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Rush University Medical Center v. Minnesota Mining and Manufacturing Co.

October 1, 2009

RUSH UNIVERSITY MEDICAL CENTER, PLAINTIFF,
v.
MINNESOTA MINING AND MANUFACTURING COMPANY, DEFENDANT.



The opinion of the court was delivered by: Wayne R. Andersen District Judge

MEMORANDUM OPINION AND ORDER

This case is before the court on the motionin limine of plaintiff Rush University Medical Center ("Rush") to bar defendant from using opinion evidence relating to Rush's alleged "contributory deficiencies" and general financial condition as well as the motion in limineof defendant Minnesota Mining and Manufacturing Company ("3M") to exclude Rush's "lost cost savings" evidence and the testimony of Robert M. Hess. For the reasons set forth below, Rush's motion in limine is denied in part and granted in part and 3M's motion in limine is granted. Additionally, for the reasons stated in the pre-trial conference held in chambers on June 26, 2009, the court made the following rulings: 1) Rush's motion in limine to exclude evidence and/or argument to offset Rush's damages by the purported value to Rush of the Care Innovation System is granted; 2) Rush's motion in limine to bar 3M from argument based on Rush's renewals of the System Purchase Agreement and continued use of the Care Innovation System is denied; 3) 3M's motion in limine to exclude evidence or reference to other lawsuits or complaints about the Care Innovation system is denied as a whole, however, the court ruled that Rush should bring any specific evidence regarding other user's complaints to the court and 3M's attention sufficiently in advance of trial so that a decision regarding each specific complaint can be made on a case-by-case basis.

This case is also before the court on 3M's motion for discovery sanctions. For the reasons set forth below, this motion is denied.

BACKGROUND

In the spring of 1995, plaintiff Rush and defendant 3M began discussions regarding Rush's interest in 3M's Care Innovation system, an integrated clinical information system designed to give medical providers improved electronic access to patient records. On December 24, 1998, after nearly three years of negotiations, the parties signed a contract for Rush to license Care Innovation. Rush paid $3 million for the Care Innovation system under the Initial Agreement and the system went "live" at Rush by the fall of 1999.

The parties' contract required 3M's Care Innovation system to link Rush's different computerized clinical and administrative systems into a single, integrated patient data system-a "clinical data repository" ("CDR") - from which Rush's physicians, nurses, and others could obtain information on patients' medical histories and treatments. The contract also required 3M to provide a Care Innovation system with certain "functionalities" that would enable Rush's physicians, nurses, researchers, and administrators to interact with the clinical information in the CDR and provide "workflow" solutions to accommodate the way in which patient care was delivered at Rush. Rush alleges that during the negotiations leading up to the parties' agreement, 3M made certain representations to Rush that caused Rush to believe that 3M had the capabilities to provide all of Rush's requested functionalities.

One of the functionalities that was supposed to be provided by 3M is an Alert Management System, which is comprised of several Alerts packages that, when activated, are supposed to provide valuable notifications to users. For example, the Alerts can generate notifications that a patient's recent lab test had come back abnormal ("Critical Lab Alerts") or that a prescribed drug may interact adversely with another prescribed drug ("Adverse Drug Events"). It is undisputed that 3M delivered Care Innovation to Rush with the Alert Management System and four Alerts packages.

On September 27, 2001, Rush sent a letter to 3M both praising Care Innovation's ease of use in delivering clinical information to Rush's clinicians and also raising specific issues with the system regarding the missing or inactive functionalities that 3M had promised to provide. On October 11, 2001, 3M sent a letter to Rush in which 3M assured Rush that 3M was committed to the development and long-term growth of its Care Innovation system. Rush contends that it relied on those representations and continued to believe that 3M would provide the key functionalities that 3M had promised to provide.

On February 21, 2002, 3M sent Rush and all of 3M's other Care Innovation customers a letter in which 3M made clear that it was no longer committed to developing certain components of Care Innovation. According to Rush, these components included certain functionalities that 3M had contracted to provide to Rush. Additionally, Rush's Clinical Alerts Study Working Group began testing the alerts and on April 29, 2002, the study group reported that the Alerts were defective. Rush noted some minor benefits with the Alerts but asserts that the Alerts' limitations made them unsuitable for deployment to its' physicians. As a result of these developments, Rush signed an agreement with another vendor to provide Rush with a system that would include the functionalities that 3M allegedly failed to provide. Rush continued to use 3M's Care Innovation system until the new system was put into place.

On October 26, 2004, Rush filed this lawsuit against 3M for breach of contract. Rush has requested over $31 million in damages, which includes Rush's alleged $9.5 million cost to replace Care Innovation as well as $22 million in "cost savings" that Rush claims 3M promised but that Rush did not realize.

This case is set for trial before this court on November 9, 2009. In preparation for trial, the court presided over a pre-trial conference on June 26, 2009, at which time Rush presented three motions in limine to the court and 3M presented two motions in limine to the court. The court ruled on three of the motions at the pre-trial conference and withheld judgment on two of the motions pending further review and briefing. We now turn to those motions.

DISCUSSION

I. Rush's Motion in limine to Bar Evidence Regarding Contributory Deficiencies and Rush's Financial Condition

Rush's motion in limine seeks to bar 3M from presenting evidence related to: 1) Rush's "contributory deficiencies" as described in the expert report of Dr. Richard Kremsdorf, and 2) Rush's financial condition during the time period relevant to this lawsuit. Dr. Kremsdorf's report discusses the fact that Rush had financial difficulties at certain times and concludes that because Rush spent below industry average on information technology, it likely had some responsibility for 3M's failures. Specifically, Dr. Kremsdorf cites to a June 24, 2005 presentation by Rush regarding technology implementation in which Rush stated that the need for Rush to have personnel support in the implementation of technology was a key lesson learned.

With respect to the contributory deficiencies evidence, Rush claims that because contributory negligence is not a defense to a breach of contract actionand because 3M fails to cite to any specific act that Rush was supposed to do but failed to do, this testimony should be barred.However, given that Rush argues that the Alerts did not function properly, 3M has to be able to present, as a defense to that argument, evidence that it delivered functioning Alerts, and the reason they did not work is because Rush did not support the system as it should have. Additionally, 3M must be allowed to use Rush's own words (such as the technology presentation) as evidence supporting its argument. However, at trial the burden will be on 3M to show that, if Rush had supported the system, the system would have functioned properly. Accordingly, we deny Rush's motion in limine with respect to the contributory deficiencies evidence and the expert testimony of Dr. Kremsdorf.

Withrespect to the evidence regarding Rush's financial condition, we grant Rush's motion in limine. Although we find that 3M should be able to present evidence that Rush did not perform as it should have and that it may not have spent enough money in the area of information technology to provide the proper support for Care Innovation, the jury does not need to know whether or not Rush was under general financial stress at the time. This information is irrelevant to whether or not 3M breached the contract. Furthermore, courts often recognize that the issue of the finances of a party can distract the jury from the real issues in the case. See, e.g., Mountain Funding, Inc. v. Frontier Ins. Co., No. 01 C 2785, 2004 U.S. Dist. LEXIS ...


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