Elkharwily v. Mayo Health System - Southeast Minnesota Region

Filing 141

ORDER overruling #129 APPEAL/OBJECTION OF MAGISTRATE JUDGE DECISION to District Judge; Sustaining in part consistent with this order #122 APPEAL/OBJECTION OF MAGISTRATE JUDGE DECISION to District Judge.(Written Opinion). Signed by Senior Judge David S. Doty on 7/21/2014. (PJM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 12-3062(DSD/JJK)
Alaa E. Elkharwily, M.D.,
Plaintiff,
ORDER

v.
Mayo Holding Company, a corporation,
d/b/a Mayo Health System, d/b/a
Mayo Clinic Health System, d/b/a
Albert Lea Medical Center - Mayo
Health System, Mayo Clinic Health
System - Albert Lea, a corporation,
Mayo Foundation, Mark Ciota, M.D.,
John Grzybowski, M.D., Dieter
Heinz, M.D., Robert E. Nesse, M.D.,
Steve Underdahl, and Stephen Waldhoff,
Defendants.

Richard T. Wylie, Esq., 222 South Ninth Street, Suite
1600, Minneapolis, MN 55402, counsel for plaintiff.
David T. Schultz, Esq., Joanne L. Martin, Esq., Charles
G. Frohman, Esq., Paul B. Civello, Esq. and Maslon,
Edelman, Borman & Brand, LLP, 90 South Seventh Street,
Suite
3300,
Minneapolis,
MN
55402,
counsel
for
defendants.

This

matter is

before

the

court

upon

the

objections by

plaintiff Alaa E. Elkharwily to United States Magistrate Judge
Jeffrey J. Keyes’s May 19, 2014, and June 2, 2014, orders granting
in part his motion to compel discovery.

Based on a review of the

file, record and proceedings herein, and for the following reasons,
the court sustains the objections in part.

BACKGROUND
This employment dispute arises out of the termination of
Elkharwily by defendant Mayo Clinic Health System - Albert Lea
(MCHSAL).

The background of this matter is fully set out in

previous orders, and the court recites only those facts necessary
for disposition of the instant objection.
Elkharwily was employed as a hospitalist at MCHSAL from
September 7, 2010, through December 10, 2010.

Second Am. Compl.

¶ 7. The employment relationship was governed by a contract, which
contemplated termination without cause with sixty days’ notice and
termination for cause with no such notice.
employed

by

MCHSAL,

Elkharwily

alleges

that

Id. ¶ 10.
he

While

observed

and

reported instances of negligence, improper patient admissions,
failure to follow care and coding procedures, compromised patient
safety and fraudulent billing.

Id. ¶¶ 11-12, 15.

On December 8,

2010, Elkharwily was placed on administrative leave.

Id. ¶ 18.

On

December 10, 2010, MCHSAL requested that Elkharwily resign.

Id.

¶

26.

24.

Elkharwily

refused

and

was

terminated.

Id.

¶

Thereafter, Elkharwily reported the allegations of compromised
patient safety and violations of federal and state law to Mayo
Clinic officials and the Minnesota Board of Medicine.
Elkharwily
termination.

also

pursued

Id. ¶ 29.

termination decision.

an

administrative

appeal

Id. ¶ 39.
of

his

On July 8, 2011, MCHSAL confirmed the

Id. ¶ 46.

2

On December 6, 2012, Elkharwily filed suit, alleging claims
for breach of contract and for retaliation under the Minnesota
Whistleblower Act, the False Claims Act and the Emergency Medical
Treatment and Labor Act (EMTALA).1

On May 5, 2014, Elkharwily

moved to compel MCHSAL to produce materials relating to these
claims. The magistrate judge denied the motion with respect to the
request for additional depositions and deferred ruling on the
remainder of the motion in order to review the relevant documents
in camera.

See ECF No. 118.

On June 2, 2014, the magistrate judge

granted in part the remaining portions of the motion and ordered
defendants to produce Exhibit 86 in unredacted form, including its
attachments, an updated privilege log and the declaration of Beth
L. Lacanne. See ECF No. 121. Elkharwily objects to the magistrate
judge’s (1) denial of the motion for 20 additional depositions and
(2) application of the peer review privilege.2

1

On July 2, 2013, the court dismissed claims for intentional
infliction of emotional distress, defamation and violations of the
Minnesota Vulnerable Adults Act. See ECF No. 42, at 23-24. The
court also dismissed the portion of the EMTALA claim based on
allegations that Elkharwily was terminated for refusing to transfer
a patient. Id. at 14. Further, the court dismissed all individual
and entity defendants other than MCHSAL. Id. at 23-24.
2

The scheduling order states that the deadline for nondispositive motions was April 1, 2014. See ECF No. 49.
Here,
Elkharwily filed motions to compel discovery on January 11, 2014,
April 4, 2014, and May 5, 2014.
See ECF Nos. 61, 93, 104.
Elharwily characterizes the instant motion as “supplementary,” as
it continues to raise objections to the defendants’ assertion of
the peer review privilege.
See ECF No. 104.
Elkharwily is
directed to observe the deadlines set out in the scheduling orders,
(continued...)
3

DISCUSSION
I.

Standard of Review
The district court will modify or set aside a magistrate

judge’s order on a nondispositive issue only if it is clearly
erroneous or contrary to law.

28 U.S.C. § 636(b)(1)(A); Fed. R.

Civ. P. 72(a); D. Minn. L.R. 72.2(a).
deferential” standard.

This is an “extremely

Reko v. Creative Promotions, Inc., 70 F.

Supp. 2d 1005, 1007 (D. Minn. 1999).

“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.”

Chakales

v. Comm’r of Internal Revenue, 79 F.3d 726, 728 (8th Cir. 1996)
(citations and internal quotation marks omitted).

“A decision is

contrary to law when it fails to apply or misapplies relevant
statutes, case law or rules of procedure.”

Knutson v. Blue Cross

& Blue Shield of Minn., 254 F.R.D. 553, 556 (D. Minn. 2008)
(citation and internal quotation marks omitted).
II.

Additional Depositions
Elkharwily argues that the magistrate judge clearly erred in

denying the motion for 20 additional depositions.

Specifically,

Elkharwily seeks to depose Steve Underdahl, who has already been
deposed, Dr. Robert Nesse, Stephanie Low, Tyson Stackhouse, Dr.

(...continued)
and untimely motions may be subject to dismissal on procedural
grounds alone. See ECF Nos. 49, 119.
4

Karen Gosen, Dr. Tom Howell, Marianne Mauer, Ramona Anderson, Dr.
Leonard Shellhamer, Dr. Jeffrey Lotts, Sandra Birchem, Jennifer
Blachowski, Amy Boyer, Kevin Nelson, Arvid Vocal and unnamed
recruiters and medical directors of Mayo Health System hospitals in
La Crosse, Austin, Owatonna and Rochester, Minnesota.
104,

at

2-3.

Elkharwily

argues

that

such

See ECF No.

individuals

have

knowledge of events relevant to his claims and should be subject to
deposition.

MCHSAL responds that the magistrate judge properly

denied

motion

the

to

compel

because

Elkharwily

failed

to

demonstrate good cause for additional depositions.
Under Rule 16, a pretrial scheduling order “may be modified
only for good cause and with the judge’s consent.”
16(b)(4).

Further,

authorized

by

the

particularized

a

request

to

scheduling

showing

of

take

order

why

the

more

“must

be

Fed. R. Civ. P.

depositions
supported

additional

than
by

discovery

a
is

necessary.” Medtronic, Inc. v. Guidant Corp., No. 00-1473, 2003 WL
23867342, at *1 (D. Minn. May 9, 2003) (citations omitted).
primary

measure

of

good

cause

is

the

movant’s

attempting to meet the order’s requirements.”

“The

diligence

in

Sherman v. Winco

Fireworks, Inc., 532 F.3d 709, 717 (8th Cir. 2008) (citations and
internal quotation marks omitted).
Elkharwily first argues that good cause is present because the
instant

dispute

relates

to

relating to public health.

serious

allegations

of

misconduct

See Pl.’s Obj., ECF No. 122, at 5-6.

5

Such an expansive interpretation of the good-cause standard is not
warranted.

As already explained, the standard is whether a movant

can demonstrate good cause for nonobservance of the scheduling
order, rather than the perceived importance of the subject matter
of the underlying suit.

As a result, such an argument is without

merit.
Elkharwily next argues that good cause is present because
defendants

belatedly

produced

the

documents

at

issue.

Specifically, Elkharwily wishes to depose Underdahl on Deposition
Exhibits 86 and 89, which were produced after his first deposition.
See ECF No. 121.

On June 2, 2014, the magistrate judge ordered

MCHSAL to produce an unredacted version of Exhibit 86, which
relates to a request for investigation into Elkharwily’s reports of
violations of medical standards.
18.

Exhibit

89

contains

See Mem. Supp., ECF No. 106, at

notes

on

Elkharwily’s

practice and placement on administrative leave.
ECF No. 122, at 9.

removal

from

See Mem. Supp.,

Elkharwily argues that he should be allowed to

depose Underdahl about such documents because they evince an intent
to create reasons for terminating Elkharwily.

Given the late

production of such documents, the court finds that the magistrate
judge

erred

in

holding

that

additional discovery on them.

Elkharwily

is

not

entitled

to

See BreathableBaby, LLC v. Crown

Crafts, Inc., No. 12-94, 2013 WL 3350594, at *7 (D. Minn. May 31,
2013); Gallus v. Am. Express Fin. Corp., No. 04-4498, 2006 WL

6

2590646, at *1 (D. Minn. June 22, 2006).

As a result, Elkharwily

is entitled to an additional limited deposition of Underdahl.
Therefore, Elkharwily will be permitted to depose Underdahl for a
maximum of two (2) hours and the subject of such deposition shall
be restricted to Exhibits 86 and 88.
Finally,

Elkharwily

argues that

the

other

newly-proposed

deponents are the only sources of specific information that is
relevant to the suit.

Elkharwily, however, points to no specific

new information that emerged in discovery that warrants a greater
number of depositions.

Indeed, the individuals and any relevant

knowledge were known to Elkharwily prior to suit, and he made
necessary choices in selecting the individuals that he deposed. As
a

result,

the

magistrate

judge

did

not

err

in

finding

that

Elkharwily failed to demonstrate good cause with respect to such
individuals and that further depositions are not warranted.

As a

result, the court sustains in part the objection relating to the
request for more depositions.
III.

Peer Review Privilege
Elkharwily also objects to the magistrate judge’s denial, on

the basis of peer review privilege, of his request for documents
relating to certain mortality conferences.3

3

On June 2, 2014, the

Elkharwily also objects to the magistrate judge’s failure to
order production of patient files and charts in response to his
most recent discovery motion. See Pl.’s Obj., ECF No. 129, 11-12.
Elkharwily’s third motion to compel, however, did not specifically
(continued...)
7

magistrate judge, after conducting an in camera review of the
documents at issue, concluded that the documents relating to
mortality conferences were either protected by the peer review
privilege or inaccessible to defendants due to the inadvertent
corruption of electronic files.4

See ECF No. 121.

Elkharwily

argues that the magistrate judge clearly erred in applying the peer
review privilege to the instant dispute.
Where, as here, a plaintiff alleges claims under both federal
and state law, it is within the court’s discretion to apply the
state peer review privilege statute. See Holland v. Muscatine Gen.
Hosp., 971 F. Supp. 385, 388 (S.D. Iowa 1997).

Even when not

federally adopted, a privilege provided by the law of the forum
state should be respected insofar as “this can be accomplished at

(...continued)
seek production of patient files or charts related to the mortality
conferences. See ECF No. 104. As a result, the magistrate judge
did not err in declining to order production of patient files and
charts, and such an objection is not properly before the court.
4

Elkharwily argues that, contrary to its stated position,
MCHSAL is able to access the corrupted files.
The court “must
accept, at face value, a party’s representation that it has fully
produced all materials that are responsive to a discovery request.”
Great Lakes Gas Transmission Ltd. P’ship v. Essar Steel Minn., LLC,
No. 09-3037, 2011 WL 1486033, at *5 (D. Minn. Apr. 19, 2011)
(citation and internal quotation marks omitted). In other words,
the court will not second-guess a party’s representation of
compliance with discovery. Rule 26 “provides adequate protection
to ensure that, if [d]efendant[] [is] found to be deficient in
[its] document production, appropriate sanctions will be leveled
and [the plaintiff] will not suffer undue prejudice.” Id. As a
result, the court credits MCHSAL’s assertion that it cannot
retrieve the documents at issue.
8

no substantial cost to federal substantive and procedural policy.”
Mem’l Hosp. for McHenry Cnty. v. Shadur, 664 F.2d 1058, 1061 (7th
Cir. 1981) (per curiam) (citation and internal quotation marks
omitted).

The recognition of new privileges in federal court

involves a “case-by-case” assessment.

See Jaffee v. Redmond, 518

U.S. 1, 8 (1996).
Here, it was not clearly erroneous for the magistrate judge to
conclude that Minnesota Statutes § 145.64 applies to the instant
dispute.

In his objection, Elkharwily attempts to reanimate his

previous objection to the application of § 145.64.

At oral

argument, however, Elkharwily conceded the potential applicability
of the Minnesota peer review privilege to the instant action.

See

Hr’g Tr., ECF No. 133, at 5:9-14 (“[T]here’s no federal peer review
privilege, but a federal court can apply [the state peer review
statute] in its discretion if there’s good reason to do it ....”).
Further, the magistrate judge did not issue a blanket ruling
applying the privilege to the case, but instead ordered that
“[o]nce privilege logs are exchanged, and an evaluation can be made
as to whether the peer review privilege applies as to specific
documents, then any unresolved issues can be brought to the [c]ourt
on motion for a determination.”
approach -

including

an

in

ECF No. 80, at 2.

camera

inspection -

Such an

balances

the

interests of encouraging effective review of medical care and
disclosure of “documents and information which have a close degree

9

of relevance to a hospital’s knowledge and investigation of the
conduct of physicians” in violation of federal law.

Holland, 971

F. Supp. at 389; see also Utech v. Bynum, No. 07-4712, 2008 WL
6582594,

at

*2-3

(D.

Minn.

2008)

(Erickson,

M.J.)

(applying

§ 145.64); Eldeeb v. Univ. of Minn., 864 F. Supp. 905, 914 n.4 (D.
Minn. 1994) (recognizing that § 145.64 applies “for the benefit of
the review organization”).

As a result, the magistrate judge did

not clearly err in applying a limited peer review privilege to the
instant matter, and the court overrules the objection relating to
application of the peer review privilege.

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1.

The objection to the magistrate judge’s order regarding

additional

depositions

[ECF

No.

122]

is

sustained

in

part,

consistent with this order;
2.

The objection to the magistrate judge’s order regarding

application

of

the

peer

review

privilege

[ECF

No.

129]

is

overruled.
Dated:

July 21, 2014
s/David S. Doty
David S. Doty, Judge
United States District Court

10