In re Blue Cross Blue Shield Antitrust Litig.
In re Blue Cross Blue Shield Antitrust Litig.
2015 WL 9694792 (N.D. Ala. 2015)
December 9, 2015
Putnam, T. Michael, United States Magistrate Judge
Summary
The court found that the requested discovery concerning Aetna's retained experts was within the scope of discovery defined by Rule 26(b)(1). However, due to the protective orders still in effect in the Aetna case, BCBS–MI was required to redact any explicit reference to any information produced by Aetna or a non-party under the protective orders. If plaintiffs obtained the written consent of Aetna and relevant nonparties, BCBS–MI was required to produce the unredacted report and testimony within twenty days.
Additional Decisions
In re: Blue Cross Blue Shield Antitrust Litigation (MDL No.: 2406)
Master File No.: 2:13–CV–20000–RDP
United States District Court, N.D. Alabama, Southern Division
Signed December 09, 2015
Putnam, T. Michael, United States Magistrate Judge
DISCOVERY ORDER No. 15
This document relates to all cases.
*1 The court has before it the motion for clarification of Discovery Order No. 10, filed by defendant Blue Cross Blue Shield of Michigan (“BCBS–MI”) on November 3, 2015. (Doc. 473). The plaintiffs have responded to the motion (doc. 480) and it was orally argued on November 19, 2015. The principal thrust of the motion is to seek clarification from the court concerning and to express opposition to the production of expert reports and depositions from separate case filed against BCBS–MI by Aetna, styled Aetna, Inc. v. Blue Cross Blue Shield of Michigan, No. 2:11–cv–15346–DPH–MKM (E.D.Mich.2011). That case has now been settled and closed.
BCBS–MI argues that the eleven expert reports from the Aetna litigation are not within the scope of “fact” discovery in this case, are inadmissible as evidence because they are hearsay, and serve no purpose but to unduly prejudice BCBS–MI in this case. Likewise, BCBS–MI contends that the eight depositions of experts taken in the Aetna litigation are undiscoverable for the same reasons. Plaintiffs respond that the reports and depositions are clearly relevant to the “Most Favor Nation” clauses at issue in this case and, thus, are within the scope of discovery authorized by Fed.R.Civ.P. 26(b)(1). Further, they point out that any question concerning the evidentiary admissibility of the information is premature and not relevant to whether they are discoverable.
At the outset, the court applies the version of Rule 26(b)(1) that became effective on December 1, 2015, which reads:
Unless otherwise limited by court order, the scope of discovery is 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.
Fed.R.Civ.P. 26(b)(1) (eff.Dec. 1, 2015). Immediately, it is important to note that the scope of discovery extends to “any nonprivileged matter that is relevant to any party's claim or defense....” The use of the term “matter” seems somewhat broader than defendant's characterization of the scope being limited to “fact” discovery. In its historical context, the rewritten version of Rule 26(b)(1) omitted the additional reference formerly in the rule allowing, upon entry of a court order, discovery “of any matter relevant to the subject matter involved in the action.” This omission, however, was not necessarily intended by the rules makers to restrict the scope of discovery. In the 2015 Comments to the rule changes, they explained:
The amendment deletes the former provision authorizing the court, for good cause, to order discovery of any matter relevant to the subject matter involved in the action. The Committee has been informed that this language is rarely invoked. Proportional discovery relevant to any party's claim or defense suffices, given a proper understanding of what is relevant to a claim or defense. The distinction between matter relevant to a claim or defense and matter relevant to the subject matter was introduced in 2000. The 2000 Note offered three examples of information that, suitably focused, would be relevant to the parties' claims or defenses. The examples were “other incidents of the same type, or involving the same product ”; “information about organizational arrangements or filing systems”; and “information that could be used to impeach a likely witness.” Such discovery is not foreclosed by the amendments. Discovery that is relevant to the parties' claims or defenses may also support amendment of the pleadings to add a new claim or defense that affects the scope of discovery. [Italics added].
*2 Thus, contrary to BCBS–MI's assertion, the scope of discovery is not limited simply to “facts,” but may entail other “matters” that remain relevant to a party's claims or defenses, even if not strictly fact-based. Here, expert reports and depositions from the Aetna litigation relate conceivably to “other incidents of the same type” as alleged in the most-favored-nation-clause claims in this action.
Nevertheless, to be discoverable, the requested documents also must meet the proportionality requirement, taking into account “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.” Addressing these factors, it appears that the expert reports and depositions from the Aetna litigation are only tangentially “important to the issues at stake” in this action. While plaintiffs claim that “Most Favored Nation” clauses has been used by the Blues, including BCBS–MI, as a barrier to competition in the health-insurance market, their principal claim is that the Blues have conspired to divide up the market geographically to avoid competing among themselves. Given the nature of the issues alleged in Aetna, it would appear that the expert reports and depositions in that case would address only a small, secondary issue in this case, and then only in the geographically limited area of Michigan.
Next, the amount at stake in this case is great, involving perhaps billions of dollars, as well as the continued viability of the Blue Cross–Blue Shield business model. Also, as to this particular information, the plaintiffs have no access (or perhaps very little access provided by some cooperation from Aetna Inc.) to the expert reports and depositions in the Aetna litigation; if they are to see the information, it must be obtained from BCBS–MI. The parties' resources are not entirely equivalent, but the plaintiffs seem to be able to meet the manpower and financial demands of such high-stake litigation.
It is not clear that this discovery of the expert reports and depositions from the Aetna litigation is important in resolving the issue whether of the most-favored-nation clauses are an illegal restraint on trade. Here, a distinction must be made between the expert reports and depositions of experts retained by BCBS–MI and those retained by Aetna.[1] Subject to the limitations imposed by the protective orders entered in the Aetna litigation, the factual information and data underlying the expert reports and depositions are being produced by BCBS–MI. Although having the opinions and conclusions of BCBS–MI's experts might be helpful to plaintiffs, none of these experts has been identified as a retained expert in the instant case. Allowing the plaintiffs to obtain BCBS–MI's experts' reports and testimony sheds little or no light on this case while effectively prejudicing BCBS–MI. The reports and the testimony of the experts were never used in the Aetna litigation and should not be treated as binding on BCBS–MI in this case. In the event any of BCBS–MI's experts in Aetna is later identified by any defendant in this case as an expert witness, the expert's previous report and testimony may become discoverable. Until that occurs, plaintiffs' own experts should be capable of analyzing the underlying information and forming their own opinions and conclusions in this case.
*3 The question remains whether the reports and testimony of the experts retained and disclosed by Aetna in the other litigation should be produced by BCBS–MI. The defendant can hardly complain that the opinions and conclusions of those experts, who presumably were adverse to BCBS–MI in the Aetna case, are in any way binding on it. Perhaps the most persuasive factor in the proportionality analysis for these experts is “whether the burden or expense of the proposed discovery outweighs its likely benefit.” In this case, at issue are eleven expert reports and eight expert depositions.[2] They are readily identifiable and available; there is no undue expense associated with producing them. The “burden or expense” of production is very light, so much so that the court cannot say that they outweigh the likely benefits of the discovery sought by plaintiffs.
For these reasons, therefore, the court finds that the requested discovery concerning Aetna's retained experts is within the scope of discovery defined by Rule 26(b)(1). The expert reports and depositions are certainly relevant to a claim being made in this case, and their production is proportional to the needs of the case. Generally speaking, production of Aetna's expert reports and testimony does not involve the level of unfair prejudice as would production of BCBS–MI's own experts from unrelated litigation.
This finding, however, does not end the issue, due to the protective orders still in effect in the Aetna case. The court assumes that even Aetna's own expert reports and testimony make reference to information and data supplied by itself and non-parties in reliance on the protective orders.[3] Like litigation documents, such as witness lists and exhibit lists, expert reports and deposition testimony are not inherently subject to protection. While BCBS–MI will not be required, at this time, to produce the reports and testimony of its own retained experts in Aetna, there is no reason that the reports and testimony of Aetna's retained experts, disclosed to BCBS–MI in the Aetna case, should not be produced to plaintiffs in this case, except that such reports and testimony may include explicit references to underlying information and data produced pursuant to the protective orders by an entity other than BCBS–MI itself. As made clear in Discovery Order No. 10, this court will not attempt to override or “end run” the existing protective orders, and that includes declining to require production of expert reports and testimony that contain data and information from sources other than BCBS–MI otherwise still subject to the protective orders.
To the extent, however, that Aetna and relevant non-parties expressly consent in writing to disclosure of the underlying data and information[4] in a report or deposition testimony, notwithstanding the protective orders, BCBS–MI will be required to produce the report and testimony of experts retained by Aetna and disclosed to BCBS–MI. In the absence of written consents by Aetna and relevant non-parties for the disclosure of such protected information and data, BCBS–MI may redact from the reports and testimony any explicit reference to any information produced by Aetna or a non-party under the protective orders in the Aetna litigation. To the extent that plaintiffs obtain the written consent of Aetna and relevant nonparties for disclosure of data or information explicitly referenced in an expert report or testimony, the unredacted report and testimony shall be produced by BCBS–MI within twenty (20) days after plaintiffs deliver such written consent to BCBS–MI.
*4 Based on the foregoing, the motion for clarification is GRANTED, and it is ORDERED as follows:
1. BCBS–MI shall not be required to produce to plaintiffs the reports and deposition testimony of its own retained experts in the Aetna litigation, unless any such experts are designated, currently or later, as defendants' experts in the instant case.
2. BCBS–MI is hereby required to produce to plaintiffs, by February 15, 2016, the reports and testimony of experts retained by Aetna, Inc., and disclosed to BCBS–MI in the Aetna litigation; provided, however, that BCBS–MI may redact from such reports and testimony any underlying information or data explicitly used or referred to by any such expert, but only to the extent that the source of such information and data (other than BCBS–MI) is readily identifiable and has not consented to disclosure of its (or their) protected confidential or proprietary information.[5]
3. BCBS–MI shall produce without redaction the reports and testimony of experts retained by Aetna and disclosed to BCBS–MI within twenty (20) days after plaintiffs deliver to BCBS–MI written consent for disclosure of underlying information and data by the readily identifiable source of such information or data.
Footnotes
The court assumes that all experts who produced a report and/or were deposed in Aetna were retained by either BCBS–MI or Aetna, Inc. Although a great deal of factual information and data were obtained from non-parties, these non-parties would not have designated an expert within the meaning of Rule 26(a)(2)(B), and there has been no indication or suggestion that a party other than BCBS–MI and Aetna produced expert reports in that case.
The parties have not identified which of the eleven reports and eight depositions are attributable to BCBS–MI's experts, as distinct from those attributable to Aetna's experts.
Because the court has not seen the actual expert reports or deposition testimony, it must assume that, in reaching their conclusions and opinions, Aetna's expert witnesses relied upon and made reference to facts, information, and data supplied both by Aetna and some nonparties. It is has been represented to the court in earlier hearings that numerous hospitals and other entities not parties to the Aetna litigation produced confidential business and proprietary information pursuant to the protective orders entered in that case. The protected nature of this information continues even when such information is referred to or revealed in an expert's report or deposition testimony.
As used here, the court intends the phrase “underlying data and information” to be information or data that can be clearly attributed to production from either Aetna or a known and identifiable non-party under the shield of a protective order. Information or data in a report or expert testimony that cannot be readily attributed to production from Aetna or a third-party pursuant to a protective order may not be redacted. If the source of information or data (other than BCBS–MI) used by an expert in a report or testimony can be identified, and that information or data was produced pursuant to a protective order, it may be redacted, unless the source has consented in writing to its disclosure. If the source of such information or data cannot be readily ascertained, it may not be redacted.
If the source of underlying information and data relied on by an Aetna-retained expert was BCBS–MI itself, the information and data may not be redacted. If the source of underlying information or data is not readily identifiable, so that disclosure does not reveal the confidential or proprietary information of a particular, known entity (other than BCBS–MI), it may not be redacted. There is, of course, a protective order in place in the instant case to limit the uses of such information and data to the preparation and presentation of this case. The court's intention is to allow redaction only where the redacted material clearly refers to or reveals confidential or proprietary information supplied by an identifiable entity (other than BCBS–MI) in reliance on the protective orders in the Aetna litigation (i.e., such information is known to have been supplied by a particular entity). This is intended to honor and comply with those protective orders.