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Deane v. Dynasplint Systems, Inc.

United States District Court, E.D. Louisiana

April 13, 2015

MEREDITH MONAHAN DEANE,
v.
DYNASPLINT SYSTEMS, INC. ET AL., Section

ORDER AND REASONS ON MOTION

JOSEPH C. WILKINSON, Jr., Magistrate Judge.

This is an action under the federal False Claims Act, 31 U.S.C. §§ 3729 et seq., in which the United States has intervened as prosecuting plaintiff. Record Doc. No. 20. The government seeks to recover millions of dollars from defendants Dynasplint Systems, Inc. and its principal, George Hepburn, alleging thousands of improperly submitted claims for reimbursement under the Medicare program. When the penalties and trebled damages sought by the government, id. at pp. 19-20, are considered, a money judgment against defendants could exceed $200 million.

The case involves an arcane and complex federal regulatory scheme and substantial volumes of medical, financial and reporting data, all cloaked in obscure acronyms and technical terminology. Understandable and complete expert opinion and analysis will be vital to evaluation of both the government's claims and the defenses, and both sides have retained experts to testify in the case.

Defendant Dynasplint's Motion to Compel, Record Doc. No. 134, is currently pending before me. Six specific forms of relief are requested. Record Doc. No. 134 at p. 3. The United States filed a timely written opposition. Record Doc. No. 140. Oral argument was conducted on April 8, 2015. At the request of counsel for the United States, the parties were given one final opportunity to determine if they could resolve their dispute over defendant's Request for Production No. 14 through an expert-to-expert discussion concerning whether material publicly available on a government website was sufficient to satisfy defendant's request, without further production from the government. That effort was unsuccessful. Record Doc. No. 145.

Having considered the record, the oral argument of counsel, their written submissions and the applicable law, IT IS ORDERED that defendant's motion is GRANTED IN PART AND DENIED IN PART as follows.

The motion is denied insofar as it seeks an order that the government has waived all objections to defendant's Request for Production No. 14, except the prematurity objection specifically asserted in the government's written response to that request. Defendant is correct that failure to assert specific written objections to requests for production within the time period established by Fed.R.Civ.P. 34(b) generally results in waiver of objections to the requests. See Poulos v. Naas Foods, Inc., 959 F.2d 69, 74 (7th Cir. 1992) (party "waived any objection to production by failing to object when disclosure was due"); Marx v. Kelly, Hart & Hallman, P.C., 929 F.2d 8, 10, 12-13 (1st Cir. 1991) (objections to requests for production were waived by failure to make timely objections); McLeod, Alexander, Powell & Apffel v. Quarles, 894 F.2d 1482, 1484 (5th Cir. 1990) (vague objections lacking in specificity held invalid); In re United States, 864 F.2d 1153, 1156 (5th Cir. 1989) ("[A]s a general rule, when a party fails to object timely to interrogatories, production requests, or other discovery efforts, objections thereto are waived."); accord Autotech Techs. Ltd. P'ship v. Automationdirect.Com, Inc., 236 F.R.D. 396, 398 (N.D. Ill. 2006); Brown-Stahlman v. Charter Trust Co., 2006 WL 680874, at *1 (D.N.H. Mar. 16, 2006); Banks v. Office of Senate Sgt.-at-Arms, 222 F.R.D. 7, 21 (D.D.C. 2004).

However, the court retains discretion to decline to compel production of requested documents when the request far exceeds the bounds of fair discovery, even if a timely objection has not been made. Fifty-Six Hope Road Music, Ltd. v. Mayah Collections, Inc., 2007 WL 1726558, at *4 (D. Nev. June 11, 2007); Lucero v. Martinez, 2006 WL 1304945, at *2 (D.N.M. Mar. 11, 2006); Kolenc v. Bellizzi, 1999 WL 92604, at *3 (S.D.N.Y. Feb. 22, 1999).

In this instance, I find that the government's previously unasserted objections concerning undue burden, expense and alternative source availability should at least be considered and not deemed waived. The production requested by defendant is indeed voluminous. Making the production will undoubtedly require much time, effort and expense incurred by the government. I cannot conclude that the government's late assertion of these objections has been made in bad faith or with dilatory intent. For all of these reasons, I exercise the court's discretion to find that these objections have not been waived.

On the other hand, I also find that the government's late objections to Request No. 14, together with the prematurity objection it timely asserted, should not prevail and must be overruled. Accordingly, the motion is granted insofar as it seeks an order compelling the government to produce all 17, 000 plus individual Medicare cost reports of the 7, 040 skilled nursing facilities ("SNF") at issue in this litigation in response to defendant's Request for Production No. 14.

The expert analysis cited by the government as the basis for its prematurity objection has now been completed. Thus, the basis for that objection no longer exists, and it is overruled. It is undisputed that the requested Medicare cost reports are relevant to the parties' claims and defenses and discoverable under Fed.R.Civ.P. 26(b)(1). In support of its motion, Dynasplint has submitted the affidavit of its expert, Scott Steiner. Record Doc. No. 134-4. Steiner states that the website information to which the government seeks to confine this discovery contains only "data elements" and that "[c]omplete SNF Medicare cost reports contain significantly greater amounts of data...." Id. at ¶ 12, p. 6 (emphasis added). He concludes that the complete data in the full cost reports, which "are not publicly available, " are "required to perform" his expert analysis in support of the defense position. Id. at ¶'s 14-15, pp. 6-7.

The legal source of the government's burden, expense and alternative source objections is Fed.R.Civ.P. 26(b)(2)(C)(i) and (iii), which provides:

On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules... if it determines that:
(i) the discovery sought... can be obtained from some other source that is more convenient, less burdensome, or less expensive;...; or (iii) 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.

Defendant is correct that the government failed to assert the undue burden and expense and alternative source objections it now makes in opposition to this motion in its Rule 34 written response. In fact, contrary to the government's current position, its written response to Request No. 14 contains the clear statement that "upon entry of an appropriate protective order [which has already occurred, Record Doc. No. 121], the United States will produce the cost reports of the skilled nursing facilities in which beneficiaries were located at the time of service for the false claims at issue." Record Doc. No. 134-2 at ...


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