United Medical, LLC v. Garg

• Court: Supreme Court of Delaware
• Decided: July 18, 2022
• Docket: 148, 2022
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

UNITED MEDICAL, LLC, § § No. 148, 2022 Third Party Below, § Appellant, § § Court Below–Court of Chancery v. § of the State of Delaware § MANISH GARG, M.D., § § C.A. No. 2019-0938 Plaintiff Below, § Appellee, § § v. § § DHRUVAL H. PATEL, M.D. § AND ROMIL R. PATEL, M.D., § § Defendants Below. §

Submitted: May 23, 2022 Decided: July 18, 2022

Before SEITZ, Chief Justice; VALIHURA and VAUGHN, Justices.

ORDER

After consideration of the notice to show cause and the parties’ responses, it

appears to the Court that:

(1) The appellant, United Medical, LLC (“United Medical”), filed an

appeal from the Court of Chancery’s order directing United Medical to comply with

a subpoena served by the plaintiff below, Manish Garg, M.D. (“Garg”), and the

Court of Chancery’s order requiring United Medical to pay the fees and expenses incurred by Garg to secure United Medical’s compliance with the subpoena

(together, the “Orders”). The Senior Clerk of the Court issued a notice to United

Medical to show cause why this appeal should not be dismissed for its failure to

comply with Rule 42 when taking an appeal from an apparent interlocutory order.

In response, United Medical argues that it is not required to follow the procedure for

interlocutory appeals because the Orders constitute a final judgment under the

collateral-order doctrine. We disagree.

(2) This Court of Chancery action was filed by Garg against his then-

business partners in Nephrology Consultants, P.A. (“NCP”), Dhruval H. Patel, M.D.

and Romil R. Patel, M.D. (together, the “Patels”). The Patels have asserted

counterclaims in their capacities as former stockholders and employees of NCP and

seek profit distributions from NCP (the “Distribution Claims”). On September 9,

2021, Garg served a subpoena on United Medical, a non-party and NCP’s former

billing company, seeking the production of billing information needed to resolve the

Distribution Claims. After United Medical untimely produced only some of the

billing information Garg sought, Garg filed a motion to enforce United Medical’s

compliance with the subpoena on December 16, 2021.

(3) On January 26, 2022, the Court of Chancery granted the motion to

enforce, noting that the information Garg sought was critical to the outcome of the

dispute, which had been prolonged because of the parties’ inability to obtain the

2 billing information without resorting to the issuance of a subpoena. On April 1,

2022, the Court of Chancery ordered United Medical to reimburse Garg for the

$32,379 in fees and expenses that he had incurred to secure United Medical’s

compliance with the subpoena. This appeal followed.

(4) The collateral-order doctrine provides that orders that (i) determine

matters independent of the issues involved in the proceeding itself, (ii) bind people

who are non-parties in the underlying proceeding, and (iii) have a substantial,

continuing effect on important rights are final and subject to immediate appellate

review.1 Here, the Orders resolve what is essentially a limited discovery dispute.2

Because we are not persuaded that the order will have “a substantial, continuing

effect on important rights,”3 the collateral order doctrine is inapplicable.

Accordingly, we have no jurisdiction in this matter, and United Medical’s appeal

must be dismissed.

1 Gannett Co., Inc. v. State, 565 A.2d 895, 900 (Del. 1989). 2 Beebe Med. Ctr. v. Villare, 2008 WL 2137860, at *1 (Del. May 20, 2208) (dismissing as interlocutory an appeal from an order granting in part and denying in part a non-party’s motion for a protective order). See also Cunningham v. Hamilton Cnty., 527 U.S. 198, 205 (1999) (holding that an order imposing sanctions—as distinguished from a finding of civil contempt—was not reviewable under the collateral-order doctrine and noting that an evaluation of the appropriateness of sanctions often will be “inextricably intertwined” with the merits of an action). Compare Evans v. Justice of the Peace Court No. 19, 652 A.2d 574 (Del. 1995) (allowing an appeal from a finding of civil contempt under the collateral-order doctrine); IMO Acierno, 1990 WL 116957 (Del. July 19, 1990) (noting that a civil-contempt order may be immediately appealable under certain circumstances). 3 Gannett, 565 A.2d at 900.

3 NOW, THEREFORE, IT IS HEREBY ORDERED, under Supreme Court

Rule 29(b), that the appeal is DISMISSED.

BY THE COURT:

/s/ Karen L. Valihura Justice