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Duffy v. Lawrence Memorial Hospital

United States District Court, D. Kansas

March 30, 2017

MEGEN DUFFY, Relator/Plaintiff,
v.
LAWRENCE MEMORIAL HOSPITAL, Defendant.

          MEMORANDUM AND ORDER

          Teresa J. James U.S. Magistrate Judge

         This matter is before the Court on Relator/Plaintiff[1] Megen Duffy's Motion to Compel Regarding Defendant's Responses and Objections to Qui Tam Plaintiff's Third Request for Production of Documents to Defendant (ECF No. 136). Pursuant to Federal Rule of Civil Procedure 37 and D. Kan. Rules 37.1 and 37.2, Plaintiff asks the Court to overrule objections and order Defendant Lawrence Memorial Hospital to produce documents responsive to Qui Tam Plaintiff's Third Request for Production of Documents to Defendant/Counter Claimant. Defendant opposes the motion. As set forth below, Plaintiff's motion is granted in part and denied in part.

         I. Relevant Background

         Plaintiff served her third document requests on December 9, 2016, and Defendant responded with objections-and no responsive documents-on January 6, 2017. On January 20, 2017, Plaintiff provided a written explanation to Defendant of the asserted impropriety of Defendant's objections. Counsel subsequently addressed the issues in two telephone conferences, and on February 8, 2017, Defendant's counsel sent Plaintiff's counsel an email with its final position. Defendant agreed to supplement its response to one of the requests, but four requests remain at issue. Given the parties' ongoing discussions, Plaintiff requested and the Court granted her a four-day extension of time to file a motion to compel.[2] Plaintiff timely filed the instant motion. Based on the parties' efforts, the Court finds they have complied with the requirements of D. Kan. Rule 37.2.

         Plaintiff requests in her motion that the Court overrule Defendant's objections and order Defendant to produce documents responsive to four requests for production. Throughout counsel's written exchanges concerning these particular discovery requests, Defendant has not withdrawn any of its objections. Accordingly, the Court has examined those objections and Plaintiff's responses thereto. The Court is now prepared to rule on the disputes at issue in Plaintiff's motion to compel.

         II. Summary of the Parties' Arguments

         Plaintiff brings this qui tam action under the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., against her former employer, Lawrence Memorial Hospital (“LMH”), alleging in part that LMH submitted false information to the federal government in order to maximize reimbursement from federal medical care programs. As required by the FCA, Plaintiff served a “copy of the complaint and written disclosure of substantially all material evidence and information” she possessed on the United States Attorney for the District of Kansas to permit the government an opportunity to elect to intervene in the action.[3] After the government elected not to prosecute the action, [4] Plaintiff's Second Amended Complaint was unsealed and Plaintiff served LMH. Defendant answered the Second Amended Complaint and asserted counterclaims against Plaintiff for breach of contract and fraud.[5]

         III. Whether the Discovery Sought is Relevant and Discoverable

         Federal Rule of Civil Procedure 26(b)(1) sets out the general scope of discovery and provides as follows:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and 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 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. Information within this scope of discovery need not be admissible in evidence to be discoverable.[6]

         Relevancy is to be “construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on” any party's claim or defense.[7] Information still “need not be admissible in evidence to be discoverable.”[8] When the discovery sought appears relevant, the party resisting discovery has the burden to establish the lack of relevancy by demonstrating that the requested discovery (1) does not come within the scope of relevancy as defined under Fed.R.Civ.P. 26(b)(1), or (2) is of such marginal relevancy that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure.[9] Conversely, when the relevancy of the discovery request is not readily apparent on its face, the party seeking the discovery has the burden to show the relevancy of the request.[10] Relevancy determinations are generally made on a case-by-case basis.[11]

         In this action, the Court finds that the relevancy of the discovery called for by Plaintiff's third request for production of documents is apparent on its face.[12] The requests directly relate to the claims Plaintiff asserts (indeed, with a verbatim statutory reference in one instance) or to the defenses raised by Defendant. The Court discusses below Defendant's other objections, but with respect to relevancy the Court overrules Defendant's objection.[13]

         Neither does the Court find support for Defendant's ubiquitous comment that Plaintiff is using every discovery request as a “roving commission” to investigate broad-brush allegations of fraud which are unsupported by any actual knowledge of Plaintiff. Along with the comment, Defendant repeats its earlier statements about Plaintiff's theory of liability being a moving target and a fishing expedition. The Court has previously addressed that argument, and need not repeat itself.[14] And as the Court previously noted, Defendant's argument distracts from the issue at hand, i.e. whether the discovery requested is relevant and discoverable.

         IV. Defendant's Common and Boilerplate Objections

         Before considering the individual requests and objections, the Court notes that Defendant has again asserted the boilerplate objection that the requests are unduly burdensome. This objection is not accompanied by facts justifying the objection or setting forth an assessment of the costs in time and/or money Defendant would incur if it produced the requested discovery. Instead, Defendant includes in its response to RFP No. 60 the vague statement that it “has already incurred significant time and expense in obtaining and producing its annual Cost Reports which Plaintiff possesses.”[15] No other response contains a reference to any time or expense Defendant has expended. To the extent the boilerplate objection lacks specificity, Defendant has not met its burden to show how the discovery requests are unduly burdensome.[16] The discovery requests at issue relate to Plaintiff's claims or Defendant's defenses, are relevant on their face, and are not unduly burdensome.

         V. Specific Discovery Requests

         The Court considers the specific discovery requests and any objections not previously addressed.

         A. RFP No. 59

         In RFP No. 59, Plaintiff seeks “[a]ll documents reflecting the base Diagnosis-Related Group (“DRG”) payments received from CMS by Defendant for fiscal years 2010 through the present.”[17] As Plaintiff explains, the request stems from the statute governing Hospital Value Based Purchasing (“HVBP”) payments, which are funded through adjustments of hospitals' DRG payments. A hospital that meets the HVBP performance standards receives an increase in the base operating DRG payment (Medicare reimbursement) amount for each discharge. If Defendant knowingly manipulated arrival times, as Plaintiff alleges, that would have affected Defendant's performance ...


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