United States District Court, W.D. Texas, San Antonio Division
JESSICA PEREZ, INDIVIDUALLY AND AS NEXT FRIEND OF KH AND MH, MINOR CHILDREN; Plaintiff,
ALVIN BOECKEN, JIM BALLARD, Defendants.
ELIZABETH S. ("BETSY") CHESTNEY, UNITED STATES
the Court in the above-styled cause of action are the
following four discovery motions: Motion to Quash and for
Protective Order, filed by non-party Alamo Neurosurgical
Institute [#13]; Opposed Motion to Quash and for Protective
Order, filed by Plaintiff [#14]; Defendants' Motion to
Compel Answers to Deposition by Written Questions and
Production of Documents and Response to Opposed Motion to
Quash and for Protective Order [#17]; and Motion for
Protective Order of Non-Party Movant Foundation Surgical
Hospital of San Antonio, Motion to Quash, and Objections to
Discovery [#19]. All four motions were referred to the
undersigned for disposition, and the Court held a hearing on
the motions on September 30, 2019. The undersigned has
authority to enter this Order pursuant to 28 U.S.C. §
636(b)(1)(A). For the reasons set forth below, the Court will
grant the motions to quash filed by non-parties Alamo
Neurosurgical Institute and Foundation Surgical Hospital of
San Antonio, deny the motion to compel filed by Defendants,
and dismiss the motion to quash filed by Plaintiff.
case arises out of a motor-vehicle collision between a car
operated by Plaintiff Jessica Perez and a commercial vehicle
driven by Defendant Alvin Boecken in the course of his
employment with Defendant Jim Ballard d/b/a CAB Transport.
Keegan Hillsman and Morgan Hillsman, Plaintiff's minor
children, were passengers in Plaintiff's car at the time
of the accident. Plaintiff filed this lawsuit on behalf of
herself and as next friend of her children against
Defendants, alleging various theories of negligence and
seeking damages for her alleged injuries stemming from the
accident. (Orig. Compl. [#1].) Plaintiff's claimed
damages include past and future reasonable and necessary
medical care and expenses related to these injuries.
(Id. at 4.)
the accident, Plaintiff sought treatment with various medical
providers for her alleged injuries, including Alamo
Neurosurgical Institute (“Alamo”) and Foundation
Surgical Hospital of San Antonio (“Foundation”),
the non-party movants who have filed two of the motions to
quash before the Court. On September 4, 2019, notices of an
intention to take deposition by written question and
accompanying subpoenas were served on behalf of Defendants to
the custodian of records for Alamo and Foundation. The
subpoenas directed the records custodians to produce to
Defendants for inspection and copying the following:
a) Any and all contracts regarding negotiated or reduced
rates for services provided to Jessica Perez including those
with Aetna, United Healthcare, First Care, Blue Cross Blue
Shield, Medicare, and Medicaid from 10/19/17 to the present.
b) Any Annual Cost Report you are required to provide to a
Medicare Administrative Contractor, as a Medicare certified
institutional provider for the years 2013, 2014, 2015, 2016,
(Subpoena [#19-1] at 4.) The notices also asked Alamo and
Foundation to “state their Medicare reimbursement rates
for any medical services performed for Jessica Perez . . .
from 10/19/17 to the present, including but not limited to
epidural steroid injections, x-rays, CT scans, laboratory
tests and emergency room services.” (Question No. 13
[#19-1] at 5.)
and Foundation have moved to quash the requests for
production and information on reimbursement rates pursuant to
Rule 45 of the Federal Rules of Civil Procedure [#13, #19].
Defendants have conversely moved to compel responses to the
questions posed to Alamo and Foundation and production of the
requested documents pursuant to Rules 45 and 37 [#17].
Plaintiff filed her own motion to quash pursuant to Rules 45
and 26 arguing for the limitation of the discovery propounded
on Alamo and Foundation. The motions are now ripe for the
Court will grant the motions to quash filed by Alamo and
Foundation and deny the motion to compel filed by Defendants.
Because the Court's resolution of the motions filed by
Alamo and Foundation awards the relief Plaintiff is seeking,
the Court need not address whether Plaintiff's motion
would be granted on its own merits and will therefore dismiss
the motion as moot.
generally limits discovery to “any nonprivileged matter
that is relevant to any party's claim or defense and
proportional to the needs of the case.” Fed.R.Civ.P.
26(b)(1). Alamo and Foundation bring their motions to quash
pursuant to Rule 45, which governs subpoenas served on
nonparties. Courts apply the same relevance and
proportionality limitations encompassed by Rule 26 to motions
to quash in the context of Rule 45 so as to avoid imposing
any undue burden or expense on the person or entity subject
to the subpoena. See, e.g., MetroPCS v.
Thomas, No. 3:18-MC-29-K-BN, 2018 WL 2933673, at *9
(N.D. Tex. June 12, 2018); Whitley v. Pinnacle
Entm't, Inc., No. CV 15-595-BAJ-RLB, 2016 WL
6154938, at *2 (M.D. La. Oct. 21, 2016).
parties' dispute centers on the interpretation and
application of a recent case issued by the Texas Supreme
Court, which held that a trial court did not abuse its
discretion by permitting discovery of the reimbursement rates
of insurers and government payors in a dispute regarding the
enforceability of a hospital lien against an uninsured
patient. See In re N. Cypress Med. Ctr.
Operating Co., Ltd., 559 S.W.3d 128, 137 (Tex. 2018).
Alamo and Foundation contend that North Cypress does
not apply in the context of a personal-injury action and with
respect to discovery sought from non-parties, as here, and
that their reimbursement rates are confidential trade secrets
that they cannot be compelled to produce. Defendants argue
that North Cypress applies to this case,
the discovery should be permitted as relevant to what
constitutes a reasonable charge for Plaintiff's expenses
and proportional to the needs of this case, and a standard
confidentiality and protective order could be issued to
protect any proprietary information.
Court agrees with Alamo and Foundation that North
Cypress does not govern the discovery issue before the
Court and the information sought is not proportional, even if
relevant, to the needs of the case. Moreover, even if
Defendants could establish relevance and proportionality as
to the disputed discovery, Foundation has established that
the reimbursement rates are trade secrets and should not be
disclosed and Defendants have failed to satisfy their burden
to demonstrate that the discovery of the reimbursement rates
are nonetheless necessary to the fair adjudication of this
North Cypress is not controlling in this context-a