United States ex rel. Liebman v. Methodist Le Bonheur Healthcare

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UNITED STATES OF AMERICA ex rel. JEFFREY H. LIEBMAN and DAVID M. STERN, M.D., Plaintiff-Relators, v. METHODIST LE BONHEUR HEALTHCARE and METHODIST HEALTHCARE-MEMPHIS HOSPITALS, Defendants.

No. 3:17-cv-00902

United States District Court, M.D. Tennessee, Nashville Division

May 11, 2023

Campbell, Judge.

MEMORANDUM OPINION AND ORDER

BARBARA D. HOLMES, United States Magistrate Judge.

Pending before the Court are a Joint Motion for Discovery Conference (Docket No. 333) and a Joint Discovery Dispute Statement (Docket No. 334) filed by Methodist Le Bonheur Healthcare and Methodist Healthcare - Memphis Hospitals (collectively “Methodist”) and the United States.

For the reasons that follow, the Joint Motion for Discovery Conference (Docket No. 333) is DENIED to the extent of the Court's finding that a discovery conference is not necessary to rule on the issues detailed in the Joint Discovery Dispute Statement (Docket No. 334), which are decided as detailed below.

I. BACKGROUND

Familiarity with this case is presumed and only the background necessary to give context to or explain the Court's ruling is recited. The present dispute concerns discovery that has previously been at issue - Methodist's RFP Nos. 26 and 27 and Topic 1 in Methodist's 30(b)(6) Notice of Deposition. After exchanging revised discovery requests and deposition notices, supplemental responses, and additional document productions, and after meeting in person and exchanging written emails and letters in a good faith effort to resolve their disputes, Methodist and the United States again find themselves at an impasse and have asked the Court to resolve their disputes.

Previously, the parties filed two joint motions for discovery conferences (Docket Nos. 270, 272) and two corresponding joint discovery dispute statements (Docket Nos. 271, 273) in which they sought the Court's ruling on whether: (1) the United States' responses to Methodists' RFP Nos. 26 and 27 were sufficient (Docket No. 271 at 2, 8-9, 14-15), and (2) the United States' response to Topic No. 1 in Methodist's 30(b)(6) Notice of Deposition was appropriate (Docket No. 273 at 2, 4-5, 6-7), among other issues.

The Court held an in person hearing on December 20, 2022 during which the undersigned made certain rulings in open court. (Docket No. 299.) With respect to RFP Nos. 26 and 27, the Court stated:

I do find that it's relevant. I don't find that the presentations themselves are necessarily relevant, but that's not what's requested in these requests for productions. These requests for productions seek . . . documents or communications between or among these specifically identified governmental agencies regarding those presentations, and I do find that it's relevant.

* * *

This is going to be the Court's ruling: that the government must search the terms and custodians based on discussions with West regarding Foley presentations as described by Mr. Solinger today and produce responsive documents.

(Id. at 49:11-17, 60:7-11.) With respect to Topic 1 in Methodist's 30(b)(6) Notice of Deposition, the Court stated:

I'm going to allow Methodist to make an inquiry about RFPs No. 26 and 27. And you [the United States] find your best witness . . . I am going to allow topic No. 1. * * * I am going to allow Methodist to include an area of inquiry, but I want you to revise the topic, Mr. Roark [counsel for Methodist]. I want you to send an updated Rule 30(b)(6) notice with the revised topics to conform to the ruling today, that it's limited to all steps taken to search for and collect documents that are responsive to document request No. 26 and document request No. 27 with the additional temporal limitations that you've also described today . . . 2011 through 2018 prior to the litigation.

* * *

Once you [the United States] produce the documents, if those are satisfactory and the answer is satisfactory, then I'm going to expect that Mr. Roark [counsel for Methodist], as an officer of the court, will be reasonable and not continue to pursue that as an area of inquiry in a Rule 30(b)(6) motion.

(Id. at 51:25-52:11, 61:15-24, 62:21-25.) The Court then issued a written order on January 4, 2023, which stated, in pertinent part:

Regarding Methodist RFPs 26 and 27, and the Rule 30(b)(6) topics that refer to those RFPs, and as discussed during the discovery conference, see Docket No. 299 at 42-62, Methodist must serve a revised Rule 30(b)(6) in conformity with the narrowed requests as defined in open court. Further, the United States must also provide supplemental responses to [RFPs] Nos. 26 and 27 to confirm that it has produced all non-privileged documents responsive to the narrowed requests as defined in open court.

(Docket No. 300 at 8-9.) The Court set a deadline of January 13, 2023 for the United States to produce these supplemental responses. (Id. at 9 n.7.)

Methodist now contends that the United States did not comply with this Court's December 20, 2022 and January 4, 2023 orders because the United States improperly limited the number of custodians and categories of custodians when conducting searches for documents that are responsive to Methodist's RFP Nos. 26 and 27 and because the United States declined to produce a witness to testify about Topic 1 in Methodist's Rule 30(b)(6) Notice of Deposition. (Docket No. 334 at 10-12.) Methodist argues that these failures necessitate sanctions under Rule 37(b)(2), including an adverse inference and an award of Methodist's fees and expenses. (Id. at 12-13.)

In response, the United States argues that it entered into a stipulation, which relieved it from its obligation to produce documents in response to Methodist's RFP Nos. 26 and 27. (Id. at 13-14.) The United States further contends that it has complied with the Court's orders because it conducted searches of documents from all obligatory custodians and used reasonable search terms. (Id. at 14-15.) It argues that its reasonable searches of the identified custodians obviated the requirement that it produce a witness to testify about Topic 1 in Methodist's Rule 30(b)(6) Notice of Deposition. (Id. at 16.) Accordingly, the United States asserts that sanctions under Rule 37(b)(2) are not warranted. (Id. at 16-17.)

II. ANALYSIS

A. Legal Standard

Parties are generally allowed to obtain discovery “regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case ....” Fed.R.Civ.P. 26(b)(1). Although Rule 26 permits a broad search for information that need not be admissible to be discoverable, determining whether something is “proportional” to the needs of a particular case requires consideration of “the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant 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.” Id. It is “well established that the scope of discovery is within the sound discretion of the trial court.” In re Flint Water Cases, 960 F.3d 820, 826 (6th Cir. 2020) (quoting Criss v. City of Kent, 867 F.2d 259, 261 (6th Cir. 1988)).

Despite the breadth of discovery, the trial court is directed to prevent the production of information that falls outside the scope described in Rule 26(b)(1). Fed.R.Civ.P. 26(b)(2)(C)(iii). Generally, the party seeking discovery is obliged to demonstrate relevance. When the information sought appears to be relevant, “the burden shifts to the party resisting discovery to show, with specificity, why the requested discovery is not proportional to the needs of the case,” Allgood v Baptist Mem. Med. Grp., Inc., No. 19-2323-JTF-tmp, 2020 WL 86455, *1 (W.D. Tenn. Jan. 7, 2020) (internal citations omitted), or to establish that the information either is not relevant or is so marginally relevant that the presumption of broad disclosure is outweighed by the potential for undue burden or harm. O'Malley v. NaphCare Inc., 311 F.R.D. 461, 463 (S.D. Ohio 2015).

Methodist seeks discovery sanctions - in particular, an adverse inference jury instruction and the payment of its reasonable expenses, including attorney's fees - pursuant to Rule 37(b)(2)(A), which authorizes the imposition of sanctions for failure to comply with a court's discovery order. Fed.R.Civ.P. 37(b)(2)(A). “The purpose of imposing sanctions is to assure both future compliance with the discovery rules and to punish past discovery failures, as well as to compensate a party for expenses incurred due to another party's failure to properly allow discovery.” Jackson v. Nissan Motor Corp., 888 F.2d 1391 (6th Cir. 1989) (quotation omitted). Rule 37(b)(2)(A) provides discretionary sanctions if a party fails to obey a discovery order. See Fed. R. Civ. P. 37(b)(2)(A)(i)-(vii). Instead of or in addition to the discretionary sanctions of Rule 37(b)(2)(A), under Rule 37(b)(2)(C), a court must order a disobedient party to “pay the reasonable expenses, including attorney's fees, caused by the failure” to comply with discovery orders “unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Fed.R.Civ.P. 37(b)(2)(C). “In the Sixth Circuit, a court generally need not make a finding of bad faith before sanctioning a party under Rule 37[(b)].” Fausz v. NPAS, Inc., No. 3:15-cv-00145-CRS-DW, 2017 WL 1227943, at *3 (W.D. Ky. Mar. 31, 2017) (citing Youn v. Track, Inc., 324 F.3d 409, 421 (6th Cir. 2003)).

The district court has “broad discretion” to permit the jury to make an adverse inference, which is “an inference that ‘the party fears [producing the evidence]; and this fear is some evidence that the circumstance or document or witness, if brought,...