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Eagle Air Med Corp. v. Sentinel Air Medical Alliance, LLC

United States District Court, D. Utah, Central Division

February 1, 2018

EAGLE AIR MED CORPORATION, a Utah corporation; and VALLEY MED FLIGHT INC., a North Dakota corporation, Plaintiffs,
SENTINEL AIR MEDICAL ALLIANCE, LLC, a Wyoming limited liability company; JEFFREY FRAZIER, an individual; and DOES 1 through 10, Defendants.

          Tena Campbell, Judge.


          Evelyn J. Furse, United States Magistrate Judge.

         Defendants Sentinel Air Medical Alliance and Jeffrey Frazier (collectively, “Sentinel”) filed a Motion to Quash Subpoenas to Sentinel Clients seeking to prevent Plaintiffs Eagle Air Med Corporation (“Eagle”) and Valley Med Flight Inc. (“Valley”) from serving subpoenas on ten Sentinel clients. (ECF No. 127). On September 19, 2017, the Court held a hearing on Sentinel's Motion. (ECF No. 133.) During the hearing, Sentinel converted its motion to quash into a motion for protective order. (ECF No. 140 at 14.) At the conclusion of the hearing, the Court asked the parties to submit additional briefing on three issues: (1) the Court's authority to modify or order withdrawal of the subpoenas issued in other jurisdictions; (2) how Eagle and Valley selected the Sentinel clients they subpoenaed; and (3) the relevance of the documents sought in the subpoenas concerning other air medical transport providers to Sentinel's good faith defense. (Id. at 41-43.) After a careful review of the parties' filings and papers, and consideration of the parties' arguments during the hearing, the Court DENIES Sentinel's Motion for the reasons addressed below.


         On April 7, 2017, the Court ordered Sentinel to provide Eagle and Valley with a list of Sentinel's clients since January 1, 2013. (ECF No. 34.) Sentinel provided the client list on June 23, 2017. (ECF No. 145 at 3.) In July 2017, Eagle and Valley's counsel noticed and served subpoenas on three entities- Builders Trust of New Mexico, New Mexico Casualty Company, and The Benefit Group-that Defendant Jeffrey Frazier identified as “top five” Sentinel clients. (Id. at 3, 6; ECF No. 145-3.) Sentinel did not object to the subpoenas until filing its motion to quash (now a converted motion for protective order) on September 11, 2017. (ECF No. 145 at 4.) The July subpoenas requested four types of documents: (1) communications with Sentinel referring to Eagle or Valley; (2) other communications with any person referring or relating to Eagle or Valley since January 1, 2013; (3) agreements with Sentinel regarding Sentinel's evaluations or recommendations concerning the medical necessity of, and reasonableness of charges and appropriate reimbursement for, any air medical transport; and (4) documents relating to services Sentinel rendered in connection with Eagle or Valley transports since January 1, 2013. (Id. at 3-4; ECF No. 127-3.)

         In August 2017, Eagle and Valley served an additional seven subpoenas on Sentinel clients-Summit Management Services, Inc., Mutual Assurance Administrators, Inc., Meritain Health, Inc., UMR, Inc., CoreSource, Inc., Gilsbar, LLC, and HealthSmart Benefit Solutions, Inc.-that they identified from the client list that Sentinel provided. (ECF No. 145 at 4-5; ECF No. 127-2.) The August subpoenas requested three specific types of documents: (1) documents regarding any review, evaluation, or recommendation that Sentinel provided from January 1, 2013 to December 31, 2015; (2) communications referring to Eagle or Valley from January 1, 2013 to December 31, 2015, including any with Sentinel; and (3) documents regarding Sentinel's expertise, skill, or qualifications. (Id.)


         Parties may conduct discovery on “any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed.R.Civ.P. 26(b)(1). “The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Fed.R.Civ.P. 26(c)(1). A protective order may “forbid[] inquiry into certain matters, or limit[] the scope of disclosure or discovery to certain matters.” Fed.R.Civ.P. 26(c)(1)(D). The party seeking the protective order bears the burden of showing good cause. McBride v. Medicalodges, Inc., 250 F.R.D. 581, 583 (D. Kan. 2008). “Whether to enter a protective order lies within the court's discretion.” Id.


         As an initial matter, the Court has jurisdiction to decide Sentinel's motion, including as it relates to subpoenas issued to third parties in other jurisdictions, since Sentinel converted its motion to quash into a motion for protective order.[1]See, e.g., Straily v. UBS Fin. Servs., Inc., No. 07-CV-00884-REB-KMT, 2008 WL 5378148, at *2 (D. Colo. Dec. 23, 2008) (unpublished) (court has authority to enter a protective order relating to discovery sought in other jurisdictions because “the broad outlines of discovery in a civil case are controlled by the court where the case is filed”); Rajala v. McGuire Woods, LLP, No. 08-2638-CM-DJW, 2010 WL 4683979, at *7 (D. Kan. Nov. 12, 2010) (unpublished) (court has authority to entertain motion for protective order “where (1) the issues raised are central to the case and extend beyond the specifics of the particular subpoena, and (2) the requested ruling is necessary to insure that general discovery issues will receive uniform treatment, regardless of the district in which the discovery is pursued”). Eagle and Valley do not dispute that the Court has this authority. (ECF No. 145 at 2 n.1.)

         With respect to the merits of its motion, Sentinel sets forth a number of arguments concerning the subpoenas, which it claims necessitate the issuance of a protective order. First, Sentinel argues that during the April 7, 2017 hearing the Court imposed limits on the scope of third party subpoenas sent to Sentinel clients. (ECF No. 127 at 2-3.) Specifically, Sentinel claims the Court limited the scope of subpoenas to documents between Sentinel and the subpoenaed party concerning Eagle and Valley. (Id.; ECF No. 136 at 2.) While the Court discussed anticipated discovery directed to Sentinel clients during the hearing, it did not impose a hard limitation on the scope of subpoenas. The hearing addressed Eagle and Valley's motion to compel production of Sentinel's client list. The Court did not have before it a motion concerning the scope of actual subpoenas directed at specific Sentinel clients, and the parties did not address the impact of the elements of the claims and affirmative defenses on the necessary scope of discovery directed to third parties. Therefore, the Court declines to use any of the statements made at the April 7 hearing to limit the scope of the subpoenas directed to Sentinel clients. Instead, the Court assesses the discovery sought through the subpoenas for relevance and proportionality.

         Second, Sentinel argues that Eagle and Valley are attempting to harass Sentinel's clients through issuance of subpoenas. (ECF No. 127 at 2, 4; ECF No. 136 at 3, 5.) The Court does not find any evidence to support this assertion and is satisfied with Eagle and Valley's explanation concerning the method it used to select entities to subpoena from the client list Sentinel produced. As Eagle and Valley point out, during his deposition, Defendant Jeffrey Frazier identified three of the clients subpoenaed-Builders Trust of New Mexico, New Mexico Casualty Company, and The Benefit Group-as “top five” Sentinel clients. (ECF No. 145 at 3, 6; ECF No. 145-3.) Sentinel's counsel also identified New Mexico Casualty and The Benefit Group as entities for which Sentinel performed claims reviews relating to Eagle and Valley. (ECF Nos. 145 at 3 n.2 & 127-4.) Therefore, the issuance of subpoenas to these entities is reasonable.

         Of the seven other entities subpoenaed, Eagle and Valley's counsel compared the Sentinel client list[2] with a list containing Eagle and Valley payors during the relevant timeframe to identify entities that were both Sentinel clients and Eagle and Valley insurance payors. (ECF No. 145 at 6-7.) Six of the seven entities that Eagle and Valley's counsel identified as clients and payors in common, and issued subpoenas to, underpaid Eagle or Valley. (Id.) In all, Eagle and Valley subpoenaed 10 out of 188, or less than 5%, of the entities identified on the Sentinel client list. (Id. at 7.) Eagle and Valley also indicate their intention to subpoena nine additional Sentinel clients that substantially underpaid Eagle and Valley during the relevant time period. (Id. at 7 n.5.) If Eagle and Valley issue these subpoenas, they will have subpoenaed approximately 10% of the total number of Sentinel clients.

         While the Court understands Sentinel's concerns regarding subpoenas to certain of its clients, the Court cannot conclude that Eagle and Valley have acted unreasonably in selecting the clients to subpoena or that they are engaging in a “fishing expedition.” Instead, the evidence indicates that Eagle and Valley's counsel have acted in good faith to limit the number of subpoenas ...

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