Querying Existing DB Isn’t Same As Creating Docs

N. Shore-Long Island Jewish Health Sys., Inc. v. MultiPlan, Inc., No. CV 12-1633 (JMA) (AKT), 2018 WL 1515711 (E.D.N.Y. Mar. 28, 2018).

In this case alleging healthcare insurance fraud, the magistrate granted the plaintiff’s motion to compel the production of specific database information. While the defendant would have to query its database to generate that information, such a query did not require creating “completely new documents.”

The plaintiff, healthcare facility operator North Shore-Long Island Jewish Hospital System, Inc. (“Northwell”), had a lengthy business relationship with the defendant, MultiPlan, Inc., a preferred provider organization. Eventually, Northwell filed suit claiming that MultiPlan engaged in fraudulent “misrepresentations and concealments” to induce it to continue their relationship.

During discovery, Northwell moved the court to compel MultiPlan to provide electronically stored information (ESI) about its revenues and profits. MultiPlan offered a host of objections before declaring that it had “no documents responsive to” Northwell’s request. The court allowed Northwell to depose a MultiPlan representative about its data.

MultiPlan’s deponent confirmed that its databases included information about fee arrangements and claim prices. Northwell again moved the court to compel production and requested sanctions. In its motion, Northwell argued that MultiPlan was obligated “to run reports to produce this data,” even if those reports weren’t produced in its ordinary course of business.

Again, MultiPlan objected. First, it argued that Northwell’s request exceeded the permissible scope of discovery because its claim for fraud was not viable. Therefore, MultiPlan stated, the information Northwell sought was not relevant to any well-pleaded claims.

MultiPlan also argued that its electronic systems “do not and cannot break down revenues for clients by provider.” It would therefore “have to perform calculations across multiple systems to create” that data. This, MultiPlan said, would improperly require the creation of new documents, exceeding the scope of Federal Rule of Civil Procedure 34.

The court rejected all of MultiPlan’s arguments. Under Rule 26, discovery should encompass information that is both relevant and proportional to the parties’ claims and defenses. But “opposition to a discovery motion is not the proper forum” for challenging the viability of claims. Rather, “Northwell should be able to examine the data at issue itself” in an attempt to establish its case.

The court did reject some of Northwell’s specific requests as disproportionate. Generally, however, it concluded that “MultiPlan is capable of producing reports” to provide the information Northwell requested.

Nor did the court agree with MultiPlan’s argument that it would have to create “completely new documents” to meet Northwell’s requests. Tellingly, MultiPlan did not “address the cost, hardship, or burden of production” in its opposition. Nor did it show that the information Northwell sought wasn’t “reasonably accessible.” Overall, MultiPlan’s “conclusory allegations that production would require a complicated departure from ordinary business protocol” did not meet the burden of proving inaccessibility.

The court granted Northwell’s motion, ordering MultiPlan to search across its databases and produce relevant ESI. However, the court recognized that MultiPlan might encounter unusual expenses in doing so. The court therefore ordered MultiPlan to provide an estimate of those expenses so that it could determine whether Northwell should bear any of those costs.

Finally, Northwell also asked the court to impose sanctions for MultiPlan’s delay, requesting both its related fees and a preclusion order. The court declined to find that MultiPlan “acted in bad faith” in its opposition. Rather, it concluded, the dispute was “a sincere disagreement” about the conclusions to be drawn from “nebulous” ESI. The court denied sanctions.

Takeaways on Making Truthful Representations About Data

MultiPlan might have been a bit lucky in this ruling. During the multi-year lead-up to the instant motion to compel, MultiPlan responded to a request for the same data by stating that it had no responsive documents. While technically this may have been true, it seems that it did have the requisite data to respond; it just didn’t have it in document form. The court concluded that there was no bad faith in MultiPlan’s arguments, but given the history, it could have gone the other way. Answer discovery requests carefully and truthfully after examining all of the documents and data you have that might be responsive.

Questions about assessing your ESI? We’re here to help you master ediscovery, which starts with knowing what ESI you have and where it is.

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