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United States ex rel. Oughatiyan v. IPC Hospitalist Company, Inc.

United States District Court, N.D. Illinois, Eastern Division

July 14, 2015

United States of America, ex rel. Bijan Oughatiyan, Plaintiffs,
IPC The Hospitalist Company, Inc. et al., Defendants.



For the reasons discussed in this order, plaintiff United States' Motion to Strike General Objections and Compel Responses to Discovery Requests [dkt 76] is granted in part and denied in part without prejudice.


Plaintiff relator Bijan Oughatiyan, who worked for defendant IPC The Hospitalist Company, Inc. ("IPC") from 2003 to 2008, brought this case under the False Claims Act. (Compl.) [Dkt 1.] In December 2013, the United States filed an election to intervene [dkt 20], and in June 2014, filed a Complaint in Intervention (U.S. Compl.) [dkt 48]. The government's complaint alleges that from January 1, 2003 to the present, IPC and its subsidiaries and affiliates knowingly billed government payors, including Medicare and Medicaid, for higher and more expensive levels of medical services than were actually performed. (U.S. Compl. ¶ 5.) The government's complaint named IPC and 29 subsidiaries and affiliated medical groups operating in 25 states ( id. ¶¶ 16-45), and alleged that IPC provides all of the non-medical administrative and management services, including billing services, necessary for the operations of each of its subsidiaries and affiliates pursuant to management agreements ( id. ¶ 16).

The defendants filed a joint motion to dismiss all claims in August 2014. (Mot. to Dismiss.) [Dkt 50.] The District Judge concluded that the government's complaint states a claim of fraud as to IPC, but fails to state a sufficient claim of fraud against the subsidiaries and affiliated groups. (Mem. Opinion and Order, Feb. 17, 2015 at 13-15.) [Dkt 67.] The claims against the 29 subsidiaries and affiliates were dismissed without prejudice. ( Id. )

The District Judge ordered non-expert discovery to close on January 22, 2016. (Order, April 24, 2015.) [Dkt 74.] The government served IPC with a set of document requests seeking 66 categories of documents, along with nine interrogatories, several of which have multiple subparts. (Def.'s Resp. Opp'n, Exs. A and B.) [Dkt 83.] IPC served responses and objections, objecting to each request and interrogatory to some extent, specifically or through fourteen "General Objections." (Gov't's Mem., Ex. A.) [Dkt 77.] The government has moved to strike IPC's general objections and compel responses to its discovery requests, focusing particularly on IPC's General Objections 10 and 11, concerning the temporal and geographic limitations on document production. (Gov't's Mem. at 2-3.) IPC filed a response [dkt 83], and the government replied [dkt 85].

Current Discovery Disputes

Geographic Scope of Discovery Requests

The government seeks documents pertaining to each of the locations in which IPC conducts business. (Gov't's Mem. at 2.) In its General Objection 11, IPC objects to that scope and agrees to produce:

documents that pertain to (1) corporate wide policies, procedures, practices or communications issued from or involving IPC ("Corporate Documents"), or (2) those geographic areas with respect to which DOJ has pled specific factual allegations, namely the states of Texas, Illinois, Michigan, Massachusetts, Tennessee, Florida, and California (the "states at issue").

(Gov't's Mem., Ex. A, Def. IPC Healthcare, Inc.'s Objections and Resp. to Pl. U.S.'s First Set Doc. Req. at 4.)

Fed. R. Civ. P. 26 (b)(1) allows discovery regarding "nonprivileged matter that is relevant to any party's claim or defense." The government contends that it has pled a nationwide case and is therefore entitled to engage in nationwide discovery. IPC argues that, although the government has alleged a nationwide scheme, the complaint contains factual allegations regarding only those seven states, and the District Judge's decision to dismiss the subsidiaries confirms that the government has stated a claim only as to IPC itself, not any of its subsidiaries. (Def.'s Resp. at 7.) IPC states that roughly half of its 2, 457 hospitalists are concentrated in the seven "states at issue, " while the other half furnish services outside those seven states. ( Id. at 7-8.) Producing documents for each of the subsidiaries, it argues, would require an "extraordinary effort" unjustified by the incremental value of the information. ( Id. at 7.) The government, on the other hand, is concerned that limiting discovery to the seven states implicitly construes the complaint as limited to those seven states going forward. (Tr. June 16, 2015 at 16-17.) [Dkt 89.]

In discussions prior to the motion hearing, the government and IPC agreed that IPC would produce documents from 80 custodians who are or were employed at the level of practice leader (referred to as "pod leader") or above. (Tr. June 16, 2015 at 6.)[1] They continue to dispute whether those 80 individuals will be drawn from all of the states in which IPC has subsidiaries or from only the seven states IPC contends are "at issue." ( Id. at 6-7.)

The government contends that all locations where IPC conducts business are "in play, " based on the investigation that led it to bring the nationwide case it argues to have pled. (Tr. June 16, 2015 at 16-17; Gov't's Reply at 7.) The issue is whether that assertion alone justifies extending discovery to all states at this point. The court must consider scope of discovery ...

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