MONTVALE SURGICAL CENTER, LLC v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY et al
Filing
110
OPINION & ORDER denying 103 Appeal Magistrate Judge Decision to District Court. It is ORDERED that the order of Magistrate Judge Waldor, entered on February 23, 2016 D.E. 99 , is hereby AFFIRMED. Signed by Judge Stanley R. Chesler on 4/12/2016. (seb)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
__________________________________________
:
MONTVALE SURGICAL CENTER, LLC,
:
:
Plaintiff,
:
Hon. Stanley R. Chesler, U.S.D.J.
:
Civil Action No. 12-5257 (SRC)
v.
:
:
CONNECTICUT GENERAL LIFE
:
INSURANCE COMPANY et al.,
:
OPINION & ORDER
:
Defendants.
:
__________________________________________:
CHESLER, U.S.D.J.
This matter comes before the Court on the appeal by Plaintiff Montvale Surgical Center,
LLC (“Montvale”) of the non-dispositive order by Magistrate Judge Waldor, entered on
February 23, 2016, deciding two motions: 1) denying Plaintiff’s motion to disqualify Gibbons,
P.C., as counsel for Defendants; and 2) granting Defendants’ motion to quash subpoenas for
deposition issued to various nonparty plan sponsors. For the reasons set forth below, the
Magistrate Judge’s order will be affirmed.
Briefly, the history is as follows. Plaintiff, a surgical center, filed a Complaint in the
Superior Court of New Jersey on July 17, 2012, which was removed to this Court. The
Complaint, in short, seeks payment for surgical services provided to various patients insured by
Defendants Connecticut General Life Insurance Company and Cigna Healthcare of New Jersey,
Inc. (collectively, “CGLIC”), alleging that Plaintiff has standing as assignee to do so. On
October 23, 2015, CGLIC moved to quash subpoenas for deposition issued to various nonparty
plan sponsors. On the same date, Plaintiff moved to disqualify Gibbons, P.C., as counsel for
Defendants. On February 22, 2016, Magistrate Judge Waldor heard oral argument on the two
motions, and then issued the decision at issue, which states that the Magistrate Judge provided
the basis for the decision on the record at the hearing. Plaintiff appeals.
A Magistrate Judge’s non-dispositive order may be set aside if it is clearly erroneous or
contrary to law. 28 U.S.C. § 636(b)(1)(A). Plaintiff first contends that the Magistrate Judge’s
denial of the motion to disqualify is clearly erroneous. In brief, Plaintiff asserts in its appeal
brief that it had argued that, because the Gibbons firm had first represented the claims
administrator, it was a conflict of interest to then represent the nonparty benefit plans, pursuant
to RPC 1.7(b), which states:
Notwithstanding the existence of a concurrent conflict of interest under paragraph
(a), a lawyer may represent a client if:
(1) each affected client gives informed consent, confirmed in writing, after full
disclosure and consultation, provided, however, that a public entity cannot
consent to any such representation. When the lawyer represents multiple clients in
a single matter, the consultation shall include an explanation of the common
representation and the advantages and risks involved;
(2) the lawyer reasonably believes that the lawyer will be able to provide
competent and diligent representation to each affected client;
(3) the representation is not prohibited by law; and
(4) the representation does not involve the assertion of a claim by one client
against another client represented by the lawyer in the same litigation or other
proceeding before a tribunal.
In brief, Magistrate Judge Waldor concluded that no RPC had been violated and that there was
no basis for disqualification. (2/22/16 Hearing Tr. 39:13-23.)
At the outset, this Court queries how a plaintiff has made even a colorable showing of a
violation of RPC 1.7(b), based on an alleged concurrent conflict of interest between a defendant
and a non-party. RPC 1.7(b) allows a lawyer to represent a client “notwithstanding the existence
of a concurrent conflict of interest” under certain conditions, such as the affected clients’
consent. Plaintiff has not even alleged that the affected parties have not consented to the
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Gibbons representation, nor that any of the three other provisions (RPC 1.7(b)(2-4)) have not
been met. Plaintiff has not proposed even a colorable argument that the four provisions of RPC
1.7(b) have not been met. On what basis could this Court conclude that RPC 1.7(b) has been
violated?
The Court also observes that Plaintiff’s appeal brief does not articulate any legal theory
supporting disqualification. Plaintiff vaguely contends that the “Magistrate Judge failed to
carefully scrutinize the facts and the law, in terms of Gibbons’ role on behalf of CGLIC,” but
does not support this by identifying the facts and the law that the Magistrate Judge failed to
scrutinize. (Pl.’s Br. 29.) In a footnote, Plaintiff’s brief hints that the Gibbons representation is
somehow a violation of Defendants’ fiduciary duties to their beneficiaries under ERISA, but
provides no basis for this Court to believe that Defendants have violated their fiduciary duties to
beneficiaries under ERISA by their retention of the Gibbons firm. (Pl.’s Br. 27 n.17.)
Plaintiff has failed to provide any basis for this Court to believe, much less conclude, that
the Magistrate Judge’s decision to deny the motion to disqualify was clearly erroneous. Plaintiff
has offered nothing to suggest that there is even the appearance of a conflict of interest in the
concurrent representation of Defendants and the benefit plans by the Gibbons firm. Given that
there is nothing in the record before this Court supporting disqualification, the Magistrate
Judge’s decision to deny the motion was sound.
Plaintiff next contends that the Magistrate Judge erred in granting Defendants’ motion to
quash subpoenas for deposition issued to various nonparty plan sponsors. In brief, Plaintiff
claims it has been struggling to discover the actual relevant benefit plan documents. There is no
dispute that Defendants have denied the payment of benefits as not covered under the terms of
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the relevant plans, and have failed to produce some plan documents on which it has based these
benefit denials. Plaintiff served subpoenas on various plans which sought depositions of plan
administrators. Defendants objected to the subpoenas, and moved to quash them. Magistrate
Judge Waldor granted the motion to quash, stating on the record:
[T]his is beyond a fishing expedition . . . I see absolutely no sign that deposing
people from some of these plans, even the plans in New Jersey, would reveal
anything. . . Discovery is now over in this case.
(2/22/16 Hearing Tr. 40:1-13.)
Again, at the outset, if Plaintiff wanted to discover the plan terms in the plan documents
themselves, this Court does not see how depositions of plan administrators would accomplish
anything beyond venturing off in the wrong direction. Furthermore, Plaintiff’s brief does not
provide any basis for this Court to disagree with the Magistrate Judge’s decision. Plaintiff does
not explain what would be discovered by deposing plan administrators.1 Moreover, crucially,
Plaintiff fails to even assert that it has been materially prejudiced by the Magistrate Judge’s
decision.
Rather than allow discovery to continue past its end for no reason, Magistrate Judge
Waldor decided to bring the discovery period to a close. Plaintiff has not given this Court any
basis to find that this was in error. Given the length of the litigation – coming up on four years
–, the decision to bring discovery to an end appears both wise and an example of skillful
management of a difficult case. The Magistrate Judge obviously has a deep knowledge of this
1
Plaintiff’s reply brief shifts from seeking to depose plan representatives to seeking to
depose Defendants’ attorneys about their conduct of discovery. (Pl.’s Reply Br. 10.) Setting
aside the issue of privilege, this “discovery about discovery” appears to be a wild goose chase in
search of a red herring.
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case, and her decision was not clearly erroneous.
This Court has reviewed both the Magistrate Judge’s decision denying the motion to
disqualify, entered February 23, 2016, as well as the decision granting the motion to quash,
entered February 23, 2016, and finds that neither decision is clearly erroneous or contrary to law.
The decisions of the Magistrate Judge will be affirmed.
For the reasons stated above,
IT IS on this 12th day of April, 2016
ORDERED that the order of Magistrate Judge Waldor, entered on February 23, 2016
(Docket Entry No. 99), is hereby AFFIRMED.
s/ Stanley R. Chesler
Stanley R. Chesler, U.S.D.J.
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