North Shore-Long Island Jewish Health Systems, Inc. v. MultiPlan, Inc. et al

Filing 173

ORDER re 160 MOTION to Compel and to impose sanctions filed by North Shore-Long Island Jewish Health Systems, Inc. See substantive decision attached here granting the motion in part and denying the motion in part. ALSO SEE ATTACHED MEMORANDUM AND ORDER FOR ADDITIONAL DIRECTIVES TO THE PARTIES. Ordered by Magistrate Judge A. Kathleen Tomlinson on 3/28/2018. (Tomlinson, A.)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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NORTH SHORE-LONG ISLAND JEWISH
HEALTH SYSTEMS, INC.,
Plaintiff,

-against-

MEMORANDUM
AND ORDER
CV 12-1633 (JMA) (AKT)

MULTIPLAN, INC., TEAMSTERS LOCAL 210
AFFILIATED HEALTH & INSURANCE FUND,
AND LOCAL 812 HEALTH FUND,
Defendants.
--------------------------------------------------------------X
A. KATHLEEN TOMLINSON, Magistrate Judge:
I.

PRELIMINARY STATEMENT
The allegations involved in this case arise from the relationship between Plaintiff North

Shore-Long Island Jewish Hospital System, Inc. (“Plaintiff” or “Northwell”1), a health care
facility operator, and Defendant MultiPlan, Inc. (“Defendant” or “MultiPlan”), a preferred
provider organization, commonly referred to as a “PPO.” According to the Second Amended
Complaint, Northwell entered into an agreement with MultiPlan (the “Participation Provider
Agreement”) in June 2007 that provided, inter alia, for MultiPlan’s clients to access Northwell’s
health care network at discounted reimbursement rates. Second Amended Complaint (“Second
Am. Compl.”) [DE 54] ¶ 7. MultiPlan in turn entered into agreements with individual health
care plans which allowed members of these entities, as MultiPlan’s clients, to access Northwell’s
health care network at the discounted rates negotiated by MultiPlan. Id. ¶¶ 14-16. Between

Plaintiff now identifies as “Northwell Health System.” Plaintiff’s Memorandum of
Law in Support of its Motion (“Pl.’s Mem. in Supp.”) [DE 161] at 1.
1

2008 and 2010, Northwell and MultiPlan engaged in further negotiations, resulting in four
amendments to the Participation Provider Agreement. Id. ¶¶ 9-13.
During the course of the Northwell-MultiPlan relationship, members of MultiPlan’s
client health care plans received health care services at Northwell’s facilities. Second Am.
Compl. ¶ 16. Northwell alleges that some of these entities repeatedly underpaid and/or were
delinquent with payment of claims for health care services rendered by Northwell. Id. ¶¶ 17-18.
Northwell claims it informed MultiPlan that this behavior constituted a breach of the terms of the
Participation Provider Agreement. Id. On September 10, 2007, Northwell gave notice to
MultiPlan that it was exercising its right under the Participation Provider Agreement to exclude
the non-compliant MultiPlan clients2 and their members from eligibility for discounted
reimbursement rates in Northwell’s health care network. Id. ¶ 10.
The heart of this action lies in MultiPlan’s alleged acts and omissions following
Northwell’s notice that it was exercising its right to exclude MultiPlan’s non-compliant clients
from its in-network, discounted reimbursement rates. Northwell asserts that following its notice,
MultiPlan deliberately misled Northwell about the fact that MultiPlan had not actually deemed
its non-compliant clients to be excluded from Northwell’s in-network, discounted rates. See
Second Am. Compl. ¶¶ 22-26. MultiPlan allegedly also failed to advise these non-compliant
clients that Northwell had deemed them excluded from its discounted, in-network rates. See id.
¶¶ 27-29, 32. As a result of MultiPlan’s concealment and misrepresentations, Northwell claims,
MultiPlan’s non-compliant clients continued to receive services at Northwell facilities and to
accrue charges at non-discounted rates. Id. ¶ 32. These charges remain unpaid. Id. ¶¶ 33-37.

2

According to Northwell, these entities include defendants Teamsters Local 210
Affiliated Health & Insurance Fund, Local 812 Health Fund, and possibly an entity named
Crossroads Healthcare Management, LLC.
2

Northwell maintains that MultiPlan’s misrepresentations and concealment were part of a
deliberate plan to induce Northwell into continuing its business relationship with MultiPlan, to
MultiPlan’s benefit and Northwell’s detriment. Northwell alleges it told MultiPlan that the
exclusion of MultiPlan’s non-compliant clients from eligibility for Northwell’s discounted, innetwork rates was, after September 10, 2007, “a material and necessary pre-condition” to
continued negotiations with MultiPlan, negotiations which led to multiple amendments and
renewal of the 2007 Participation Provider Agreement. Second Am. Compl. ¶¶ 9-13, 47.
Northwell’s Second Amended Complaint asserts no less than nine claims against MultiPlan and
its non-compliant clients arising out of these alleged acts and omissions. Id. ¶¶ 30-116.
Before the Court is Northwell’s motion to compel MultiPlan to produce certain
electronically stored information and to impose sanctions on MultiPlan. Northwell seeks to
compel production of, inter alia, information related to MultiPlan’s revenues and profits during
the course of its business relationship with Northwell. Northwell also argues that sanctions are
appropriate given MultiPlan’s misrepresentations and intransigence during the discovery process.
MultiPlan opposes Northwell’s motion. For the reasons which follow, Northwell’s motion to
compel certain electronically stored information relating to MultiPlan’s revenues and profits, and
for sanctions, is GRANTED, in part, and DENIED, in part.
II.

RELEVANT BACKGROUND
This action and the pending discovery dispute have a complex procedural history. As

such, the Court summarizes those aspects of the procedural background which bear directly on
the instant motion and the parties’ positions.

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A.

Procedural Posture

In Request No. 8 of its first Rule 34 request for the production of documents dated
September 20, 2013, Northwell sought from MultiPlan any “document that would reflect any
profit obtained by MultiPlan from January 1, 2006 to the present arising out [of] any contracts
entered into between MultiPlan and the plaintiff.” Plaintiff’s Declaration in Support (“Pl.’s
Decl.”) [DE 162] at Ex. 10. In its November 18, 2013 response, MultiPlan “object[ed] to this
Request on the same basis that it objected to Request for Documents No. 23 on the attached
Exhibit ‘A’,” which in turn stated “MultiPlan asserts the General Objections; further responding,
MultiPlan objects to Document Request No. 23 on the basis that it is overly-broad, irrelevant and
not likely to lead to the discovery of admissible evidence.”3 Id. at Ex. 11. On February 13,
2014, MultiPlan served a supplemental response to Northwell’s Request No. 8, stating:
MultiPlan asserts the General Objections. MultiPlan further objects
to Request for Production No. 8 as impossibly vague, overly board,
and unduly burdensome, in that it requests “[a]ny document”
without regard to time period, custody, or control. MultiPlan also
objects to this Request as it is not reasonably calculated to lead to
the discovery of admissible evidence as it seeks documents
predating the allegations in this lawsuit. MultiPlan further objects
to this Request as irrelevant as any alleged profit of MultiPlan is not
at issue nor is it a measure of damages available to Plaintiff under
any cause of action. MultiPlan further objects to this Request to the
extent it seeks documents protected by the attorney-client and/or
work-product privilege. MultiPlan also objects to this Request to
the extent it seeks documents already in the possession, custody, or
control of Plaintiff, particularly those previously produced.
Id. at Ex. 12. On February 24, 2014, MultiPlan served a second supplemental response to
Northwell’s Request No. 8. This response was identical in part to the first four sentences of its

3

The Court points out that this type of general objection is insufficient to preclude
otherwise appropriate discovery and is no longer the proper standard, as discussed infra at
Section III.C.
4

first supplemental response, with the following addition: “Further responding, MultiPlan has no
documents responsive to this Request.” Id. at Ex. 13.
On February 28, 2014, Northwell filed a letter motion with the Court requesting that
MultiPlan be compelled to comply with Request No. 8 of Northwell’s first Rule 34 Request. See
generally Plaintiff’s First Motion to Compel (“Pl.’s First Mot. to Compel”) [DE 86]. Northwell
argued that information related to MultiPlan’s profits and revenues, as evidence of the motive for
MultiPlan’s misrepresentations, was relevant to its claim for fraud and punitive damages. Id.
at 2. According to Northwell, the language of MultiPlan’s amended responses to Request No. 8,
the realities of MultiPlan’s day-to-day business operations, and the fact that MultiPlan had
already produced several documents related to its revenues, all belied its assertion that it had no
responsive documents. Id. at 2-3.
MultiPlan opposed Northwell’s initial motion. According to MultiPlan, it agreed to
perform and did perform a good faith search for documents responsive to Request No. 8 and
found none. See Defendant’s Opposition to Plaintiff’s First Motion to Compel (“Def.’s Opp’n.
to Pl.’s First Mot. to Compel”) [DE 89] at 1-2. MultiPlan also took issue with what it saw as
Northwell’s conflation of the terms “profit” and “revenue” and asked the Court to limit
Northwell’s inquiry strictly to information relating to “profit.” Id. at 3 (“To the extent that North
Shore would now ask the Court to broaden its Request to include revenues or other areas not
included in the term ‘profits,’ MultiPlan would object to any such request.”).
While that motion was pending, Northwell served a second Rule 34 Request on July 24,
2014. See Pl.’s Decl., Ex. 20. That request sought documents which Northwell alleges were
referenced at the April 28, 2014 depositions of two MutliPlan representatives, Michael Genzel

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and James Taratunio. See id. at Ex. 18, 19. Northwell sought, inter alia, the following
documents:
(h) [] documents regarding MultiPlan being compensated by part of
shared savings as referenced at page 62, line 18 [of Michael
Genzel’s deposition transcript];
...
(j) Any documents regarding the process to determine the volume
and/or the total charges, as identified at pages 74-76 and 79 [of
Michael Genzel’s deposition transcript], and provide such
information with regard to all the claims processed by MultiPlan for
plaintiff for 2006 through the present by year, including any reports
and/or electronic data;
(k) Any documents regarding a report by volume and charges by
payor, as identified at page 76 and 22 [of Michael Genzel’s
deposition transcript], and provide such information by year from
2006 to the present, for all claims processed by MultiPlan for
plaintiff . . . including but not limited to any electronic data;
and
(k) Any documents concerning Crossroads claims payment history
from 2006 – 2010;
(l) All documents concerning a report for claims of members of
Crossroads generated through MultiPlan, as identified at pages 6667 [of James Taratunio’s deposition transcript], provide such
information for the years 2006-2010.
Id., Ex. 20. Dated September 5, 2014, MultiPlan’s response to Northwell’s second Rule 34
Request asserted that for all but one of the above referenced requests, no such documents existed
or could be produced. Id. at Ex. 21.
On August 5, 2014,4 Northwell served on MultiPlan a combined Rule 30(b)(6) Notice
and Rule 34 Request. See Pl.’s Decl., Ex. 3. The Rule 30(b)(6) Notice identified fifteen topics

4

The Notice appears to be mistakenly dated August 5, 2012.
6

for testimony, including “[k]nowledge of revenue, profit, and volume generated by MultiPlan,
Inc. by way of the processing of claims of the beneficiaries of MultiPlan’s clients’ health plans
who were treated at or received services from the plaintiff from 2006 until 2011.” Id. MultiPlan
did not serve any objections to the noticed topics bearing on MultiPlan’s revenues and profits.
Plaintiff’s Reply Declaration (“Pl.’s Reply Decl.”) [DE 167] at 4. Northwell’s August 5, 2014
Rule 34 Request identified four categories of documents for production, including “[a]ll
documents and data demonstrating revenue, profit, and volume generated by MultiPlan, Inc. by
way of processing claims received from North Shore-LIJ from 2006 through 2011.” Pl.’s Decl.,
Ex. 3. MultiPlan similarly did not serve any objections to this Rule 34 request. Pl.’s Reply Decl.
at 4.
In an Order dated September 29, 2014, the Court ruled on Northwell’s initial motion to
compel [DE 86], authorizing Northwell to serve a Rule 30(b)(6) Notice to probe the
representation made by MultiPlan’s counsel that MultiPlan did not have any documents
responsive to Request No. 8 of Northwell’s first Rule 34 Request. See DE 141 at 4. The Court
further instructed Northwell that “[t]he Notice must provide the lists of topics related to the
information on profits it is seeking.” Id. Thereafter, on or about October 30, 2014, Northwell
served on MultiPlan an amended and supplemental Rule 30(b)(6) Notice and Rule 34 Request.
See Pl.’s Decl., Ex. 2. This amended Notice identified twenty-three topics for testimony,
including, inter alia, the details of MultiPlan’s expenses, revenues, and profits with respect to
claims for services provided by Northwell. Id. The amended Rule 34 Request identified five
categories of documents and electronic information for production, including documents relating
to “any revenues, expenses, or profits of MultiPlan in connection with the processing of claims
for health care services provided by North Shore-LIJ in each year from 2006 through 2011.” Id.

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The deposition of MultiPlan’s Rule 30(b)(6) corporate representative, Leeann Christ,
took place on April 20, 2016. On September 14, 2016, in an apparent attempt to preempt
Northwell’s anticipated motion to compel, MultiPlan filed a letter motion requesting a protective
order “prohibiting North Shore from pursuing any further written or deposition discovery with
respect to MultiPlan’s profits, revenues, or expenses as a result of its contract with North Shore.”
DE 155 at 2. The Court denied MultiPlan’s motion in an Order dated September 25, 2016. See
DE 159. On October 17, 2016, Northwell filed the instant motion to compel production of
discovery and for sanctions against MultiPlan, with MultiPlan’s opposition.
B.

The Parties’ Positions
1.

Northwell’s Motion to Compel

Northwell asks the Court to compel MultiPlan to produce an extensive amount of
electronically stored information, the existence of which was purportedly confirmed by
MultiPlan’s Rule 30(b)(6) deponent, Ms. Christ. According to Northwell, Ms. Christ testified to
the existence of four categories of information pertinent to MultiPlan’s revenue associated with
the re-pricing of Northwell claims, as described below. 5 See generally Plaintiff’s Motion to
Compel (“Pl.’s Mot.”) [DE 160].
First, Northwell alleges Ms. Christ “admitted MultiPlan can run reports from its
databases showing (1) each claim by Northwell, including the Northwell facility or ancillary
provider responsible for that claim; (2) the number, amount, and date of that claim; and (3) the
MultiPlan client responsible to pay Northwell the re-priced amount of each such claim.” Pl.’s
Mem. at 5.

Northwell notes that MultiPlan limited Ms. Christ’s testimony to three of the topics
listed in the Rule 30(b)(6) Notice, namely those regarding profit, revenue, and expenses
associated with the re-pricing of Northwell claims. See Pl.’s Mem. at 4.
5

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Second, Northwell alleges Ms. Christ admitted that MultiPlan’s databases contain data
showing the type of fee arrangement MultiPlan had with its clients, with clients paying either a
“percentage of savings” access fee (“percentage of savings clients”) to MultiPlan for access to its
discounted network rates, or a flat “per employee, per month” access fee (“per employee, per
month clients”) for access to MultiPlan’s discounted network rates. Pl.’s Mem. at 5.
Third, Northwell alleges Ms. Christ admitted that with respect to Northwell claims repriced by or for percentage of savings clients, MultiPlan databases contain information,
separable by year, regarding (1) the amount of each re-priced claim; (2) the amount of savings
the client was calculated to realize on each claim; (3) the percentage of savings that the client
agreed to pay MultiPlan; (4) the corresponding amount of money the client was obliged to pay
MultiPlan for each claim; (5) each client’s payment history to MultiPlan; and (6) the total
amount of claim charges for all providers in the MultiPlan network which were submitted for repricing for or by each such client. See Pl.’s Mem. at 5-6.
Fourth, Northwell alleges Ms. Christ admitted that with respect to Northwell claims repriced by or for per employee, per month clients, MultiPlan databases contain information,
separable by year, regarding (1) the amount of each re-priced claim; (2) the monthly access fee
rate each such client agreed to pay MultiPlan; (3) each such client’s history of payments of
monthly access fees; and (4) the total amount of claim charges of all providers in the MultiPlan
network that were submitted for re-pricing by or for each such client. See Pl.’s Mem. at 6.
Based on the purported admissions of MultiPlan’s Rule 30(b)(6) corporate representative,
Northwell asks the Court to compel production of the following five categories of information
relative to the period January 1, 2007 through December 31, 2011:
(1) data regarding the number, amount, and date of each Northwell
claim charge, the name of the MultiPlan client associated with the
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claim, and whether that client is a percentage of savings or a per
employee, per month client;
(2) for each percent of savings client responsible to pay a Northwell
claim, the amount of each re-priced claim, the savings realized by
the client, and the percentage of that savings paid to MultiPlan, in
addition to invoices prepared for each such client, documents
reflecting accounts receivable for each such client, and the total
claims submitted by all other providers (other than Northwell) for
re-pricing of claims by or for each such client;
(3) for each per employee, per month client responsible to pay a
Northwell claim, the amount of revenue MultiPlan received from
each such client, along with the number of claim charges submitted
by Northwell for each client, and the number of claim charges
submitted by all other providers (other than Northwell) for each such
client;
(4) the identity of an unidentified percentage of savings client
referenced in the Rule 30(b)(6) deposition and information
regarding its claims and payments to MultiPlan; and
(5) a sworn statement from a MultiPlan representative regarding
exactly what fields of information can be extracted from any
MultiPlan database.
Pl.’s Mem. at 11-15. According to Northwell, MultiPlan has an obligation to run reports to
produce this data even if MultiPlan does not usually run such reports in the ordinary course of
business. Id. at 17. As Northwell argues, “it is the fact that the business stores and keeps the
data, not whether or how the business uses the data, which makes the data discoverable.” Id.
The fact that the data by itself may not be dispositive on an issue does not preclude production
according to Northwell, for “a party even must provide data that might be combined to show
something that is not otherwise in the database.” Id. at 18.
Northwell further argues that the October 30, 2014 Rule 30(b)(6) Notice did not exceed
the scope of the Court’s September 29, 2014 Order authorizing Northwell to perform its Rule
30(b)(6) deposition. Northwell points to the Court’s use of the word “topics,” plural, in directing

10

that Northwell’s Rule 30(b)(6) Notice “must provide the list of topics on profits that it is
seeking.” Pl.’s Mem. at 19. This authorization to probe multiple topics related to profits is,
according to Northwell, “consistent with other court holdings that discovery on a topic
encompasses any component part of that topic.” Id.
Lastly, Northwell argues the Rule 34 Request that accompanied its October 30, 2014
Rule 30(b)(6) Notice is not barred by any discovery deadline. Pl.’s Mem. at 21. Even if the
Court did not intend to permit any new document request for the information identified at the
Rule 30(b)(6) deposition, MultiPlan has an obligation to supplement, or provide in the first
instance, responses to numerous outstanding discovery requests seeking the same information.
Id.
With regard to sanctions, Northwell asks the Court for its fees in filing its original motion
to compel of February 28, 2014, preparing the Rule 30(b)(6) Notices and Requests, conducting
the Rule 30(b)(6) deposition, and making the instant motion. See Pl.’s Mem. at 23-24.
Northwell also asks that the Court issue a preclusion order preventing MultiPlan from submitting
evidence on expenses associated with the revenues generated from the processing and re-pricing
of Northwell claims, as Ms. Christ was purportedly unable to testify as to the existence of any
such expenses in her deposition. Id. at 24.
2.

MultiPlan’s Opposition

MultiPlan opposes Northwell’s motion on four grounds. First, MultiPlan argues that
Northwell has failed to comply with Local Civil Rule 37.1. See Defendant’s Memorandum in
Opposition to Plaintiff’s Motion to Compel (“Def.’s Opp’n.”) [DE 163] at 6. Rule 37.1 requires
a party seeking court intervention under Fed. R. Civ. P. 37 to “specify and quote or set forth
verbatim in the motion papers each discovery request and response to which the motion or

11

application is addressed.” Loc. Civ. R. 37.1. MultiPlan argues that Northwell fails to set forth
the individual requests and responses at issue in the body of its motion, and its motion should be
denied as a result. See Def.’s Opp’n. at 7.
Identifying the scope of permissible discovery as limited to information relevant to the
parties’ claims and defenses, MultiPlan next argues that Northwell does not present a viable
claim for fraud or punitive damages. See Def.’s Opp’n. at 7. Without a viable fraud claim, the
argument goes, Northwell is not entitled to information the relevance of which goes only to an
alleged fraudulent motive. Id. at 7-11. MultiPlan also takes issue with the fact that Northwell
has presented no evidence “that anyone at MultiPlan who participated in the alleged inducements
had any knowledge of the profits or revenue MultiPlan received through the Northwell
Agreement.” Id. at 11. Similarly, MultiPlan argues that Northwell cannot credibly allege that
calculations of profits or revenues motivated any fraudulent behavior where MultiPlan does not
create or maintain these calculations in the ordinary course of business. Id. Additionally,
MultiPlan challenges the breadth of the information sought, noting the motion “seeks documents
and information regarding charges related to any client of MultiPlan, and in fact also seeks
documents and information related to providers other than Northwell.” Id. at 12.
Third, MultiPlan argues that producing the information Northwell seeks would
improperly require MultiPlan to “create” new documents. Def.’s Opp’n. at 13. MultiPlan asserts
that its systems “do not and cannot break down revenues for clients by provider or clients who
choose to pay for access through the PEMP6 method, nor is the system capable of tracking
expenses by provider at all.” Id. Because its systems do not store or produce data in the manner
sought by Northwell, MultiPlan argues it “would have to perform calculations across multiple

6

PEMP refers to “Per Employee, Per Month.”
12

systems to create the information sought by Northwell. [ ] This is not merely the extraction of
data into a new report as Northwell would suggest, but rather the creation of new data from
multiple sources using calculations. That is simply beyond the scope of Rule 34.” Id. at 14.
Lastly, MultiPlan contends that the discovery Northwell now seeks was not timely
requested. Laying out the six discovery requests it sees as bearing on the instant motion,
MultiPlan argues that each request was either mooted by a subsequent request or court order, or
in the case of Northwell’s July 24, 2014 Rule 34 Request, served after the May 30, 2014 fact
discovery deadline set forth in the Court’s Final Scheduling Order. See Def.’s Opp’n. at 17
(citing DE 78).
With respect to Northwell’s motion for sanctions, MultiPlan states that it has complied
with its discovery obligations, and should not be punished for what it sees at Northwell’s
improper enlargement of the scope of discovery. Def.’s Opp’n. at 19. MultiPlan also argues that
Northwell is not entitled to a preclusion order, as it has failed to set forth any facts that would
support a finding it has suffered prejudice as a result of MultiPlan’s actions. Id. at 20.
3.

Northwell’s Reply

Challenging MultiPlan’s argument that it has failed to comply with Local Civil Rule
37.1, Northwell asserts that because the instant motion is a “follow up to the Court’s disposition
of a prior motion to compel and the Court ordered 30(b)(6) deposition, it has identified the
pertinent discovery requests and responses in substantial compliance with Local Civil Rule
37.1.” Pl.’s Reply Mem. [DE 166] at 1. Northwell also attaches to its reply memorandum a
declaration setting forth the passages of each relevant discovery request and Multiplan response
that bear on the instant motion. See generally DE 167.

13

Northwell addresses MultiPlan’s argument that the discovery it seeks is not relevant
because of purported legal insufficiencies of Northwell’s claim for punitive damages and fraud.
See Pl.’s Reply Mem. at 2. According to Northwell, “a party may not avoid discovery on the
ground the discovery relates to allegations that are not viable or well-pleaded.” Id. at 3. Further,
Northwell argues this Court does not have the authority to render an essentially dispositive
determination on the viability of claims or defenses. Id. And Northwell points out that
MultiPlan has not raised its relevance objection prior to its opposition to the instant motion, and
as such, the objection is waived. Id. at 3-4. Lastly, Northwell argues that MultiPlan cannot
prevent discovery of information on the grounds that, in MultiPlan’s view, its employees did not
access it in the ordinary course of business and therefore could not form a fraudulent motive. Id.
at 4. According to Northwell, “it is for the trier of fact, not MultiPlan, to decide the credibility of
[MultiPlan’s employees] regarding their motivation to lie.” Id.
Regarding the timeliness of the relevant discovery requests, Northwell points out that in a
July 17, 2014 letter, counsel for MultiPlan submitted a joint proposal of an October 31, 2014
deadline to serve written discovery, making Northwell’s July, August, and October 2014
requests timely. See Pl.’s Reply Mem. at 8 (referencing DE 131). Northwell observes that “[t]he
Court has not yet entered a final scheduling order setting a deadline to complete fact discovery,
and on August 19, 2016, the parties submitted a joint report to the Court regarding the status of
open fact and expert discovery which remains to be completed, including fact discovery sought
by MultiPlan.” Id. at 8-9 (citing DE 153).

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III.

DISCUSSION
A.

Alleged Procedural Deficiencies

As an initial matter, the Court finds unpersuasive MultiPlan’s argument that
Northwell’s motion warrants denial on the basis of noncompliance with Local Civil
Rule 37.1, or on the basis of untimeliness.
1.

Local Civil Rule 37.1

Local Civil Rule 37.1 requires that in any motion made pursuant to Federal Rule of Civil
Procedure 37, “the moving party shall specify and quote or set forth verbatim in the motion
papers each discovery request and response to which the motion or application is addressed. The
motion or application shall also set forth the grounds upon which the moving party is entitled to
prevail as to each request or response.” Loc. Civ. R. 37.1. Rule 37.1 exists to prevent the
needless waste of judicial resources that occurs when the Court has to constantly flip-flop
between documents in order to locate the discovery request at issue, the opposing party’s
response, the nature of each party’s arguments, and the relevant case law cited in support of each
party’s position. See Carl v. Edwards, No. 16 Civ. 3863, 2017 WL 4271443, at *5 (E.D.N.Y.
Sept. 25, 2017).
While it is true that Northwell’s memorandum of law does not explicitly identify which
of several discovery requests the instant motion addresses,7 the Court has the discretion to view
the instant motion as a “follow-up” to the Court’s September 29, 2014 Order, and Northwell’s
February 28, 2014 motion to compel on which that Order was based. See Pl.’s Reply Mem. at 1.
Northwell’s February 28, 2014 motion substantially complied with Local Civil Rule 37.1. See

7

Northwell submits a reply declaration that attempts to address this. See generally

DE 167.
15

DE 86. Indeed, the first sentence of Northwell’s memorandum in support of the instant motion
states the motion is being made “pursuant to this Court’s September 29, 2014 Order.” Pl.’s
Mem. at 1. The fact that MultiPlan is able to easily identify the operative discovery request on
page 1 of its opposition memorandum provides further support for construing the instant motion
as an extension of Northwell’s February 28, 2014 motion and this Court’s September 28, 2014
Order. See Def.’s Opp’n. at 1 (identifying Request No. 8 as “[c]entral to [the initial motion to
compel] and the current dispute”). The Court also finds MultiPlan’s reliance on Johnson v.
Riverhead Cent. Sch. Dist., No. 14-CV-7130, 2016 WL 4507002 (E.D.N.Y. Aug. 26, 2016)
unavailing. See Def.’s Opp’n. at 7. Johnson involved an egregious violation of Rule 37.1 and is
distinguishable from the unique procedural circumstances identified above. The Court
consequently declines to deny the motion for a claimed failure to comply with Rule 37.1.8
2.

Timeliness

MultiPlan’s argument that the information Northwell now seeks was not timely requested
appears to have two components. First, MultiPlan argues the information Northwell seeks is
beyond the scope of Request No. 8 of its September 20, 2013 Rule 34 Request as well as the
scope of the September 29, 2014 Court Order addressing that request, and is therefore not timely.
See Def.’s Opp’n. at 18. That Order, MultiPlan maintains, authorized a Rule 30(b)(6) deposition
only “for the limited purpose of exploring MultPlan’s representation that it did not maintain
documents reflecting profit by provider.” Id. (internal quotations omitted). Second, MultiPlan
argues the other discovery requests potentially at issue, namely the July 24, 2014 Rule 34 Request
and the August 5 and October 30, 2014 Rule 30(b)(6) Notices and Rule 34 Requests, are either

The Court declines to address Northwell’s 2011 discovery requests stemming from the
state court proceeding. See DE 167 at 8-9.
8

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untimely because they were served after the May 30, 2014 discovery deadline, or were mooted by
some subsequent event. Id. at 17-18.
MultiPlan’s argument that the July 24, 2014 Rule 34 Request is untimely is belied by the
fact that MultiPlan responded to the request, as it admits, see Def.’s Opp’n. at 17-18, and without
any apparent objection to timeliness.9 See Pl.’s Decl., Ex. 21. More importantly, as explained
above, the Court views the instant motion as an extension of Northwell’s initial motion to compel
and the September 29, 2014 Order addressing it. Both of these documents concerned Request No.
8 of Northwell’s first Rule 34 Request. Accordingly, any information properly within the scope
of Request No. 8 is considered to have been timely requested.
B.

The Proper Scope of Request No. 8 and the Court’s September 29, 2014
Order

Having determined that (1) the instant motion is appropriately viewed as an extension of
Northwell’s initial motion to compel and the Court’s September 29, 2014 Order, and (2) no
procedural deficiencies preclude analysis of the motion’s substance, the Court turns to the issue of
the proper scope of Request No. 8 and this Court’s September 29, 2014 Order.
Request No. 8 of Northwell’s First Rule 34 Request seeks “[a]ny document that would
reflect any profit obtained by MultiPlan from January 1, 2006 to the present arising out [of] any
contracts entered into between MultiPlan and the plaintiff.” Pl.’s Decl., Ex. 10. In its
September 29, 2014 Order, the Court authorized a Rule 30(b)(6) deposition to explore
MultiPlan’s assertion that it “has no documents that reflect profits obtained by it from the North
Shore contract.” DE 141 at 3; see DE 89 at 2. The Court directed Northwell to provide “the list
In addition, while the Court issued a “Final Scheduling Order” on January 29, 2014 that
established a deadline for fact discovery of May 30, 2014, see DE 78, in an Order dated July 2,
2014, the Court acknowledged that discovery was proceeding beyond this date and stated its
intention to issue a subsequent final scheduling order. See DE 123.
9

17

of topics related to the information on profits that it is seeking.” DE 141 at 4. MultiPlan now
objects to Northwell’s request of “component parts” of documents pertaining to its profits.
Def.’s Opp’n. at 2. According to MultiPlan, Northwell’s argument that it can use component
parts of MultiPlan’s records to perform its own analysis is “spurious, as it asks the Court and
MultiPlan to read a discovery request so broadly that it includes any document that could ever be
conceivably linked to MultiPlan’s profit or revenue.” Id. MultiPlan’s argument is
unpersuasive.10
Black’s Law Dictionary defines “profit” as “[t]he excess of revenues over expenditures in
a business transaction.” Black's Law Dictionary (10th ed. 2014); see Arthur the Dog v. U.S.
Merch. Inc., No. 05 Civ. 0958, 2007 WL 2493427, at *6 (E.D.N.Y. Aug. 29, 2007) (“[N]et
profits can be defined as the gross amount that would have been received pursuant to the
business less the cost of running the business.”) (internal quotations omitted). Since the concepts
of revenue, expenses, and profit are inexorably intertwined, and since this Court’s September 29,
2014 Order correctly presupposed any Rule 30(b)(6) deposition would involve testimony on
multiple topics related to “profit,” it would be an improperly narrow reading of both Request
No. 8 and the Court’s September 29, 2014 Order to conclude that MultiPlan does not have an
obligation to produce documents bearing on revenue and expenses related to its contract with
Northwell. Accordingly, to the extent mandated by Fed. R. Civ. P. 34, MultiPlan must produce
any information otherwise discoverable within the scope of Fed. R. Civ. P. 26 that reflects profits

The Court also observes that MultiPlan attempts to frame Northwell’s discovery
request as a request for “profits, revenues, or expenses by provider.” See DE 163 at 2, 4
(emphasis added); see also DE 155. The argument appears to be that production as requested by
Northwell would impermissibly require MultiPlan to organize and aggregate data so it is
presented “by provider.” However, Northwell’s Request No. 8 includes no such qualifier, and
rather seeks documents reflecting profit “arising out [of] any contracts entered into between
MultiPlan and the plaintiff.” Pl.’s Decl., Ex. 10.
10

18

– including revenue and expenses, related to any contract between MultiPlan and Northwell
within in the pertinent time period.
C.

Whether the Requested Information is “Discoverable” Under
Fed. R. Civ. P. 26(b)(1)

Federal Rule of Civil Procedure 26(b)(1), as amended on December 1, 2015, recognizes
that “[i]nformation is discoverable . . . if it is relevant to any party’s claim or defense and is
proportional to the needs of the case.” Rule 26 Advisory Committee Notes to 2015
Amendments; see Sibley v. Choice Hotels Int’l, No. CV 14-634, 2015 WL 9413101, at *2
(E.D.N.Y. Dec. 22, 2015) (recognizing that “the current version of Rule 26 defines permissible
discovery to consist of information that is, in addition to being relevant ‘to any party’s claim or
defense,’ also ‘proportional to the needs of the case.’”) (internal citation omitted). “Information
is relevant if: (a) it has any tendency to make a fact more or less probable than it would be
without the evidence; and (b) the fact is of consequence in determining the action. Relevance is
a matter of degree, and the standard is applied more liberally in discovery than it is at trial.”
Vaigasi v. Solow Mgmt. Corp., No. 11 Civ. 5088, 2016 WL 616386, at *11 (S.D.N.Y. Feb. 16,
2016) (internal quotations and citations omitted).
Notably, although Rule 26 still permits a wide range of discovery based upon relevance
and proportionality, the “provision authorizing the court . . . to order discovery of any matter
relevant to the subject matter involved in the action” has been eliminated. Rule 26 Advisory
Committee Notes to 2015 Amendments; see Sibley, 2015 WL 9413101, at *2 (internal citation
omitted). The rationale behind the elimination of this phrase is the reality that it “has been used
by some, incorrectly, to define the scope of discovery.” Rule 26 Advisory Committee Notes to
2015 Amendments. Thus, Rule 26(b)(1), as amended, although not fundamentally different in
scope from the previous version “constitute[s] a reemphasis on the importance of proportionality
19

in discovery but not a substantive change in the law.” Vaigasi, 2016 WL 616386, at *13; see
Robertson v. People Magazine, No. 14 Civ. 6759, 2015 WL 9077111 at *2 (S.D.N.Y. Dec. 16,
2015) (“[T]he 2015 amendment [to Rule 26] does not create a new standard; rather it serves to
exhort judges to exercise their preexisting control over discovery more exactingly.”).
Notwithstanding the foregoing principles, “[t]he party seeking discovery must make a
prima facie showing that the discovery sought is more than merely a fishing expedition.”
Barbara v. MarineMax, Inc., No. 12 Civ. 368, 2013 WL 1952308, at *2 (E.D.N.Y. May 10,
2013) (citing Wells Fargo Bank, N.A. v. Konover, No. 05 Civ. 1924, 2009 WL 585430, at *5
(D.Conn. Mar. 4, 2009)); Denim Habit, LLC, v. NJC Boston, LLC, No. 13-CV-6084, 2016 WL
2992124, at *3 (E.D.N.Y. May 23, 2016). Once the requesting party has made a prima facie
showing of relevance, “it is up to the responding party to justify curtailing discovery.”
Fireman’s Fund Ins. Co. v. Great American Ins. Co. of New York, 284 F.R.D. 132, 134
(S.D.N.Y. 2012); Winfield v. City of New York, No. 15-CV-05236, 2018 WL 716013, at *4
(S.D.N.Y. Feb. 1, 2018) (“The party seeking discovery bears the initial burden of proving the
discovery is relevant, and then the party withholding discovery on the grounds of burden,
expense, privilege, or work product bears the burden of proving the discovery is in fact
privileged or work product, unduly burdensome and/or expensive.”).
However, “[g]eneral and conclusory objections as to relevance, overbreadth, or burden
are insufficient to exclude discovery of requested information.” Lindsey v. Butler, No. 11 CIV.
9102, 2017 WL 4157362, at *3 (S.D.N.Y. Sept. 18, 2017) (quoting Melendez v. Greiner, No. 01
Civ. 7888, 2003 WL 22434101, at *1 (S.D.N.Y. Oct. 23, 2003)); Trilegiant Corp. v. Sitel Corp.,
275 F.R.D. 428, 431 (S.D.N.Y. 2011) (same); Diaz v. Local 338 of Retail, Wholesale Dep’t Store
Union, United Food & Commercial Workers, No. 13-CV-7187, 2014 WL 4384712, at *2

20

(E.D.N.Y. Sept. 3, 2014) (same). “Rather, a party resisting discovery has the burden of showing
‘specifically how, despite the broad and liberal construction afforded the federal discovery rules,
each interrogatory is not relevant or how each question is overly broad, burdensome or
oppressive.’” 11 Lindsey, 2017 WL 4157362, at *3 (quoting Fort Worth Employees' Retirement
Fund v. JP. Morgan Chase & Co., 297 F.R.D. 99, 102-03 (S.D.N.Y. 2013)).
1.

Relevance to a Claim or Defense

The Court is not persuaded by MultiPlan’s argument that, generally speaking,
Northwell’s request for information reflecting MultiPlan’s profits arising out of any contract with
Northwell lacks relevance to a claim or defense in this litigation. According to MultiPlan,
Northwell’s fraud claim is insufficient in law because (1) MultiPlan’s conduct is not actionable
as an independent tort; (2) MultiPlan’s conduct was not part of a pattern of behavior aimed at the
public generally; and (3) Northwell’s fraud claim is duplicative of its breach of contract claim.
See Def.’s Opp’n. at 9-10. Because Northwell lacks a viable fraud claim, the logic goes,
information relevant only to that claim is not discoverable within the scope of Fed. R. Civ. P. 26.
Id. at 11. However, and as Northwell points out, MultiPlan’s opposition to a discovery motion is
not the proper forum for raising challenges to the viability of Northwell’s claims, nor are such
challenges proper grounds to preclude otherwise appropriate discovery. See XChange Telecom
Corp. v. Sprint Spectrum L.P., No. 14-CV-54, 2015 WL 773752, at *3 (N.D.N.Y. Feb. 24, 2015)

Significantly, “[t]his too remains true after the 2015 amendments to Rule 26.
‘Restoring the proportionality calculation to Rule 26(b)(1) does not change the existing
responsibilities of the court and the parties to consider proportionality, and . . . does not place on
the party seeking discovery the burden of addressing all proportionality considerations.’” Royal
Park Investments SA/NV v. Deutsche Bank Nat'l Tr. Co., No. 14-CV-04394, 2016 WL 4613390,
at *7 (S.D.N.Y. Aug. 31, 2016) (quoting Rule 26 Advisory Committee Notes to 2015
Amendments).
11

21

(“[I]t is not presently appropriate given the pending motion [to compel], or within the
jurisdiction of the undersigned, to determine whether the substantive issues raised during the
briefing should lead to the decision that various claims or defenses need to be stricken and that,
by extension, the discovery demands are inappropriate. Instead such arguments regarding the
viability of the remaining claims and defenses should be properly presented, in a dispositive
motion, before the District Judge.”); Electrified Discounters, Inc. v. MI Techs., Inc., No. 3:13CV-1332, 2015 WL 2383618, at *6 (D. Conn. May 19, 2015) (“Because an adjudication on the
merits normally comes only after discovery, it is no objection to a[ ] [discovery request] that it
relates to a defense or claim which is insufficient in law.”) (citing Kimbro v. I.C. System, Inc.,
No. 3:01-CV-1676, 2002 WL 1816820, at *1 (D. Conn. July 22, 2002)).
The Court finds MultiPlan’s remaining arguments regarding relevance to be similarly
flawed. MultiPlan argues that because “Northwell cannot dispute that MultiPlan does not create
or maintain . . . in the ordinary course of business” information sought by Northwell, Northwell
cannot credibly assert this information was sufficiently known to MultiPlan’s employees to
provide a motive for its alleged fraudulent actions. Def.’s Opp’n. at 11-12. As with its argument
regarding the viability of Northwell’s claims, here MultiPlan raises an issue properly addressed
outside of the discovery context. MultiPlan’s argument goes to the credibility of its employeewitnesses, and should be properly made to a trier of fact rather than in opposition to a discovery
motion. Additionally, the purpose of the Court’s September 29, 2014 Order was to allow
Northwell to probe MultiPlan’s representation that it did not have documents reflecting profit
earned by MultiPlan arising out of its contract with Northwell. See DE 141. For Northwell to
effectively probe this representation, Northwell should be able to examine the data at issue itself
and draw its own conclusions about its ability to inspire motive.

22

For the foregoing reasons, the Court finds that information relating to MultiPlan’s
revenues, expenses, or profits arising out of any contract with Northwell is relevant to a claim in
this litigation pursuant to Fed. R. Civ. P. 26. See Second Am. Compl. ¶¶ 44-48, 72-75.
2.

Proportionality

To be discoverable within the scope of Fed. R. Civ. P. 26, information that is relevant to a
party’s claim or defense must also be
proportional to the needs of the case, considering the importance of
the issues at stake in the action, the amount in controversy, the
parties’ relative access to the information, the parties’ resources, the
importance of the discovery in resolving the issues, and whether the
burden or expense of the proposed discovery outweighs its likely
benefit.
FED. R. CIV. P. 26(b)(1). “Proportionality and relevance are ‘conjoined’ concepts; the greater the
relevance of the information in issue, the less likely its discovery will be found to be
disproportionate.” Vaigasi, 2016 WL 616386, at *14 (citation omitted).
While the Court finds that, generally speaking, the information sought in Request No. 8
of Northwell’s first Rule 34 Request satisfies the relevance requirement of Rule 26, some of the
discovery Northwell seeks in the instant motion fails the proportionality requirement of Rule 26.
After reviewing the party’s motion papers, the transcript of Leann Christ’s deposition, and the
five categories of information Northwell seeks in its motion, see Pl.’s Mem. at 11-15, the Court
concludes that data contained in MultiPlan’s databases (1) pertaining to claims submitted by
providers other than Northwell, and (2) pertaining to MultiPlan clients for whose members no
record of a Northwell charge exists, are over-inclusive and not proportional to the needs of the
case. This conclusion is supported by the fact that Northwell’s primary motivation in seeking
this information is to support a claim for punitive damages. Indeed, Northwell’s Second
Amended Complaint alleges multiple causes of action which are not dependent upon the probity
23

of the data Northwell seeks. In these circumstances, where the breadth and volume of the data
requested is potentially vast, proportionality principles require tailoring production to the subject
matter of the litigation and the parties involved. See Cornell Research Found., Inc. v. Hewlett
Packard Co., No. 5:01-CV-1974, 2005 WL 5955715, at *5 (N.D.N.Y. Oct. 11, 2005) (finding
reports run from databases that produce data on products not the subject of a patent infringement
lawsuit to be over-inclusive). For these reasons, the Court finds that requests for (1) data
pertaining to claims submitted by providers other than Northwell, and (2) data pertaining to
MultiPlan clients for whose members no record of a Northwell charge exists, are not
proportional to the needs of the case, and therefore are not discoverable under Fed. R. Civ. P.
26(b)(1).
D.

Scope of Production of Discoverable ESI Under Fed. R. Civ. P. 26(b)(2)(B),
26(b)(2)(C), and Fed. R. Civ. P. 34

Having determined that certain information relating to MultiPlan’s revenues, expenses, or
profits arising out of any contract with Northwell, with the exceptions identified above, is
discoverable under Fed. R. Civ. P. 26(b)(1), the Court now turns its attention to the limitations of
Rule 26 on otherwise discoverable information. Rule 26 establishes limitations on the
production of electronically stored information (“ESI”) in certain circumstances:
A party need not provide discovery of electronically stored
information from sources that the party identifies as not reasonably
accessible because of undue burden or cost. On motion to compel
discovery or for a protective order, the party from whom discovery
is sought must show that the information is not reasonably
accessible because of undue burden or cost. If that showing is made,
the court may nonetheless order discovery from such sources if the
requesting party shows good cause, considering the limitations of
Rule 26(b)(2)(C). The Court may specify conditions for the
discovery.
Fed. R. Civ. P. 26(b)(2)(B). Rule 26(b)(2)(C) in turns requires that

24

[o]n motion or on its own, the court must limit the frequency or
extent of discovery otherwise allowed by these rules or by local rule
if it determines that: (i) the discovery sought is unreasonably
cumulative or duplicative, or can be obtained from some other
source that is more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to obtain
the information by discovery in the action; or (iii) the proposed
discovery is outside the scope permitted by Rule 26(b)(1).
Fed. R. Civ. P. 26(b)(2)(C).
To determine whether MultiPlan has met its burden under Fed. R. Civ. P. 26(b)(2)(B), it
is necessary to review the testimony of Ms. Christ as to what data MultiPlan is able to produce
from its databases. The Court identifies the following relevant testimony regarding MultiPlan’s
data production capabilities:12
(1) MultiPlan maintains a database called NetworkX in which
information is accessible by a provider or facility’s tax identification
number. Pl.’s Decl. in Supp. at Ex. 1 (41:8-22). This database
“brings the client and the provider information together in order to
determine whether or not the client had access to [a] particular
provider contract.” Id.. (43:4-7). Ms. Christ assumes NetworkX can
be searched with respect to clients. Id. (42:22-23, 43:2-11);
(2) MultiPlan maintains a separate database containing certain client
information, called Salesforce.com. Pl.’s Decl. in Supp. at Ex. 1
(43:15-17);
(3) When a “percentage of savings” client pays a percentage of
savings access fee to MultiPlan, some combination of MultiPlan’s
databases can estimate what providers’ claim charges are included
in that fee. Pl.’s Decl. in Supp. at Ex. 1 (62:25, 63:6-9);
(4) With respect to “per employee, per month” clients, MultiPlan
can produce a “utilization report,” which would show charges and
savings, although per employee, per month clients don’t pay an
access fee based on this amount of savings, and rather pay a flat per
employee, per month access fee. Pl.’s Decl. in Supp. at Ex. 1 (73:611);

12

The Court acknowledges that MultiPlan can only produce data that is actually
reported to it by its clients. See Pl.’s Decl., Ex. 1 (93:9-10).
25

(5) The utilization report can be tailored to an individual provider.
Pl.’s Decl. in Supp. at Ex. 1 (73:15);
(6) There is a department at MultiPlan called “Reportrequest” that
is dedicated to running reports of the company’s databases. Pl.’s
Decl. in Supp. at Ex. 1 (77:3-7). Reportrequest is led by an
employee named Mike McEttrick. Id. (80:17-20);
(7) Through Reportrequest, the account managers of the sales
department, as well as the finance department, would be able to
produce a report showing the payment history of a particular client
to MultiPlan. Pl.’s Decl. in Supp. at Ex. 1 (86:3-14);
(8) MultiPlan would be able to generate a report showing total billed
charges by one or all of the Northwell facilities to a particular
MultiPlan client. Pl.’s Decl. in Supp. at Ex. 1 (93:1-5);
(9) MultiPlan would be able to generate a report showing billed
charges by Northwell to all MultiPlan clients who received services
from a Northwell facility. Pl.’s Decl., Ex. 1 (93:6-10, 19-23).
Based on the testimony of Ms. Christ, the Court concludes that MultiPlan is capable of
producing reports which would capture certain portions of the information sought by Northwell.
According to Ms. Christ, MultiPlan has several tools at its disposal for the exploration of
information stored in its databases. Through some combination of these tools, MultiPlan would
be able to produce reports showing the following categories of information with respect to
Northwell: (1) percentage of saving clients whose access fee includes charges by Northwell, see
Pl.’s Decl., Ex. 1 (63:6-9); (2) charges and savings by Northwell for each per employee, per
month client, see id. (73:6-15); (3) the payment history of each client for whose members
MultiPlan has a record of charges by Northwell, see id. (86:6-14); (4) the total charges billed by
Northwell to each client for whose members MultiPlan has a record of charges by Northwell, see
id. (93:1-5); and (5) billed charges by Northwell to all MultiPlan clients whose members
received services at Northwell facilities in the period relevant to this litigation. See id. (93:6-10,
19-23). For these five categories of information, the Court finds that MultiPlan has not made a
26

sufficient showing that this information is not reasonably accessible because of undue burden or
cost, and has therefore not met its burden under Fed. R. Civ. P. 26(b)(2)(B).
The Court disagrees that the data sought by Northwell is not discoverable because its
production requires “not merely the extraction of data into a new report . . . but rather the
creation of new data from multiple sources using calculations. That is simply beyond the scope
of Rule 34.” Def.’s Opp’n. at 14 (emphasis in original). While “a party should not be required
to create completely new documents, that is not the same as requiring a party to query an existing
dynamic database for relevant information. Courts regularly require parties to produce reports
from dynamic databases, holding that the technical burden . . . of creating a new dataset for [ ]
litigation does not excuse production.” Apple Inc. v. Samsung Elecs. Co., No. 12-CV-0630, 2013
WL 4426512, at *3 (N.D. Cal. Aug. 14, 2013) (internal quotation omitted). See Gonzales v.
Google, Inc., 234 F.R.D. 674, 683 (N.D. Cal. 2006) (requiring production of data where it
required party to “create new code to format and extract query and URL data from many
computer banks, in total requiring up to eight full time days of engineering time.”); Northern
Crossarm Co. Inc. v. Chemical Specialties, Inc., No. 03–C–415–C, 2004 WL 635606, at *1
(W.D. Wisc. March 3, 2004) (noting that “Rule 34(a) specifies that electronic data falls within
the definition of ‘documents,’ and requires that the respondent must, if necessary, translate that
information into reasonably useable form”).
MultiPlan holds raw data in several databases. See Pl.’s Decl., Ex. 1 (42:22-23; 43:2-11,
15-17). To the extent MultiPlan can input search parameters and produce varying configurations
of this raw data, and to the extent the data is otherwise discoverable, MultiPlan cannot avoid
production without a more thorough showing that production would be unduly burdensome or
costly. It is noteworthy that the only section of MultiPlan’s opposition memorandum addressing

27

the viability of production does not address the cost, hardship, or burden of production. See
DE 163 at 13-15. MultiPlan’s argument in opposition is instead founded on the purported
unreliability and incompleteness of data it could produce, and the fact that certain data reports
are not run in the ordinary course of business. Id. Otherwise conclusory allegations that
production would require a complicated departure from ordinary business protocol does not meet
the burden established in Rule 26(b)(2)(B). See New York v. Mt. Tobacco Co., No. 12-CV-6276,
2015 WL 3455080, at *11 (E.D.N.Y. May 29, 2015)) (finding conclusory allegations that
production would require a “complicated” departure from standard record-keeping protocol were
insufficient to meet the standard under Fed. R. Civ. P. 26(b)(2)(B)). And while MultiPlan can
challenge the conclusions Northwell draws from the raw data, it cannot raise these challenges to
avoid disclosure in the first instance.
MultiPlan’s reliance on A&R Body Speciality and Collision Works, Inc. v. Progressive
Cas. Ins. Co. is misplaced. The court in A&R Body Speciality and Collision Works, Inc. declined
to order defendants to merge data they had already produced with data from defendants’ third
party provider, which had also already been produced. No. 3:07-CV-929, 2014 WL 4437684, at
*3-4 (D. Conn. Sep. 9, 2014), adhered to on reconsideration, No. 3:07-CV-929, 2014 WL
5859024 (D. Conn. Nov. 10, 2014). In the instant litigation, MultiPlan would query its own
databases to produce data within its control – data that has not yet been produced. The fact that
defendants and their third party provider in A&R Body Speciality and Collision Works, Inc. even
produced data sets in the first instance shows such production can indeed be proper.13 Id. at *2.

It is worth noting the court’s treatment of Rule 34 vis-à-vis ESI. “Although all
documents are not necessarily data, under Rule 34, all data is encompassed within the definition
of ‘documents.’” A&R Body Speciality and Collision Works, Inc., 2014 WL 4437684 at *3.
13

28

For these reasons, MultiPlan is ordered to produce the five categories of information
identified by the Court, and to provide a sworn statement by someone with first-hand knowledge
of MultiPlan’s databases which identifies each field of information that can be extracted from
any database.
While the Court finds that, as outlined above, certain data should be produced under Fed.
R. Civ. P. 26(b)(1) to the extent such production is possible as stated in Ms. Christ’s deposition,
the Court also reiterates that data related to providers other than Northwell, and data related to
MultiPlan clients for whose members there is no record of a Northwell charge, is beyond the
scope of permitted discovery under Fed. R. Civ. P. 26(b)(1). As the Court previously explained,
the production of such information would not be “proportional to the needs of the case,” FED. R.
CIV. P. 26(b)(1), and is therefore precluded under Fed. R. Civ. P. 26(b)(2)(C)(iii).
With respect to Northwell’s demand for information pertaining to the unidentified
MultiPlan client identified in Ms. Christ’s deposition, see Pl.’s Mem. at 14-15, the Court finds
there is insufficient reason to preclude production of information related to this client when the
information would be otherwise producible. As such, the Court orders information related to this
MultiPlan client, including the client’s identity, to be produced. The parties shall adhere to the
requirements of the Protective Order in the disclosure of all confidential information. See
DE 53.
E.

Cost-Shifting Analysis

Generally, the party responding to discovery requests bears all costs associated with
production. See Rowe Entm’t, Inc. v. William Morris Agency, Inc., 205 F.R.D. 421, 429
(S.D.N.Y. 2002) (recognizing the “well-established legal principle . . . that the responding party
will pay the expenses of production”); Novick v. AXA Network, LLC, No. 07 CIV. 7767, 2013

29

WL 5338427, at *3 (S.D.N.Y. Sept. 24, 2013) (“The presumption is that the responding party
must bear the expense of complying with discovery requests, but he may invoke the district
court’s discretion under Rule 26(c) to grant orders protecting him from ‘undue burden or
expense’ in doing so, including orders conditioning discovery on the requesting party’s payment
of the costs of discovery.”) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 358, 98
S. Ct. 2380, 2393, 57 L. Ed. 2d 253 (1978)); Wood v. Capital One Servs., LLC, No. 09-CV-1445,
2011 WL 2154279, at *4 (N.D.N.Y. Apr. 15, 2011) (“Ordinarily the presumption is that the party
whose ESI is being sought during discovery must bear the expense of complying with the
discovery request, just as is the case with regard to any other more traditional discovery.”);
Quinby v. WestLB AG, 245 F.R.D. 94, 101 (S.D.N.Y. 2006) (same); Hallmark v. Cohen &
Slamowitz, LLP, No. 11-CV-842, 2016 WL 1128494, at *3 (W.D.N.Y. Mar. 23, 2016) (“[I]n
federal civil discovery it is presumed that a responding party will bear the expense of
production.”).
Notwithstanding operation of the general rule, a court may, under limited circumstances,
consider “cost-shifting” of such production expenses to the requesting party. See Wood, 2011
WL 2154279, at *4 (recognizing that “[i]n some cases . . . it is appropriate to shift all or some
costs of producing discovery to the requesting party”). Such a deviation “should be considered
only when electronic discovery imposes an ‘undue burden or expense’ on the responding party.”
Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 318 (S.D.N.Y. 2003) (emphasis in original);
see Quinby, 245 F.R.D. at 101; Novick, 2013 WL 5338427, at *4. In the event a threshold
determination is made that the electronic data sought is “relatively inaccessible,” the court in
Zubulake set forth the following factors which should be considered:
(1)

The extent to which the request is specifically tailored to discover relevant
information;
30

(2)

The availability of such information from other sources;

(3)

The total cost of production, compared to the amount in controversy;

(4)

The total cost of production, compared to the resources available to each party;

(5)

The relative ability of each party to control costs and its incentive to do so;

(6)

The importance of the issues at stake in the litigation; and

(7)

The relative benefits to the parties of obtaining the information.

Zubulake, 217 F.R.D. at 322; see Wood, 2011 WL 2154279, at *4; Quinby, 245 F.R.D. at 102.
In the context of the instant motion, based on the testimony of Ms. Christ, the Court
recognizes that discoverable data stored in MultiPlan’s several databases is likely comingled
with non-discoverable data pertaining to providers other than Northwell and data pertaining to
MultiPlan clients whose members never received services at Northwell facilities. Given these
circumstances, the Court is directing MultiPlan to provide the Court with an estimated
breakdown by MultiPlan’s in-house Information Technology director or an outside vendor of the
cost to produce the ESI which the Court has authorized in this Memorandum and Order. That
information is to be provided to the Court and opposing counsel by April 20, 2018. Northwell
will then have ten days to respond to the estimate from its own Information Technology
personnel or vendor if it chooses to do so. Once the Court has received this information, it will
make a determination whether cost-shifting is appropriate, and, if so, what the reasonable
apportionment should be. See EM Ltd. v. Republic of Argentina, 695 F.3d 201, 207 (2d Cir.
2012) (“A district court has broad latitude to determine the scope of discovery and to manage the
discovery process.”).

31

F.

Northwell’s Motion for Sanctions and an Order of Preclusion

“The district court possesses the inherent power to levy sanctions.” See Bilodeau v.
Vlack, Civ. No. 07-CV-1178, 2010 WL 2232484, at *6 (D. Conn. Mar. 17, 2010); see Palmer v.
Cty. of Nassau, 977 F. Supp. 2d 161, 167 (E.D.N.Y. 2013) (“Federal courts have inherent
equitable powers of courts of law over their own process, to prevent abuses, oppression, and
injustices.”). Neither the adoption of 28 U.S.C. § 1927, a federal statute authorizing sanctions,
nor the Federal Rules of Civil Procedure, supplant the inherent power of the court to levy
sanctions. See Chambers v. NASCO, Inc., 501 U.S. 32, 111 (1991). The Court’s inherent power
includes the authority to sanction where “a party has ‘acted in bad faith, vexatiously, wantonly,
or for oppressive reasons.’” Chambers, 501 U.S. at 33 (quoting Alyeska Pipeline Service Co. v.
Wilderness Society, 421 U.S. 240, 258-59 (1975); Palmer, 977 F. Supp. 2d at 167; see Sassower
v. Field, 973 F.2d 75, 80–81 (2d Cir. 1992) (“The Supreme Court has made clear that a district
court has inherent authority to sanction parties appearing before it for acting in bad faith,
vexatiously, wantonly, or for oppressive reasons.”).
Based on the foregoing standard, and after a review of the parties’ motion papers, the
Court cannot conclude that MultiPlan has “acted in bad faith, vexatiously, wantonly, or for
oppressive reasons.” Chambers, 501 U.S. at 33 (internal quotation omitted). While the
testimony of Ms. Christ bears out that MultiPlan’s databases store information “that would
reflect [ ] profit obtained by MultiPlan from January 1, 2006 to the present arising out [of] any
contracts entered into between MultiPlan and the plaintiff,” Pl.’s Decl., Ex. 10, it does not appear
to be the case that MultiPlan has been knowingly withholding documents which clearly link the
Participation Provider Agreement and MultiPlan’s revenues or profits. Rather, given the
complexity of the data retention systems utilized by MultiPlan in the context of its tri-partite

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healthcare network, the instant dispute appears to be a sincere disagreement about the nature of,
and possible conclusions one can draw from, nebulous electronically-stored data. For this
reason, the Court does not find sanctions to be warranted. See Summerlin v. City of New York,
No. 13-CV-1617, 2014 WL 4443469, at *2 (S.D.N.Y. Sept. 2, 2014) (“[A] particularized
showing of bad faith [is required] to justify the use of the court’s inherent power.”) (quoting
United States v. Int'l Bhd. of Teamsters. 948 F.2d 1338, 1345 (2d Cir.1991)); see also Chambers,
501 U.S. at 44 (“Because of their very potency, inherent powers must be exercised with restraint
and discretion.”).
With respect to Northwell’s request for a preclusion order, “it must be remembered that a
preclusion order is a drastic remedy, and while the district court clearly has the power to issue
such an order, that power should be exercised only to the extent necessary to achieve the desired
purpose— that is, an entirely just disposition of the case in a speedy and efficient manner.”
Syracuse Broad. Corp. v. Newhouse, 271 F.2d 910, 915 (2d Cir. 1959) (internal citations
omitted). When determining whether a preclusion order is appropriate, a Court should consider
“(1) the proponent's explanation for failing to provide the subject evidence; (2) the importance of
such evidence to the proponent’s case; (3) the opponent’s time needed to prepare to meet the
evidence; and (4) the possibility of obtaining a continuance to permit the opponent to meet the
evidence.” Coene v. 3M Co., 303 F.R.D. 32, 45 (W.D.N.Y. 2014). Northwell seeks a preclusion
order as to expenses associated with revenues generated from the repricing and processing of
Northwell claims. See Pl.’s Mem. at 24. Weighing these facts in light of the circumstances of
this nuanced discovery dispute, the Court concludes that a preclusion order is not appropriate
here.

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IV.

CONCLUSION
For the reasons set forth in this Memorandum and Order, Northwell’s motion to compel

and for sanctions is GRANTED, in part, and DENIED, in part. MultiPlan shall produce the
estimated breakdown of costs involved in retrieving the information designated by this Order by
April 20, 2018.

SO ORDERED.
Dated: March 28, 2018
Central Islip, New York

/s/ A. Kathleen Tomlinson
A. KATHLEEN TOMLINSON
U.S. Magistrate Judge

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