James et al v. Midlands Choice, Inc.
ORDER - IT IS ORDERED: The defendant's Motion to Compel Production of Documents and Request for Sanctions (Filing No. 93 ) is granted as set forth in this order. Counsel for the parties shall confer on a reasonable amount to be awarded and , if there is agreement, shall file on or before October 3, 2014, a stipulation of the costs and fees to be awarded. In the event the parties fail to reach an agreement, the defendant may file on or before October 8, 2014, an application for the a ward of the costs and fees accompanied by an affidavit of such costs and fees, pursuant to Civil Rules of the United States District Court for the District of Nebraska 54.3 and 54.4. The plaintiff shall have until on or before October 13, 2014, to respond to the defendants application. Thereafter, the issue of costs and sanctions will be deemed submitted and a written order entered. Ordered by Magistrate Judge Thomas D. Thalken. (TCL)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
DEBRA K. JAMES ex rel.
UNITED STATES OF AMERICA,
MIDLANDS CHOICE, INC., a Nebraska
This matter is before the court on the defendant’s, Midlands Choice, Inc. (Midlands),
Motion to Compel Production of Documents and Request for Sanctions (Filing No. 93).
Midlands filed a brief (Filing No. 94) and an index of evidence (Filing No. 95) in support of the
motion. The plaintiff, Debra K. James (James), filed a brief (Filing No. 99) and index of
evidence (Filing No. 100) in opposition. In reply, Midlands filed a brief (Filing No. 105) and
index of evidence (Filing No. 106).
This case involves James’ termination from Midlands in June of 2012. See Filing No.
90 - Second Amended Complaint. James generally alleges Midlands terminated her for
exercising her rights under the Family Medical Leave Act (FMLA), submitting a workers’
compensation claim, and for identifying Midlands’ breach of contract with a health care
provider. Id. James, an at-will employee, worked full-time as Midlands’ Director of Provider
Contracting from 2004 to June 1, 2012. Id. at 4-12. James’ job responsibilities included
negotiating contracts with health care providers. Id. In late 2010, James discovered and
reported to Midlands’ management that Midlands failed to implement negotiated contract
terms with a provider. Id. As a result, the pricing on claims was incorrect.1 Id. James
alleges Midlands unilaterally altered the effective date of the negotiated contract with the
provider to avoid re-adjudicating the claims. Id. James reported to senior management
failure to implement the contract terms was illegal and fraudulent. Id.
The contract pricing with providers was the basis for calculating and submitting claims to primary insurers and
secondary government programs such as Medicare, Medicaid, and an Iowa reimbursement program. See Filing
No. 90 - Second Amended Complaint p. 2, 7.
During James’ employment she suffered a non-work related injury in May of 2011 and
a work related injury in April of 2011.
The second injury required surgery and
rehabilitation. Id. James took FMLA leave for the second injury. Id. Midlands did not timely
report or file James’ workers’ compensation matter regarding the second injury.
Following James’ inquiry into Midlands’ treatment of her FMLA leave time for both injuries,
Midlands recalculated the amount of time attributed to James’ leave.
questioned Midlands’ allocation of time attributed to workers’ compensation for work related
injuries James reported. Id. Within months after raising such questions, Midlands terminated
James’ employment. Id.
James initiated this action on March 1, 2013. See Filing No. 1 - Complaint. On July
22, 2014, James filed a Second Amended Complaint. See Filing No. 90 - Second Amended
Midlands generally denies James’ allegations, asserts several affirmative
defenses, and alleges a counterclaim. See Filing No. 92 - Answer to Second Amended
In Midlands’ counterclaim, Midlands alleges James breached her Employee
Confidentiality Agreement by removing and disclosing confidential and proprietary information
belonging to Midlands without Midlands’ knowledge or authorization. Id.
The parties have exchanged numerous emails in an attempt to obtain and provide
discovery. See Filing No. 94 - Brief p. 1-4; Filing No. 99 - Response p. 1-3; Filing Nos. 95-7 95-18 - Email Correspondence.2 Midlands’ instant motion stems from discovery requested in
two sets of requests for production of documents as well as correspondence and recordings
James referenced during her deposition, which were not previously produced.
No. 94 - Brief p. 1-4; Filing Nos. 95-1 and 95-2 - First and Second Requests for Production of
Documents; Filing Nos. 95-3 - 95-6 - James’ Depo.3
Gradually, James produced the
requested discovery; however, some repeatedly requested discovery remains outstanding.
See Filing No. 94 - Brief; Filing No. 99 - Response.
Specifically, Midlands argues the
following discovery remains outstanding: 1) James’ second deposition; 2) Midlands’ request
The parties sufficiently delineate the exact dates and content of emails exchanged, which do not need to be
replicated here. See Filing No. 94 - Brief p. 1-4; Filing No. 99 - Response p. 1-3 (compiling a chart explaining
As relevant here, Midlands sought all documents relating to any communication between James and any
current or former employee of Midlands or any other persons that pertain to any of the allegations in this matter
and all documents James received and removed from Midlands in connection with her employment. During
James’ deposition, James testified she communicated with former co-workers, recorded conversations with
human resources, and used personal home computers for work. Following the deposition, Midlands requested
discovery of the material James identified.
to inspect James’ personal home computers for confidential documents from Midlands; 3)
2009 and 2013 tax returns; 4) audio recordings; and 5) email correspondence with former coworkers. See Filing No. 94 - Brief. Midlands argues the second deposition is necessary, and
court authorized, due to additional discovery provided and James’ added claim in her Second
Amended Complaint. Id. Additionally, Midlands argues the outstanding discovery is relevant
to Midlands’ affirmative defenses and counterclaim. Id.4
In response, James argues she has not engaged in any conduct that would warrant a
motion to compel and sanctions under Fed. R. Civ. P. 37. See Filing No. 99 - Response.
James argues she does not have responsive emails with former co-workers and states the
tax returns and third audio recording will be produced.
Id. at 4.
James contends she
searched her personal computers and provided responsive documents to her counsel for
Id. at 4-7.
James argues the response delays were due to circumstances
outside James’ control. Id. James’ counsel explains during Midlands’ requests for discovery,
James’ counsel underwent unexpected surgery and follow-up procedures and moved to a
new law firm after her previous firm closed its office. Id.
Midlands replies its discovery requests were served well before the occurrence of
James’ counsel’s life events, thus its motion to compel and request for sanctions should be
granted. See Filing No. 105 - Reply. Midlands reiterates it was forced to file the instant
motion because relevant discovery remains outstanding or was not provided until after the
filing of this motion. Id. Midlands argues James previously admitted in her deposition she
emailed former co-workers but now, without explanation, claims she has no responsive
documents. Id. at 3-4 (citing Filing No. 106-1 - James’ Depo.). Regarding documents on
James’ personal computers, Midlands contends James did not conduct a complete search of
her computers and argues James has not provided an explanation for refusing to let a thirdparty search her computers. Id. at 7-9. Midlands asserts the court should order a third-party
diagnostic search at James’ expense due to the delay and lack of explanation.
Additionally, Midlands argues to the extent one of James’ computers is destroyed, the court
should issue a spoliation sanction against James. Id.
Midlands also requested a sixty-day extension of discovery deadlines; however, the matter is moot
considering the parties subsequently filed a joint motion to extend case deadlines, which the court granted. See
Filing No. 98 - Second Amended Order Setting Final Schedule for Progression of Case.
“Parties may obtain discovery regarding any nonprivileged matter that is relevant to
any party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). “Broad discovery is an important tool
for the litigant, and so ‘[r]elevant information need not be admissible at the trial if the
discovery appears reasonably calculated to lead to the discovery of admissible evidence.’”
WWP, Inc. v. Wounded Warriors Family Support, Inc., 628 F.3d 1032, 1039 (8th Cir.
2011) (alteration in original) (quoting Fed. R. Civ. P. 26(b)(1)).
information includes “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.” Oppenheimer Fund, Inc. v.
Sanders, 437 U.S. 340, 351 (1978). Mere speculation that information might be useful will
not suffice; litigants seeking to compel discovery must describe with a reasonable degree of
specificity the information they hope to obtain and its importance to their case.
Cervantes v. Time, Inc., 464 F.2d 986, 994 (8th Cir. 1972). Once the requesting party
meets the threshold relevance burden, generally “[a]ll discovery requests are a burden on the
party who must respond thereto. Unless the task of producing or answering is unusual,
undue or extraordinary, the general rule requires the entity answering or producing the
documents to bear that burden.” Continental Ill. Nat’l Bank & Trust Co. of Chicago v.
Caton, 136 F.R.D. 682, 684-85 (D. Kan. 1991) (citation omitted).
The issue in this motion is not an objection to discovery requests but the delay in
production of discovery.
The requested discovery, if it exists, is relevant to James’ and
Midlands’ claims. The court will address Midlands’ discovery issues in seriatim.
Former Co-Worker Correspondence
During James’ deposition, James admitted she used her personal email address to
communicate with former co-workers regarding the allegations in her lawsuit. See Filing No.
106-1 - James’ Depo. In response to the instant motion, James represents she has no
responsive documents. See Filing No. 99 - Response p. 4; Filing No. 100-2 - James’ Email.
Midlands argues this is contradictory. However, James did not deny she communicated with
Instead, James stated she does not have responsive documents.
Midlands fails to account for the possibility James might not have older emails saved on her
computer or her email account.
If, after an exhaustive search, James does not have
responsive emails she shall inform Midlands by October 3, 2014, why she does not have any
emails. If James discovers responsive emails, she shall produce such emails to Midlands by
October 3, 2014.
Tax Records and Tape Recordings
James explains production of the 2009 return was contested and James had not filed
her 2013 return at the time of Midlands’ discovery request. Additionally, James explains her
counsel was not aware the third recording failed to reach Midlands’ counsel.
represents it finally received the third tape recording but has not received the 2009 and 2013
tax returns. James’ counsel represents James is now prepared to produce responsive tax
returns; therefore, James shall produce the returns by October 3, 2014.
James initially objected to Midlands’ February 12, 2014, discovery request seeking
production of all documents received or removed from Midlands as a result of James’
position; however, James subsequently produced some documents.
In response to the
instant motion, James’ counsel represents responsive documents were provided to her.
James did not state whether those were the previously disclosed documents or are new
documents. If the documents were not previously disclosed, James’ counsel shall produce
such documents by October 3, 2014.
Midlands provided insufficient information for the court to compel production of James’
personal computers for third-party review.
For example, Midlands has not provided the
scope of review. The court will not require James to send her personal computers to a thirdparty for an unlimited search, which could result in the discovery and disclosure of attorneyclient communication or other irrelevant material. Nevertheless, the parties shall confer and
determine if James did a complete search of her computers. If James has not done an
exhaustive search, James should coordinate with Midlands’ counsel to either review the
computers or have a third-party review the computers. Midlands can suggest a method of
searching James’ computers (i.e., terms to use, location to search, etc.). James does not
have to produce the computers to a third-party at her expense. If James did an exhaustive
search for confidential documents on her personal computers and found no additional
responsive documents, James should so inform Midlands.
James should disclose what
terms she used and how she searched her computer.
Midlands also requests a spoliation sanction.
Midlands has not presented any
evidence James’ third personal computer is destroyed. Additionally, there is no evidence of
when James used the personal computer and whether it could contain confidential
documents from Midlands. Therefore, Midlands’ request for a spoliation sanction is denied.
Generally, the court would require additional briefing on the matter of sanctions,
however, the parties used the briefing of this motion to address the appropriateness of
sanctions, thus additional briefing is unnecessary.
Federal Rule of Civil Procedure
If the motion [to compel] is granted--or if the disclosure or
requested discovery is provided after the motion was filed--the
court must, after giving an opportunity to be heard, require the
party or deponent whose conduct necessitated the motion, the
party or attorney advising that conduct, or both to pay the
movant’s reasonable expenses incurred in making the motion,
including attorney’s fees. But the court must not order this
(i) the movant filed the motion before attempting in good
faith to obtain the disclosure or discovery without court
(ii) the opposing party’s nondisclosure, response, or
objection was substantially justified; or
(iii) other circumstances make an award of expenses
Fed. R. Civ. P. 37(a)(5)(A).
Although production of the discovery was not immediate, some of the delays appear to
have resulted from the discovery’s unavailability (i.e., 2013 returns) or James’ counsel’s
unforeseen circumstances and do not appear intentional.
Accordingly, sanctions, to the
extent Midlands seeks, are inappropriate in this instance. See Fed. R. Civ. P. 37(a)(5)(A)(ii)(iii) (allowing the avoidance of sanction if “the opposing party’s nondisclosure, response, or
objection was substantially justified; or . . . other circumstances make an award of expenses
unjust”). Additionally, James’ second deposition is already at her expense as previously
ordered. See Filing No. 83 - Order p. 5-6. However, several items of discovery should have
been produced following Midlands’ request in November of 2013.
Further, had James’
counsel more thoroughly communicated with Midlands’ counsel or sought extensions, this
motion could have been avoided. For example, James’ counsel could have clarified James
did not have responsive emails with former co-workers, responded to Midlands’ request to
search the computers, or set a date for James’ second deposition. Accordingly, the court will
award Midlands half of its attorneys’ fees expended in filing this motion. See J.B. ex rel.
Bailey v. Avilla R-XIII Sch. Dist., 2012 WL 1113343 (W.D. Mo. Mar. 31, 2012) (awarding
attorney’s fees for failure to timely produce documents). The court is confident the parties
can agree to promptly hold James’ second deposition and come to a resolution regarding
The court cautions James to avoid any more delays in producing
discovery or sitting for a second deposition, and if a delay occurs, to file a motion to extend
any necessary deadlines after showing good cause for the extension.
IT IS ORDERED:
The defendant’s Motion to Compel Production of Documents and Request for
Sanctions (Filing No. 93) is granted as set forth in this order.
Counsel for the parties shall confer on a reasonable amount to be awarded and,
if there is agreement, shall file on or before October 3, 2014, a stipulation of the costs and
fees to be awarded. In the event the parties fail to reach an agreement, the defendant may
file on or before October 8, 2014, an application for the award of the costs and fees
accompanied by an affidavit of such costs and fees, pursuant to Civil Rules of the United
States District Court for the District of Nebraska 54.3 and 54.4. The plaintiff shall have until
on or before October 13, 2014, to respond to the defendant’s application. Thereafter, the
issue of costs and sanctions will be deemed submitted and a written order entered.
Dated this 24th day of September, 2014.
BY THE COURT:
s/ Thomas D. Thalken
United States Magistrate Judge
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