*1 At Docket 373 Plaintiffs Laurie Miller, Brian Dimas, Kim Mills, Anthony Soza, Bruce Campbell, Kellie Bowers, Tim Hunter, Brian Saylor, Michael Schamadan, individually and as representative of the estate of his wife, Brandi Schamadan, and Joi Klages filed a sealed motion to compel. Defendants York Risk Services Group and the Frank Gates Service Company D/B/A/ Avizent Risk responded at docket 399, with their supporting documents filed under seal at docket 401. Plaintiffs replied at docket 414. Oral argument was not requested and would not assist the court.

The basis for Plaintiffs' lawsuit and a detailed description of the dispute is located at docket 23. The parties are familiar with the background of the case, and it need not be repeated here.

Plaintiffs request that the court compel the production of three categories of materials: (1) copies of all independent medical exam reports performed by Drs. Rockowitz, Beghin, Carter, and Rowley in connection with Defendants' adjustment of workers' compensation claims for the City of Phoenix (the “City”); (2) documents submitted to the City in connection with Defendants' application and selection as the third-party administrator for the City's workers' compensation program; and (3) “[r]eports containing aggregate data related to the handling of claims for the City of Phoenix including ... the management operating system report referred to by Mr. Jon Pease ... at his deposition.”[1]Defendants object to these three requests, arguing they do not have any materials that are responsive to such requests or that the materials requested are not relevant or too burdensome to locate.

On a motion to compel, the party seeking to compel discovery has the initial burden of establishing that its' request satisfies the relevancy requirements of Rule 26(b).[2] Relevance for purposes of discovery is defined broadly; “[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”[3] In turn, if the requested discovery is relevant for purposes of discovery, the party opposing discovery has the burden to demonstrate that discovery should not be allowed due to burden or cost and must explain and support its objections with competent evidence.[4] The court must limit the requested discovery if it is shown to be “unreasonably cumulative or duplicative”; if “the party seeking the discovery has had ample opportunity to obtain the information”; or if “the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.”[5]

*2 Plaintiffs have requested that Defendants provide copies of any independent medical exam (“IME”) reports authored by Drs. Rockowitz, Beghin, Carter, and Rowley in connection with workers' compensation claims by City employees. Defendants allege that IME reports prepared in connection with other employees' claims are irrelevant to this case. The court disagrees. Given the liberal scope of relevancy needed for discovery, it is clear to the court that the IME reports authored by the four doctors could reasonably lead to evidence that is of consequence to this case. Plaintiffs have alleged as part of their RICO and bad faith claims that Defendants and the City purposefully used specific doctors to provide biased reports and to limit the extent of the injuries claimed by Plaintiffs, while at the same time holding those doctors out as independent and unbiased vendors.[6] Plaintiffs allege that Defendants knew from ample experience that certain doctors retained to conduct IMEs would be critical of claimants' injuries and likely favor denial of benefits.[7] Information about how often Drs. Rockowitz, Beghin, Carter, and Rowley sided with Defendants regarding the compensability of work related injuries is relevant to these allegations.

Defendants argue that information about the doctors' conclusions in non-party employees' workers' compensation claims is irrelevant because such information alone would not prove that the doctors' conclusions were unwarranted or false. Defendants inaccurately frame the possible relevance of such information. Plaintiffs are not suggesting that the information is needed in order to prove that the doctors have a pattern of authoring fraudulent reports. Rather, they seek data regarding the frequency with which the doctors aided in claim denials. Such data could reasonably lead to relevant statistical evidence.

Defendants also assert that they cannot turn over IME reports without violating the Health Insurance Portability and Accountability Act (“HIPAA”) because the reports contain protected health information. However, HIPAA is not an absolute bar to production; there are circumstances where “[a] covered entity may use or disclose protected health information without the written authorization of the individual ... or the opportunity for the individual to agree or object.”[8] Disclosure is allowed in conjunction with judicial and administrative proceedings when the disclosure is in response to an order, provided that the covered entity discloses only the protected health information expressly authorized by such order, or in response to a discovery request accompanied by a qualified protective order.[9] While the current protective order in place here does not cover protected health information, it could be amended to do so in a manner that complies with HIPAA regulations.[10] Moreover, as noted above, specific identifying information contained within each IME report is not relevant. Plaintiffs are seeking information about how often the doctors are used, how often they side with Defendants, and whether they had financial or other pressure to do so. Thus, redactions would be appropriate. Indeed, Plaintiffs have expressed their preference for redactions of any personal identifiers within the reports.

Defendants also object to the request as far too burdensome. They assert that finding IME reports authored by the four doctors would require a manual examination of every file for all workers' compensation claims made by City employees. It may be that finding all the IME reports authored by the four defendants would require an extensive, time-consuming manual search of thousands of claim files, in which case their argument in favor of limiting such discovery would be compelling, but Defendants have not put forth any evidence to lend support to their assertion that the task is too burdensome. There is no testimony or sworn statement providing any information about what it would take to determine which workers' compensation claims involved the four doctors. While Defendants correctly assert that just “because a company stores files in an electronic format does not mean it is possible to do a global search of all electronically stored document or a particular word or name,”[11] they fail to establish whether it is possible to do a global search in this particular instance. Defendants cite to testimony by their 30(b) representative to show that they do not maintain separate data about IME doctors and do not conduct reviews of IME doctors. That testimony, however, only shows that they have not previously isolated information and data about IME doctors. It does not show that they tried to do so and failed or that they would not be able to do so. Furthermore, as noted by the Plaintiffs, there may be other sources to help Defendants identify files associated with the four doctors, which could then help narrow the electronic searching, but Defendants have made no attempt to figure out a way to cooperate with Plaintiffs' request.

*3 Defendants also contend that complying with Plaintiffs' request would be burdensome because, pursuant to HIPAA, they would have to redact over eighteen different categories of personal health identifiers before disclosing any IME reports to Plaintiffs. Redaction of eighteen types of information is not necessarily burdensome, depending on how many files are at issue. Indeed, Defendants have made no effort to identify how many other files the four doctors have been associated with, and thus it is impossible to determine how burdensome manual redaction would be. Moreover, the required redactions to which Defendants refer are those necessary to de-identify records so that they are not deemed protected information under HIPAA. As noted above, disclosure of protected information, that is information with personal identifiers, is discoverable in judicial proceedings pursuant to a court order or with a qualified protective order in place.

Finally, Defendants point to an order by Judge Aspey to argue that Plaintiffs' request is too burdensome. At docket 191, Judge Aspey concluded that Plaintiffs' subpoena to the City requesting all documents generated as a result of the IMEs performed by the four doctors for a period of 11 years was unreasonably burdensome, especially in light of the fact that they asked for medical records. The Judge based his decision on the fact that the subpoena was directed at a third party, was asking for any and all documents related to those four doctors, involved private medical records of numerous nonparty City employees, and spanned over 11 years. Here, Plaintiffs' request is directed at Defendants, and they have narrowed the scope of the request by only asking for the IME reports authored by the four doctors (not any and all documents associated with IMEs conducted by the doctors) over the life of the contract, which began in 2009. As discussed above, any concerns with privacy can be addressed with a protective order and redactions, and Defendants have not submitted any evidence to demonstrate that the request is unduly burdensome.

Plaintiffs ask the court to order Defendants to produce all materials Defendants presented to the City in connection with their application and selection as the third-party administrator for the City's workers' compensation program. Defendants state that they have turned over all materials submitted to the City to procure the January 2009 contract. Pursuant to that contract, the City had the option to renew and extend that same contract through 2013. Plaintiffs assert in their motion to compel that Defendants should also provide materials Defendants submitted in 2014 in order to secure a new contract with the City and continue being the City's administrator. Defendants assert that those materials are not relevant because they would only address future relations, not what happened during the prior contract. The court disagrees. While the 2014 contract itself is irrelevant, it is possible that in submitting their proposal for renewal and advocating for the City to continue its relationship with them, Defendants included information about past performance under the 2009 contract. Discovery of such material could potentially lead to evidence regarding the City's expectations and the Defendants' claim handling motivations at the time of Plaintiffs' workers' compensation claims.

Plaintiffs have also requested that Defendants produce “[r]eports containing aggregate data related to the handling of claims for the City of Phoenix including but not limited to the management operating system report referred to by ... [Defendant's] corporate representative at his deposition.”[12] This is not the first time that they have requested such information. Previously, Plaintiffs requested any “aggregate claims handling reports ... [Defendants] provided to the City of Phoenix,”[13] but as noted by the court in one of its recent orders, Defendants have demonstrated that no such reports exist because the City of Phoenix has direct access to Defendants data systems and thus can simply run any needed “reports” without involvement from Defendants. Plaintiffs subsequently rephrased their request by asking for all reports that relate to claims handling practices, whether or not those reports were provided to the City. Defendants insist that they do not run regular “reports,” but rather, they simply look at data on an as-needed basis. They cite deposition testimony to confirm that they do not maintain copies of all the ad-hoc reports ever run by their employees.[14]

*4 It is clear that information about Defendants' claims handling practices for the City's workers' compensation program are relevant, but it is also clear that this information does not appear in a formal report like Plaintiffs believe or wish that it did. Defendants however continue to skirt the issue by simply stating without support that they cannot possibly search for all the ad-hoc reports ever generated that might possibly relate to their claim handling practices for the City. Defendants offer to pull together specific data for Plaintiffs, but assert that they need more guidance. For example, they state that Plaintiffs have not specifically asked for data related to statistics on the resolution of claims or information about goals for reduction of claims paid.[15] However, it is clear that by using the phrase “aggregate data related to the handling of claims for the City of Phoenix” they are looking for data related to statistics on the resolution of claims or information about Defendants' goals for reduction of claims paid, and by looking for “[r]eports containing” such data, they want to know the manner and context in which Defendants discussed these issues.

In order to attempt to resolve this discovery impasse, the Court concludes that Defendants must attempt to locate reports or summaries exchanged either internally or with third-parties between 2009 and July 2013 that have to do with the resolution of workers' compensation claims for the City or reports and summaries dealing with the reduction of claim pay-outs between 2009 and July 2013. In order to avoid a situation where Defendants' attorneys merely assert without evidentiary support that such materials do not exist or are too burdensome to find, which may be the case, Defendants should be prepared to provide a sworn statement from the appropriate corporate representative describing what efforts were taken to locate such information.

The “management operating system report” that Plaintiffs specifically request is a staffing report.[16] The court has already held that such reports are not relevant or discoverable.[17]

Based on the preceding discussion Plaintiffs' motion at docket 373 is GRANTED as follows:

DATED this 13th day of January 2015.

Doc. 373 at pp. 2-3.

Fed. R. Civ. P. 26(b)(1).

Fed. R. Civ. P. 26(b)(1).

See Lind v. United States, No. 13-cv-032, 2014 WL 2930486, at * 3 (D. Ariz. June 30, 2014); Integrated Global Concepts, Inc. v. j2 Global, Inc., No. 5:12-cv-03434, 2014 WL 232211, at *1 (N.D. Cal. Jan. 21, 2014).

Fed. R. Civ. P. 26(b)(2)(C).

Doc. 208 at ¶ 85(d)-(f).

Doc. 208 at 85(f).

In re Zyprexa Prods. Liab. Litig., 254 F.R.D. 50, 54 (E.D.N.Y. 2008).

45 C.F.R. § 164.512(e).

See 45 C.F.R. § 164.512(e)(1)(v).

Doc. 399 at p. 8.

Doc. 373 at p.3.

Doc. 191 at p. 6.

Doc. 399 at p. 12, n.12.

Doc. 399 at pp. 12-13.

Doc. 399 at p. 14, n.18.

Doc. 344 at p. 3.