New Mexico Oncology and Hematology Consultants, Ltd. v. Presbyterian Healthcare Services et al
ORDER by Magistrate Judge Gregory B. Wormuth granting in part and denying in part 575 Motion to Compel; adopting in part 609 Special Master's Second Report and Recommendations; granting 621 Defendant's Motion to Modify the Special Master's Second R&R; granting in part 622 Plaintiff's Motion to Adopt Special Master's Second R&R. (bni)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
NEW MEXICO ONCOLOGY AND
HEMATOLOGY CONSULTANTS, LTD.,
PRESBYTERIAN HEALTHCARE SERVICES, et al.,
Case No. 12‐cv‐526 MV/GBW
ORDER ADOPTING IN PART SPECIAL MASTER’S SECOND REPORT &
This matter comes before the Court upon Plaintiff’s Motion to Adopt the Special
Master’s Second Report and Recommendation (doc. 622) and Defendants’ Motion to
Modify the Special Master’s Second Report and Recommendation (doc. 621). On
December 29, 2016, Plaintiff filed a Motion to Compel and Objection to Presbyterian
Clawback (doc. 575). In its Motion, Plaintiff requests that the Court compel Defendants
to produce all unredacted iterations of an email sent to Presbyterian President and CEO
Jim Hinton on April 12, 2013 (hereinafter, the “Hinton Email”). Doc. 575 at 1, 9. On
November 16, 2016, in anticipation of the filing of Plaintiff’s motion, the Court
appointed Special Master Alan C. Torgerson to address the motion. Doc. 551.
On February 27, 2017, the Special Master filed his Second Report and
Recommendation. Doc. 609. The Court has reviewed it and has considered the Special
Master’s recommendations that the Court: (1) find that the Hinton email was not
produced as a result of “inadvertence;” (2) deny Defendants’ request to clawback the
Hinton Email; (3) order that all iterations of the Hinton Email be produced in un‐
redacted form; (4) order Defendants to pay Plaintiff for its reasonable costs and fees for
having to file the motion; and (5) order Defendants to pay the Special Master’s fee in
connection with the Second Special Master Report. See id. at 17.
In its Motion, Plaintiff asks the Court to adopt each of the Special Master’s
recommendations. See generally doc. 622. For their part, Defendants object solely to the
Special Master’s recommendation that Defendants pay Plaintiff’s reasonable costs and
fees associated with its motion. Doc. 621 at 1‐2. Defendants object to this
recommendation by the Special Master arguing that (1) the Special Master was not
authorized to recommend an award of costs and fees and (2) Defendants’ clawback
request was substantially justified and therefore costs should not be awarded. For the
following reasons, the Court adopts the Special Master’s Second Report and
Recommendation in part.
A. The Special Master was authorized to recommend an award of costs and
fees associated with the motion.
On August 11, 2016, the Court issued its initial order appointing Special Master
Torgerson to review Defendants’ privilege designations. Doc. 470. Defendants argue
that the Court’s statement that “[t]he Special Master’s recommendation on costs is
limited to responsibility for payment of the Special Master’s costs” withholds authority
to recommend an award of costs and fees associated with Plaintiff’s motion. Doc. 621 at
4. However, on November 16, 2016, the Court issued a Supplemental Order
Appointing Special Master, which expanded the scope of the Special Master’s
assignment to include Plaintiff’s Motion to Compel on the clawback issue. Doc. 551.
Notably, this supplemental order did not contain a similar restriction on the Special
Master’s consideration of costs. See generally id. The question of whether the Special
Master could consider an award of costs associated with Plaintiff’s motion is thus not
expressly resolved in the orders appointing the Special Master. However, the Court did
state in its supplemental order that it “hereby expands the Scope of Work . . . to also
include consideration of [Plaintiff’s] Motion [to Compel].” Doc. 551 at 2.
Motions to compel are brought pursuant to Rule 37 of the Federal Rules of Civil
Procedure. See Fed. R. Civ. P. 37(a). That rule specifically requires that the “losing”
party must be required to pay the reasonable expenses incurred in making or opposing
the motion unless (i) the prevailing party failed to make a good faith effort to obtain the
disclosure without court action; (ii) the “losing” party’s grounds were “substantially
justified” or (iii) the “circumstances make an award of expenses unjust.” Fed. R. Civ. P.
37(a)(5).1 Consequently, consideration of a motion to compel necessarily includes
ruling on the matter of costs. This truism is particularly apt here where the motion
referred to the Special Master for his consideration included a Plaintiff’s request for an
1 Of course, the party must be given an opportunity to be heard as well. This requirement is met
where, as here, the opposing party seeks sanctions in its briefing and the sanctioned party has an
opportunity to respond thereafter. See, e.g., McCoo v. Denny’s Inc., 192 F.R.D. 675, 697 (D. Kan. 2000).
“award [of] reasonable costs and fees … for having to file this Motion.” Doc. 575 at 17.
Therefore, referral of the motion to compel to the Special Master included the authority
to make a recommendation regarding awarding costs and fees associated with filing the
B. Review of Special Master’s Recommendation
With respect to the sole contested issue, the Special Master recommended “that
NMOHC be awarded reasonable costs and fees for having to file this Motion….” Doc.
609 at 17. As with all factual findings and legal conclusions of a special master, this
recommendation is reviewed de novo.3 Fed. R. Civ. P. 53(f). Because the Special Master
did not expressly state the basis for this recommendation, the Court will assume that he
was applying the standards of Rule 37. As noted above, expenses associated with a
motion to compel are not assessed to the “losing” party if their arguments against
disclosure were “substantially justified.” Fed. R. Civ. P. 37(a)(5). While the Special
Master never explicitly found that Defendants’ arguments were not “substantially
justified,” such a finding is implied in his final recommendation. The Court disagrees.
2 The Court is untroubled by the apparent conflict between this result and the language in the
original order of appointment. The matters referred to the Special Master in the original order were not
brought in the form of a motion. Therefore, in that original order, limiting any costs recommendation to
responsibility for payment of the Special Master’s costs did not exclude any authority from the Special
Master that he otherwise would have possessed.
3 Factual findings can be reviewed under a clear error standard if so stipulated by the parties and
approved by the Court. Fed. R. Civ. P. 53(f)(3). Neither prerequisite is present here.
According to the Special Master, the matter at issue in his Second Report and
Recommendation boiled down to two arguments: (1) did Defendants waive any
privilege by allowing Plaintiff’s attorney to use the email during the Hinton deposition,
and (2) if not, was the email subject to clawback? On the first of the questions
(addressed second by the Special Master), the Special Master agreed with Defendants.
See doc. 609 at 12‐17. On the second question, Defendants were not so fortunate. In
ruling against Defendants, the Special Master rejected two related arguments.
First, the Special Master ruled that Defendants’ right to clawback was governed
by Fed. R. Evid. 502(b). Id. at 5‐9. This ruling rejected Defendants’ argument that their
right to clawback was governed by the parties’ stipulated protective order. This
distinction was important because, under Rule 502(b), a clawback is only permitted for
“inadvertent” disclosures where the party also satisfies certain pre‐ and post‐ disclosure
duties. Under the protective order, clawback was permitted for disclosures through
“inadvertence, mistake or other error….” Doc. 93, ¶25. Because the Special Master
found that Defendants’ disclosure of the email was not “inadvertent,” he held that
clawback under Rule 502(b) was not permitted. Next, the Special Master opined that,
even if the protective order standard applied, the email was not produced as a result
“inadvertence, mistake or other error.” See doc. 609 at 9‐12.
While the Court herein adopts these conclusions, it finds Defendants’ contrary
arguments were substantially justified. The Court finds that they were justified to
argue that the protective order applied and gave broader clawback protection than
provided for in Rule 502(b), and that the Hinton email disclosure was a “mistake”4 and
subject to clawback under the protective order. Therefore, expenses for the underlying
motion to compel will not be assessed to them.
WHEREFORE IT IS HEREBY ORDERED that the Plaintiff’s Motion to Adopt
the Special Master’s Second Report and Recommendation (doc. 622) is GRANTED IN
PART and Defendants’ Motion to Modify the Special Master’s Second Report and
Recommendation (doc. 621) is GRANTED. The Second Special Master Report (doc. 609)
is ADOPTED IN PART by the Court. Plaintiff’s Motion to Compel (doc. 575) is
GRANTED with the exception of the request for fees and costs which is DENIED.
Defendants’ request to clawback the Hinton Email is DENIED. Defendants shall
produce all iterations of the Hinton Email in its un‐redacted form. Pursuant to Rule
53(g), the Special Master fee with regards to this motion shall be paid by Defendants, as
recommended by the Special Master. See doc. 609 at 17.
GREGORY B. WORMUTH
UNITED STATES MAGISTRATE JUDGE
4 “An action or decision that is wrong or produces a result that is not correct or not intended.”
Mistake, Cambridge Academic Content Dictionary (Cambridge University Press 2017) (emphasis added).
The special master’s conclusion was based on his determination that Defendants’ disclosure was
intentional. However, as noted by the emphasis in this definition, under some understandings of the
word, lack of intent is not necessary for an action to qualify as a “mistake.”
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