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Priddy v. Health Care Service Corporation

United States District Court, C.D. Illinois

October 25, 2016

SUSAN PRIDDY, et al., Plaintiffs,
v.
HEALTH CARE SERVICE CORPORATION, Defendant.

          BEFORE U.S. DISTRICT JUDGE RICHARD MILLS:

          OPINION AND ORDER

          RICHARD MILLS, UNITED STATES DISTRICT JUDGE.

         Before the Court is the Defendant's Motion to Compel Answers to Interrogatories (d/e 68) (Motion) and Plaintiff's Response to Motion to Compel Answers to Interrogatories (d/e 71) (Response).

         BACKGROUND

         The Plaintiffs' First Amended Complaint (d/e 12) in this case includes seven counts alleging violations of the Employee Retirement and Income Security Act of 1974 (ERISA), 29 U.S.C. §1001, et seq. as well as Illinois statutory and common law claims. The original Plaintiffs consisted of eight individuals[1] and three entities. The Defendant, Health Care Service Corporation, is an Illinois Mutual Reserve Insurance Company, d/b/a Blue Cross and Blue Shield of Illinois, d/b/a Blue Cross and Blue Shield of Montana, d/b/a Blue Cross and Blue Shield of New Mexico, d/b/a Blue Cross and Blue Shield of Oklahoma, d/b/a Blue Cross and Blue Shield of Texas. (HCSC)

         HCSC filed a Motion to Dismiss Plaintiffs' First Amended Complaint (d/e 13) (Motion to Dismiss) pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure (FRCP). HCSC is an insurance company licensed by the State of Illinois. The individual Plaintiffs obtained insurance coverage from the Defendant through a plan purchased by their employers. The corporate Plaintiffs are corporations that purchased coverage through one of HCSC's divisions to cover their employees. The Plaintiffs' seven count First Amended Complaint asserted violations of ERISA, in addition to claims under Illinois statutes and Illinois common law for breach of fiduciary duty by HCSC. Plaintiffs' First Amended Complaint also sought appointment of a receiver and an accounting.

         On March 22, 2016, United States District Judge Richard Mills ruled on the Motion to Dismiss. (Opinion, d/e 21) Judge Mills dismissed all corporate Plaintiffs based upon lack of standing. The Court also allowed Defendant's Motion to Dismiss (d/e 13) regarding Plaintiffs' claims which alleged breaches of fiduciary duty under ERISA for failure to pass on rebates and discounts, and dismissed Counts IV and V of Plaintiffs' First Amended Complaint.

         In his Opinion regarding the Motion to Dismiss, Judge Mills stated when reaching his conclusion that the Plaintiffs have asserted plausible claims (d/e 21, pg 24), that the First Amended Complaint included sufficient allegations which suggested discovery might reveal evidence of liability. Judge Mills also noted that certain claims were lacking in specificity and allowed the Plaintiffs to go forward in order to determine whether discovery will reveal that the allegations of the complaint are supported. (d/e 21, pg 26)

         The Plaintiffs and Defendant have exchanged interrogatories. Defendant's Motion (d/e 68) requests that various Plaintiffs be compelled to answer five interrogatories. The Defendant maintains that the Plaintiffs' answers to the interrogatories are improper and inadequate. Specifically, Defendant asserts that Plaintiffs' objections that the answers to certain interrogatories “call for legal conclusions that a lay plaintiff is incapable of answering” and that the “Plaintiff is not an attorney and therefor has no knowledge to answer this question law” are improper.

         The specific interrogatories and the Plaintiffs' responses will be discussed in detail below.

         ANALYSIS

         1. Answers of Plaintiffs Beiler, Yard, Friedman, and Schacht to Defendant's Interrogatories Numbered 2 and 3, and Answer of Plaintiff Fischer to Defendant's Interrogatory Number 5 Defendant seeks to compel answers to its Interrogatories Numbered 2, 3, and 5. Those interrogatories are set forth below:

Interrogatory No. 2 to Plaintiffs Yard, Beiler, Friedman, and Schacht: Identify the Illinois law that you contend defines an "owner" as "each person or entity purchasing insurance from Defendant or purchasing the services of Defendant to administer a plan of insurance" as alleged in Paragraph 29 of the First Amended Complaint.
Interrogatory No. 3 to Plaintiffs Yard, Beiler, Friedman, and Schacht: Identify the basis for your contention in Paragraph 31 of the First Amended Complaint that Illinois recognizes or otherwise supports "a presumption of self-dealing created by the placement by Defendant of its Officers and Directors on the boards and/or control groups of affiliates and subsidiaries which it purchased using the assets of this mutual insurance company." Interrogatory No. 5 to Plaintiff Fischer: Describe the fiduciary duties you contend D efendant breached and the specific actions, policies, practices or procedures that constituted the breach(es) you allege in Count VI of the First Amended Complaint.

         The answers to the Interrogatories Numbered 2 and 3 are substantially the same for Plaintiffs Beiler, Friedman, and Schacht. Their answer to Interrogatory No. 2 is as follows:

Plaintiff is not an attorney and therefore has no knowledge as to the answer to this question of law. This interrogatory is improper because it asks for a pure statement of law. See also, Defendant's answer to Paragraph 29 of the Plaintiffs' Amended Complaint ...

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