U.S. ex rel. Fischer v. Cmty. Health Network, Inc.
U.S. ex rel. Fischer v. Cmty. Health Network, Inc.
2023 WL 9788400 (S.D. Ind. 2023)
October 19, 2023
Klump, M. Kendra, United States Magistrate Judge
Summary
The United States filed a motion to compel production of documents from Epstein Becker & Green, P.C. in a qui tam complaint alleging violations of the False Claims Act. However, the Court denied the motion because EBG and its custodian of records do not reside, work, or regularly transact business within 100 miles of the designated place for production. The Court also declined to reach the substantive merits of the parties' dispute regarding the application of the Shelton case.
Additional Decisions
UNITED STATES OF AMERICA ex rel. Thomas P. Fischer, et al., Plaintiffs,
v.
COMMUNITY HEALTH NETWORK, INC., et al., Defendants
v.
COMMUNITY HEALTH NETWORK, INC., et al., Defendants
No. 1:14-cv-01215-RLY-MKK
United States District Court, S.D. Indiana, Indianapolis Division
Filed October 19, 2023
Counsel
Arthur Di Dio, U.S. Department of Justice, Civil Division, Los Angeles, CA, Claire Horrell, David M. Finkelstein, Joanna G. Persio, U.S. Department of Justice, Civil Division, Washington, DC, Justin R. Olson, Shelese M. Woods, United States Attorney's Office, Indianapolis, IN, Kelly Quinn McAuliffe, Commercial Litigation Branch, Fraud Section, Norfolk, VA, for Plaintiff United States of America.Fallon Lilly, Lawrence J. Carcare, II, Matthew Garner Whitmire, Office of the Indiana Attorney General, Indianapolis, IN, for Plaintiff State of Indiana.
Blake P. Holler, Marc T. Quigley, Krieg DeVault LLP, Carmel, IN, Daniel C. Fundakowski, Pro Hac Vice, Eleanor Chung, Pro Hac Vice, Elizabeth A. Harris, Erica Sibley Bahnsen, George B. Breen, Richard W. Westling, Pro Hac Vice, Epstein Becker & Green P.C., Washington, DC, Jeremy A. Morris, Taft Stettinius & Hollister LLP, Indianapolis, IN, Libby Yin Goodknight, Thomas J. Costakis, Krieg DeVault, LLP, Indianapolis, IN, Robert Kennedy McBride, Pro Hac Vice, Taft Stettinius & Hollister LLP, Covington, KY, for Defendant Community Health Network, Inc.
Blake P. Holler, Marc T. Quigley, Krieg DeVault LLP, Carmel, IN, Daniel C. Fundakowski, Pro Hac Vice, Eleanor Chung, Pro Hac Vice, Elizabeth A. Harris, Erica Sibley Bahnsen, George B. Breen, Richard W. Westling, Pro Hac Vice, Epstein Becker & Green P.C., Washington, DC, Libby Yin Goodknight, Thomas J. Costakis, Krieg DeVault LLP, Indianapolis, IN, for Defendants Community Physicians of Indiana, Inc., Visionary Enterprises, Inc., Hancock Surgery Center, Community Endoscopy Center, LLC, North Campus Surgery Center LLC, South Campus Surgery Center, LLC, East Campus Surgery Center, Hamilton Surgery Center, LLC, Howard Community Surgery Center, Northwest Surgery Center, LLC, Indianapolis Endoscopy Center, LLP, North Campus Office Associates, L.P.
Klump, M. Kendra, United States Magistrate Judge
ORDER
*1 This matter is before the Court on the United States’ Motion to Compel Production of Documents from Epstein Becker & Green, P.C., Dkt. [595]. The motion is fully briefed and ripe for the Court's decision.
I. Background
A. Relator's qui tam Complaint and United States’ intervention
On July 21, 2014, Relator filed a qui tam complaint, alleging that the Defendants violated the federal False Claims Act and the Indiana False Claims and Whistleblower Protection Act. (Dkt. 1). Relator also brought a breach of contract and other state law claims relating to his employment at Defendant Community Health Network, Inc. (“CHN”). (Id.; see also Dkt. 32 (First Amend. Compl.)).
Five years later, on August 7, 2019, the United States elected to intervene in part and declined to intervene in part, and this matter was unsealed on December 23, 2019. (Dkts. 86, 93). On January 6, 2020, the United States filed its Amended Complaint in Intervention against CHN. (Dkt. 96).
B. Discovery Dispute
On February 10, 2023, Defendants filed their Statement of Defenses in which CHN indicated that it was asserting an “advice of counsel” defense to rebut the scienter requirement of the United States’ and Realtor's case in chief. (Dkt. 497 at 5-6, 14-15). CHN disclosed that it relied on advice “obtained pursuant to an engagement with David Matyas at Epstein Becker & Green, P.C., who also engaged Arthur J. Gallagher & Company to advise [CHN].” (Id. at 6, 14).
Based on this defense and as allowed by Federal Rules of Civil Procedure 26 and 34, on May 1, 2023, the United States propounded Requests for Production of Documents on Epstein Becker & Green, P.C. (“EBG”). (Dkt. 595-1). The requests required EBG to comply with a subpoena issued pursuant to Rule 45 of the Federal Rules of Civil Procedure. (Id.). The subpoena was served to EBG's office in Washington, D.C., and the subpoena commanded EBG to produce documents relevant to CHN's advice of counsel defense at “United States Attorney's Office, Southern District of Indiana; 10 W. Market Street, Suite 2100; Indianapolis, Indiana 46204” by noon on May 30, 2023. (Id. at 2). EBG is incorporated under the laws of the State of New York and is headquartered in New York, New York. (Dkt. 612-1 at 3). EBG has an office in Washington, D.C., and its custodian of records, Christopher M. Farella (“Farella”), works in EBG's New York office. (Id.). EBG does not have an office in Indiana. (Id.).
On May 15, 2023, in response to the United States’ subpoena, Farella emailed a letter to government counsel, objecting to the requested production. (Dkt. 595-2). Farella, on behalf of EBG, explicitly objected to the requests on two bases: (1) the United States sought discovery from opposing counsel without establishing certain facts, including that “the information sought is relevant and nonprivileged,” (id. at 2); and (2) the requests were “unreasonably cumulative or duplicative or can more properly be obtained ... from parties or other sources for which the requests are more convenient, less burdensome, or less expensive,” (id. at 3). EBG attached its general and individual objections to the May 15, 2023, letter. (Dkts. 595 at 5; 595-4).
*2 After receiving EBG's objections, counsel for the United States and EBG met and conferred to try and resolve EBG's objections. (Dkt. 595 at 6). The meet and confer did not resolve the parties’ disagreement, and on June 15, 2023, the United States filed its motion to compel production of documents from EBG. (Dkt. 595).
II. Legal Standard
A. Rules 26 and 34
Federal Rule of Civil Procedure 26 allows a party 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). Within the scope of Rule 26(b), a party may compel production of documents from a nonparty consistent with the restrictions of Rule 45. Fed. R. Civ. P. 34(c).
B. Rule 45
Rule 45 allows a party to command production of “documents, electronically stored information, or tangible things ....” Fed. R. Civ. P. 45(a)(1)(D). A subpoena may command production only “at a place within 100 miles of where the person resides, is employed, or regularly transacts business in person[.]” Fed. R. Civ. P. 45(c)(2)(A). The served party may object to production by serving the party or attorney named on the subpoena with a written objection no later than 14 days after the subpoena is served. Fed. R. Civ. P. 45(d)(2)(B). In response to the objection(s), the serving party “may move the court for the district where compliance is required for an order compelling production or inspection.” Fed. R. Civ. P. 45(d)(2)(B)(i).
III. Discussion
The United States asks this Court to compel EBG “to produce documents in response to the United States’ subpoena.” (Dkt. 595 at 2). In response, EBG asserts several objections, including that the United States’ subpoena violates the geographic limits of Rule 45(c). (Dkt. 612 at 7). EBG
At the outset, the Court addresses the United States’ argument that EBG's objection is untimely. The United States served its subpoena on May 1, 2023. (Dkt. 595-5 at 4). On May 15, 2023, Farella emailed United States’ counsel a letter accompanied by general and individual objections to the United States’ requests. (Dkts. 595-2; 595-4). After unsuccessful meet and confers, the United States filed the present motion.
Consistent with the requirements of Rule 45(d)(2)(B)(i), the Court finds that EBG's objections were timely. EBG served its objections within 14 days of the United States’ subpoena, as it was required to do. (Id.). “In timely serving a written objection, the responding party fully complies with its obligations under Fed. R. Civ. P. 45(d)(2)(B).” Rexing Quality Eggs v. Rembrandt Enterprises, Inc., No. 3:17-cv-141-JMS-MPB, 2018 WL 11456638, at *2 (S.D. Ind. Aug. 24, 2018). EBG explicitly stated its objections were not exhaustive. (Dkt. 595-2 at 3; see also Dkt. 595-4 at 9). And, although it did not expressly invoke the 100-mile rule, EBG's objections indicated that it did not believe the subpoena complied with Rule 45. (See Dkt. 595-4 at (“The Requests, definitions, and instructions ... fail to comport with the Government's duty under Federal Rule of Civil Procedure 45 to ‘avoid imposing undue burden or expense’ on EBG as a non-party.”)). After receiving EBG's objections, the United States decided to avail itself of Rule 45’s remedy: a motion to compel EBG's compliance with its subpoena. (Dkt. 595).
The United States argues that EBG is seeking to quash or modify the subpoena, and that such efforts are both untimely and waived. (Dkt. 619 at 4). Whether the subpoena is quashed or modified, however, is not the issue to be decided. This matter is not in front of this Court on EBG's motion to quash or modify; it is before the Court on the United States’ motion to compel EBG's compliance. (Dkt. 595). The question, therefore, is not whether EBG complied with the Federal Rules for quashing a subpoena, but whether the United States issued a valid subpoena such that it can move to compel EBG's compliance. As discussed herein, the Court finds that the United States’ subpoena does not comply with Federal Rule of Civil Procedure 45(c). As such, the Court will not compel EBG's compliance.
*3 Rule 45 is a powerful tool to obtain discovery from parties and non-parties alike. However, Rule 45’s powers are not limitless; subsection (c) checks those powers to ensure that non-parties are not overly burdened or expensed. Fed. R. Civ. P. 45(c). The Rule's mandate is clear: a third party cannot be commanded to produce “documents, electronically stored information, or tangible things” at a location that is more than 100 miles of where the third party “resides, is employed, or regularly transacts business in person.” Fed. R. Civ. P. 45(c)(2)(A). “The serving party has the burden of establishing the appropriateness of a subpoena duces tecum served on a nonparty.” Rexing Quality Eggs, 2018 WL 11456638, at *2.
The United States failed to satisfy its burden of showing that its subpoena to EBG was appropriate.[1] The undisputed evidence is that neither EBG nor its custodian of records “resides, is employed, or regularly transacts business in person” within 100 miles of the Southern District of Indiana. (Dkt. 612-1). More specifically, neither EBG nor Farella lives, works, or regularly transacts business within 100 miles of 10 W. Market Street, Suite 2100, Indianapolis, Indiana—the place designated for production, (Dkt. 595-1). Because the United States’ subpoena designates the place of compliance as the United States Attorney's Office in Indianapolis, Indiana, the subpoena is invalid on its face.[2] See AngioScore, Inc. v. TriReme Med., Inc., No. 12-cv-03393-YGR (JSC), 2014 WL 6706873, at *1 n.1 (N.D. Cal. Nov. 25, 2014) (a subpoena which required compliance more than 100 miles from a nonparty's headquarters was “invalid on its face”). For this reason, the Court denies the United States’ Motion. Rexing Quality Eggs, 2018 WL 11456638, at *2 (denying motion to compel because subpoena violated Rule 45’s geographic requirement, despite the fact that “no timely motion [to quash] was filed”).[3]
IV. Conclusion
For the foregoing reasons, the United States’ Motion to Compel Production of Documents from Epstein Becker & Green, P.C., Dkt. [595], is DENIED.
So ORDERED.
Footnotes
In so holding, the Court makes no finding regarding the actual burden of production on EBG, given that much of the requested production was for electronically stored information.
The United States points to the Advisory Committee's notes to argue that Rule 45’s geographical limitations do not prevent parties from arranging production outside of the 100-mile radius requirement of subsection (c). This is true; however, unlike here, this arrangement requires the serving party and the responding party to agree to the arrangement. Fed. R. Civ. P. 45(c)(2), adv. Comm. note to 2013 amend. The fact that some parties may be able to reach an agreement without court involvement does not empower this Court to ignore the Rule 45(c)’s procedural limitations.
See also Koenig v. Johnson, No. 2:18-cv-3599-DCN, 2020 WL 635772, at *2 (D.S.C. Feb. 11, 2020) (“Koenig has filed this motion to compel in the district of South Carolina, and his subpoena requires Litigation Solutions's compliance in Columbia, South Carolina. Litigation Solutions headquarters and the documents Koenig seeks are located in Pittsburg, Pennsylvania, in the Western District of Pennsylvania. As such, Koenig is caught between a procedural Scylla and Charybdis. If he argues that he brought this motion to compel in the correct district because his subpoena requires compliance in Columbia, South Carolina, then his subpoena fails because it requires Litigation Solution's compliance more than 100 miles away from where Litigation Solutions is located. If, however, he argues that the subpoena requires compliance in Pittsburg, then he has brought his motion to compel in the wrong district, as the Federal Rules would require that the Western District of Pennsylvania hear the dispute. Either way, the court must deny the motion. Because of the subpoena's fatal procedural shortcomings, the court need not reach its substantive merit.”)