claim or
defense . . . .” Fed. R. Civ. P. 26(b)(1).
[R]elevancy is “construed broadly to encompass any matter that bears on,
or that reasonably could lead to other matter that could bear on, any issue
that is or may be in the case.” Chavez v. DaimlerChrysler Corp., 206 F.R.D.
615, 619 (S.D. Ind. 2002) (citations omitted); accord Med. Assur. Co. v.
Weinberger, 295 F.R.D. 176, 181 (N.D. Ind. 2013) (citing Fed.R.Civ.P. 26(b)(1)
and defining material as “relevant to the claim or defense of any party” if
the material “bears on” or “reasonably could lead to other matter[s] that
could bear on, any issue that is or may be in the case”).
Executive Management Services, Inc. v. Fifth Third Bank, No. 1:13-cv-582-WTL-MJD, 2014
WL 5529895, *3 (S.D. Ind., Nov. 3, 2014). While courts may consider a party’s lack of
diligence and poor planning in determining good cause for discretionary allowances
(such as extensions of deadlines), courts generally will determine relevance on its own
merits. Therefore, the Court will consider only the relevance objections that are germane
to the specific requests at issue. In addition, Defendants explain that the relevance of and
necessity for some of their requests were manifested only after Plaintiffs’ earlier discovery
responses.
2

Second, Plaintiffs’ argument based on Defendants’ objections to Plaintiffs’ motions
to extend the discovery deadlines is unexplained and unclear and, therefore, is
unconvincing. When Defendants served the present R.F.P. on September 22, 2014, the
discovery deadline was November 25, 2014, Second Amended Case Management Plan [doc.
94] (“Second CMP”), ¶ IV.B.; Entry on Telephonic Pretrial Conference, June 13, 2014 [doc. 96],
which afforded enough time for Defendants to receive responsive documents if Plaintiffs
had timely produced them. Second CMP ¶ IV n. 1 (discovery deadlines are the dates by
which discovery must be “completed,” meaning when timely responses can be served).
The discovery deadline was not extended until November 14, 2014, when the Court
extended it to February 27, 2015. Entry and Order (November 18, 2014 ) [doc. 151].
Plaintiffs’ general relevancy objection is rejected.
Request no. 1. This request asks for “[a]ll correspondence with any governmental
agency regarding Plaintiffs’ billing.” Defendants argue that the documents are relevant
to Plaintiffs’ alleged damages. Plaintiffs object that Defendants “fail[ ] to establish how
all of Plaintiffs’ correspondence with any governmental entity bears on” the issue of
Plaintiffs’ claimed losses and lost profits. (Response at 2.) They also argue that the request
is overly broad and unduly burdensome in that it is “limitless”, covering each and every
bill submission to government agencies for processing, and “Plaintiffs should not have
to locate each and every newsletter, notice, advertisement, and communication with any
governmental agency that arguably relates to Plaintiffs’ billing.”

3

Plaintiffs allege that they have suffered at least $126,600,000 of injuries, Plaintiffs’
First Amended Complaint [doc. 16] (”Complaint”) ¶¶ 80, 81, 90-92, 103, 110, § V, which they
attribute to deficiencies in Defendants’ software and service.

They allege that the

deficiencies directly caused the loss of unpaid (and, now, uncollectable) insurance claims,
which consequentially caused the loss of business opportunities and profits. Therefore,
claims or billings that Plaintiffs submitted to governmental agencies for payment and
correspondence regarding those claims or billings are relevant to Plaintiffs’ claims for
damages. Plaintiffs do not support their argument that searching for and producing
responsive documents would be unduly burdensome, but their argument appears largely
to be based on too broad a reading of the request’s scope. In their reply, Defendants
explain that they are seeking documents revealing “the nature and degree of problems
Plaintiffs experienced when submitting claims to Medicare or Medicaid;” they are not
seeking “the bills themselves, nor do they seek general correspondence such as
newsletters or advertisements.” (Defendants’ Reply Brief in support of Motion To Compel
Plaintiffs To Respond to Requests for Production [doc. 212] (“Reply”) at 2.)
As so limited to correspondence that (1) is between any of the Plaintiffs and any
governmental agency, and (2) includes content that addresses any bills that any of the
Plaintiffs submitted for payment under Medicare or Medicaid programs, request no. 1 is
relevant to the claims and defenses in this case. Because Defendants have not shown that
compliance would cause an undue burden, the Court does not find that production will

4

be unduly burdensome. Therefore, Plaintiffs must produce all responsive documents in
their possession, custody, or control.
Requests nos. 2 and 3. These requests ask for the draft and final employment
agreements and the personnel files of all persons employed by Plaintiffs between January
1, 2003 and December 31, 2012. Defendants argue that these employment records are
relevant because (1) Plaintiffs allege that the losses that they suffered due to Defendants’
conduct caused them to be unable to hire three interventional pain-medicine physicians,
which caused them to lose thirty-five million dollars, Complaint, ¶¶ 81; (Reply at 5); and
(2) former employees of Plaintiffs testified in depositions that turnover in and lack of
internal management of Plaintiffs’ billing staff resulted in improper billing procedures,
Reply at 5. Plaintiffs object that (1) the Court already ruled on the permissible scope of
Defendants’ access to Plaintiffs’ employment records through its ruling on Defendants’
first request for production no. 26 and Defendants should not be permitted to reopen that
ruling based on arguments that were available to them then, and (2) the unnamed former
employees do not speak for Plaintiffs and offer nothing new to a theory that was available
to Defendants before.
Although Plaintiffs’ primary objection is that the Court “has previously addressed
the concerns of overbreadth, burdensomeness, and relevance related to employment
records” in its ruling on Defendants first request no. 26, they fail to cite or identify that
ruling. The closest that the Court finds is its Entry on Telephonic Pretrial Conference, May
28, 2014 [doc. 89] which records only that, during that conference, the parties reported
5

reaching agreement on several discovery disputes, including that Plaintiffs had produced
all documents responsive to request no. 26.2 That statement does not constitute a ruling
on Plaintiffs’ scope, burden, or relevance objections or establish any limits on the request.
In addition, Plaintiffs have shown no basis for such findings now.
Next, while it would have been better had Defendants supplied factual support
for their assertion regarding the testimony of Plaintiffs’ former employees and the size of
Plaintiffs’ staff, Plaintiffs do not assert that the witnesses’ testimonies were not as
Defendants described and they do not rebut Defendants’ assertion that the number of
employees fails to support an undue compliance burden. Plaintiffs’ only objection is that
their former employees do not speak for the plaintiff entities, but that the witnesses were
not speaking as designated representatives under Fed. R. Civ. P. 30(b)(6) does not render
their observations of Plaintiffs’ conduct irrelevant.
Plaintiffs’ insistence that Defendants should have sought this discovery and raised
these arguments earlier is mistaken. First, the Court has already found that there has
been no ruling setting limits on discovery of employment records and, second, Plaintiffs
cite no support for a rule that parties are allowed only one opportunity to request a
category or subject matter of documents. Discovery was still open when these requests
were served and is still open. Defendants cite deposition testimony after service of their
initial requests for production as the basis for the present requests for employment

2

The Court also mistakenly noted that Plaintiffs’ counsel agreed to consult with his clients to
determine if they had any responsive documents.

6

records and that basis supports the relevance of the requested material. If some of the
responsive documents were previously produced, then Plaintiff may identify those
documents in their previous productions to avoid duplication of production.
Therefore, Plaintiffs must produce all responsive documents in their possession,
custody, or control.
Requests nos. 5 and 6. These requests seek all of Plaintiffs’ financial statements
between January 1, 2003 and December 31, 2012, and Plaintiffs’ state and federal tax
returns for 2003 through 2012. Plaintiffs’ opposition is, again, difficult to decipher. They
argue that Defendants have shown no basis to revisit the Court’s previous ruling
regarding Defendants’ prior requests for “all financial records relating to the operation
or administration of Plaintiffs’ enterprises” and indicate that the ruling was on
“contention discovery,” (Response at 5), but they, again, fail to cite the order they have in
mind. The Court is at a loss to discern any such order that precludes the present requests.
Plaintiffs also submit a copy of a January 12, 2015 e-mail from Plaintiffs’ counsel to
Defendants’ counsel advising that Plaintiffs will produce financial statements that “relate
to the end of year forecasting” when an individual (“Jeff”) prepares them. [Doc. 210-2.]
The meaning of this e-mail to the present motion is unclear.
Plaintiffs’ financial statements and state and federal tax returns for the years 2003
through 2012 are relevant to Plaintiffs’ claims for damages. Plaintiffs do not assert that
the statements and returns do not exist and they do not assert that producing them
presents an undue burden. If Plaintiffs already have produced any statement or return,
7

they may identify it or them in Plaintiffs’ prior productions, so that duplicates are not
produced.

Therefore, Plaintiffs must produce all responsive documents in their

possession, custody, or control.
Requests nos. 7 through 10. These requests seek (1) SQL backup of Plaintiffs’
client database from their SQL service for 2003 through 2012; (2) the backup and all
documentation of the database from which Plaintiffs created the closing files that
Plaintiffs sent to Defendants for 2003 through 2012; and (3) contents of folder 91071 on
Plaintiffs’ SQL server. Apparently, Plaintiffs are confused about what Defendants are
requesting and the Court is not satisfied that Defendants’ Reply has provided complete
clarification. The parties’ informal resolution discussions do not appear to have been
sufficiently in-depth or clear to have constituted a meaningful attempt. The Court also is
not satisfied that sufficient explanation has been provided for the Court to recognize, let
alone resolve, any existing dispute.
The Court directs the parties to meet and confer further to better identify the
materials Defendants seek and the parties’ positions on their discoverability. The Court
offers the following guidance. First, if the SQL backup of Plaintiffs’ database, the backup
and documentation of the closing-files database, and the contents of folder 91071 would
tend to show information about Plaintiffs’ billings and, therefore, their alleged damages,
then the materials are relevant. Second, if Plaintiffs have already produced any of the
material requested, then they may identify it in previous productions and need not make
a duplicate production. Finally, if Defendants already possess any of the information
8

requested, in the same form, nature, and completeness, in all material aspects, such that
production of the requested documents by Plaintiffs would add nothing material, then it
is unlikely that the Court will compel production.
Therefore, Defendants’ motion to compel is denied, without prejudice, as to
requests nos. 7 through 10. After the parties meet and confer again, and consider the
Court’s specific guidance as to these requests and general guidance as to the other
requests, if the disputed issues are not resolved, then Defendants may file a renewed
motion regarding these requests.
Requests nos. 11 through 14.

These requests seek information regarding

Plaintiffs’ allegation that they had “patent rights to a porous Neurostimulator Lead and
[are] expected to suffer an unknown loss related to this lost opportunity at this time but
to be proven at trial.” Complaint ¶ 81. The requests ask for (1) the patent application, (2)
all communications with any governmental patent agency regarding the patent, and (3)
all communications and documents related to the preparation of the patent application.
Plaintiffs object that (1) the requests are duplicative of Defendants’ previous
request for communications supporting Plaintiffs’ contention that they suffered damages
due to lost opportunities with the patent; (2) the iterations, modifications, and changes to
the patent are irrelevant to lost-opportunity damages; and (3) the patent application is in
the public domain and, thus, equally available to Defendants. Defendants contend that
(1) their current requests are broader and more specific than their previous request; (2)
information about the patent at issue is relevant to Plaintiffs’ claim for damages due to
9

lost opportunities and is reasonably calculated to lead to admissible evidence; and (3)
while Defendants appear to concede the equal availability of the patent application, they
point out that communications and documents regarding the application are not publicly
available.
The Court agrees with Defendants that the materials requested are relevant and
they are broader than their earlier request. Communications with patent agencies about
the patent and communications (internal and with third parties) about the patent
application could tend to show, or lead to evidence showing, the monetary value of the
patent to Plaintiffs and, thus, of the lost-opportunity damages to Plaintiffs. Plaintiffs did
not assert an undue-burden objection.
Therefore, Plaintiffs must produce documents responsive to requests nos. 11
through 14. If any responsive documents were produced in response to Defendants’
earlier request for production, then Plaintiffs may identify such documents in their
previous production. Plaintiffs need not produce the patent application if it is in the
public domain and freely accessible to Defendants.

10

Conclusion
Defendants’ Motion To Compel Plaintiffs To Respond to Requests for Production [doc.
203] is GRANTED in part and DENIED in part as set forth herein.
SO ORDERED this date: 04/14/2015

Denise K. LaRue
United States Magistrate Judge
Southern District of Indiana

Distribution to all ECF-registered counsel of record via ECF-generated e-mail.

11