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U.S. v. Emergency Staffing Sols., Inc.

2024 WL 4920769 (N.D. Tex. 2024)

June 20, 2024

Rutherford, Rebecca, United States Magistrate Judge

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Summary

The court limited the scope of permissible discovery for ESI to the state of Oklahoma and a specific time period, and denied some of the plaintiff's motions to compel ESI production. The court emphasized the importance of relevance and proportionality in ESI discovery requests and required the party resisting discovery to provide specific objections.

Additional Decisions

UNITED STATES OF AMERICA and the State of OKLAHOMA ex rel. MICHAEL CARTER, Plaintiff,
v.
EMERGENCY STAFFING SOLUTIONS, INC.; HOSPITAL CARE CONSULANTS, INC., Defendants

No. 3:19-cv-01238-E

United States District Court, N.D. Texas, Dallas Division

Filed June 20, 2024

Counsel

Andrew Stricker Robbins-Doj, U.S. Attorney's Office, Dallas, TX, for Plaintiff United States of America.
Charles S. Siegel, Caitlyn E. Silhan, Waters & Kraus LLP, Dallas, TX, Benjamin Patterson Bucy, Barrasso Usdin Kupperman Freeman & Sarver, L.L.C., St. Simons Island, GA, James F. Barger, Jr., Frohsin & Barger LLC, Birmingham, AL, John Walter Joyce, Laurence Donnelly LeSueur, Jr., Lorcan L. Connick, Richard E. Sarver, Taylor L. Gamm, Barrasso Usdin Kupperman Freeman & Sarver LLC, New Orleans, LA, for Plaintiff Michael Carter.
John M. Hafen, David Russell Wortham, Jr., Hanshaw Kennedy Hafen, LLP, Frisco, TX, for Defendants.

Rutherford, Rebecca, United States Magistrate Judge

DISCOVERY ORDER

*1 Before the Court are two motions to compel discovery filed by Relator Michael Carter, each of which Judge Brown referred to United States Magistrate Judge Rebecca Rutherford. See Third Mot. Compel (ECF No. 121); Order Referring Mot. (ECF No. 124); Fourth Mot. Compel (ECF No. 128); Order Referring Mot. (ECF No. 131). Through his motions, Carter moves the Court pursuant to Federal Rule of Civil Procedure 37(a)(3)(B)(iii)-(iv) to compel Defendants to produce relevant information and documents in response to Requests for Production Nos. 30 and 31— addressed in his third motion to compel—and Requests for Production Nos. 16, 23, and 25—addressed in his fourth motion to compel. For the following reasons, the Court DENIES in part and GRANTS in part Carter's third motion to compel discovery (ECF No. 121). The Court DENIES Carter's fourth motion to compel discovery (ECF No. 128) in its entirety.

Background

Relator Michael Carter—a hospital administrator with 25 years of experience in health care management—brought this qui tam suit alleging violations of the False Claims Act, Anti-Kickback Statute, Stark Law, and Oklahoma False Claims Act. See generally Compl. (ECF No. 2). Defendant Emergency Staffing Solutions, Inc. (ESS) is medical management and physician staffing company that contracts with rural and suburban hospitals to provide physicians and boost revenue. Id. ¶ 12. Carter alleges that Defendant Hospital Care Consultants, Inc. (HCC) is an alter-ego corporation of ESS and operates the “hospitalist” arm of Defendants' operation. Id. ¶ 13. As already explained by this Court at an earlier procedural stage:

The gravamen of the Complaint is that ESS and HCC operate an illegal kickback scheme in which they incentivize physicians to refer and admit patients to inpatient care. Carter alleges that this scheme violates the Federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), and the Stark Law, 42 U.S.C. § 1395nn. Carter alleges that Defendants caused hospitals to submit legally false Medicare and Medicaid claims by falsely certifying compliance with these laws, which constitute false claims under the False Claims Act. 31 U.S.C. §§ 3729-3733.

Mem. Op. & Order (ECF No. 62). The United States of America declined to intervene after an investigation into Carter's allegations. See Notice of Declination (ECF No. 24). All nine states named as plaintiffs also declined to intervene.

Defendants ESS and HCC jointly moved to dismiss Carter's Complaint pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). Mot. Dismiss (ECF No. 44). The Court ultimately granted in part and denied in part Defendants' motion. See Mem. Op. & Order (ECF No. 62). Specifically, the Court denied Defendants' motion with respect to Carter's claims under the False Claims Act, concluding that “Carter sets out in detail a kickback and prohibited referral scheme that would serve as a predicate for FCA violations if his allegations are true.” Id. at 12. The Court granted Defendants' motion with respect to most of Carter's state law claims, explaining that “[w]hile Carter may have alleged a nationwide scheme of FCA violations predicated on Anti-Kickback Statute and Stark Law violations, he has provided no reliable indicia leading to a strong inference that Defendants submitted false claims in any state other than Oklahoma.... As such, the Court must conclude that Carter has failed to plead specific facts which establish a plausibility of entitlement to relief on his non-Oklahoma state-law claims[.]” Id. at 14.

*2 Thereafter, Carter filed a motion to compel seeking production of documents “related to all of ESS's client hospitals that employed the ‘Hybrid Model’ or ‘Hospitalist Model’ from 2010 to present[,]” and generally seeking to compel nationwide discovery. Mot. Compel (ECF No. 73). The Court denied Carter's request for nationwide discovery and ordered that “[t]he geographic scope of permissible discovery is limited to the State of Oklahoma, unless otherwise agreed by the parties in writing or otherwise ordered by the court.” Order 2 (ECF No. 93). The Court additionally granted a motion for protective order filed by Defendants and limited the temporal scope of permissible discovery to “January 1, 2015 through the present,” unless otherwise agreed by the parties in writing or ordered by the court. Id. at 1.

Later, Carter filed another motion to compel, this time seeking “documents related to the Defendants' Hospitalist Program[.]” Mot. Compel 1 (ECF No. 99). The Court ultimately granted this motion and ordered Defendants to produce discovery concerning the hospitalist program. Order (ECF No. 111). But the Court further clarified that “[t]he scope of permissible discovery includes the hospitalist program in facilities located within the State of Oklahoma, [and] is limited to documents or information which has specifically been requested through discovery requests, unless otherwise agreed by the parties in writing or otherwise ordered by the court.” Id.

Carter's third and fourth motions to compel are fully briefed and ripe for determination.

Legal Standards and Analysis

“The Federal Rules of Civil Procedure control the scope of a proper discovery request in the form of requests for production or inspection, interrogatories, and requests for admission.” Lopez v. Don Herring Ltd., 327 F.R.D. 567, 573 (N.D. Tex. 2018). Under Rule 26(b)(1):

Unless otherwise limited by court order, ... [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, 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). And “[t]o be relevant under Rule 26(b)(1), a document or information need not, by itself, prove or disprove a claim or defense or have strong probative force or value.” Samsung Electronics Am., Inc. v. Yang Kun Chung, 321 F.R.D. 250, 280 (N.D. Tex. 2017).

Federal Rule of Civil Procedure 37(a) governs motions to compel discovery responses. Rule 37(a)(3)(B) provides that a party seeking discovery may move for an order compelling production against another party when the latter has failed to produce documents requested under Federal Rule of Civil Procedure 34 or to answer interrogatories under Federal Rule of Civil Procedure 33. See Fed. R. Civ. P. 37(a)(3)(B)(iii)–(iv). The party resisting discovery must show specifically how each request is not relevant or otherwise objectionable. See McLeod, Alexander, Powel & Apffel, P.C. v. Quarles, 894 F.2d 1482, 1485 (5th Cir. 1990).

I. Carter's Third Motion to Compel Discovery (ECF No. 121)

1) Request for Production No. 30

Defendants originally objected to request number 30. However, the parties represent to the Court in the briefing that Defendants produced the documents sought in this request after Carter filed his third motion to compel. See Reply 2 (ECF No. 126); Resp. 5 (ECF No. 125). Accordingly, it appears that the parties' dispute related to request number 30 has been resolved without court intervention.

2) Request for Production No. 31

*3 Carter's Request for Production 31 seeks:

[A]ll documents and things produced (or made available) by You to the United States Government, the Centers for Medicare and Medicaid Services, the United States Attorney's Office, the Department of Justice, the Federal Bureau of Investigation, and/or the United States Department of Health and Human Services, or any similar state agency or department, relating to the allegations in the Complaint.

Defendants object that this request is overbroad and fails to describe the documents sought with reasonable particularity. Resp. 5-7 (ECF No. 125).

The Court agrees that this request is overbroad—specifically to the extent that it seeks documents outside the geographic and temporal scope previously established by this Court. Accordingly, the Court limits request number 31 and ORDERS Defendants to respond, to the extent they have not already done so, with responsive documents falling within the geographic scope of the State of Oklahoma and the temporal scope of January 1, 2015 to the present. The Court further ORDERS Carter to specifically identify the nature of documents sought among those produced during the Government's investigation into Carter's claims. See Lopez, 327 F.R.D. at 575-76 (internal citations omitted) (Rule 26(g) and Rule 34 require requests to be made with “reasonable particularity” and “provide sufficient information to enable [the party to whom the request is directed] to identify responsive documents”). Defendants must respond to the limited request within 30 days of Carter specifying the nature of documents requested.

II. Carter's Fourth Motion to Compel Discovery (ECF No. 128)

Carter filed his fourth motion to compel discovery on April 16, 2024. But pursuant to the Court's Scheduling Order, “[a]ny motion to compel discovery or for a protective order must be filed by the later of: (1) 14 days before the completion-of-discovery deadline; or (2) 10 days after the discovery response at issue was served or due to be served.” Am. Scheduling Order 3 (ECF No. 95). The Scheduling Order set the deadline for completion of discovery for April 15, 2024. Id. at 1. The responses to the discovery requests at issue were served on October 24, 2022. Relator's App. at 99 (ECF No. 130). Accordingly, Carter was required to file any motion to compel no later than April 1, 2024.

“A schedule may be modified only for good cause and with the judge's consent.” Fed. R. Civ. P. 16(b)(4). To show good cause, the movant must demonstrate that he “ ‘could not reasonably have met the scheduling deadline’ ” despite his diligence. Grant v. Rathbun, 2016 WL 1750572, at *2 (N.D. Tex. May 3, 2016) (quoting Matamoros v. Cooper Clinic, 2015 WL 4713201, at *2 (N.D. Tex. Aug. 7, 2015)).

Moreover, in the Fifth Circuit, “precedent suggests that a district court is within its discretion to deny a motion to compel filed on or after the court-ordered discovery deadline—regardless of the requested discovery's value to the party's case.” McCollum v. Puckett Machinery Co., 628 F. App'x 225, 228 n. 4 (5th Cir. 2015) (citing Grey v. Dallas Indep. Sch. Dist., 265 F. App'x 342, 348 (5th Cir. 2008) (finding no abuse of discretion in the denial of a motion to compel discovery filed on the day of the discovery deadline after an extensive discovery period); Days Inn Worldwide, Inc. v. Sonia Investments, 237 F.R.D. 395, 398-99 (N.D. Tex. 2006) (noting that relevance and importance of discovery were not generally considered by courts in deciding whether to consider an untimely motion, and that both were inconsistent with a delay in seeking the discovery)).

*4 When a motion to compel is filed after the discovery deadline, courts consider a number of factors in determining whether the motion should be permitted, including (1) the length of time since the expiration of the deadline, (2) the length of time that the moving party has known about the discovery, (3) whether the discovery deadline has been extended, (4) the explanation for the tardiness or delay, (5) whether dispositive motions have been scheduled or filed, (6) the age of the case, (7) any prejudice to the party from whom late discovery was sought, and (8) disruption of the court's schedule. Days Inn, 237 F.R.D. at 398.

Here, the relevant factors weigh in favor of disallowing Carter's fourth motion to compel as untimely. The discovery deadline in this case has already been extended by the Court—in the Court's initial scheduling order entered on August 2, 2022, the deadline set for completion of discovery was October 5, 2023. See Scheduling Order 1 (ECF No. 53). Carter does not present persuasive reasons justifying his tardiness in filing his fourth motion to compel. Instead of outlining to the Court his own diligence in seeking timely discovery, Carter argues he was forced to file his fourth motion to compel after the set deadline because of “Defendants' dawdling discovery strategy.” Reply 3 (ECF No. 150). But, at most, the Court discerns an inability by both sides in this action to confer with one another meaningfully and effectively in an effort to obtain discovery without court action. See Fed. R. Civ. P. 37(a)(1). Such an inability is not a sufficient explanation for filing a motion to compel beyond the Court's deadline.

Additionally, several dispositive motions have been filed and are presently pending before the Court, including a motion for summary judgment filed by Defendants on May 15, 2024 (ECF No. 134) and a motion for partial summary judgment filed by Carter on the same day (ECF No. 143). Finally, the age of this case weighs heavily in favor of strictly abiding by the Court's live scheduling order and denying the motion to compel as untimely—Carter filed his Complaint in this action over five years ago, on May 22, 2019. Compl. (ECF No. 2). Considering this and the other factors, the Court does not find adequate reason to further disrupt the Court's schedule or prolong the continuous discovery battles in this case.

Accordingly, the Court DENIES Carter's fourth motion to compel as untimely.

Moreover, even if Carter's fourth motion was timely, the Court would sustain Defendants' objections to each request at issue.

Carter's Request for Production 16 seeks:

[A]ll documents relating to any compensation You offered or paid to any physicians, hospitals, or other medical providers (individual or institutional) or any patients during the relevant time period (or paid outside the relevant time period for referrals within the relevant time period).

Carter's Request for Production 23 seeks:

[A]ll documents relating to ESS's physician remuneration structure, as well as all documents showing the actual remuneration to each physician who was employed by or contracted with ESS, including the amount, date and form of remuneration.

And Carter's Request for Production 25 seeks:

[T]he personnel and employment files for Shonda Rupe, Dr. David Ficklen, and Ron Weiss, and all documents relating to their compensation from ESS.

These requests are overbroad and generally lack the particularity and specificity required by the Federal Rules. See Lopez, 327 F.R.D. at 575-76 (internal citations omitted) (Rule 26(g) and Rule 34 require requests to be made with “reasonable particularity” and “provide sufficient information to enable [the party to whom the request is directed] to identify responsive documents”).

*5 Accordingly, the Court declines to compel Defendants to respond to these requests.

SO ORDERED.