State Farm Mutual Automobile Insurance Company v. Pointe Physicial Therapy, LLC et al

Filing 244

OPINION and ORDER Rejecting 236 Appeal of Magistrate Judge Decision and Affirming 235 Order on Motion for Protective Order, Order on Motion to Quash. Signed by District Judge Paul D. Borman. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Plaintiff,

Case No. 14-cv-11700
Paul D. Borman
United States District Judge

v.

Stephanie Dawkins Davis
United States Magistrate Judge
POINTE PHYSICAL THERAPY, LLC,
et al.,
Defendants.
_______________________________________/
OPINION AND ORDER (1) REJECTING NON-PARTY AFFILIATED
DIAGNOSTIC OF OAKLAND, LLC’S OBJECTION TO OPINION AND
ORDER DATED JUNE 12, 2017 DENYING MOTION TO QUASH TO
SUBPOENA (ECF NO. 236); and (2) AFFIRMING MAGISTRATE JUDGE
DAVIS’S JUNE 12, 2017 OPINION AND ORDER DENYING MOTION FOR
PROTECTIVE ORDERS and MOTION TO QUASH (ECF NO. 235)
On June 12, 2017, Magistrate Judge Davis issued an Opinion and Order (ECF
No. 235) denying in part the Motion of non-party Affiliated Diagnostic of Oakland
County’s (“Affiliated”) to Quash and/or for a Protective Order (ECF No. 183). On
June 26, 2017, Affiliated filed an Objection to the Magistrate Judge’s June 12, 2017
Opinion and Order, which is presently before the Court. (ECF No. 236.) For the

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reasons that follow, the Court REJECTS Affiliated’s Objection, and AFFIRMS the
Magistrate Judge’s June 12, 2017 Opinion and Order.
II.

STANDARD OF REVIEW
28 U.S.C. § 636(b)(1)(A) and Federal Rule of Civil Procedure 72(a) both

provide that a district judge must modify or set aside any portion of a magistrate
judge’s non-dispositive pretrial order found to be “clearly erroneous or contrary to
law.” 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a). The United States Supreme
Court and the Sixth Circuit Court of Appeals have stated that “a finding is ‘clearly
erroneous’when although there is evidence to support it, the reviewing court on the
entire evidence is left with the definite and firm conviction that a mistake has been
committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948) (explaining
the clearly erroneous standard under Rule 52(a)); Hagaman v. Comm'r of Internal
Revenue, 958 F.2d 684, 690 (6th Cir. 1992) (quoting U.S. Gypsum Co.). See also
United States v. Mandycz, 200 F.R.D. 353, 356 (E.D. Mich. 2001) (explaining the
standard under Rule 72(a)).
This standard does not empower a reviewing court to reverse the Magistrate
Judge’s finding because it would have decided the matter differently. Anderson v.
City of Bessemer City, N.C., 470 U.S. 564, 573 (1985) (interpreting the clearly
erroneous standard in Rule 52(a)). The Sixth Circuit has noted that: “[t]he question
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is not whether the finding is the best or only conclusion that can be drawn from the
evidence, or whether it is the one which the reviewing court would draw. Rather, the
test is whether there is evidence in the record to support the lower court’s finding, and
whether its construction of that evidence is a reasonable one.” Heights Cmty. Cong.
v. Hilltop Realty, Inc., 774 F.2d 135, 140 (6th Cir. 1985).
“The ‘clearly erroneous’ standard applies only to the magistrate judge’s factual
findings; his legal conclusions are reviewed under the plenary ‘contrary to law’
standard. . . . Therefore, [the reviewing court] must exercise independent judgment
with respect to the magistrate judge’s conclusions of law.” Haworth, Inc. v. Herman
Miller, Inc., 162 F.R.D. 289, 291 (W.D. Mich.1995) (citing Gandee v. Glaser, 785 F.
Supp. 684, 686 (S.D. Ohio 1992)). “‘An order is contrary to law when it fails to apply
or misapplies relevant statutes, case law, or rules of procedure.’” Mattox v. Edelman,
No. 12-13762, 2014 WL 4829583, at *2 (E.D. Mich. Sept. 29, 2014) (quoting Ford
Motor Co. v. United States, No. 08–12960, 2009 WL 2922875, at *1 (E.D. Mich.
Sept. 9, 2009)).
III.

ANALYSIS
It has been established that bank records of certain third party entities are

relevant and may be discoverable in this case. In her June 12, 2017 Opinion and
Order, Magistrate Judge Davis held that Affiliated was such an entity whose relation
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to the alleged fraudulent scheme had been adequately demonstrated so that
Affiliated’s bank records were relevant and discoverable. Affiliated Objects to this
determination, asserting (with no factual support) that the Magistrate Judge “took a
leap of faith,” and based her ruling on “pure speculation and conjecture.” (ECF No.
236, Objection 6, PgID 8946.) The Court rejects Affiliated’s Objection and concludes
that the Magistrate Judge’s ruling that Affiliated’s bank records are relevant and
discoverable was neither clearly erroneous nor contrary to law.
As an initial matter, Affiliated’s very general Objection fails to identify exactly
where it claims the Magistrate Judge erred – that is to say that the Objection does not
identify any particular factual finding that it disputes or any legal conclusion that it
claims is contrary to law. Rather, Affiliated merely asserts, without explication, that
State Farm is engaged in a “rambling exploration” in an endeavor “to determine
whether a claim exists.” (Objection 7, PgID 8947.) Such general assertions, which
fail to direct this Court’s attention to the particular aspects of the Magistrate Judge’s
Order that it claims are factually erroneous or contrary to law, are insufficient to
warrant review.
In any event, the Court concludes that Magistrate Judge Davis gave sufficient
factual basis for her determination regarding relevance, none of which is convincingly
disputed by Affiliated in its Objection. The following support the Magistrate Judge’s
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findings related to Affiliated’s alleged role in the alleged fraudulent scheme, and thus
of the relevance of Affiliated’s banking records to the issues in this case, and the need
to discover financial information from Affiliated’s banking institution: (1) evidence
that suggests that Affiliated may be owned in part by Defendant Bazzi’s daughter and
that Defendant Bazzi may actually control the operations of Affiliated; (2) State
Farm’s inability to obtain through other means the financial information that would
be necessary to establish the alleged fraudulent scheme; and (3) the absence of any
articulated significant burden of compliance on Affiliated, given that the subpoena is
directed to Affiliated’s banking institution, Citizens Bank, N.A.
In addition, the recently-filed Affidavit of Dr. Ram Gunabalan, M.D. supports
the suggestion of a tie between Affiliated and the alleged fraudulent scheme. (ECF
No. 242, Corrected Affidavit of Dr. Ram Gunabalan ¶ 70.) The Magistrate Judge’s
finding of the relevance of Affiliated’s financial banking records is neither clearly
erroneous nor contrary to law.
IV.

CONCLUSION
State Farm has sufficiently suggested Affiliated’s relation to the alleged

fraudulent scheme such that Affiliated’s banking records are relevant and discoverable
in this action. Magistrate Judge Davis’s ruling denying Affiliated’s motion to
quash/and or for a protective order is neither clearly erroneous nor contrary law.
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Accordingly, Affiliated’s Objection is REJECTED, and the Magistrate Judge’s June
12, 2017 Order is AFFIRMED.
IT IS SO ORDERED.

s/Paul D. Borman
PAUL D. BORMAN
UNITED STATES DISTRICT JUDGE
Dated: July 21, 2017

CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon each
attorney or party of record herein by electronic means or first class U.S. mail on July
21, 2017.

s/Deborah Tofil
Case Manager

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