Puerto Rico Medical Emergency Group, Inc. v. Iglesia Episcopal Puertorriquena, Inc. et al

Filing 250

OPINION AND ORDER re 246 Motion in Compliance as to 236 Order and re 247 Motion in Compliance with Order and to Establish Scheduling Order as to 236 Order. The parties' respective motions for a final scheduling order are held in abeyance. The Court ORDERS each party to submit, no later than February 2, 2018, an informational motion. No extensions past February 2, 2018 will be allowed. Signed by Judge Francisco A. Besosa on 01/24/2018. (brc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
PUERTO RICO MEDICAL EMERGENCY
GROUP, INC.,
Plaintiff,
v.

Civil No. 14-1616 (FAB)

IGLESIA EPISCOPAL
PUERTORRIQUEÑA, INC., et al.,
Defendants.

OPINION AND ORDER
BESOSA, District Judge.
Before the Court is plaintiff Puerto Rico Medical Emergency
Group, Inc. (“PRMEG”)’s motion for a final scheduling order.
(Docket No. 236.)

Defendants Iglesia Episcopal Puertorriqueña,

Inc. (“IEP”), Servicios de Salud Espiscopales, Inc. (“Servicios de
Salud”),

Servicios

Generales

Episcopales,

Inc.

(“Servicios

Generales”), and Saint Luke’s Memorial Hospital, Inc. (“Saint
Lukes”)

(collectively

scheduling order.

“defendants”)

(Docket No. 247.)

also

request

a

final

For the reasons set forth

below, the Court ORDERS the parties to provide a summary of
completed

discovery,

namely:

(1)

a

general

overview

of

all

disclosed documents, (2) outstanding discovery requests, (3) the
reasons for failing to fulfill outstanding requests, (4) all
depositions completed as of the date of this order, (5) the parties
in attendance during all past depositions, and (6) requested

Civil No. 14-1616 (FAB)

2

depositions that remain outstanding.

With regard to Saint Lukes,

the most recently named defendant in this case, the Court ORDERS
Saint Lukes and PRMEG to specify the extent of Saint Lukes’
participation in discovery as a non-party prior to August 4, 2017,
the date in which PREMG filed the third amended complaint. (Docket
No. 206.)
case

Lastly, the Court ORDERS the parties to submit proposed

management

discovery,

orders

dispositive

containing
motions,

specific

pretrial

deadlines

orders,

voir

questions, jury instructions, pretrial conference, and trial.

for
dire
The

parties’ respective motions for a final scheduling order are held
in abeyance.
I.

(Docket Nos. 246 & 247.)

Background
This case commenced on August 11, 2014, when PREMG first

alleged that IEP, Servicios de Salud, Servicios Generales, and
Hospital
Influenced

Episcopal
and

San

Corrupt

Lucas,

Inc.

Organization

violated
Act,

18

the

Racketeer

U.S.C.

1962(b) & (c) (“section 1962(b)” and “section 1962(c)”). 1

sections
(Docket

1 The Court has diligently adjudicated all motions submitted by the parties as
evidenced by the seven opinions issued in this case.
See Docket Nos. 49
(memorandum and order denying without prejudice PRMEG’s motion to file a second
amended complaint), 50 (opinion and order granting in part and denying in part
defendants’ motion to dismiss), 117 (opinion and order denying defendants’
motion to dismiss the second amended complaint), 121 (opinion and order granting
in part and denying in part PRMEG’s motion to compel discovery), 131 (memorandum
and order denying motion for extension of discovery and granting motion for
sanctions), 192 (order to show cause as to whether Saint Lukes Memorial
Hospital, Inc. is not already a party in this case), & 201 (opinion and order
denying motion to dismiss and granting PRMEG leave to file a third amended
complaint).

Civil No. 14-1616 (FAB)
No. 1.)

3

Additionally, PRMEG set forth six causes of action

invoking this Court’s supplemental jurisdiction. Id. at pp. 2533; See 28 U.S.C. § 1367.

After the Court dismissed the section

1962(b) cause of action with prejudice, PREMG filed a second
amended complaint. 2

See Docket Nos. 50 & 69.

Defendants challenged the second amended complaint pursuant
to

Federal

Rule

of

Civil

Procedure

19

because,

according

to

defendants, PRMEG failed to join an indispensable party in this
action.

(Docket Nos. 69 & 146.)

file

third

a

amended

The Court granted PREMG leave to

complaint

to

include

Saint

Lukes,

an

indispensable party and signatory to the contract forming the basis
of this controversy.

(Docket No. 192.)

Subsequently, PRMEG filed

the third amended complaint, naming IEP, Servicios de Salud,
Servicios Generales and Saint Lukes as defendants.

(Docket No.

206.)
Litigation serving only to prolong the disposition of this
case is unacceptable.

Following contentious ligation, repeated

2 The remaining causes of action set forth by PMREG are the: (1) section 1962(c)
claim against IEP as set forth in the first cause of action, (2) breach of
contract claim against Saint Lukes as set forth in the second cause of action,
(3) breach of implied covenant of good faith claim against Saint Lukes as set
forth in the third cause of action, (4) contractual fraud claim against Saint
Lukes as set forth in the fourth cause of action, (5) declaratory judgment claim
as set forth in the sixth cause of action, and (6) tortious interference, bad
faith and use of confidential information as to all defendants pursuant to the
seventh cause of action. (Docket No. 206.) Saint Lukes counterclaimed against
PRMEG, setting forth four breach of contract claims and two declaratory judgment
claims. (Docket No. 220 at pp. 53—58.)

Civil No. 14-1616 (FAB)
extensions

to

4

conclude

discovery,

the

failure

to

name

an

indispensable party, sanctions for failure to comply with the
Court’s discovery order, and three amended complaints, this matter
is

quickly

docket. 3

approaching

its

fourth

year

on

the

Court’s

civil

This matter will either advance to trial or settle in

the absence of dilatory motion practice.
II.

The Court Possesses
Management Orders
Courts

possess

Broad

Discretion

“formidable

in

case-management

Issuing

Case

authority.”

Rosario-Diaz v. González, 140 F.3d 312, 315 (1st Cir. 1998).

“In

an era of burgeoning caseloads and thronged dockets, effective
case management has become an essential tool for handling civil
litigation.”

Cortés-Rivera v. Dep’t. of Corr. & Rehab. of P.R.,

617 F. Supp. 2d 7, 21 (D.P.R. 2009) (Besosa, J.) (quoting Tower
Ventures, Inc. V. City of Westfield, 296 F.3d 43 at 45 (1st Cir.
2002)).

The

considerable

3

Federal
authority

Rules
to

of

Civil

enforce

Procedure

case-management

grant

courts

orders.

Id.

The parties have received ample opportunity to litigate this case, obtaining
permission to file amended complaints on multiple occasions. See Docket Nos.
15 (request for extension of time granted, 20 (amended complaint), 33 (motion
for extension of time granted), 38 (motion for extension of time granted), 42
(motion for extension of time granted), 68 (motion for extension of time
granted), 69 (second amended complaint), 78 (motion to continue granted), 82
(motion to continue granted), 88 (motion for extension of time granted), 90
(motion for extension of time granted), 107 (order continuing pretrial
conference and trial), 108 (motion for extension of time granted), 152 (motion
for extension of time granted), 200 (extension of time granted), 1205 (order
adopting report and recommendation awarding attorney’s fees), 206 (third amended
complaint), 210 (extension of time granted), 216 (motion for extension of time
granted), & 219 (motion for extension of time granted).

Civil No. 14-1616 (FAB)

5

(citing Fed. R. Civ. P. 16(f); see Tower Ventures, Inc., 296 F.3d
at 46 ("To manage a crowded calendar efficiently and effectively,
a

trial

court

must

take

an

active

role

in

case

management.

Scheduling orders are essential tools in that process-and a party's
disregard of such orders robs them of their utility").

Failure to

comply with the case management order may result in dismissal of
this action.

See Mulero-Abreu v. P.R. Police Dep’t, Case No. 09-

1652 (FAB), 2011 U.S. Dist. LEXIS 28535 (D.P.R. Mar. 17, 2011)
(Besosa, J.) (dismissing action with prejudice because plaintiffs
repeatedly flouted discovery deadlines), aff’d

675 F.3d 88 (1st.

Cir. 2012) (Dismissal of this case “illustrates the folly of
treating case-management orders as polite suggestions rather than
firm directives”).
III. PRMEG and Defendants’
Scheduling Order

Respective

Requests

for

a

Final

The parties are at an impasse regarding the progression of
this case.

The Court ordered the parties to tender a proposed

case management order. 4

(Docket No. 236.)

PRMEG and defendants

did so, each submitting individual proposals.

(Docket Nos. 246 &

247.)

4

Federal Rule of Civil Procedure 16 requires this Court to “issue the scheduling
order as soon as practicable,” which “may be modified only for good cause and
with the judge’s consent.” F.R. Civ. P. 16(b)(2)—(4).

Civil No. 14-1616 (FAB)

6

PREMG suggests that this Court should: (1) impose a discovery
period extending no more than 90 days, (2) limit discovery to the
allegations set forth in the counterclaim, (3) deny requests for
duplicative depositions, (4) allow no more than ten additional
depositions, (5) adopt an expedited timeframe for dispositive
motions, and (6) set the pretrial conference and trial “for Spring
2018.”

(Docket No. 246 at pp. 11 & 12.)

Defendants collectively request that the Court: (1) order
PRMEG to serve initial disclosures to Saint Lukes pursuant to
Federal Rule of Civil Procedure 26(a) (“Rule 26(a)”), 5 (2) order
the parties to exchange written discovery by January 23, 2018,
(3) allot the parties 28 days after the discovery deadline to
answer the complaint and counterclaim, 6 (4) allow defendants to
conduct 1 two-day deposition pursuant to Federal Rule of Civil
Procedure 20, 1 expert deposition, and 5 fact witness depositions,

5 Federal Rule of civil Procedure 26(a) provides that “[a] party must make the
initial disclosures at or within 14 days after the parties’ Rule 26(f)
conference unless a different time is set by stipulation or court order, or
unless a party objects during the conference that initial disclosures are not
appropriate in this action.” F. R. Civ. P. 26(a)(1)(C). The parties conducted
the Rule 26(f) conference on November 8, 2017. (Docket Nos. 235 & 237.) Because
the Court has not altered Rule 26(a) timeframe, the initial disclosures were
due on November 22, 2017. Based on defendants’ motion requesting the initial
disclosures by December 29, 2017, the Court deems that the initial disclosures
from PREMG are outstanding. The Court reserves judgment regarding defendants’
request for initial disclosures until the parties comply with this order.
6 This request is moot.
Saint Lukes answered the third amended complaint.
(Docket No. 220.) The remaining defendants answered in a separate pleading the
third amended complaint. (Docket No. 222.)
PRMEG answered the counterclaim.
(Docket No. 226.)

Civil No. 14-1616 (FAB)
(5)

set

a

July

31,

7

2018

discovery

deadline,

(6)

order

that

dispositive motions be filed no later than September 21, 2018, and
(7) establish a September 28, 2018 deadline for proposed joint
pretrial

orders,

voir

dire

questions,

(Docket No. 247 at pp. 30, 31.)

and

jury

instructions.

Defendants further request that

the trial date be set sometime after September 28, 2018.
Defendants

make

no

distinction

between

the

recently

Id.
named

defendant, Saint Lukes, and defendants present in this litigation
since

2014,

Generales.

including

IEP,

Cumulatively,

Servicios
defendants

Salud,
request

and
28

Servicios
additional

depositions (four depositions pursuant to Federal Rule of Civil
Procedure 30, four expert witness depositions, and 20 fact witness
depositions).
IV.

Id.

Due Process for Recently Named Defendant Saint Lukes
Federal Rule of Civil Procedure 1, calling for the “just,

speedy and inexpensive determination of every action”, is the
guiding principle informing the Court’s issuance of a scheduling
order.

Fed. R. Civ. P. 1.

While defendants move for a scheduling

order that preserves Saint Lukes’ due process rights, PRMEG seeks
an

expedited

scheduling

duplicative discovery.

order

that

avoids

undue

delay

and

(Docket No. 247 at p. 15; Docket No. 246.)

The Court will approve a scheduling order that accounts for both
considerations.

Civil No. 14-1616 (FAB)
A.

8

Recently Named Defendant Saint Lukes is Entitled to
Conduct Discovery
Undisputedly, parties named as litigants in existing

actions are entitled to be heard, to conduct discovery, and to
present a defense within the confines of the Federal Rules of Civil
Procedure.
due

See Nelson v. Adams, 529 U.S. 460 (2000) (holding that

process

necessitates

that

new

parties

be

afforded

an

opportunity to respond and contest liability); Sims v. Fla. Dep’t
of Highway Safety & Motor Vehicles, 862 F.2d 1449, 1470 (11th Cir.
1989) (“due process requires that the new party be served with
process and provided an opportunity to be heard”).

With the

addition of Saint Lukes to this litigation, the Court is cognizant
that modifications to the prior scheduling order are inevitable. 7
Granted,
defendant.

PRMEG

recently

named

Saint

Lukes

as

a

Saint Lukes, however, is no stranger to this case.

PRMEG first referred to Saint Lukes on May 18, 2016 in the context
of a discovery dispute, claiming that Saint Lukes was “part and
parcel of the RICO Enterprise Defendants.”

7

(Docket No. 114 at

Courts routinely extend discovery to account for newly added litigants. See
Iron Workers’ Local No. 25 Pension Funds v. Steel Enters., Case No. 07-10882,
2008 U.S. Dist. LEXIS 77945 *8 (E.D. Mich. Sept. 30, 2008) (prolonging discovery
by one month to accommodate newly added parties that were closely related to
existing defendants); Commerce Benefits Group, Inc. v. McKesson Corp., Case No.
07-2036, 2008 U.S. Dist. LEXIS 15181 *1 (N.D.O. Feb. 13, 2008); (extending
discovery for two months after Court granted plaintiffs leave to file third
amended complaint naming new defendant that was a subsidiary of an existing
defendant); Scull v. Mgmt. & Training Corp., Case No. 11-207, 2013 U.S. Dist.
LEXIS 65031 *5 (D.N.M. Apr. 12, 2013) (affording a recently added party an
additional month to perform discovery).

Civil No. 14-1616 (FAB)
p. 2.)

9

Prior to May 2016, PRMEG served Saint Lukes notice of

deposition pursuant to Federal Rule of Civil Procedure 30(b)(6).
Id. at p. 1.

Notably, on April 21, 2016, PRMEG deposed Pedro Barez

in his capacity as the Chief Operating Officer of then non-party
Saint Lukes.

(Docket No 146-7 at pp. 10 & 16.)

The Court first acknowledged the existence of Saint
Lukes in an Opinion and Order concerning PRMEG’s motion to compel
discovery.

(Docket No. 121 at 15-16) (denying motion to compel

the production of discovery because Saint Lukes was, at that time,
a non-party).

The Court addressed PRMEG’s allegations that Saint

Lukes and the defendants were intertwined corporations, cautioning
explicitly that “[i]f defendants have possession, custody, or
control of documents held by [Saint Lukes] and those documents
have previously been requested by PRMEG, this part of the Court’s
Opinion and Order will not protect defendants from sanctions for
failure to produce those documents.”

Id. at p. 16.

Since at least

a year before the third amended complaint, Saint Lukes was aware
of this litigation, of the claims stemming from a contract to which
only Saint Lukes and PRMEG were parties, and participated in

Civil No. 14-1616 (FAB)
depositions.

10

Saint Lukes cannot feign surprise or unfamiliarity

with this action. 8
The Court will not approve a case management order from
a tabula rasa.

Not only has Saint Lukes participated in discovery

as a non-party, but the causes of action set forth in the second
and third amended complaints are nearly identical.
69 & 206).

(Docket Nos.

In both complaints, PRMEG alleges that defendants

fraudulently obtained millions of dollars in payments from nonparty insurance companies by falsely representing that defendants
were entitled to bill those insurance companies for services
provided by PRMEG, knowing full well that only PRMEG had the
contractual right to do so.

Id.

By Saint Lukes’ own admission,

“the Board of Directors of Saint Lukes is composed of members of
the Board of Directors of IEP.” 9

(Docket No. 220 at p. 5.)

Procedurally, Saint Lukes is a new party.

From a pragmatic

perspective, however, no impediment exists that would preclude an

8 Attorney Anibal Núñez-González (“Núñez”) represents Saint Lukes.
(Docket
No. 214.) Núñez first appeared in this case on behalf of IEP on December 15,
2016. (Docket No. 143.) As the Court previously noted, “[Núñez] has appeared
on behalf of other defendants and with little effort can answer the third
amended complaint.” (Docket No. 219.) Núñez need not expend considerable time
and effort in orienting himself with the facts and legal questions presented by
this case.
9 The Court’s reference to the interwoven relationship between Saint Lukes and
IEP implies only that defendants are uniquely familiar with this case. No party
has pierced the corporate veil. Defendants retain their individual, corporate
identities.

Civil No. 14-1616 (FAB)
expedited

scheduling

order

11
that

simultaneously

protects

Saint

Lukes’ due process rights.
Nothing in this order prevents the parties from conducting
discovery, or from submitting joint stipulations.

Rather than

“grind to a halt whenever a new party is added,” litigants should
“pursue the case and then supplement in a limited manner whatever
additional discovery the new party may seek.” Vaughn v. Homegoods,
Inc., Case No. 07-15085, 2008 U.S. Dist. LEXIS 66831, at *2 (E.D.
Mich. Sept. 11, 2008).
The Court will not rule in an information vacuum. Before
the Court issues a final scheduling order, and to understand the
status of this case better, the parties must specify the extent of
completed disclosures.
V.

Conclusion
For the above reasons, the Court ORDERS each party to submit,

no later than February 2, 2018, an informational motion setting
forth:
1.

A general overview of all disclosed documents.

2.

All outstanding discovery requests.

3.

The reasons for failing to fulfil outstanding discovery
requests.

4.

All depositions completed as of this order.

5.

The parties in attendance during all past depositions.

Civil No. 14-1616 (FAB)
6.

12

Requested depositions that remain outstanding.

The Court ORDERS Saint Lukes and PRMEG to specify the extent
of Saint Lukes’ participation in discovery as a non-party prior to
the third amended complaint.

(Docket No. 206.)

Lastly, the Court

ORDERS the parties to submit proposed case management orders
containing specific deadlines for discovery, dispositive motions,
pretrial orders, voir dire questions, jury instructions, pretrial
conference, and trial. The parties’ respective motions for a final
scheduling order are held in abeyance.

(Docket Nos. 246 & 247.)

No extensions past February 2, 2018 will be allowed.
IT IS SO ORDERED.
San Juan, Puerto Rico, January 24, 2018.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE