United States District Court, W.D. Texas, San Antonio Division
NEIL GILMOUR III, TRUSTEE FOR THE GRANTOR TRUSTS OF VICTORY PARENT COMPANY, LLC; VICTORY MEDICAL CENTER CRAIG RANCH, LP, VICTORY MEDICAL CENTER LANDMARK, LP, VICTORY MEDICAL CENTER MID-CITIES, LP, VICTORY MEDICAL CENTER PLANO, LP, VICTORY MEDICAL CENTER SOUTHCROSS, LP, VICTORY SURGICAL HOSPITAL EAST HOUSTON, LP, VICTORY MEDICAL CENTER BEAUMONT, LP, Plaintiffs,
AETNA HEALTH, INC., AETNA HEALTH INSURANCE COMPANY, AETNA LIFE INSURANCE COMPANY, Defendants.
ELIZABETH S. ("BETSY") CHESTNEY UNITED STATES
the Court in the above-styled cause of action is the Opposed
Motion for Protective Order to Limit Attendance at Upcoming
Depositions [#78] filed by Defendants Aetna Health, Inc.,
Aetna Health Insurance Company, and Aetna Life Insurance
Company (collectively, “Aetna”). By its motion,
Aetna asks the Court for an order preventing witness Robert
Helms, a non-party witness, and his criminal-defense attorney
Michael Wynne from attending the upcoming depositions of
non-party witnesses Shannon Osteen, Tanya Snodgrass, and
Michael Austin, as well as any future depositions other than
their own. The Court held a hearing on the motion on August
27, 2019, at which counsel for the parties as well as Mr.
Wynne, appearing on behalf of Mr. Helms, appeared. The Court
issued certain oral rulings at the close of the hearing,
which it now memorializes with this written Order.
case was filed by Neil Gilmour III (“Plaintiff”),
who is a trustee for seven former orthopedic hospitals (some
of which went bankrupt) and their parent company, Victory
Parent Company LLC. The hospitals and their parent company
are referred to collectively in this Order as
“Victory.” Plaintiff sued Aetna alleging claims
under ERISA, the Texas Insurance Code, and Texas common law.
Plaintiff claims that Aetna failed to pay or underpaid
certain out-of-network claims for covered services that
Victory provided to Aetna plan members in operating its
hospitals and other medical facilities throughout Texas.
response, Aetna asserted counterclaims against Victory,
claiming Victory engaged in a fraudulent billing scheme to
submit excessive charges for services allegedly provided to
Aetna’s health plan members, specifically high charges
for implants and referrals by physicians with financial
interests in Victory. Aetna claims that Victory intentionally
set up an out-of-network business model that resulted in
charges at 400% or more of Victory’s actual cost for
services and that Victory provided kick-backs to referring
physicians and billed patients for these amounts. Aetna seeks
to recover these allegedly improper payments through claims
of fraud, “money had and received,” negligent
misrepresentation, and unjust enrichment, and also pleads
exemplary damages. Alternatively, Aetna, as an ERISA
claim-fiduciary with authority to recover overpayments, seeks
the equitable return of plan benefits paid to Victory that
are not payable under the terms of the ERISA plans at issue.
parties are currently engaged in discovery related to these
counterclaims. Aetna is in the midst of deposing individuals
it contends have knowledge regarding the alleged fraudulent
scheme. Aetna recently deposed Mr. Helms, the former CEO of
Victory, who is a witness but not a party in this case.
During the deposition, Mr. Helms was represented by Mr.
Wynne, who also represents him in other criminal matters.
Aetna has also noticed the depositions of former
management-level employees of Victory-Shannon Osteen and
Tanya Snodgrass-as well the former CEO of a company that sold
implant devices to Victory, Michael Austin. Ms. Osteen and
Ms. Snodgrass have retained Mr. Wynne to represent them
during their depositions. Mr. Austin, on the other hand, has
not. After Mr. Wynne and Mr. Helms expressed their intention
to attend these depositions, Aetna filed this motion seeking
to have them excluded.
Court will issue a protective order that prevents Mr. Helms
from attending the scheduled depositions and prevents Mr.
Wynne from attending any deposition unless he represents a
party or has been formally retained to represent the
deponent. The Federal Rules of Civil Procedure allow a court,
for good cause, to issue an order to protect a party from
“annoyance, embarrassment, oppression, or undue burden
or expense,” including “designating the persons
who may be present while the discovery is conducted.”
Fed. R. Civ. P. 26(c)(1)(E). A party may not simply request
sequestration of a witness at the time and place of the
scheduled deposition, as is permitted in the context of trial
testimony through the invocation of “the rule.”
See In re Terra Int’l, Inc., 134 F.3d 302, 306
(5th Cir. 1998); Fed. R. Evid. 615 (establishing the right of
any party at trial to invoke “the rule” to
request that the court “order witnesses excluded so
that they cannot hear other witnesses’
testimony”). Rule 30 of the Federal Rules of Civil
Procedure expressly excludes the application of Federal Rule
of Evidence 615 in the context of a deposition. Fed. R. Civ.
P. 30(c)(1) (“The examination and cross-examination of
a deponent proceed as they would at trial under the Federal
Rules of Evidence, except Rules 103 and 615.”).
Although “Rule 30(c)’s exclusion of depositions
from the strictures of Rule 615 was intended to establish a
general rule that ‘other witnesses are not
automatically excluded from a deposition simply by the
request of a party,’” a showing of good cause
under Rule 26 is sufficient to exclude a witness from a
deposition. In re Terra Int’l, Inc., 134 F.3d
at 306 (quoting Fed. R. Civ. P. 30(c) advisory committee
notes); Fed. R. Civ. P. 26(c).
has demonstrated the requisite good cause to exclude Mr.
Helms and Mr. Wynne from the upcoming depositions. Mr. Helms
is the former CEO of the Victory hospitals that filed for
Chapter 11 bankruptcy and whose trustee has filed this
lawsuit against Aetna to recover allegedly underpaid claims.
Aetna contends that Mr. Helms and the other witnesses may
have been involved in perpetuating the fraudulent scheme
underlying Aetna’s counterclaims. Courts have
recognized that where a party alleges fraud, there is good
cause to exclude others who may have knowledge of or
involvement in the alleged fraud from each other’s
depositions because there is a risk of influence, collusion,
or intimidation. See, e.g., In re Levine,
101 B.R. 260, 262 (Bankr. D. Colo. 1989) (“When
allegations of fraud and conspiracy to commit fraud are
joined, it can be persuasively argued that during discovery
the need to test the observation, recollection and
communication of each deponent independently should outweigh
that party’s right to be present for
deposition.”) (internal quotation omitted). Here, Aetna
contends Mr. Helms is at the center of Victory’s
fraudulent scheme and could improperly affect or influence
the testimony of the upcoming deponents, who are also
potential participants in the alleged fraud. This is
sufficient reason to exclude Mr. Helms from the depositions.
Helms argues he should be able to attend the depositions
because he has a financial interest in the outcome of the
litigation, as Victory’s largest secured creditor. But
his status as a secured creditor in the Chapter 11 bankruptcy
neither gives him the right to attend the upcoming
depositions nor trumps Aetna’s identification of good
cause for his exclusion. Plaintiff, as Trustee, has the
responsibility of protecting the interest of all secured
creditors of Victory, including but not limited to Mr. Helms.
should Mr. Wynne be permitted to attend any upcoming
depositions unless he has been retained by the deponent for
purposes of the deposition. Plaintiff’s response to
Aetna’s motion indicates that Shannon Osteen and Tanya
Snodgrass have retained Mr. Wynne to represent them in their
depositions. Accordingly, Mr. Wynne may attend these
depositions as retained counsel. Mr. Wynne may not attend the
deposition of Michael Austin, however, as he has not been
retained by Mr. Austin. Mr. Wynne is Mr. Helms’s
criminal-defense attorney. His interest in attending the
deposition is therefore to represent Mr. Helms’s
interests, a non-party. The good cause established for Mr.
Helms’s exclusion applies with equal force to Mr.
Wynne’s attendance. Mr. Wynne unpersuasively claimed at
the hearing that his attendance is required to ensure that
truthful testimony is given. If a witness desires to retain
Mr. Wynne to defend him, he may. Moreover, witnesses are
sworn in at the beginning of their depositions and reminded
of their legal obligation to tell the truth. Finally,
Plaintiff is represented by able counsel, who will be present
to lodge objections to any misleading or confusing questions.
Court will, however, deny Aetna’s motion insofar as it
requests a blanket order preventing Mr. Helms from reviewing
any deposition transcripts or discussing the depositions with
Mr. Wynne. There is an Agreed Protective Order in place in
this case [#27], which sets forth a mechanism for designating
information disclosed at a deposition as confidential. The
parties may utilize this process to ensure that certain
depositions or portions thereof are preserved as
confidential, and therefore not subject to disclosure to
non-parties, including Mr. Helms, his attorney, or other
non-party witnesses or their attorneys. The Protective Order
thus provides a mechanism for the parties to more
specifically tailor the confidentiality designations than the
requested blanket order would.
IS THEREFORE ORDERED that Defendants’ Opposed
Motion for Protective Order to Limit Attendance at Upcoming
Depositions [#78] is GRANTED IN PART as
• Robert Helms is not permitted to attend the
depositions of Shannon Osteen, Tanya Snodgrass, Michael
Austin or any ...