Case Number: BC655088 Hearing Date: January 02, 2019 Dept: 34

SUBJECT: Motion to Compel Further

Moving Party: Plaintiff-relator State Farm Mutual Automobile Insurance Company

Resp. Party: Defendants United Medical Imaging, Inc., and United Medical Imaging Healthcare, Inc.,

Plaintiff’s motion to compel further is GRANTED. Plaintiff is awarded sanctions in the amount of $3,864.00.

BACKGROUND:

Plaintiffs commenced this action on 03/24/17 against defendants for violations of the Insurance Frauds Prevention Act (Insurance Code section 1871.7) The complaint alleges that defendants have committed fraud by submitting insurance claims for 3D MRI scans that were not actually performed.

ANALYSIS:

Plaintiff moves to compel further responses to Request for Production of Documents Nos. 2 and 34.

A. Relevant Law

Before bringing a motion to compel further responses to any discovery request, the moving party is required to make efforts to meet and confer in good faith and must submit a declaration attesting to those efforts. (Code Civ. Proc., §§ 2031.310(b)(2), 2030.300(b), 2033.290(b).) “A meet and confer declaration in support of a motion shall state facts showing a reasonable and good faith attempt at an informal resolution of each issue presented by the motion.” (Code Civ. Proc. § 2016.040.) However, a discovery motion need not be denied automatically based upon the reason that the moving parties failed to meet and confer in good faith. (See Obregon v. Sup. Ct. (1998) 67 Cal.App.4th 424, 434.)

The notice of motion must be served within 45 days after service of the responses in question (extended if served by mail, overnight delivery, or fax (see Code Civ. Proc., § 1013)); otherwise, the demanding party waives the right to compel any further response. (Code Civ. Proc., §§ 2030.300(c), 2031.310(c), 2033.290(c), 2016.050; see Sperber v. Robinson (1994) 26 Cal.App.4th 736, 745.) The 45-day time limit is mandatory and jurisdictional. (Sexton v. Sup.Ct. (Mullikin Med. Ctr.) (1997) 58 Cal.App.4th 1403, 1410.) However, the parties can also agree in writing on a specific later date by which to file the motion to compel. (Code Civ. Proc., §§ 2030.300(c), 2031.310(c), 2033.290(c).)

Any motion involving the content of a discovery request or the responses to such a request shall be accompanied by a separate statement providing all information necessary to understand each discovery request and all the responses at issue. (California Rules of Court, Rule 3.1345(a), (c).) “Failure to include the separate statement required by CRC 3.1345 is ground for denial of [the] motion.” (Edmon & Karnow, Civ. Proc. Before Trial (The Rutter Group 2017) 8:1151.1.)

A motion to compel further responses to requests for production “shall set forth specific facts showing good cause justifying the discovery sought by the inspection demand.” (Code Civ. Proc. § 2031.310(b)(1).) “To establish ‘good cause,’ the burden is on the moving party to show both: [¶] Relevance to the subject matter (e.g., how the information in the documents would tend to prove or disprove some issue in the case); and [¶] Specific facts justifying discovery (e.g., why such information is necessary for trial preparation or to prevent surprise at trial.) [Citations.] [¶] The fact that there is no alternative source for the information sought is an important factor in establishing ‘good cause’ for inspection. But it is not essential in every case.” (Edmon & Karnow, California Practice Guide: Civ. Proc. Before Trial (The Rutter Group 2017) ¶ 8:1495.6.) “For discovery purposes, information is relevant if it ‘might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement.’ [Citation] Admissibility is not the test and information, unless privileged, is discoverable if it might reasonably lead to admissible evidence. [Citation] These rules are applied liberally in favor of discovery.” (Gonzales v. Superior Court (1995) 33 Cal.App.4th 1539, 1546.)

“If ‘good cause’ is shown by the moving party, the burden is then on the responding party to justify any objections made to document disclosure (the same as on motions to compel answers to interrogatories or deposition questions.” (Edmon & Karnow, supra, at ¶ 8:1496.)

B. Merits

RFPD No. 2 seeks “All documents related to any claims, invoices, or bills presented or submitted to any insurer or payor, including, but not limited to, government payors, for 3D MRIs for which you billed from March 24, 2009 to the present, including but not limited to all communications, medical records, test results (including raw data, reports, films, and interpretations), notes, bills, referrals for treatment, referrals for consultations, referrals for testing, sign-in sheets, prescriptions, disability determinations, and orders for each patient related to those claims.”

RFPD No. 34 seeks “All documents related to any communications between you and any agent or representative of any insurer or other payor, including, but not limited to, government payors, related to 3D MRIs.”

The parties primary dispute is whether Plaintiff can seek these documents, given that they relate to other insurers, and not to any injury Plaintiff suffered. Neither party presents legal authority that is directly on point. Rather, Plaintiff cites to cases interpreting other qui tam actions, and argues the expansive discovery permitted in those actions should likewise apply to this insurance fraud qui tam action, while Defendants cite to cases that imply only insurers that have actually been harmed may bring an insurance fraud qui tam action, and that Plaintiff therefore cannot base its action on harms suffered by other insurers.

As between these two, Plaintiff has the superior argument. Plaintiff identifies numerous federal cases permitting broad discovery in qui tam actions. (U.S. v. R&F Properties of Lake County, Inc. (11th Cir. 2005) 433 F.3d 1349, 1359 [discovery relating to false claims act extended beyond termination of plaintiff, given allegations that further false claims were made after the termination]; U.S. ex rel. Fiederer v. Healing Hearts Home Care, Inc. (D. Nev. 2014) 2014 WL 4666531 *5 [“The court is unpersuaded by Defendants’ argument that the scope of discovery permitted under Rule 26 should be limited to the duration of a relator’s employment. . . . Limiting a relator’s discovery rights to the duration of her employment would weaken the Act by placing limits on qui tam actions that do not exist for government-initiated actions.”]; U.S. ex rel. Brooks v. Stevens-Henager College, Inc. (D. Utah 2018) 2018 WL 296088 * 6 [same]; U.S. ex rel. McCartor v. Rolls-Royce Corp. (S.D. Ind. 2013) 2013 WL 5348536 *6 [“It is unreasonable, in this judge’s view, to impose a limit on discovery and recovery in qui tam cases to specific examples of fraudulent behavior that relators were able to describe in their complaint when-as in this case-the complaint describes a general fact pattern of alleged fraudulent behavior supported by specific examples of that behavior. The court sees no good reason to prevent a relator from discovering other examples of behavior substantially similar to those described in the complaint and that similarly fit the pattern of conduct on which the complaint is focused.”]; U.S. ex rel. Dicken v. Northwest Eye Clinic, P.A. (D. Minn. 2018) 2018 WL 2980394 *3 [permitting discovery of all “patient files and billing materials” that contained an identified billing code that was allegedly used in a suspicious manner].)

The trend in these cases is to allow discovery that goes beyond the claims of the actual plaintiff, because the government, as the real party in interest, would have broader rights if it had brought an enforcement action.

Defendants emphasize that, in People ex rel. Allstate Ins. Co. v. Dahan (2016) 3 Cal.App.5th 372, 379, the Court of Appeal described claims under Ins. Code § 1871.7 as being brought “for the person and for the State of California.” Defendants argue this language suggests there must be some limitation given this qualification that the action is brought ‘for the person.’ But the same language also notes that, like other qui tam actions, the claim is brought “for the State of California.” This suggests the cited federal authority, discussing the discovery rights of the government, is analogous.

More fundamentally, the Court concludes this information would likely be discoverable even if the Court adopted Defendants’ more limited interpretation of Plaintiff’s qui tam rights. Plaintiff is entitled to discovery anything “relevant to the subject matter” and “reasonably calculated to lead to the discovery of admissible evidence.” (CCP § 2017.010.) Even if Plaintiff were to ultimately seek relief based solely on fraudulent insurance claims made to Plaintiff, which Defendants argue is all Plaintiff would be entitled to, the information now sought by Plaintiff may be admissible to prove Defendants’ pattern and practice or knowledge of making false claims. Thus, even without the complications arising from the qui tam nature of this action, the discovery would be relevant.

Defendants also argue that its due process rights will be infringed if this discovery is ordered, because Defendants will be unable to pursue other discovery related to these claims, in order to defend itself against the use of these claims at trial. For example, Defendants assert that they would likely want to conduct discovery or even depositions of the other insurers who received the claims at issue, so that Defendants could verify that these other claims were not fraudulent.

This argument is premature: this is a discovery motion, not a Motion in Limine to admit documents. At this time, the Court has no information to suggest which of the documents produced in discovery will be moved into evidence by one party, or whether the opposing party will object to the documents admission into evidence. Until it is clear to what purpose Plaintiff intends to put the discovery, the Court cannot conclude whether admitting the evidence would constitute a due process violation. Additionally, it is unclear why this lack of other discovery would be a due process violation, given that any such limitation would apply equally to Plaintiff, given the discovery cut-off dates.

Defendants next argue that Plaintiff should be judicially estopped from moving to compel further, because granting the motion will necessarily require a continuance, while Plaintiff opposed Defendants’ motion to file a cross-complaint in part on the ground that it would require a continuance, which would be prejudicial to Plaintiff. Thus, Defendants argue Plaintiff has taken two contrary positions before the Court, and should be judicially estopped from asserting the latter position.

Plaintiff concedes that, if the motion is granted, it will seek a “60 to 90 day continuance to permit Entity Defendants time to comply with the Order and to allow Relator SFMAIC to incorporate the Requested Documents . . . into its trial strategy.” (Reply, p. 1:29-2:1.) The Court disagrees that this constitutes a contradiction with its prior position, however. The key difference is that, in each instance, Defendants are the parties at fault. Plaintiff was opposed to a continuance for Defendants where that continuance was due to Defendants’ own delay in seeking leave to file a cross-complaint. Here, by contrast, a continuance may be rendered necessary by Defendants refusal, over the past six months, in producing these documents. The different circumstances justify different responses from Plaintiff.

Finally, Defendants argue this request is unduly burdensome. Defendants’ declarations note the number of bills that exist — 1,500,000 — but do not otherwise provide an estimate as to how much time or effort it would take to produce documents responsive to Plaintiff’s request. (See Zarian Decl. ¶ 5.) This is insufficient to carry its burden. (Williams v. Superior Court (2017) 3 Cal.5th 531, 549-50 [“An ‘objection based upon burden must be sustained by evidence showing the quantum of work required.’ [Citation.] As the objecting party, Marshalls had the burden of supplying supporting evidence, but in response to Williams’s motion to compel it offered none. Given this, the trial court had nothing in the record upon which to base a comparative judgment that any responsive burden would be undue or excessive, relative to the likelihood of admissible evidence being discovered.”].) In this day of computerized records, it may take no more than a few clicks of a mouse to download these documents onto a flashdrive.

For the foregoing reasons, Plaintiff’s motion to compel further is GRANTED.

Plaintiff seeks $3,864.00 in sanctions, representing 9 hours (of 15 actually incurred) researching and preparing the motion and 3 hours preparing the reply, at a rate of $317.001/hour, and a $60 filing fee. (Fawaz Decl. ¶ 13.) The Court grants the sanctions as requested.

The Court orders counsel to meet-and-confer to see if they can agree upon:

· a date for the production of these documents;

· the length of a trial continuance; and

· whether and to what extent discovery should be reopened during the continuance of the trial.