Robinson-Hill et al v. Nurses Registry and Home Health Corporation

Filing 126

MEMORANDUM OPINION & ORDER: 1. 114 MOTION to Compel by USA GRANTED IN PART as follows: No docs duplicative of Central Bank records need be produced; info on American Express statements revealing how Lennie and Vicki House spendy any funds p rovided by Nurses' Registry may be redacted; agreed protective order governing use of responsive records may be filed. 2. Dft Nurses' Registry shall begin producing docs responsive to Req. No. 7 of USA's 9th RPOD w/in 14 days, and that all docs responsive to that request shall be produced w/in 60 days. Signed by Judge Karen K. Caldwell on 6/7/2013.(STB)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
at LEXINGTON
CIVIL ACTION NO. 5:08-145-KKC
UNITED STATES OF AMERICA
ex rel. ALISIA ROBINSON-HILL and
DAVID A. PRICE,
v.

PLAINTIFFS

MEMORANDUM OPINION AND ORDER

NURSES’ REGISTRY AND HOME
HEALTH CORP., LENNIE G. HOUSE,
and VICKI HOUSE

DEFENDANTS

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This matter is before the Court on the Motion to Compel filed by the United States. (DE
114).

With this motion, the government seeks to compel production of certain financial

documents from Defendants Nurses’ Registry and Home Health Corp, Lennie House, and Vicki
House. Defendants argue that they have already provided sufficient discovery responsive to this
request, and that the additional information sought is burdensome, unduly intrusive, and not
relevant to the claims of unjust enrichment or payment by mistake. The government, however,
argues that the documents sought are relevant and has offered proposals for limiting the
production of responsive documents. For the reasons stated below, the motion will be granted.
I. Background
At issue in the government’s motion to compel is a request for production of documents
propounded on Nurses’ Registry on November 28, 2012. In particular, the motion seeks an order
compelling the disclosure of documents responsive to Request for Production No. 7, which went
unanswered by Nurses’ Registry other than by way of objection. The discovery request seeks the
production of “all documents reflecting the transfer of remuneration from [Nurses’ Registry] to

Lennie House, Vicki House, or any entity owned, operated, or controlled by Lennie House or
Vicki House.” (DE 114-2 at 8). The discovery request defines “remuneration” as “any payment
made directly or indirectly, overtly or covertly, in case or in kind.” (Id. at 3). The government
contends that the requested documents are relevant to prove the amount of funds Nurses’
Registry paid or transferred to the Houses and the purpose of any payments or transfers and thus
substantiate its claims of unjust enrichment and payment by mistake.
Nurses’ Registry responded to this request with an objection based on several grounds.
(DE 114-9). Nurses’ Registry notes that the government previously had subpoenaed bank
records from Central Bank & Trust Company, BB& Corp., First Farmers Bank, and Peoples
Bank of London. According to Nurses’ Registry, “a review of checks produced from Central
Bank & Trust Company indicates the government is already in possession of this information.”
(Id.).

Nurses’ Registry claims that the government essentially seeks post-judgment asset

discovery with this request.
II. Analysis
Federal Rule of Civil Procedure 26 provides that “[p]arties may obtain discovery
regarding any nonprivileged matter that is relevant to any party’s claim or defense.” Fed. R. Civ.
P. 26(b)(1). The information sought through discovery need not be admissible at trial so long as
“the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”
Id.

Rule 26 has been ‘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.’”
Marsico v. Sears Holding Corp., 370 F. App’x 658, 664 (6th Cir. 2010) (quoting Oppenheimer
Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)).

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The government contends that the discovery sought is related to its common law claims
for unjust enrichment and payment by mistake against Lennie and Vicki House. Defendants
sought dismissal of those claims because no money was paid directly from the government to
Lennie or Vicki House. When denying Defendants’ motion to dismiss these claims, this Court
held that “[t]o recover based on unjust enrichment and payment by mistake theories, it is not
necessary that money has been paid directly to individual defendants if the individual defendants
received payment indirectly through his or her control of a company that received improper
payments and the individuals participated in the wrongful conduct.” (DE 87, Memorandum
Opinion and Order of October 2, 2012, at 14). In making this ruling, the Court relied on two
cases involving at least some discovery into similar issues: United States ex rel. Roberts v. Aging
Care Home Health, Inc., 474 F.Supp. 2d 810, 821 (W.D. La. 2007); United States v. Rogan, 459
F. Supp. 2d 692, 727-28 (N.D. Ill. 2006); United States ex rel. Piacentile v. Wolk, 1995 WL
20833, at *5 (E.D. Pa. Jan 17, 1995).
The government argues that the purpose of its request is “to determine the amount of
funds that NR paid or transferred to the Houses and the companies they control, and the purposes
for which such payments or transfers were made.” (DE 125). The government states that,
contrary to what Nurses’ Registry has suggested, it does not seek how the Houses spent whatever
they received from Nurses’ Registry, but to discover information relevant to its common law
claims. For example, the government desires information related to American Express charges
paid by Nurses’ Registry. The government states that while the Central Bank records reveal
payments to American Express (totaling $1,240,114.03 in the relevant period), the bank records
do not show whether the charges benefited the Houses or the corporation. In addition, the

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government seeks the production of tax documents from the Houses and corporate accounting
records from Nurses’ Registry.
Nurses’ Registry, on the other hand, believes the government possesses information
relevant to its claims within the 62,000 pages of financial information produced from its Central
Bank accounts. Nurses’ Registry contends that further production is unnecessary in light of the
material already provided.

Moreover, Nurses’ Registry argues that production of personal

information in tax records or in American Express records is intrusive and burdensome.
Under the broad discovery permitted by the Federal Rules, the government may “obtain
discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense . . .”
Fed. R. Civ. P. 26(b)(1). The Court agrees that the documents sought in Request for Production
No. 7 are relevant to the claims of unjust enrichment and payment by mistake. See Alvarez v.
Wallace, 107 F.R.D. 658, 661 (W.D. Tex. 1985) (“The fact that certain information is also useful
in executing a judgment does not render that information unsusceptible to discovery prior to
judgment if it also tends to prove Plaintiffs’ case in chief.”). “When the discovery material
sought appears to be relevant, the party who is resisting production has the burden to establish
that the material either does not come within the scope of relevance or is of such marginal
relevance that the potential harm resulting from production outweighs the presumption in favor
of broad disclosure.” Groupwell Int'l (HK) Ltd. v. Gourmet Exp., LLC, 277 F.R.D. 348, 359
(W.D. Ky. 2011) (internal quotation marks and citations omitted). Nurses’ Registry has not
made this showing, especially in light of the proposals made by the government to adjust the
discovery request. Therefore, the Court finds that the information sought is relevant and will
grant the motion to compel.

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III. Conclusion
Accordingly, IT IS HEREBY ORDERED:
1. The Motion to Compel (DE 114) filed by the United States is GRANTED IN PART as
follows:
a. No documents duplicative of the Central Bank records (checks copies, bank
statements, etc.) need be produced.
b. Information on the American Express statements revealing how Lennie House
and Vicki House spent any funds provided by Nurses’ Registry may be redacted.
c.

An agreed protective order governing the use of responsive records may be filed.

2. Defendant Nurses’ Registry shall begin producing documents responsive to Request No.
7 of the United States’ Ninth Request for Production of Documents within fourteen days
of the entry of this Order, and that all documents responsive to Request No. 7 shall be
produced within sixty (60) days of entry of this Order.
This 7th day of June, 2013.

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