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Methodist Health Services Corporation v. OSF Healthcare System

United States District Court, C.D. Illinois, Peoria Division

April 22, 2014



JONATHAN E. HAWLEY, Magistrate Judge.

Now before the Court are the Defendant OSF Healthcare System's (OSF) Limited Motion to Compel Discovery (Doc. 68) and its Motion to Compel Discovery of UnityPoint (Doc. 69). The Motions are fully briefed. For the reasons stated herein, OSF's Limited Motion to Compel Discovery (Doc. 68) is GRANTED IN PART AND DENIED IN PART. Its Motion to Compel Discovery of UnityPoint (Doc. 69) is DENIED.

In its Complaint, the Plaintiff Methodist Health Services Corporation (Methodist) alleges that the Defendant has engaged in predatory and exclusionary conduct to reduce competition and raise prices at the expense of consumers in two relevant product markets in the tri-county area of Peoria, Tazewell, and Woodford: 1) the sale of general acute-care inpatient hospital services to commercial health insurers; and 2) the sale of outpatient surgical services to commercial health insurers. The Plaintiff specifically alleges that OSF has leveraged its size and status to force commercial health insurers to enter into exclusionary contracts to preclude those insurers from contracting with other hospitals and healthcare facilities. The Complaint specifically identifies six commercial health insurers including Blue Cross Blue Shield of Illinois (BCBS), Humana, Health Alliance, Aetna, United Healthcare, and Coventry Health Care.[1] The Plaintiff brings claims for violations of Sections 1 and 2 of the Sherman Act, the Illinois Antitrust Act, the Illinois Consumer Fraud Act, and for tortious interference with prospective economic advantage.

The federal discovery rules are to be construed broadly and liberally. Herbert v. Lando, 441 U.S. 153, 177 (1979); Jefferys v. LRP Publications, Inc., 184 F.R.D. 262, 263 (ED Pa. 1999). Parties are allowed to obtain discovery regarding any unprivileged matter relevant to the claim or defense of any party. FRCP 26(b)(1). Relevant information need not be admissible at trial if the discovery appears to be reasonably calculated to lead to the discovery of admissible evidence. Id . District courts have broad discretion in matters relating to discovery. See Brown-Bey v. United States, 720 F.2d 467, 470-71 (7th Cir 1983). For discovery purposes, relevancy is construed broadly to encompass "any matter that bears on, or that reasonably could lead to other matter[s] that could bear on, any issue that is or may be in the case." Chavez v. DaimlerChrysler Corp., 206 F.R.D. 615, 619 (SD Ind 2002), quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)).

The party opposing discovery has the burden of proving that the requested discovery should be disallowed. Carrigan v. K2M Inc., 2011 WL 1790423, *4 (CD Ill), citing Etienne v. Wolverine Tube, Inc., 185 F.R.D. 653, 656 (D Kan.1999); Golden Valley Microwave Foods, Inc. v. Weaver Popcorn Co., 132 F.R.D. 204, 207 (ND Ind 1990). The objecting party must do more than simply recite boilerplate objections such as overbroad, burdensome, oppressive or irrelevant. See, for example, Telco Group Inc v. Ameritrade Inc., 2006 WL 560635 (D Neb); Roesberg v. Johns-Manville Corp., 85 F.R.D. 292, 297 (D Pa. 1980).

If the basis for an objection is lack of relevance, "the party resisting the discovery has the burden to establish the lack of relevance by demonstrating that the requested discovery is of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure." Chavez, 206 F.R.D. at 619; Sheehan v. Kruger, 2012 WL 6049007 (ND Ind).

I. Limited Motion to Compel Discovery (Doc. 68)

In its Limited Motion to Compel, the Defendant requests that the Plaintiff be ordered to turn over: 1) documents related to Methodist's physician staffing, compensation, and recruitment (Document Requests 20, 21, 23, and 24); and 2) materials concerning certain meetings of Methodist's Board of Directors that OSF says relate directly to the product markets alleged in this lawsuit (Document Request 52). The Plaintiff objected to Requests 20, 21, 23, 24, and 52 as "overly broad, vague, irrelevant, or not likely to lead to admissible evidence." After the Defendant narrowed Requests 20, 21, 23, and 24 following a meet and confer, the Plaintiff objected to the amended Requests 21, 23, and 24 for the additional reason that they unnecessarily invaded the privacy of physicians within the Peoria community. After the Defendant sent an Amended Request 52 to the Plaintiff, Methodist objected to one subpart of the amended request as overly broad, vague, and unduly burdensome, and another subpart as overly broad and unduly burdensome.

A. Amended Requests 20, 21, 23, and 24

First, the Court finds that the Defendant seeks relevant information via Amended Requests 20, 21, 23, and 24. The Defendant set forth twelve affirmative defenses in its Answer including that there is no direct or proximate causal connection between any harm or injury the Plaintiff alleged and any of OSF's alleged acts. See (Doc. 12 at pp. 55-57). The Defendant points to Paragraphs 32 and 102 of the Plaintiff's Complaint in order to show the relevance of the information requested via Amended Requests 20, 21, 23, and 24. Paragraph 32 states:

A new hospital must recruit and hire qualified staff and physicians. Hospitals also rely on referrals from physicians. A new hospital in the Tri-County Area would need to convince area physicians to change their referral patterns. This would be difficult enough if all physicians in the area had independent practices. Here, it would be even more difficult because Saint Francis has sewn up the loyalties of many physicians through its OSF Medical Group, which owns the practices of referring physicians, and other physician groups controlled by Saint Francis or its affiliates.

(Doc. 1 at pp. 9-10). Paragraph 102 states:

Furthermore, Saint Francis' conduct adversely impacts physician referral patterns and hospital affiliations. Physicians treating patients covered by commercial health insurers that have been forced into exclusionary contracts by Saint Francis likely have referred more patients to Saint Francis, and more patients likely have chosen to use Saint Francis. Physician productivity mandates that they fill their daily schedule. Many doctors engage in "blockbooking, " finding it most efficient to perform all of a given day's surgeries and other procedures at the same facility. If they cannot see the majority of their commercial insurance patients at a facility, such as Methodist, they will shift their patients elsewhere to try to maximize productivity. Thus, absent Saint Francis' exclusionary conduct, its competitors would receive higher patient volumes and utilization, increased revenues, and substantially higher profits.

(Doc. 1 at pp. 26-27). The Defendant summarizes Methodist's allegations in Paragraph 32 to allege that the effects of OSF's conduct on physician practices are a barrier to the entry of new competitive hospitals or surgical centers. The Defendant summarizes the allegations of Paragraph 102 to allege that OSF's actions have the goal and effect of dissuading physicians from affiliating with Methodist and ultimately decreasing Methodist's revenues. Thus, the Defendant says that it is ...

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