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United States ex rel. Rembert v. Bozeman Health Deaconess Hospital

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

March 1, 2018

UNITED STATES ex rel. FRANK M. REMBERT, et al., Relators,
v.
BOZEMAN HEALTH DEACONESS HOSPITAL, et al., Defendants.

          MEMORANDUM OPINION AND ORDER TRANSFERRING MOTIONS

          DAVID L. HORAN, UNITED STATES MAGISTRATE JUDGE.

         Defendant Bozeman Health Deaconess Hospital (“BDH”) has filed a Motion to Quash Subpoena and for Protective Order [Dkt. No. 1 (the “Motion to Quash”)] under Federal Rules of Civil Procedure 26(c) and 45(d), directed at a document subpoena and a subpoena for a Federal Rule of Civil Procedure 30(b)(6) deposition (the “Subpoenas”) that Relators Frank M. Rembert and Michael R. Paradise, the relators in United States ex. rel. Rembert v. Bozeman Health Deaconess Hospital, et al., No. CV-15-80-BU-SEH (the “Underlying Matter”), in the United States District Court for the District of Montana, served on Non-Party Value Management Group, LLC (“VMG”). BDH seeks an order quashing or modifying the Subpoenas and entering a protective order “because [the Subpoenas] seek information that is protected by BDH's attorney-client privilege and the attorney work product protection.” Dkt. No. 1 at 1.

         Relators, in turn, filed a Rule 45(f) Motion to Transfer Consideration of Subpoena-related Motions [Dkt. No. 9 (the “Motion to Transfer”)] under Federal Rule of Civil Procedure 45(f) and a Rule 45(d)(2)(B)(i) Cross-Motion to Compel Compliance with Subpoena Duces Tecum [Dkt No. 11 (the “Cross-MTC”)] under Federal Rule of Civil Procedure 45(d)(2)(B)(i).

         United States District Sidney A. Fitzwater has referred the Motion to Quash, the Motion to Transfer, and the Cross-MTC to the undersigned United States magistrate judge for determination under 28 U.S.C. § 636(b)(1)(A). See Dkt. Nos. 4 & 14.

         Relators oppose the Motion to Quash, see Dkt. No. 12; BDH opposes the Motion to Transfer, see Dkt. No. 19, and the Cross-MTC, see Dkt. No. 20; and BDH and Relators have filed replies in support of their motions, see Dkt. Nos. 20, 21, & 22.

         Background

         In their Motion to Transfer, Relators request an order under Rule 45(f) transferring the subpoena-related Motion to Quash and Cross-MTC to the United States District Court for the District of Montana, as the issuing court, for decision in connection with the Underlying Matter. See Dkt. No. 9 at 1-2.

         Relators report that “[t]he subpoena recipient in this case, [VMG], has not responded to Relators' inquiries to indicate whether it consents to transfer” but note that “[t]ransfer may nonetheless be appropriate, without VMG's consent, if exceptional circumstances exist.” Dkt. No. 10 at 1. Relators explain that, “in this case, it is not the subpoenaed party that has objected or claimed a right in the documents being withheld”; that “[t]he only objection to VMG's full compliance with [the Subpoenas] was raised by Defendant [BDH], which is already participating in the” Underlying Matter in Montana”; and that “[t]he subpoenaed party has not objected and has not responded to Relators' inquiries about whether it would oppose transfer” and “[b]y all indications, ... has no dog in this fight so transfer would cause it no inconvenience.” Id. at 2.

         And, Relators assert,

[t]ransfer is also appropriate because, aside from the threshold waiver issue, Defendant BDH's motion raises issues that may overlap with matters that will necessarily be decided in Montana.
For example, BDH claims a privilege over documents generated by VMG in 2014 - almost two years before the underlying suit was filed - that have been shared with non- party InterCity Radiology, P.C. (“ICR”). Defendants have claimed that they share a common interest with ICR that permits them to withhold communications about the subject matter of this dispute dating back as early as 2005. See Cause No. CV 15-80-BU-SHE (Doc. 163) (addressing Defendants' argument regarding a common interest/joint defense privilege). On January 20, shortly before filing its motion here in Texas, BDH issued a privilege claw-back notice seeking to recover from Relators hundreds of pages of 2014 communications with and about VMG that were previously produced in discovery. The clawed-back documents included not only documents produced by BDH itself but also documents produced by non- party ICR in response to another Rule 45 subpoena. Relators were forced to respond with a Rule 26(b)(5)(B) motion for determination of privilege which is currently pending in the underlying case. See Cause No. CV 15-80-BU-SHE (Doc. 159).
To the extent resolution of the parties' cross- motions in this matter depends on findings about whether Defendants share a common interest/joint defense privilege with ICR, those issues are already pending in Montana and are really part of a larger dispute between Relators and Defendant BDH, so Rule 45(f) transfer is appropriate.

Id. at 2-3. Relators further explain in their briefing on the Motion to Quash and the Cross-MTC that, “[s]hortly before filing [BDH's Motion to Quash], Defendants issued a Rule 26(b)(5)(B) claw-back notice seeking the return of numerous documents related to the 2014 valuation”; that “[m]ost of those documents were produced by Defendants, but some were produced by non-party ICR”; that “Relators prepared a log of the documents Defendants seek to claw-back”; but that “Relators cannot present those documents to this Court.” Dkt. No. 12 at 20 (citing Dkt. No. 13, Ex. 23, App. 213-222).

         BDH opposes transfer, arguing that “Relators have not met their burden of showing the exceptional circumstances necessary to warrant such a transfer.” Dkt. No. 19 at 1. BDH contends that, while transfer may be warranted to avoid disrupting the issuing court's management of the underlying litigation, ” the Court should look for two such situations: (1) when the issuing court “has already ruled on issues presented by the motion, ” and (2) when “the same issues are likely to arise in discovery in many districts.” Id. at 2. According to BDH, “Relators do not and cannot contend that the issuing court has ‘already ruled on issues presented by the motion' because it has not, ” and Relators cannot “contend that the same issues are likely to arise ‘in many districts'” and, instead, “omit the phrase ‘in many districts' from their discussion, incorrectly suggesting that the test is simply whether ‘the same issues are likely to arise in discovery.'” Id. (quoting Dkt. No. 10 at 1-2). BDH argues that, “[h]aving misapplied the relevant test, Relators' argument, that the cross-motions raise issues that ‘may' overlap with matters that will be decided in one other district (the issuing court), is ...


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