*1 All counsel of record via ECF

Counsel:

This will address Defendant Positive Physician Insurance Company's (“PPIC”) motion to compel compliance with a subpoena duces tecum it served on non-party Overlook Medical Center (“Overlook), (ECF No. 17), and Overlook's cross-motion to quash that subpoena. (ECF No. 23). In accordance with Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1, the Court resolves these applications without oral argument. Upon careful consideration of the parties’ submissions, and for the reasons set forth below, both motions are GRANTED IN PART AND DENIED IN PART.

I. RELEVANT BACKGROUND AND PROCEDURAL HISTORY

Plaintiff Richard H. Blum, M.D. alleges that he is a doctor licensed to practice in the State of New Jersey, and a specialist in Obstetrics and Gynecology. (Compl. ¶ 1, ECF No. 1-2). On October 9, 2008, Dr. Blum took part in the delivery of a baby, A.M., at Overlook Hospital in Summit, New Jersey. (Id. ¶ 6). At that time, Dr. Blum carried professional liability insurance through Obstetrics Risk Retention Group of America, (id. ¶ 9), which has since declared bankruptcy. (Id. ¶ 12). Dr. Blum later obtained a professional liability insurance coverage policy from Defendant PPIC (the “Policy”). (Id. ¶ 4). The Policy “was a claims-made policy with effective dates of April 1, 2019 to April 1, 2020, including a tail to cover claims arising after a retroactive date of January 1, 2003.” (Id.).

On or about September 19, 2019, AM's legal guardians filed a lawsuit against Dr. Blum in connection with AM's delivery, alleging, among other things, that Dr. Blum acted negligently and failed to obtain informed consent for the procedure (the “Malpractice Action”). (Id. ¶ 6; PPIC Motion, Ex. A, ECF No. 17-1). The Malpractice Action is currently pending in the Union County vicinage of the New Jersey Superior Court. (Compl. ¶ 6, ECF No. 1-2). Dr. Blum submitted a claim to PPIC regarding the Malpractice Action, and PPIC initially “assigned coverage and defense counsel to represent” Dr. Blum therein. (Id. ¶ 19). PPIC's assigned counsel thereafter took certain actions on Dr. Blum's behalf in the Malpractice Action. (Id. ¶¶ 20, 22). PPIC ultimately “purported to renounce and disclaim the insurance coverage and assignment of defense counsel” it provided to Dr. Blum in the Malpractice Action, on the grounds that the terms of the Policy barred such coverage. (Id. ¶ 9-11).

On March 17, 2020, Dr. Blum commenced the above-referenced matter by filing a two-count Complaint against PPIC in the Superior Court of New Jersey. (Generally id.). Dr. Blum seeks a declaratory judgment requiring PPIC to provide him with coverage vis-à-vis the Malpractice Action. (Id. ¶¶ 4-27). On May 1, 2020, PPIC removed the case to federal court, arguing that the United States District Court had subject matter jurisdiction over Plaintiff's claims pursuant to 28 U.S.C. § 1332. (Notice of Removal, ¶¶ 7-8, 11, ECF No. 1).

The parties are currently engaged in discovery. On or about October 16, 2020, counsel for PPIC served a subpoena duces tecum on Overlook, seeking:

(PPIC Motion, Ex. F, ECF No. 17-6) (emphasis in original). PPIC's attorney thereafter corresponded with counsel for Overlook in an effort to resolve the matter. (PPIC Motion, Ex. G, ECF No. 17-7). Overlook ultimately advised that: (1) it could not produce the medical records at issue without a release satisfying the requirements of the Health Insurance Portability and Accountability Act (“HIPAA”); and (2) Dr. Blum did not report any incident related to A.M.’s birth to the hospital, either contemporaneously or thereafter. (Id.). In response to PPIC's inquiries regarding any “Patient Safety Event Reports” that the hospital prepared in connection with A.M.’s birth, Overlook advised that it would not produce them, as their disclosure was statutorily protected. (Id.). PPIC separately requested that A.M.’s legal guardians willingly sign an authorization permitting Overlook to release the medical information at issue, but the guardians declined to do so. (PPIC Motion, Ex. H, ECF No. 17-8).

On February 19, 2021, PPIC filed a motion to compel compliance with its subpoena. In that motion, PPIC seeks several forms of relief. First, PPIC requests that the Court compel A.M.’s guardians to execute releases necessary to permit Overlook to release the entire patient chart related to A.M.’s delivery. (PPIC Br. at 6, ECF No. 17). In the alternative, PPIC requests that the Court compel Overlook to release that medical information directly. (Id.). Finally, PPIC asks the Court to compel Overlook to produce “any and all relevant records concerning this incident, which includes the Patient Safety Event Reports / peer review documents.” (Id.). Overlook filed a cross-motion asking the Court to quash PPIC's subpoena and issue a protective order “making all materials generated by [Overlook] during the Patient Safety Review process of [A.M.’s] birth privileged under the New Jersey Patient Safety Act, not discoverable in this matter, and not admissible at trial.” (Overlook Cross-Mot. at 2, ECF No. 23). Both motions are fully briefed and ripe for resolution. (ECF Nos. 24, 27). The Court will address each of the parties’ disputes in turn.

II. LEGAL DISCUSSION

a. PPIC's Application to Compel A.M.’s Guardians to Execute Authorizations

The Court first examines PPIC's request to compel A.M.’s guardians to execute authorizations permitting Overlook to release the patient chart related to A.M.’s delivery. PPIC ostensibly seeks that relief on the basis that A.M.’s guardians have “control” over those documents. At its heart, therefore, PPIC's request is an application to compel the guardians to produce the medical information at issue and the Court will treat it as such.

Federal Rule of Civil Procedure 34, which generally governs the production of documents in discovery, provides that “a nonparty may be compelled to produce documents and tangible things or to permit an inspection” in accordance with Rule 45. Fed. R. Civ. P. 34(c). Rule 45, in turn, sets forth requirements for the form, service, and enforcement of subpoenas, including those intended to command a non-party to produce documents. Generally Fed. R. Civ. P. 45. While PPIC has served a subpoena on Overlook, nothing in the record suggests that PPIC has also served a subpoena on A.M.’s guardians. Nor has PPIC provided any other legal basis for its request to compel A.M.’s guardians to execute authorizations or otherwise produce the documents in question. PPIC's motion is therefore DENIED to the extent it seeks information from A.M.’s guardians.

b. PPIC's Subpoena to Overlook

*3 Having decided that PPIC cannot compel A.M.’s guardians to authorize release of the medical records pertaining to A.M.’s birth, the Court must next determine whether it may enforce PPIC's subpoena and compel Overlook to produce either those records or any related Patient Safety Event Reports.

The Court begins its analysis by observing that “[a] Rule 45 subpoena served in conjunction with discovery must fall within the scope of proper discovery under Fed. R. Civ. P. 26(b)(1).” Schmulovich v. 1161 Rt. 9 LLC, No. 07-597 (FLW), 2007 U.S. Dist. LEXIS 59705, at *4 (D.N.J. Aug. 13, 2007); accord Biotechnology Value Fund, L.P. v. Celera Corp., No. 14-4046 (PGS), 2014 U.S. Dist. LEXIS 119878, at *2 (D.N.J. Aug. 27, 2014) (“[T]he permissible scope of discovery under Rule 45 is the same as under Rule 26(b).”). Rule 26(b)(1), in turn, provides that “[p]arties 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 ...” “Rule 26 is to be construed liberally in favor of disclosure, as relevance is a broader inquiry at the discovery stage than at the trial stage.” Cdk Glob. v. Tulley Auto. Grp., No. 15-3103 (KM), 2018 U.S. Dist. LEXIS 237964, at *6 (D.N.J. June 28, 2018) (citing Tele—Radio Sys. Ltd. v. De Forest Elecs., Inc., 92 F.R.D. 371, 375 (D.N.J. 1981)); accord Berardino v. Prestige Mgmt. Servs., No. 2:14-cv-3451 (ES), 2017 U.S. Dist. LEXIS 229510, at *5 (D.N.J. Dec. 8, 2017) (“The Rule 26 relevancy requirement has been construed ‘broadly and liberally.’ ”) (quoting DIRECTV. Inc. v. Richards, No. 03-5606 (GEB), 2005 U.S. Dist. LEXIS 43764, at *8 (D.N.J. June 22, 2005)).

“If the subpoenaing party shows the documents sought to be relevant, the resisting non-party must ‘explain why discovery should not be permitted.’ ” Biotechnology Value Fund, L.P., 2014 U.S. Dist. LEXIS 119878 at *2-3 (citation omitted). Indeed, “[t]he party opposing the subpoena ... bears a heavy burden of demonstrating that an order to quash would be proper under [Federal Rule of Civil Procedure 45].” Malibu Media, LLC v. Doe, No. 15-1742 (MCA), 2015 U.S. Dist. LEXIS 139966, at *2-3 (D.N.J. Oct. 14, 2015) (collecting cases). Subpart (d) of that Rule provides several mechanisms for subpoenaed parties to challenge, and for the Court to address, unduly burdensome or otherwise legally problematic subpoenas.

First, Rule 45(d)(1), which requires any party or attorney serving a subpoena to “take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena”, also explicitly directs the Court to “enforce [that] duty and impose an appropriate sanction” in the event of noncompliance. Fed. R. Civ. P. 45(d)(1). Next, Rule 45(d)(3)(A) requires that the Court quash or modify any subpoena that:

Fed. R. Civ. P. 45(d)(3)(A). Finally, under Rule 45(d)(3)(B), the Court may, in its discretion, quash or modify any subpoena that requires:

Fed. R. Civ. P. 45(d)(3)(B). The Court will apply these standards when evaluating PPIC's subpoena to Overlook. As the two categories of documents that PPIC seeks are also subject to unique statutory limitations on disclosure, the Court will consider them individually.

The Court will first address PPIC's application to compel Overlook to produce all medical records (i.e., the entire patient chart) pertaining to A.M.’s birth. PPIC represents that, when applying to PPIC for retroactive insurance coverage, Dr. Blum made the following representation:

(PPIC Br. at 2, ECF No. 17). The application then required Dr. Blum to “[r]eport any such incidents involving serious injury.” (Id.). PPIC further represents that Dr. Blum failed to report anything regarding A.M.s delivery when applying for retroactive insurance coverage. (PPIC Br. at 3-4, ECF No. 17). Finally, PPIC argues that, in denying coverage regarding the Malpractice Action, it invoked a provision in the Policy stating:

(PPIC Br. at 3-4, ECF No. 17). PPIC contends that Dr. Blum's alleged failure to disclose the complications in A.M.’s delivery represents a “material misrepresentation” in his application, thus rendering the Policy void ab initio. (Id. at 4). PPIC also suggests that another provision in the Policy – exclusion “J” – “excludes from coverage medical incidents that an insured knew of and should reasonably have expected would result in a claim or had reported to a previous insurer.” (Id.).

The parties’ claims and defenses in this case turn, in part, on whether Dr. Blum knew or should have known that he was required to disclose A.M.’s delivery when applying to PPIC for retroactive malpractice insurance. Certainly, the medical records regarding A.M.’s delivery are relevant to that determination. Having found that the records are relevant under Federal Rule of Civil Procedure 26(b)(1), the Court must determine whether Overlook has established that the Court should nevertheless quash PPIC's subpoena under Rule 45.

Overlook makes two arguments in opposition to producing the medical records. First, Overlook contends that the records are absolutely privileged under HIPAA and that no exception permits Overlook to release them absent an authorization from A.M.’s guardians. (Overlook Br. at 17-18, ECF No. 23-1). Overlook argues that producing the documents under these circumstances would be “unduly burdensome”, such that the Court is required to quash PPIC's subpoena in accordance with Rule 45. (Id. at 17-19). Overlook focuses its analysis on 45 C.F.R. § 164.512(e)(1)(ii) and (iii), which are inapplicable to the question of whether the Court may order disclosure of protected health information when resolving a motion to compel compliance with a subpoena. See 45 C.F.R. § 164.512(e)(1)(ii) (governing the disclosure of protected information “[i]n response to a subpoena, discovery request, or other lawful process, that is not accompanied by an order of a court”) (emphasis added); 164.512(e)(1)(iii) (providing additional details regarding compliance with 164.512(e)(1)(ii)). Rather, 45 C.F.R. § 164.512(e)(1)(i), which permits disclosure “[i]n response to an order of a court”, governs the situation here. Thus, if the Court orders Overlook produce the medical records, the facility may do so without running afoul of HIPAA. That situation creates no burden for Overlook, let alone an “undue burden” that might justify quashing PPIC's subpoena under Rule 45.

*5 Next, Overlook suggests that the Court should limit PPIC's proposed discovery pursuant to Federal Rule of Civil Procedure 26(b)(2)(C)(ii), (Overlook Br. at 18-19, ECF No. 23-1), which requires the Court to “limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that ... the party seeking discovery has had ample opportunity to obtain the information by discovery in this action.” Fed. R. Civ. P. 26(b)(2)(C)(ii). Overlook suggests that, because PPIC may obtain certain information from other sources, such as A.M.’s guardians or Dr. Blum, it may not obtain that discovery from Overlook. (Overlook Br. at 18-19, ECF No. 23-1). Overlook has not presented any case law supporting that argument. The single case Overlook cited, Nova Biomedical Corp. v. i-Stat Corp., 182 F.R.D. 419 (S.D.N.Y. 1998), is inapposite. In Nova Biomedical, the district court affirmed a Magistrate Judge's decision to quash subpoenas after determining that those subpoenas, which sought years of records and were duplicative of earlier subpoenas, imposed an undue burden. Id. at 422-23.

Here, the Court has determined that the medical records fall within the scope of discovery. The fact that PPIC might obtain the documents from A.M.’s guardians (another non-party) or gather certain related information by deposing Dr. Blum does not impact this analysis.[1] Overlook has not carried its burden of establishing that Rule 45 might justify quashing PPIC's subpoena vis-à-vis the medical records. The Court will therefore GRANT PPIC's motion and DENY Overlook's cross-motion with regard to those records. In light of their nature, however, the Court will direct Overlook to produce those records pursuant to a discovery confidentiality order (“DCO”). The parties shall meet and confer and submit an appropriate form of proposed DCO for the Court's consideration on or before August 31, 2021.[2] Overlook shall not produce the records to PPIC until the Court enters the DCO. When Overlook does produce the records, it shall designate them as “Confidential” pursuant to the DCO.

The Court next turns to PPIC's request for materials that Overlook prepared pursuant to the New Jersey Patient Safety Act, N.J.S.A., § 26:2H-12.23, et seq. (the “NJPSA”), in connection with A.M.’s birth. The NJPSA requires, among other things, that health care facilities “develop and implement a patient safety plan for the purpose of improving the health and safety of patients at the facility.” N.J.S.A. § 26:2H-12.25(b). The NJSPA also mandates that health care facilities “report to [the appropriate agency in the New Jersey state government], in a form and manner established by the [Commissioner of Health], every serious preventable adverse event that occurs in that facility.” N.J.S.A. § 26:2H-12.25(c). Consistent with the New Jersey State Legislature's explicit findings that it would be necessary to maintain the confidentiality of such reports to encourage health care providers and facilities to freely disclose information regarding adverse events, N.J. Stat. § 26:2H-12.24(e)-(f), the NJPSA provides:

*6 N.J. Stat. § 26:2H-12.25(g). The relevant regulations contain the same restriction. N.J.A.C. § 8:43E-10.9(b). The NJPSA is clear, however, that it does not “increase or decrease the discoverability ... of any documents, materials or information if obtained from any source or context other than those specified in [the Act].” N.J. Stat. § 26:2H-12.25(k).

Overlook represents that, at the time of A.M.’s birth, it had established a “Patient Safety Plan” as required by the NJPSA. (Certification of Karen McCann ¶¶ 3-4, ECF No. 23-2; Overlook Br. at 2, ECF No. 23-1). In accordance with that plan, Overlook tasked a “Patient Safety Committee” with reviewing potentially adverse events, such as A.M.’s birth. (Certification of Karen McCann ¶ 5, ECF No. 23-2). Overlook further represents that its Patient Safety Committee generated Patient Safety Event Reports in connection with A.M.’s birth. (Id. ¶¶ 6-7; Overlook Br. at 3, ECF No. 23-1). PPIC argues that those Reports are responsive to its subpoena and now seeks to compel Overlook to produce them.

The Court must first determine whether the Reports fall within the scope of discovery under Rule 26(b)(1). Overlook argues that they do not, as the Reports do not contain any statements from Dr. Blum and thus have no bearing on the claims or defenses in this case. (Overlook Br. at 16, ECF No. 23-1). This Court disagrees. Regardless of whether Dr. Blum contributed to the Reports, they may still contain information (e.g., statements from other staff members involved in A.M.’s birth) that bears on whether Dr. Blum had reason to know that the adverse event might expose him to potential liability. The Court therefore finds that the Reports are well within the scope of discovery. The Court must next determine whether Overlook has established that the Court should nevertheless quash PPIC's request for the Reports pursuant to Rule 45. The Court finds that it has.

Where, as here, a federal court's subject matter jurisdiction is based on diversity of citizenship, the Court “must apply the substantive law of the state whose laws govern the action.” Borse v. Piece Goods Shop, Inc., 963 F.2d 611, 614 (3d Cir. 1992); Chem. Leaman Tank Lines, Inc. v. Aetna Casualty and Surety Co., 89 F.3d 976, 983 (3d Cir.1996). In this instance, the Court must apply the NJPSA and case law interpreting that statute. The New Jersey Supreme Court's decision in Brugaletta v. Garcia, 234 N.J. 225 (N.J. 2018), definitively establishes that the information PPIC seeks is not discoverable. The Brugaletta court observed that the NJPSA “unconditionally protects the process of self-critical analysis, the analysis's results, and the resulting reports developed by a facility in its compliance with the PSA.” Id. at 247. It further noted that the statute's language demonstrates “an intent to encase the entire self-critical-analysis process in a privilege, shielding a health care facility's deliberations and determinations from discovery or admission into evidence”, id. at 232 (citing N.J.S.A. 26:2H-12.25), before ultimately finding that “a court may not order the release of documents prepared during the process of self-critical analysis.” Id. at 239. Brugaletta's guidance is unequivocal; New Jersey law prohibits PPIC from obtaining the Patient Safety Event Reports in discovery.

*7 The Court must briefly address two ancillary arguments that PPIC raised in its reply submission. First, PPIC suggests that the NJPSA does not apply to the Reports at all, because Overlook has not sufficiently established that it prepared them in “strict compliance” with the statute. (PPIC Reply at 8-10, ECF No. 27). The Court is satisfied from its review of the motion record, however, that the statute operates to shield the reports from discovery. (See, e.g., Certification of Karen McCann, ECF No. 23-2) (describing Overlook's compliance with the NJPSA and its preparation of the Reports at issue in accordance with the Act). Second, PPIC argues that the NJPSA “does not shield facts” and that it is therefore “entitled to whatever factual content is contained in the [Reports].” (PPIC Reply at 11, ECF No. 27). This Court disagrees.

While N.J. Stat. § 26:2H-12.25(k) states that the NJPSA does not “increase or decrease the discoverability ... of any documents, materials or information if obtained from any source or context other than those specified in [the Act]”, PPIC's interpretation ignores the second half of that provision. The statute clearly indicates that, while certain information may be discoverable, that is only the case when it is “obtained from any source or context other than those specified in the [Act].” In other words, PPIC cannot obtain the Reports or the information that Overlook obtained while undertaking the self-critical analysis required under the NJPSA, whether that information is “factual” in nature or otherwise. The Brugaletta court's commentary that the NJPSA “shields the process of self-critical analysis, beginning to end, including its outcome”, 234 N.J. at 248 (emphasis added), leaves no doubt in this regard. If, however, underlying information is available from other sources, such as medical records related to the adverse event in question – which the Court has already found that PPIC may obtain here – then the NJPSA does not bar discovery from those sources. The single case that PPIC cites in support of its argument, Trella v. Bradish, No. A-3039-18T3, 2019 N.J. Super. Unpub. LEXIS 2067, at *8-9 (App. Div. Oct. 8, 2019), confirms the Court's interpretation.

In Trella, the Appellate Division interpreted Brugaletta and found that., because New Jersey law requires that health care facilities document any “adverse incidents” in a patient's medical chart, and the health care facility in question failed to do so contemporaneously (despite admitting that an adverse incident had occurred), it was required to review those medical records provide the plaintiff with a “narrative” identifying the adverse incident – including where the plaintiff could locate that incident in the 310-page medical chart. 2019 N.J. Super. Unpub. LEXIS 2067, at **16-18. Rejecting the health care facility's argument that such a narrative was “privileged” under the NJPSA, the Appellate Division noted that “[t]he trial court did not ... order [the facility] to produce [its self-critical analysis] or any documents, materials, or information developed in the process of self-critical analysis.” Id. at *17. Thus, information gathered or prepared in connection with an NJPSA-required analysis is absolutely privileged. Information generated outside of that process (e.g., medical records, including notations of “adverse events” required by statute) is not.

As Federal Rule of Civil Procedure 45(d)(3)(A)(iii) requires the Court to quash any subpoena that “requires disclosure of privileged or other protected matter, if no exception or waiver applies”, and that the materials in question are absolutely protected under the NJPSA, the Court will GRANT Overlook's cross-motion to quash to the extent PPIC's subpoena seeks any Patient Safety Event Reports related to A.M.’s birth or any information that Overlook collected or generated when preparing those Reports. PPIC's motion to compel production of those materials is DENIED. Given the Court's determination, it need not address the parties’ other arguments on this issue.

III. CONCLUSION

*8 Based on the foregoing, it is on this 17th day of August, 2021,

ORDERED that PPIC's motion to compel compliance with the subpoena it served on Overlook, (ECF No. 17), and Overlook's cross-motion to quash that subpoena, (ECF No. 23), are both GRANTED IN PART AND DENIED IN PART; and it is further

ORDERED that PPIC's motion is DENIED to the extent it seeks to compel A.M.’s legal guardians to execute authorizations for the release of medical records; and it is further

ORDERED that the parties shall meet and confer and, on or before August 31, 2021, shall submit an appropriate, proposed form of Discovery Confidentiality Order for the Court's consideration; and it is further

ORDERED that PPIC's motion is GRANTED to the extent it seeks to compel Overlook to produce the medical records related to A.M.’s birth. While Overlook is required to produce those records to PPIC, it shall not do so until after the Court enters a Discovery Confidentiality Order in this matter. Overlook shall produce the documents within 10 days of the Court's entry of a Discovery Confidentiality Order. When Overlook does produce the records to PPIC, it shall designate them as “Confidential” under the Discovery Confidentiality Order; and it is further

ORDERED that Overlook's motion to quash is DENIED to the extent it seeks to protect those medical records; and it is further

ORDERED that PPIC's motion to compel is DENIED to the extent it seeks the Patient Safety Event Reports that Overlook prepared in connection with A.M.’s birth or any information that Overlook collected or generated when preparing those Reports. Overlook's cross-motion to quash is GRANTED with regard to that information. Overlook need not produce it in response to PPIC's subpoena.