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.
RODRIGUEZ, UNITED STATES DISTRICT JUDGE.
the Court is Defendants' appeal and objections to the
October 10, 2019 order of Magistrate Judge Elizabeth C.
Chestney. The Court has considered Defendants' Statement
of Appeal and Objections (ECF No. 27), the response of
non-party movants Foundation Bariatric Hospital of San
Antonio, L.L.C. d/b/a Foundation Surgical Hospital of San
Antonio and Alamo Neurosurgical Institute, P.A. (ECF No. 28),
and Defendants' Reply (ECF No. 32). For the reasons
stated below, the Court AFFIRMS the Magistrate Judge's
case is brought by Plaintiff Jessica Perez, on her own behalf
and on behalf of her minor children, against Defendants for
damages arising from a motor-vehicle collision between
Plaintiff and a commercial vehicle driven by Defendant
Boecken in the course of his employment with Defendant
Ballard. Plaintiff's claimed damages include past and
future reasonable and necessary medical care and expenses
related to injuries caused by the collision. Among various
medical providers, Plaintiff sought treatment for her alleged
injuries with Alamo Neurosurgical Institute
(“Alamo”) and Foundation Surgical Hospital of San
Antonio (“Foundation”), non-parties in the case
sub judice. Defendants sought discovery from the
non-party movants of:
(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 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,
also asked the non-party movants 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
non-party movants moved to quash these requests, while
Defendants moved to compel responses to the same. Magistrate
Judge Chestney granted the non-party movants' Motion to
Quash and denied Defendants' Motion to Compel. Defendants
now appeal Magistrate Judge Chestney's Order.
standard of review for pre-trial matters decided by a
Magistrate Judge and appealed to the District Court is found
in Rule 72 of the Federal Rules of Civil Procedure.
Fed.R.Civ.P. 72(a). Rule 72 provides in part: “The
district judge to whom the case is assigned shall consider
such objections and shall modify or set aside any portion of
the magistrate judge's order found to be clearly
erroneous or contrary to law.” Id.; see
also 28 U.S.C. § 636(b)(1)(A) (“A judge of
the court may reconsider any pretrial matter ... where it has
been shown that the magistrate judge's order is clearly
erroneous or contrary to law.”)
argue Magistrate Judge Chestney's Order was clearly
erroneous and contrary to established law for three reasons:
(1) the information sought from the non-party movants is
relevant and discoverable under North Cypress; (2)
the requested discovery is proportional to the needs of this
case; (3) the non-party movants failed to establish the
requested information is a trade secret. The Court disagrees.
this Court finds no reason to set aside Magistrate Judge
Chestney's holding that the discovery sought did not meet
the relevance or proportionality standards. Defendants failed
to convince Magistrate Judge Chestney to extend North
Cypress beyond its holding, and they have failed to
convince this Court that Magistrate Judge Chestney's
declination to do so is clear error or contrary to law.
Cypress was a case between an uninsured patient and a
hospital over the reasonableness of a hospital lien. In
re North Cypress Med. Ctr. Operating Co., 559 S.W.3d 128
(Tex. 2018). There, the uninsured patient-plaintiff, who bore
the burden of challenging the reasonableness of the lien,
sought discovery from the hospital-defendant of the amounts
the hospital accepts from other patients for the same
services rendered to the plaintiff. Id. at 134-37.
The Texas Supreme Court reasoned that because of the Texas
hospital-lien statute at issue, a central issue in the case
would be “what a reasonable and regular rate would
be” for the services rendered to the plaintiff.
Id. at 133. Thus, the amounts the hospital-defendant
accepted from other patients for the same services rendered
to the plaintiff were relevant and therefore discoverable.
Id. at 137.
case is entirely distinguishable from a case, like the
present one before this Court, based on personal injury
incurred by a plaintiff and caused by a defendant, where the
plaintiff bears the burden of proving the reasonableness of
her damages, and where defendant seeks substantial discovery
from a non-party based on reimbursement rates and charges
wholly unrelated to the plaintiff. Plaintiff here is an
uninsured patient. Defendants seek information from the
non-party movants about rates they have charged other people
for the same services ...