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Perez v. Boecken

United States District Court, W.D. Texas, San Antonio Division

October 10, 2019

JESSICA PEREZ, INDIVIDUALLY AND AS NEXT FRIEND OF KH AND MH, MINOR CHILDREN; Plaintiff,
v.
ALVIN BOECKEN, JIM BALLARD, Defendants.

          ORDER

          ELIZABETH S. ("BETSY") CHESTNEY, UNITED STATES MAGISTRATE JUDGE

         Before 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.

         I. Background

         This 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.)

         After 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, and 2017.

(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.)

         Alamo 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's review.

         II. Analysis

         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.

         Rule 26 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).

         The 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.

         The 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 case.

         A. North Cypress is not controlling in this context-a personal-injury ...


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