United States of America et al v. Bozeman Health Deaconess Hospital et al

Filing 294

ORDER. BDH's Motion of Bozeman Health Deaconess Hospital to Quash Subpoena and for Protective Order is DENIED, without prejudice subject to renewal. BDH may renew its motion, on or before May 25, 2018, if it files with the Court, in camera, the specific communications it seeks to protect as privileged. Relators' Rule 45(d)(2)(B)(i) Cross-Motion to Compel Compliance with Subpoena Duces Tecum is DENIED as moot. Relators' Unopposed Motion to Consolidate is GRANTED. Cau se No. CV 18-18-BU-SEH and Cause No. CV 15-80-BU-SEH are consolidated for resolution of issues related to Bozeman Health Deaconess's Motion to Quash Subpoena and Relators' Cross-Motion to Compel Compliance. Documents filed in the consolidat ed action shall be captioned in the same manner as documents previously filed in Cause No. CV 15-80-BU-SEH, and shall be maintained and docketed in Cause No. CV 15-80-BU-SEH. The clerk is directed to close Cause No. CV 18-18-BU-SEH. (See Order for further details.) Signed by Judge Sam E Haddon on 5/22/2018. (NOS)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BUTTE DIVISION
UNITED STATES OF AMERICA EX
REL. FRANK M. REMBERT AND
MICHAEL R. PARADISE,

FILED
MAY 2 2 2018
Clerk, U.S. District Court
District Of Montana
Helena

No. CV 15-80-BU-SEH

Plaintiffs,
vs.
BOZEMAN HEALTH DEACONESS
HOSPITAL D/B/A BOZEMAN
HEALTH, and
DEACONESS-INTERCITY
IMAGING, LLC D/B/A ADVANCED
MEDICAL IMAGING,
Defendants.

UNITED STATES OF AMERICA EX
REL. FRANK M. REMBERT AND
MICHAEL R. PARADISE,
Plaintiffs,
vs.
BOZEMAN HEALTH DEACONESS
HOSPITAL D/B/A BOZEMAN
HEALTH,and
DEACONESS-INTERCITY
IMAGING, LLC D/B/A ADVANCED
MEDICAL IMAGING,
Defendants.

No. CV 18-18-BU-SEH

Before the Court are: (1) Motion of Bozeman Health Deaconess Hospital to
Quash Subpoena and for Protective Order,1 (2) Relators' Rule 45(d)(2)(B)(i)
Cross-Motion to Compel Compliance with SubpoenaDuces Tecum, 2 and (3)
Relators' Unopposed Motion to Consolidate. 3
Motions (1) and (2) were filed in the United States District Court for the
Northern District of Texas, Dallas Division. Magistrate Judge David L. Horan, of
that court, issued an order staying "[a]ny requirement to further comply with the
subpoenas at issue." 4 On March 1, 2018, the district court in Texas granted
Relators' request to transfer the two motions to this Court, under Federal Rule of
Civil Procedure 45(f). 5
On April 3 0, 2018, this Court ordered, by agreement of the parties, that
"[t]he deposition of Value Management Group, LLC ("VMG") may proceed on
May 4, 2018," on the conditions that ( 1) counsel "not ask questions about the
work performed by VMG in 2014," and (2) "[i]fthe Court determines that work
performed by VMG in 2014 is not privileged, the VMG deposition may be
1

Doc. I, CV 18-18-BU-SEH.

2

Doc. 11, CV 18-18-BU-SEH.

3

Doc. 257, CV 15-80-BU-SEH.

4

Doc. 5, CV 18-18-BU-SEH.

5

Doc. 23, CV 18-18-BU-SEH.

2

reopened to allow the parties to question VMG on that topic only." 6
Background

Attached to the parties' motions are documents in support which state the
following:
(1) On January 31, 2014, Value Management Group, LLC ("VMG")
provided T.J. Sullivan of Drinker Biddle & Reath ("DBR") with a "Proposal to
Provide Valuation Services" to DBR and DBR's client, Bozeman Deaconess
Hospital ("BDH"). 7 The proposal was to "perform an independent fair market
value analysis at the minority level of Advanced Medical Imaging." 8
(2) On August 31, 2017, Relators served a Subpoena Duces Tecum on
VMG, seeking, inter alia, VMG's "entire file related to the diagnostic imaging
joint venture between Intercity Radiology, P.C. ("ICR") ... and Bozeman
Deaconess Hospital." 9 Relators served the same subpoena on VMG on October 5,
2017. 10
(3) A Subpoena to Testify at a 30(6)(6) Deposition was issued on January
6

Doc. 273 at 1-2, CV 15-80-BU-SEH.

7

Doc. 1-1 at 6, CV 18-18-BU-SEH.

8

Doc. 1-1 at 6, CV 18-18-BU-SEH.

9

Doc. 13 at 58-66, CV 18-18-BU-SEH.

10

Doc. 13 at 79, CV 18-18-BU-SEH.
3

12, 2018, commanding VMG to appear and testify at a March 2, 2018, deposition
on the subject of, inter alia, communications between VMG and BDH related to
work done by VMG in 2004, 2005, 2009, and 2014. 11
Discussion

Fed. R. Civ. P. 45(d)(3)(A) provides, in part, that "[o]n timely motion, the
court for the district where compliance is required must quash or modify a
subpoena that ... (iii) requires disclosure of privileged or other protected matter,
if no exception or waiver applies." Fed. R. Civ. P. 26(c)(l) provides that "[t]he
court may, for good cause, issue an order to protect a party or person from
annoyance, embarrassment, oppression, or undue burden or expense."
BHD requests an order (1) quashing, or modifying, the two subpoenas and
(2) entering a protective order on the grounds that "documents and testimony
regarding the 2014 Engagement are protected by BDH's attorney client privilege
and the work product doctrine." 12 The Court has addressed certain documents filed
under seal, which related to VMG's valuation work in 2014. 13 By Order of April 5,
2018, the Court determined that the documents filed were not protected by the

11

Doc. 1-1 at20-23, CV 18-18-BU-SEH.

12

Doc. 1 at 2, CV 18-18-BU-SEH.

13

Doc. 262, CV 15-80-BU-SEH.
4

attorney-client privilege or work-product protection. 14
BDH has failed to establish that documents and testimony regarding VMG's
2014 engagement are protected by the attorney-client privilege or workproduct protection.

The standard for establishing attorney-client privilege is as follows:
(I) legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or
by the legal adviser, (8) unless the protection be
waived. 15
"The party asserting the attorney-client privilege has the burden of
establishing the relationship and privileged nature of the communication." 16
Moreover, "[a] party claiming the privilege must identify specific communications
and the grounds supporting the privilege as to each piece of evidence over which
privilege is asserted." 17 "Blanket assertions are 'extremely disfavored."' 18 "The

14

Doc. 262, CV 15-80-BU-SEH.

15

United States v. Richey, 632 FJd 559,566 (9th Cir. 2011) (quoting United States v.
Graf, 610 F. 3d 1148, 1156 (9th Cir. 2010)).
16

Richey, 632 FJd at 566 (citing United States v. Bauer, 132 F.3d 504, 507 (9th Cir.

1997)).
17

United States v. Martin, 278 F.3d 988, I 000 (9th Cir. 2002) ( citing United States v.
Osborn, 561 F.2d 1334, 1339 (9th Cir. 1977)).
18

Martin, 278 F.3d at 1000 (quoting Clarke v. Am. Commerce Nat'! Bank, 974 F.2d 127,
129 (9th Cir. 1992)).
5

attorney-client privilege may extend to communications with third parties who
have been engaged to assist the attorney in providing legal advice. If the advice
sought is not legal advice, but, for example, accounting advice from an accountant,
then the privilege does not exist." 19
Attorney work product protection applies to "documents and tangible things
that are prepared in anticipation of litigation or for trial by or for another party or
its representative." 20 Documents are protected that "would not have been created
in substantially similar form but for the prospect of litigation." 21
Here, BDH seeks a blanket determination that the "documents and
testimony regarding the 2014 Engagement are protected by BDH's attorney client
privilege and the work product doctrine." However, BDH has failed to meet its
burden on either issue. The Court cannot make a determination of privilege, under
Martin and Richey, unless the party claiming privilege points out the specific
communications it seeks to protect and states supporting grounds as to each piece
of evidence,22 particularly in circumstances where the communications are not
19

Richey, 632 F.3d at 566 (citing Weil v. Inv./Indicators, Research & Mgmt., Inc., 647
F .2d I 8, 24 (9th Cir. I 981 )).

°Fed. R. Civ. P. 26(b)(3)(A).

2

21

Richey, 632 F.3d at 568 (quoting In re Grand Jury Subpoena (Mark Torf/J'orf Envtl.
Mgmt.), 357 F.3d 900, 908 (9th Cir. 2004)).
22

See Martin, 278 F.3d at 1000 (citing Osborn, 561 F.2d at I 339).
6

directly between attorney and client. 23 BDH made no such showing for
communications or other documents related to the valuation work performed by
VMG in 2014. Nor has BDH stated any substantive grounds of entitlement to
attorney work-product protection.
The Court has no basis to quash or modify either subpoena or otherwise
protect the related documents from being produced or discussed at deposition.
Likewise, the Court finds no good cause for the issuance of a protective order
under Federal Rule of Civil Procedure 26(c )(1 ).
ORDERED:

I.

BHD's Motion of Bozeman Health Deaconess Hospital to Quash

Subpoena and for Protective Order24 is DENIED, without prejudice to renewal.
BDH may renew its motion, on or before May 25, 2018, if it files with the Court,

in camera, the specific communications it seeks to protect as privileged. 25
2.

IfBDH takes the steps described in paragraph 1, the Court will issue

an order determining privilege with respect to the specific documents submitted. If
such documents are not privileged, the VMG deposition may be reopened, under
23

See Richey, 632 F.3d at 567 (citing Osborn, 561 F.2d at 1339).

24

Doc. I, CV 18-18-BU-SEH.

25

Any renewal of this motion shall be filed in Cause No. CV I 5-80-BU-SEH. See
paragraphs 1-4 below.
7

the conditions stated in the Court's Order of April 30, 2018. 26
3.

IfBDH fails to take the steps described in paragraph 1:
a.

Magistrate Horan's stay of"[any] requirement to further

comply with the subpoenas at issue," 27 shall be deemed lifted;
b.

Communications related to the work performed by VMG in

2014 shall be deemed unprotected by attorney-client privilege or workproduct protection; and
c.

The VMG deposition may be reopened under the conditions

stated in the Court's Order of April 30, 2018. 28
3.

Relators' Rule 45(d)(2)(B)(i) Cross-Motion to Compel

Compliance with Subpoena Duces Tecum 29 is DENIED as moot.
FURTHER ORDERED:
1.

Relators' Unopposed Motion to Consolidate30 is GRANTED, as

follows.
2.
26

27

Cause No. CV-18-18-BU-SEH and Cause No. CV 15-80-BU-SEH are
Doc. 273, CV 15-80-BU-SEH.
Doc. 5,CV 18-18-BU-SEH.

28

Doc. 273, CV 15-80-BU-SEH.

29

Doc. 11, CV 18-18-BU-SEH.

30

Doc. 257, No. CV-15-80-BU-SEH.
8

consolidated for resolution of issues related to Bozeman Health Deaconess's
Motion to Quash Subpoena31 and Relators' Cross-Motion to Compel
Compliance. 32
3.

Documents filed in the consolidated action shall be captioned in the

same manner as documents previously filed in Cause No. CV 15-80-BU-SEH, and
shall be maintained and docketed in Cause No. CV-15-80-BU-SEH.
5.

The clerk is directed to close Cause No. CV 18-18-BU-SEH.

lflj.
DATED this~ day of May, 2018.

United States District Judge

31

Doc I, No. CV-18-18-BU-SEH.

32

Doc 11, No. CV- I 8-18-BU-SEH.
9