Woods ex rel. United States v. Southerncare, Inc.

303 F.R.D. 405, 2014 U.S. Dist. LEXIS 175500, 2014 WL 7035939
CourtDistrict Court, N.D. Alabama
DecidedNovember 4, 2014
DocketCivil Action No. 2:14-mc-1847-WMA
StatusPublished
Cited by5 cases

This text of 303 F.R.D. 405 (Woods ex rel. United States v. Southerncare, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Woods ex rel. United States v. Southerncare, Inc., 303 F.R.D. 405, 2014 U.S. Dist. LEXIS 175500, 2014 WL 7035939 (N.D. Ala. 2014).

Opinion

MEMORANDUM OPINION AND ORDER

WILLIAM M. ACKER, JR., District Judge.

Deborah Woods, Theresa Goolsby, and Teresa Rieder, the relators in an action pending before the United States District Court for the Southern District of Mississippi, Civil Action No. 3:09-cv-313-CWR-LRA served Simione Healthcare Consultants, LLC (“Simione”), with a subpoena on August 15, 2014. (Doc. 1 at 16). The subpoena designated the law office of Oscar Price, an attorney for the relators, as the place of compliance; such office is located in the Northern District of Alabama. Simione moved to quash the subpoena in this court on Septem[406]*406ber 29, 2014. (Doc. 1). SouthernCare, Inc., the defendant in the underlying suit, filed its own motion to quash the subpoena the following day. (Doc. 3). In response to the motions to quash, the relators filed a motion to transfer the motions to the court that issued the subpoena, the Southern District of Mississippi. (Doc. 6). For the reasons stated below, the relators’ motion to transfer will be denied.

BACKGROUND

SouthernCare is a hospice company with locations in fifteen states. (Doc. 6 at 2). In January 2009, SouthernCare settled a lawsuit with the United States; the suit was brought under the False Claims Act, alleging that the company submitted false claims to the government on behalf of patients who were not eligible for hospice care. (Doc. 6-1 at 2). As part of the settlement, SouthernCare agreed to be evaluated by an Independent Review Organization. (Doc. 6-2). Simione was retained by SouthernCare to perform such evaluation. (Doe. 1 at 3). Simione is a consulting firm based in Hamden, Connecticut, with expertise in the hospice industry. (Doc. 1 at 2-3).

The relators in the underlying action, former employees of SouthernCare, sued the company in the Southern District of Mississippi under the False Claims Act in May 2009, alleging that the company continued to submit false claims to the government. (Doc. 6 at 3). This litigation is ongoing. The relators issued a subpoena to Simione on August 15, 2014, essentially seeking all documents in Simione’s possession that relate to its review of SouthernCare. (Doc. 6 at 3). The subpoena requires production at an address in this judicial district. Simione objected and filed a motion to quash in this court on four grounds: (1) the subpoena requires disclosure of proprietary trade secrets and confidential business information; (2) the subpoena requires disclosure of unre-tained expert’s opinions; (3) the subpoena requires disclosure of protected health information of patients and privileged materials; and (4) the subpoena subjects Simione to undue burden. (Doc. 1). SouthernCare filed its own motion to quash and objected on two grounds: (1) the subpoena is overbroad and seeks irrelevant documents; and (2) the subpoena requires disclosure of unretained expert’s opinions. (Doe. 4). In response, the relators moved to transfer the motions to the Southern District of Mississippi. (Doc. 6).

DISCUSSION

Subpoenas are governed by Fed.R.Civ.P. 45, which was substantially amended in 2013. As amended, a subpoena must be issued by the court where the underlying action is pending, but challenges to the subpoena are to be heard by the disti’ict court encompassing the place where compliance with the subpoena is required. Fed.R.Civ.P. 45(a)(2), (d)(3)(A). The subpoena must state the place where compliance is required, which must be within 100 miles of where the subpoenaed party resides, is employed, or regularly transacts business in person. Fed.R.Civ.P. 45(a)(l)(A)(iii), (e)(2)(A).

Subsection (f) of Rule 45 is new. It allows the court where compliance is required to transfer a motion regarding the subpoena to the court that issued it. Such transfer is only permissible “if the person subject to the subpoena consents or the court finds exceptional circumstances.” Fed.R.Civ.P. 45(f). SouthernCare has not consented to transfer, so the relators must demonstrate that exceptional circumstances exist. The Advisory Committee note explains the exceptional circumstances standard:

In the absence of consent, the court may transfer in exceptional circumstances, and the proponent of transfer bears the burden of showing that such circumstances are present. The prime concern should be avoiding burdens on local nonparties subject to subpoenas, and it should not be assumed that the issuing court is in a superior position to resolve subpoena-related motions. In some circumstances, however, transfer may be warranted in order to avoid disrupting the issuing court’s management of the underlying litigation, as when that court has already ruled on issues presented by the motion or the same issues are likely to arise in discovery in many districts. Transfer is appropriate only if such interests outweigh the inter[407]*407ests of the nonparty served with the subpoena in obtaining local resolution of the motion.

Fed.R.Civ.P. 45(f) advisory committee’s note (2013).

There is little case law interpreting subsection (f), and none from courts within the Eleventh Circuit, since the rule has been in effect for less than a year. The rule text and Advisory Committee’s note make clear, however, that subpoena-related motions should be heard in the court where compliance is required, unless the proponent of transfer demonstrates that exceptional circumstances exist. If such circumstances exist, those interests should then be balanced against the nonparty’s interest in local resolution of the motion to determine if transfer is warranted.

The Committee’s reasoning is evident: local nonparties should be burdened as little as practicable by litigation in which they are not involved, and local resolution of the motion will typically impose a lighter burden. Si-mione, however, is not a local nonparty at all; it is a company based in Connecticut. The parties dispute the importance of this fact. The relators contend that this favors transfer, since Simione has no real interest in resolution of the motion in one foreign forum over another. Simione, on the other hand, complains that it has already been dragged to this forum by the relators, so allowing the relators to continue to drag Simione over to Mississippi would be inequitable.

Neither of these arguments is responsive to the standard of Rule 45(f). Relators mistake the requirements of the rule for a strict balancing test, as if the circumstances favoring transfer are simply to be weighed against the interests of the nonparty in obtaining local resolution. According to the relators, Simione has no interest in local resolution, since it is not a local nonparty, so transfer is appropriate.

Rule 45(f) and its comment, however, set forth a different standard.1 Transfer is only warranted if exceptional circumstances exist; in other words, exceptional circumstances must first be found before any balancing takes place. The lack of a burden imposed on the nonparty by transfer is not in itself an exceptional circumstance and is insufficient to warrant transfer.

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303 F.R.D. 405, 2014 U.S. Dist. LEXIS 175500, 2014 WL 7035939, Counsel Stack Legal Research, https://law.counselstack.com/opinion/woods-ex-rel-united-states-v-southerncare-inc-alnd-2014.