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Advanced Physicians S.C v. Connecticut General Life Insurance Co.

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

April 17, 2019

ADVANCED PHYSICIANS, S.C, Plaintiff,
v.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, CIGNA HEALTH AND LIFE INSURANCE COMPANY, CIGNA HEALTHCARE MANAGEMENT, INC., GREAT-WEST HEALTHCARE-CIGNA and NFL PLAYER INSURANCE PLAN, Defendants.

          MEMORANDUM OPINION AND ORDER

          REBECCA RUTHERFORD, UNITED STATES MAGISTRATE JUDGE

         Before the Court is Plaintiff Advanced Physicians, S.C.'s (“Advanced”) Motion to Compel (ECF No. 110), seeking to compel the production of documents that Defendants Connecticut General Life Insurance Company, Cigna Health and Life Insurance Company, Cigna Healthcare Management, Inc., Great-West Healthcare-Cigna (collectively, “Cigna”), and NFL Player Insurance Plan, (together with Cigna, “Defendants”) claim are protected by the attorney-client privilege. For the reasons discussed below, the Court DENIES Advanced's Motion.

         Background

          Advanced is a healthcare provider that provided chiropractic and medical diagnostic services to certain beneficiaries of the NFL Player Insurance Plan (the “Plan”). Mot. 1; Fourth Am. Compl. 3 (ECF No. 81). Cigna makes determinations on claims filed under the Plan. JSR 11 (ECF No. 116). Beginning in 2015, Cigna denied the claims of beneficiaries who received services from Advanced because Cigna determined the underlying injuries were “work-related” and treatment for work-related injuries is not compensable under the Plan. Fourth Am. Compl. 6-7. Those Plan beneficiaries assigned “their rights as participants or beneficiaries in the Plan and their causes of action against the Plan to Advanced.” Id. 13; Defs.' Ex. A (ECF No. 127-1). Advanced then sued Cigna for violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) under 29 U.S.C. § 1132 to recover benefits it claimed the beneficiaries were entitled to under the Plan. Mot. 1; Fourth Am. Compl. 2, 12-13. As part of this lawsuit, on August 8, 2018, Advanced served written discovery, requests for production and interrogatories, on Cigna, which objected on privilege grounds, among others. Mot. 1-2; JSR 5.

         As a result, Plaintiff filed its Motion to Compel. In lieu of response and reply briefs, the parties submitted a Joint Status Report per the Court's January 29, 2019 Order. JSR; Order (ECF No. 111). At the March 19, 2019 hearing on the Motion, the Court and the parties further narrowed the issues in dispute such that the only remaining issue concerned whether Advanced could assert the fiduciary exception to the attorney-client privilege to gain access to Cigna's privileged documents. Accordingly, the Court ordered the parties to submit supplemental briefs on that issue and required Cigna to submit 25 representative documents from its privilege log for in camera review. Order (ECF No. 129). The parties timely filed their supplemental briefs, Pl.'s Supp. Br. (ECF No. 128); Defs.' Supp. Br. (ECF No. 127), and Cigna submitted its in camera documents. The Motion is ripe for determination.

         Legal Standards

          Federal Rule of Civil Procedure 26(b)(1) provides, “[u]nless 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). Under Rule 34, “[a] party may serve on any other party a request within the scope of Rule 26(b): (1) to produce and permit the requesting party or its representative to inspect, copy, test, or sample the following items in the responding party's possession, custody, or control: (A) any designated documents or electronically stored information-including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations-stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form.” Fed.R.Civ.P. 34(a)(1)(A). When a party fails to produce documents requested under Rule 34, Rule 37 permits, “a party seeking discovery . . . [to] move for an order compelling production against another party.” Zenith Ins. Co. v. Tex. Inst. for Surgery, L.L.P., 328 F.R.D. 153, 160 (N.D. Tex. 2018) (citing Fed.R.Civ.P. 37(a)(3)(B)(iv); Crosswhite v. Lexington Ins. Co., 321 Fed.Appx. 365, 368 (5th Cir. 2009)). Rule 26(b)(1), however, applies to nonprivileged matter, and a party withholding discovery on privilege grounds, “‘must: (i) expressly make the claim; and (ii) describe the nature of the documents, communications, or tangible things not produced or disclosed-and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.'” Id. at 161 (quoting Fed.R.Civ.P. 26(b)(5)(A)). Rule 37 dictates “an evasive or incomplete disclosure, answer, or response must be treated as a failure to disclose, answer, or respond.” Fed.R.Civ.P. 37(a)(4).

         Attorney-Client Privilege

         “The Federal Rules of Evidence provide that evidentiary privileges ‘shall be governed by the principles of the common law . . . in the light of reason and experience.'” United States v. Jicarilla Apache Nation, 564 U.S. 162, 169 (2011) (ellipses in original) (quoting Fed.R.Evid. 501). The attorney-client privilege “is the oldest of the privileges for confidential communications known to the common law.” Upjohn Co. v. United States, 449 U.S. 383, 389 (1981) (citation omitted). It serves to promote the observance of law and administration of justice by “encourag[ing] full and frank communication between attorneys and their clients.” Id.

         For the attorney-client privilege to apply to a communication, “the proponent ‘must prove: (1) that he made a confidential communication; (2) to a lawyer or his subordinate; (3) for the primary purpose of securing either a legal opinion or legal services, or assistance in some legal proceeding.'” E.E.O.C. v. BDO USA, L.L.P., 876 F.3d 690, 695 (5th Cir. 2017) (emphasis in original) (quoting United States v. Robinson, 121 F.3d 971, 974 (5th Cir. 1997)). Whether the privilege applies is a “‘highly fact-specific' inquiry, and the party asserting the privilege bears the burden of proof.” Id. (citing Stoffels v. SBC Commc'ns, Inc., 263 F.R.D. 406, 411 (W.D. Tex. 2009)). To carry that burden, the party “must provide sufficient facts by way of detailed affidavits or other evidence to enable the court to determine whether the privilege exists”; only afterward is in camera review appropriate. Navigant Consulting, Inc. v. Wilkinson, 220 F.R.D. 467, 473 (N.D. Tex. 2004) (citation omitted) (conducting a privilege analysis under Tex. R. Evid. 503(b), which sets forth essentially the same elements as those articulated by the Fifth Circuit in E.E.O.C., 876 F.3d at 695). Once the party asserting the privilege has proven that it applies, the burden shifts to the other party to prove “any applicable exceptions.” E.E.O.C., 876 F.3d at 695 (internal quotation marks omitted) (quoting Perkins v. Gregg Cty., 891 F.Supp. 361, 363 (E.D. Tex. 1995)). Because privileges shield relevant information from discovery, the attorney-client privilege is to be construed narrowly, and “[a]mbiguities as to whether the elements of a privilege claim have been met are construed against the proponent.” Id. (citation omitted); see also Robinson, 121 F.3d at 974 (citations omitted).

         While “[t]he attorney-client privilege ranks among the oldest and most established evidentiary privileges, ” an exception exists “when a trustee obtains legal advice related to the exercise of fiduciary duties” such that “the trustee cannot withhold attorney-client communications from the beneficiary of the trust.” Jicarilla Apache Nation, 564 U.S. at 165. This is because “the trustee has no independent interest in trust administration” and “is subject to a general common-law duty of disclosure.” Id. at 166. The Fifth Circuit has recognized this “fiduciary exception” in the ERISA context. See Wildbur v. ARCO Chem. Co., 974 F.2d 631, 645 (5th Cir. 1992)modified, 979 F.2d 1013 (5th Cir. 1992) (per curiam). An ERISA plan administrator owes fiduciary duties to the plan's beneficiaries. Id. (citing 29 U.S.C. §§ 1002(21); 1103(a), (c)(1); 1104(a)(1)). Thus, “[w]hen an attorney advises a plan administrator or other fiduciary concerning plan administration, the attorney's clients are the plan beneficiaries for whom the fiduciary acts, not the plan administrator.” Id. (citing Wash.-Balt. Newspaper Guild, Local 35 v. Wash. Star Co., 543 F.Supp. 906, 909 (D.D.C. 1982)). As a result, “an ERISA fiduciary cannot assert the attorney-client privilege against a plan beneficiary about legal advice dealing with plan administration.” Id. (citing Wash.-Balt. Newspaper Guild, 543 F.Supp. at 909).

         Analysis

         Advanced contends that all the documents listed on Cigna's privilege log, dated prior to the filing of this lawsuit, should be produced because the documents relate to Cigna's acts of Plan administration and the fiduciary exception to the attorney-client privilege applies. Specifically, Advanced contends Cigna denied its reimbursement claims based on a benefits review conducted by Cigna's legal department that involved Plan interpretation, which is a fiduciary determination conducted as a function of Plan administration. Advanced further contends that it is entitled to invoke the fiduciary exception because it is an assignee of the beneficiaries' rights to make claims for medical services under the Plan and, as such, it “takes all of the rights of the assignor for the thing assigned.” Pl.'s Supp. Br. 6. Cigna disputes that Advanced is a beneficiary of the Plan entitled to invoke the fiduciary exception to the attorney-client privilege. Cigna further asserts that Advanced is not entitled to invoke the exception as the beneficiaries' assignee because “the rights the provider obtains are limited to those expressly set forth in the assignment.” Defs.' Supp. Br. 7.

         Assuming, without deciding, for the purposes of Advanced's Motion to Compel that the documents on Cigna's privilege log constitute confidential communications concerning Plan administration, the Court concludes that Advanced is not entitled to assert the fiduciary exception to the attorney-client privilege on behalf of the beneficiaries because under Advanced's “Assignment ...


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