GLEN RIDGE SURGICENTER, LLC v. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, INC.
MEMORANDUM AND ORDER that the oral decision of Magistrate Judge Hammer, dated November 9, 2015 ( ECF no. 266) is AFFIRMED. Further discovery is to be taken in accordance with the foregoing memorandum opinion. Signed by Judge Kevin McNulty on 2/24/16. (sr, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Barbara EDWARDS, in her capacity
as trustee in bankruptcy of
Roxbury Surgical Center, LLC
f/d/b/a/ Roxbury Open MRI and
Surgery Center, individually and
on behalf of all others similarly
Civ. No. 2:08-cv-6 160
MEMORANDUM and ORDER
HORIZON BLUE CROSS BLUE
SHIELD OF NEW JERSEY
KEVIN MCNULTY, U.S.D.J.
This matter comes before the Court on appeal from a non-dispositive oral
ruling of Magistrate Judge Hammer. By letter order dated November 20, 2014, I
directed the parties to engage in targeted discovery as to certain issues
potentially relevant to the plaintiff’s motion for class certification. (ECF No.
225) Magistrate Judge Hammer has ably supervised and resolved hard-fought
issues over discovery of complex records involving UCR reimbursement
methods, especially as to self-funded and large employer plans; plans using
Navigant; self-funded plans and the extent to which Horizon exercises
authority over them; and standing via patient assignments. In particular,
Horizon was directed to supply affidavits on those subjects, with appropriate
documentary exhibits. It appears that plaintiffs also served discovery requests
Disputes arose as to whether Horizon had fully complied with the court’s
letter order. On November 20, 2015, Magistrate Judge Hammer received
multiple letter submissions, heard oral argument, and ruled. (The transcript of
that hearing is cited herein as “Tr.”)
A central dispute is over Horizon’s use of the Navigant Allowance, a
reimbursement allowance for certain out of network (OON) claims in
connection with ambulatory surgical centers (ASC). Another dispute is over the
large, medium and small sized employer plans and the UCR reimbursement
method for each as that may bear on commonality and predominance. Horizon
states that it does not have the information necessary to break down the plans
by UCR allowance method because, as to OON providers, it did not maintain
any such centralized records, and that such facts might be better gleaned from
claims processing systems such as QBlue and NASCO. Horizon, in accordance
with my letter order, did submit two affidavits (the Mehroke and Naeris
affidavits) explaining the scope of the records and the technological limits on
producing the information formatted in the manner plaintiffs desire.
Magistrate Judge Hammer, after thorough analysis of the record,
accepted the conclusions of the affidavits. He found, in addition, that the
defendant had made very significant efforts to analyze claims to which the
Navigant allowance applied for ASO and non-ASO plans; to produce data for
OON ASC plans, both ASO and insured, adjudicated in QBlue; to produce a
NASCO-prepared report of Horizon OON ASC claims; and other NASCO data.
This, Judge Hammer found, discharged defendants’ duty to produce, not just
raw data, but to perform analysis of the data for plaintiffs’ benefit. Judge
Hammer also directed production, within two weeks, of plan documents for
ASO plans for which Horizon exercised authority (on the theory that, where
some entity other than Horizon is adjudicating claims, then the material would
be irrelevant). (Tr. at 22—27)
Plaintiffs characterize these matters as dispositive, but they are not. The
District Court will reverse a Magistrate Judge’s decision on a non-dispositive
motion only if it is “clearly erroneous or contrary to law.” Fed. R. Civ. P. 72(a);
L. Civ. R. 72. 1(c)(l)(A). This Court has frequently spoken of the discretion
granted to the Magistrate Judge in non-dispositive matters. Where the appeal
seeks review of a matter within the core competence of the Magistrate Judge,
such as a discovery dispute, an abuse of discretion standard is appropriate.
See Cooper Hospital/Univ. Med. Ctr. v. Sullivan, 183 F.R.D. 119, 127 (D.N.J.
1998); Deluccia v. City of Paterson, No. 09-703, 2012 WL 909548, at *1 (D.N.J.
March 15, 2012). “This deferential standard is especially appropriate where the
Magistrate Judge has managed this case from the outset and developed a
thorough knowledge of the proceedings.” Lithuanian Commerce Corp., Ltd. v.
Sara Lee Hosiery, 177 F.R.D. 205, 214 (D.N.J. 1997)(internal quotations
omitted); see Deluccia, 2012 WL 909548, at *1 (same). Abuse of discretion
review, of course, may get us to much the same place: as a practical matter it
incorporates plenary review of legal questions and clear error review of factual
ones. See Koon v. United States, 518 U.S. 81, 100 (1996). And I add that even
plenary review would make no difference, because I find myself in agreement
with Judge Hammer, for the reasons expressed below.
Plaintiffs have appealed from Magistrate Judge Hammer’s decision.
Essentially, they object to the limitations on discovery; object to allowing
Horizon to “unilaterally” determine the plans over which it exercises authority;
and seek a plenary hearing on whether Horizon has met its discovery
obligations and/or spoliated evidence. (The spoliation claim relates to an earlier
analysis of cost savings which, according to plaintiffs, implies that Horizon
once had the relevant Navigant data that it says does not now exist.)
To handle the main issue presented first, I will affirm the order of
Magistrate Judge Hammer that the defendants had complied with their
obligations under my letter order (as supplemented by his own rulings). This
was a well-considered and balanced ruling, based on thorough review of the
record and affidavits before him. It lies well within the traditional discretion
exercised by a Magistrate Judge.
I will, however, add the following.
When they appeared before me, Plaintiffs expressed a desire to reach a
prompt decision as to class certification. I found that certain necessary
information was missing. I crafted a letter order in an attempt to reach a
practical accommodation, via the submission of affidavits by Horizon, that
would fill certain specified gaps.’ Plaintiffs now protest, in essence, that this
left too much discretion in the hands of Horizon.
Of course, discovery in the federal system, as Judge Hammer pointed
out, relies to some degree on the attorneys’ and the parties’ honoring their
obligations. And a party cannot, without more, obtain a plenary hearing simply
to test whether discovery has been thorough so far.
That said, the precise contours of my letter order should not themselves
give rise to satellite litigation; the overarching concern is to have sufficient
discovery exchanged so that the parties may present their positions in
connection with class certification. In addition to affirming Judge Hammer’s
order, I will therefore order the following additional relief.
To supplement what has been furnished by affidavit, the parties may
serve document requests directed at the issues identified in my earlier letter
order. Likewise, they may notice depositions of the two affiants, Mehroke and
Naeris, to explore their assertions about the existence, or not, of the records
sought pursuant to the letter order.
I add, to be clear, that I do not find any sufficient indications that
spoliation has occurred, and am not calling for a hearing on that issue at this
time. Nor am I suggesting that discovery provided to date has been less than
complete, although further discovery may shed light on that.
One of those gaps involved patient assignments and standing. My order noted
that a relevant Third Circuit case was pending. That and other cases have now been
decided, bringing more clarfty to the issue, which had divided the district courts. See,
e.g., N.J. Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d 369, 372 (3d Cir. 2015); American
Chiropractic Ass’n v. American Specialty Health Inc., 625 F. App5c 169, 175 (3d Cir.
2015); CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165, 176 n.l0 (3d Cir. 2014).
Once that discovery has been taken, the parties may approach Judge
Hammer with respect to additional discovery that may be required, on either
side, to position this matter for a decision on class certification.
IT IS THEREFORE this 24t1 day of Feburary, 2016
ORDERED that the oral decision of Magistrate Judge Hammer, dated
November 9, 2015 (ECF no. 266) is AFFIRMED. Further discovery is to be
taken in accordance with the foregoing memorandum opinion.
United States District Judge
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