Mason et al v. Health Management Associates, Inc. et al

Filing 194

ORDER denying 142 Motion to Determine the Sufficiency of Responses to Plaintiffs' First Set of Requests for Admission by the HMA Defendants and 146 Motion to Determine the Sufficiency of Responses to Plaintif fs' First Set of Requests for Admission by the EmCare Defendants. Denying as moot 151 Motion to Compel. All other matters are taken under advisement pending receipt of further information from the parties as directed by the Court during the hearing on December 3, 2020. Signed by District Judge Kenneth D. Bell on 12/7/2020. (nvc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL ACTION NO. 3:10-CV-472-KDB
THOMAS L. MASON M.D. et al.,
Plaintiffs,
v.

ORDER

HEALTH MANAGEMENT
ASSOCIATES LLC et al.,
Defendants.

THIS MATTER is before the Court on Plaintiffs’ Objection, (Doc. No. 183), to
Magistrate Judge David Cayer’s September 28, 2020 Order, (Doc. No. 182) (“the Order”),
resolving numerous discovery motions filed by both Plaintiffs and Defendants. At Plaintiffs’
request, this Court held a hearing on the objections on December 3, 2020. After carefully
considering the parties’ written briefs and oral arguments, the Court will deny Plaintiffs’
objections to the Magistrate Judge’s ruling on Plaintiffs’ Motion to Determine the Sufficiency of
Responses to Plaintiffs’ First Set of Requests for Admission by the HMA Defendants (Doc. No.
142), Plaintiffs’ Motion to Determine the Sufficiency of Responses to Plaintiffs’ First Set of
Requests for Admission by the EmCare Defendants (Doc. No. 146), and Defendants EmCare
Inc., EmCare Holdings Inc., Emergency Medical Services L.P., and Envision Corporations’
Motion to Compel Further Responses to First Set of Interrogatories from Plaintiffs (Doc. No.
151). The Court will take Plaintiffs’ objections to the rulings on all other motions under
advisement pending receipt of further information from the parties.

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I.

RELEVANT BACKGROUND

Plaintiffs, a corporation that provides emergency room (“ER”) services under
professional service agreements to local hospitals and two of their ER doctors, originally brought
this action as qui tam relators on their own behalf and on behalf of the United States. Plaintiffs
allege that the HMA Defendants terminated their contracts in retaliation for their refusal to
participate in a nation-wide scheme to submit false claims to Medicare, Medicaid, and other
government funded healthcare programs. After Plaintiffs complained about and attempted to stop
the fraudulent activity at Lake Norman and Davis Regional hospitals, the HMA Defendants
replaced Plaintiffs’ ER services with those provided by the EmCare Defendants who allegedly
agreed to participate in HMA’s fraudulent scheme in exchange for ER contracts. In addition to
their retaliation claims under federal and state law, Plaintiffs assert claims for tortious
interference with contract, unfair and deceptive trade practices, civil conspiracy, and defamation
and slander per se.1 A more detailed description of the allegations and history of this case can be
found in the Order and the Court’s order on Defendants’ motions to dismiss, (Doc. No. 115).
In the Order, the Magistrate Judge resolved eight pending discovery motions (Doc. Nos.
137, 140, 142, 144, 146, 151, 153, 174). The majority of the motions stem from the parties’
fundamental disagreement on the appropriate scope of discovery. Plaintiffs wish to obtain
discovery from a broad range of hospitals owned by HMA in an effort to show a nation-wide
conspiracy between the Defendants, while Defendants seek to limit discovery only to the Lake
Norman and Davis Regional hospitals where Plaintiffs worked. The other motions involve
specific responses to various discovery requests.

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While the Court dismissed Plaintiffs independent claim for civil conspiracy (as North
Carolina law does not recognize an independent cause of action for civil conspiracy), it allowed
Plaintiffs to proceed with civil conspiracy as a theory for damages. (Doc. No. 115).
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The Order describes the appropriate scope of discovery as follows: “The appropriate
scope of discovery here is whether Plaintiffs participated in protected activities at Lake Norman
and Davis Hospital, whether Defendants had knowledge of those activities, and whether
Defendants wrongfully terminated Plaintiffs’ contracts with those hospitals.” (Doc. No. 182, at
4). The Order further denies Plaintiffs’ motions against each Defendant requesting the Court to
determine the sufficiency of Defendants’ answers to Plaintiffs’ first set of requests for admission
(Doc. Nos. 142, 146) and grants the EmCare Defendants’ Motion to Compel Further Responses
to the First Set of Interrogatories (Doc. No. 151). Plaintiffs filed their objections to the Order on
October 13, 2020. (Doc. No. 183).
II.

LEGAL STANDARD

A district court judge may designate a magistrate judge to hear and determine any pretrial
matter pending before the court, including discovery disputes. See 28 U.S.C. § 636(b)(1)(A).
Rule 72(a) of the Federal Rules of Civil Procedure permits a party to submit objections to a
magistrate judge’s ruling on non-dispositive matters, such as discovery orders, within 14 days
after being served with a copy of the order. Fed. R. Civ. P. 72(a). When a party timely objects to
a magistrate judge’s ruling on a non-dispositive discovery issue, the district court will modify or
set aside any part of the order only if it is “clearly erroneous or is contrary to law.” Id.
“A finding is ‘clearly erroneous’ when although there is evidence to support it, the
reviewing court on the entire evidence is left with the definite and firm conviction that a mistake
has been committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948); see also
Walton v. Johnson, 440 F.3d 160, 173-74 (4th Cir. 2006). “If a magistrate judge’s order is
contrary to law then the judge must have failed to apply or misapplied statutes, case law, or

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procedural rules.” Winthrop Resources Corp. v. Commscope, Inc. of North Carolina, No. 5:11CV-172, 2014 WL 5810457, at *1 (W.D.N.C. Nov. 7, 2014).
III.

DISCUSSION

On July 6, 2020, Plaintiffs filed two motions asking the Court to determine the
sufficiency of the HMA and EmCare Defendants’ responses to certain requests for admission
(“RFAs”). (Doc. Nos. 142, 146). In connection with the alleged fraudulent conspiracy noted
above, the HMA Defendants entered into a settlement agreement with the DOJ. As part of that
agreement, the HMA Defendants signed a Non-Prosecution Agreement (“NPA”) and a related
Statement of Facts (“SOF”). Pursuant to the NPA, the HMA Defendants affirmed that they
would not “make any public statement, in litigation or otherwise, contradicting . . . the facts
described” in the NPA SOF. (Doc. No. 122-1, at 4). As part of their RFAs, Plaintiffs primarily
sought admissions related to the NPA SOF from both the HMA Defendants and the EmCare
Defendants. In their RFAs, Plaintiffs repeatedly cited to a specific paragraph in the NPA SOF
followed by a revised description of those facts. The HMA Defendants responded to the requests
by answering in part and objecting in part. For many of the objections, the HMA Defendants
responded that the NPA SOF “speaks for itself.” Plaintiffs argued in their motion before the
Magistrate Judge that the HMA Defendants impermissibly asserted answers and objections to
their requests and failed to properly respond to the substance of the specific NPA SOF requests.
Plaintiffs’ RFAs to the EmCare Defendants similarly focused on the NPA SOF. The
EmCare Defendants objected to the RFAs on the basis that the Plaintiffs improperly incorporated
an external document and stated that they were not a party to the NPA, did not agree to the NPA
SOF, and did not review the contents of the NPA or NPA SOF. Plaintiffs argued in their motion
before the Magistrate Judge that the EmCare Defendants impermissibly asserted answers and

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objections to the requests, are fully capable of admitting the substance of the RFAs, and failed to
make a reasonable inquiry into the requests.
The Order denies both motions to determine the sufficiency of Defendants’ responses.
(Doc. No. 182, at 3-4). Plaintiffs object, arguing that the Order is clearly erroneous because it
ignores the requirements of Rule 36 and allows the HMA Defendants to avoid their
responsibilities and obligations under the NPA.
Requests for admission are governed by Federal Rule of Civil Procedure 36, which
requires that a party’s RFA be admitted or denied, or, “when good faith requires that a party
qualify an answer or deny only a part of a matter, the answer must specify the part admitted and
qualify or deny the rest.” Fed. R. Civ. P. 36(a)(4). Further, the answering party may assert that it
lacks sufficient knowledge to admit or deny a particular RFA “if the party states that it has made
reasonable inquiry and that the information it knows or can readily obtain is insufficient to
enable it to admit or deny.” Id.
After considering Rule 36, the Plaintiffs’ RFAs, Defendants’ responses, and the written
and oral arguments of counsel, the Court cannot conclude that the rulings on Plaintiffs’ motions
concerning Defendants’ RFA responses are clearly erroneous or contrary to law. In their
response to Plaintiffs’ objection that the RFA answers were improper, the HMA Defendants
point to various cases holding that a party’s incorporation by reference of another document into
an RFA (here the NPA SOF) is generally improper. See, e.g., Sparton Corp. v. United States, 77
Fed. Cl. 10, 19 (2007); Martin Mariette Materials, Inc. v. Bedford Reinforced Plastics, Inc.,
2007 WL 1300772, at * 3 (W.D. Pa. May 2, 2007); Sec. & Exch. Comm’n v. Micro-Moisture
Controls, Inc., 21 F.R.D. 164, 166 (S.D.N.Y. 1957). The HMA Defendants argue that rather than
simply object or deny the admission without explanation, which the Rule and caselaw would

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plainly allow (if done in good faith), they answered the RFAs by responding that the NPA SOF
“speaks for itself.” The HMA Defendants claim that this answer was intended to enable them to
fulfill their obligation under the NPA—that they not contradict the SOF—while denying that
Plaintiffs’ alteration to that language was truthful and denying that Lake Norman and Davis
Regional hospitals were specifically identified in the SOF or were participants in the conduct
described. Indeed, even Plaintiffs acknowledge that the DOJ investigation and SOF did not
primarily involve Lake Norman and Davis Regional hospitals. Thus, while the HMA
Defendants’ responses to the RFAs might have been more detailed or more fully explained their
position, the Court does not find that the responses were made in bad faith or otherwise violate
Rule 36.
The EmCare Defendants similarly denied the RFAs incorporating the SOF from the
HMA Defendants and DOJ’s NPA. Plaintiffs do not dispute that the EmCare Defendants were
not a party to the SOF, had no part in negotiating the SOF, and are not bound by the SOF.
Accordingly, it appears Plaintiffs’ use of the NPA SOF in its RFAs to EmCare is more of an
attempt to tie the EmCare Defendants to the NPA SOF than an effort to determine the truth of the
facts contained in the requests. Accordingly, the Court does not find that the EmCare
Defendants’ responses to the RFAs at issue violate Rule 36.
Notably, as acknowledged by Defendants at oral argument, Plaintiffs could have avoided
these disputes by directly asking Defendants to admit or deny precise facts rather than
referencing the lengthy description of the facts in the SOF and then altering the language.
Moreover, Plaintiffs’ objections to the rulings on the RFAs are largely a repackaging of the
arguments made in the predicate motions that were before the Magistrate Judge. Plaintiffs,
perhaps disappointed by the consequences of their imprecise drafting of the RFAs, hope that this

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Court will take another (and hopefully more favorable) look at their underlying motions.
However, they have failed to particularly describe how the Order is clearly erroneous or contrary
to law with respect to these motions. Therefore, the ruling on Plaintiffs’ motions to determine the
sufficiency of the Defendants’ responses to their RFAs will not be overturned.
As for the EmCare Defendants’ Motion to Compel (Doc. No. 151), Plaintiffs informed
the Court that they have already complied with the Order’s ruling on that issue and Defendants
made no objection to that representation. Thus, Plaintiffs’ objection to the Order granting the
EmCare Defendants’ Motion to Compel will be denied as moot.
The Court will take under advisement the Order’s rulings regarding the scope of
discovery pending receipt of further information from the parties as specified at the hearing.
IV.

ORDER

IT IS THEREFORE ORDERED THAT:
(1) Plaintiffs’ objection to the Magistrate Judge’s ruling on Plaintiffs’ Motion to
Determine the Sufficiency of Responses to Plaintiffs’ First Set of Requests for
Admission by the HMA Defendants (Doc. No. 142) is DENIED;
(2) Plaintiffs’ objection to the Magistrate Judge’s ruling on Plaintiffs’ Motion to
Determine the Sufficiency of Responses to Plaintiffs’ First Set of Requests for
Admission by the EmCare Defendants (Doc. No. 146) is DENIED;
(3) Plaintiffs’ objection to the Magistrate Judge’s ruling on Defendants EmCare Inc.,
EmCare Holdings Inc., Emergency Medical Services L.P., and Envision
Corporations’ Motion to Compel Further Responses to First Set of Interrogatories
from Plaintiffs (Doc. No. 151) is DENIED AS MOOT; and

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(4) All other matters are taken under advisement pending receipt of further information
from the parties as directed by the Court during the hearing on December 3, 2020.
SO ORDERED.

Signed: December 7, 2020

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