North Cypress Medical Center Operating Co., Ltd. et al v. Cigna Healthcare et al
Filing
514
MEMORANDUM AND ORDER granting in part denying in part 460 MOTION to Strike 447 MOTION for Summary Judgment (Signed by Judge Keith P Ellison) Parties notified.(arrivera, 4)
United States District Court
Southern District of Texas
ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
NORTH CYPRESS MEDICAL CENTER
OPERATING CO., LTD., et al,
Plaintiffs,
VS.
CIGNA HEALTHCARE, et al,
Defendants.
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September 07, 2016
David J. Bradley, Clerk
CIVIL ACTION NO. 4:09-CV-2556
MEMORANDUM AND ORDER
Pending before the Court is Plaintiffs’ Motion to Strike Defendants’ Summary Judgment
Evidence (Doc. No. 460). After considering the Motion, the responses thereto, and all applicable
law, the Court finds that the Motion should be granted in part and denied in part.
I.
BACKGROUND
Plaintiffs have moved to strike several exhibits attached to Defendants’ Motion for
Summary Judgment. First, Plaintiffs move to strike the declaration of Richard W. Nicholson, Jr.,
counsel for Defendants, and the attached exhibits, which consist of summaries of voluminous
documents (Doc. No. 447-2; hereinafter “Nicholson declaration”). Second, Plaintiffs move to
strike the expert report of Sean M. May (Exhibit 32). Finally, Plaintiffs move to strike portions
of Exhibits 12, 13, 26, 28, 33, and 35 on hearsay grounds.
II.
LEGAL STANDARDS
On a motion for summary judgment, a court may consider any evidence in the record,
“including depositions, documents, electronically stored information, affidavits or declarations,
stipulations (including those made for purposes of the motion only), admissions, interrogatory
answers, or other materials.” Fed. R. Civ. P. 56(c)(1)(A). However, hearsay, unsubstantiated
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assertions, and unsupported speculation will not suffice to create or negate a genuine issue of
fact. McIntosh v. Partridge, 540 F.3d 315, 322 (5th Cir.2008); Eason v. Thaler, 73 F.3d 1322,
1325 (5th Cir.1996); Reese v. Anderson, 926 F.2d 494, 498 (5th Cir.1991); Shafer v.
Williams, 794 F.2d 1030, 1033 (5th Cir.1986); see Fed. R. Civ. P. 56(c)(4). A party may object
to material cited in a summary judgment motion that would not be admissible in evidence. Fed.
R. Civ. P. 56(c)(2).
As a general matter, hearsay evidence (out of court statements offered to prove the truth
of the matter asserted) is not admissible. Fed. R. Ev. 801-02. There is, however, an exception to
the rule against hearsay for business records where:
(A) the record was made at or near the time by—or from information transmitted by—
someone with knowledge; (B) the record was kept in the course of a regularly conducted
activity of a business, organization, occupation, or calling, whether or not for profit;
(C) making the record was a regular practice of that activity; (D) all these conditions are
shown by the testimony of the custodian or another qualified witness, or by a certification
that complies with Rule 902(11) or (12) or with a statute permitting certification; and
(E) the opponent does not show that the source of information or the method or
circumstances of preparation indicate a lack of trustworthiness.
Fed. R. Ev. 803(6).
Moreover, under Rule 1006, a litigant “may use a summary, chart, or calculation to prove
the content of voluminous writings, recordings, or photographs that cannot be conveniently
examined in court.” Fed. R. Ev. 1006. A summary, chart, or calculation is only admissible if the
underlying information is also admissible. Soden v. Freightliner Corp., 714 F.2d 498, 506 (5th
Cir. 1983). The proponent of the summary, chart, or calculation must make the underlying
information available to the other parties for examination, copying, or both. Fed. R. Ev. 1006.
However, the proponent is not required to produce the underlying data; she merely must make it
available to the opposing party. Guchausky v. Am. Life Assurance Co. of Columbus, No. CV-1059-H-DWM, 2012 WL 4849688, at 1 n.1 (D. Mont. Oct. 11, 2012).
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III.
ANALYSIS
a. Nicholson declaration
Plaintiffs move to strike the Nicholson declaration and its attachments on three separate
grounds. First, Plaintiffs argue that the documents underlying the summaries are inadmissible.
(Doc. No. 460 at 4-7.) 1 In response, Defendants provided two declarations from Cigna
employees (Doc. Nos. 469-2, 469-3) which characterize the underlying documents as business
records admissible under Federal Rule of Evidence 803(6). 2 In their declarations, the Cigna
employees address elements (A) through (D) of Rule 803(6). Plaintiffs have not shown that the
source of information or the method or circumstances of preparation indicate a lack of
trustworthiness. See Fed. R. Ev. 803(6)(E). Therefore, the Court finds that the documents
underlying the Nicholson declaration and its attachments are admissible.
Second, Plaintiffs allege that the Defendants failed to make the underlying documents
available to Plaintiff as required in Federal Rule of Evidence 1006. The Court disagrees. Every
document underlying the summaries was identified by Bates number, and all were in the
possession of Plaintiffs. See Doc. No. 469 at 6. Plaintiffs did not ask Defendants for an
opportunity to examine or copy any of the underlying documents. See Guchausky, 2012 WL
4849688, at *1 n.1 (admitting summary data when plaintiffs had “months to examine any
underlying data if it wanted to do so” and had not “come forward with any evidence showing
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Plaintiffs also make a formalistic argument that Rule 1006 requires a declarant to affirmatively
establish the admissibility of the underlying documents in the declaration. Plaintiffs provide no
support for this argument (other than a single case from the Court of Federal Claims); the
authority Plaintiffs cite merely establishes that the underlying documents are required to be
admissible. Therefore, the Court only addresses the actual admissibility of the underlying
documents.
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Plaintiffs argue that the Court should not consider these declarations because Defendants did
not seek prior leave to submit them. However, Federal Rule of Civil Procedure 56(e)(1) allows
the Court to give Defendants an opportunity to support or address its assertion, and the Court
hereby grants Defendants that opportunity.
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that [the defendant] refused to provide access to the data”). Therefore, Defendants satisfied the
requirement to make the underlying documents available to Plaintiffs. The Court does not agree
with Plaintiffs that Rule 1006 required Defendants to re-produce all of the voluminous
underlying documents and deliver them to Plaintiffs, despite the fact that Plaintiffs already had
the documents in their possession.
Finally, Plaintiffs move to strike the Nicholson declaration and attachments on the
ground that the declaration improperly includes legal opinions and argumentative conclusions.
The phrases to which Plaintiffs object, however, are merely descriptive. For example, Plaintiffs
take issue with the Nicholson declaration’s designation of certain plan language as “fee forgiving
exclusionary language.” (Doc. No. 460 at 9.) However, the declaration specifies exactly the plan
language to which it refers. And the declaration’s use of the word “key” to describe the
exclusionary plan language merely echoes the Fifth Circuit’s language in its 2015 opinion. See
N. Cypress, 781 F.3d at 196-97. Therefore, the Court does not find that the Nicholson declaration
improperly includes legal opinions and argumentative conclusions.
b. Expert report of Dr. Sean May
In challenging Dr. May’s expert report (Exhibit 32; Doc. No. 447-32), Plaintiffs
incorporate by reference their earlier Motion to Strike and Daubert Challenge to the Expert
Report and Proposed Testimony of Defendants’ Expert Witness, Sean M. May, Ph.D. (Doc. No.
264). The Court denied this motion on August 18, 2015 and declines to revisit these arguments
now.
Plaintiffs also challenge Dr. May’s expert report (Exhibit 32; Doc. No. 447-32) on the
grounds that it is not verified under penalty of perjury. As noted above, the Court may grant
Defendants an opportunity to support or address an unsupported assertion. Fed. R. Civ. P.
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56(e)(1). Therefore, the Court will accept the declaration from Dr. May verifying his January 13,
2012 and January 20, 2016 expert reports that Defendants attached to their opposition brief.
(Doc. No. 469-10.) Because Dr. May’s report is now verified, Plaintiffs’ argument is moot.
c. Hearsay objections
Plaintiffs have moved to strike portions of Exhibits 12 and 13, transcripts of the
depositions of James L. Nadler and Brian L. Wallach, in which the deponents describe
conversations they had with intake personnel at North Cypress Medical Center. However, these
statements are not offered to prove the truth of the matter asserted. Instead, they are offered to
show the effect that the statements had on Cigna and to establish Cigna’s state of mind with
regard to the evidence of fee-forgiving behavior that it was gathering at the time. See Defs.’ Mot.
for Summ. J. at ¶ 18 (Doc. No. 447). Therefore, they are not hearsay and should not be stricken.
The same cannot be said of the objected-to portions of Exhibits 33 and 35. In those
exhibits, deponents Michael J. Koehler and John W. Matheny describe conversations with
Cypress Independent School District personnel about the high costs the District was
experiencing. Defendants clearly offered these statements to prove the truth of the matter
asserted. In their motion for summary judgment, Defendants cite these exhibits to support their
claim that “the record shows that [Plaintiffs’] scheme cost plans tremendously, even causing one
of Cigna’s clients, a local school district, ‘to go over [its budgets] by several million
dollars,…[and] lay off teachers as a result.’” Id. at 20 (emphasis added). Defendants go on to
argue that Plaintiffs’ reading of the contested plan language “would force employers to continue
to pay these extreme, unintended costs.” Id. Because these portions of Exhibits 33 and 35 are out
of court statements offered to prove the truth of the matter asserted, they must be stricken.
Exhibit 26 is a Cigna newsletter from April 2014 reminding in-network providers that
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“Participant incentives,” including “reduc[ing] or satisfy[ing] a Participant’s cost-sharing
obligations” are prohibited. Without reaching the hearsay objection, the Court finds that this
exhibit is irrelevant, since this case involves only claims prior to July 31, 2012. Therefore, this
evidence is stricken from the record.
Finally, the Court finds that the portions of Exhibit 28, the deposition of Wendy Sherry,
in which Ms. Sherry describes conversations with other Cigna employees about Cigna’s
provision of plan documents, are hearsay and must be stricken. Defendants object that there is a
great deal of evidence to corroborate Ms. Sherry’s testimony. The existence of corroborating
evidence, however, is irrelevant to the question of the admissibility of this particular piece of
evidence.
IV.
CONCLUSION
Plaintiffs’ Motion to Strike (Doc. No. 460) is GRANTED IN PART and DENIED IN
PART. The following exhibits are STRICKEN from Defendants’ motion for summary
judgment (Doc. No. 447): Exhibit 26, Exhibit 28 at 17, Exhibit 33, and Exhibit 35. Plaintiffs’
Motion is DENIED with regard to all other exhibits.
IT IS SO ORDERED.
SIGNED at Houston, Texas on this the 7th day of September, 2016.
HON. KEITH P. ELLISON
UNITED STATES DISTRICT JUDGE
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