The opinion of the court was delivered by: JAMES KNOLL GARDNER, District Judge
This matter is before the court on plaintiffs' motions to preclude
defendants from presenting evidence or argument in opposition to
plaintiffs' motion for class certification, on defendants' motions for
sanctions seeking attorneys' fees and costs for preparation of their
responses to plaintiffs' motions to preclude, and on the motion of
defendants Keystone Health Plan Central, Inc. and Joseph Pfister
(collectively "Keystone" or "Keystone defendants") for reconsideration of
the January 14, 2004 Order of Magistrate Judge Arnold C. Rapoport
directing Keystone to provide documents to plaintiffs. For the reasons
expressed below, we deny each motion.
The pertinent facts underlying plaintiffs' original Complaint were
succinctly addressed in our September 18, 2003 Opinion. We incorporate
that full recitation of the facts herein. However, a brief recitation of
the facts is helpful to address the discovery issues presented.
Plaintiffs seek to certify this action as a class action pursuant to
Rule 23 of the Federal Rules of Civil Procedure. Plaintiff Natalie M.
Grider, M.D. is a family practitioner and President of plaintiff Kutztown
Family Medicine, P.C. Plaintiffs and their affiliates provide medical
services to about 4,000 patients who are insured by Keystone. Keystone is
a Health Maintenance Organization ("HMO") organized under the
Pennsylvania Health Maintenance Organization Act.*fn1
Plaintiffs contend that defendants Capital Blue Cross and Highmark
Inc., direct and control the operations of Keystone and receive all of
its profits. Plaintiffs further contend that defendants, John S. Brouse,
James M. Mead and Joseph Pfister are the Chief Executive Officers of
Highmark, Capital and Keystone, respectively. Plaintiffs allege that
defendants and various non-parties together form what is styled as the
"Managed Care Enterprise", an entity which allegedly operates to defraud
plaintiffs and the proposed class through a variety of illegal methods.
Plaintiffs entered into an HMO-physician agreement with defendant Keystone in December 1998 to provide medical services to
the HMO's members. In addition to a complex bonus system, the agreement
provides for two basic methods by which plaintiffs are paid for rendering
medical services: (1) capitation, and (2) fee for service.
Plaintiffs allege a variety of ways in which defendants used the mail
and wires to defraud plaintiffs by wrongfully delaying and denying
compensation due under both methods of payment. Plaintiffs also assert
that the HMO-physician agreement contains a number of misrepresentations
and material omissions. Specifically, plaintiffs allege that defendants
(1) "shave" capitation payments by purposefully under-reporting the
number of patients enrolled in plaintiffs' practice group; (2) defraud
plaintiffs of fees for medical services rendered by wrongfully
manipulating CPT codes to decrease the amount of reimbursements; and (3)
defraud plaintiffs of bonuses promised in the HMO-physician agreement.
Plaintiffs also assert a number of RICO claims premised on extortion in
violation of the Hobbs Act,*fn2 bribery,*fn3 and violations of the Travel Act.*fn4
Finally, plaintiffs bring state law causes of action asserting that
defendants violated the prompt-payment provision of Pennsylvania's
Quality Health Care Accountability and Protection Act*fn5 and for breach
of contract as noted above.
PROCEDURAL HISTORY Plaintiffs filed their Complaint in the Court of Common Pleas of
Philadelphia County on October 5, 2001. Defendants removed the action to
this court on November 7, 2001. By Order and Opinion of the undersigned
dated September 18, 2003, we granted in part and denied in part
Defendants' Motion to Dismiss, which motion filed January 23, 2002.*fn6
On January 14, 2004, a comprehensive Rule 16 Status Conference Order
was entered by the undersigned based upon the status conference held
before the undersigned December 30, 2003. In our Order, we set deadlines
for class discovery, expert reports, and expert depositions regarding
class discovery; defendants' deadline for a response to plaintiffs'
motion for class certification; a hearing date for plaintiffs' motion for
class certification; deadlines for trial expert reports and depositions;
a dispositive motion deadline; a deadline for motions in limine; and a
In addition, by separate Jury Trial Attachment Order dated January 14,
2004 we set deadlines for trial memoranda, exchange of exhibits, voir dire questions, a proposed verdict sheet,
points for charge and other issues related to the trial of this matter.
Plaintiffs' Motion to Preclude
Plaintiffs seek an Order for sanctions pursuant to Rule 37(b) of the
Federal Rule of Civil Procedure for alleged deficiencies in the responses
to plaintiffs' interrogatories and requests for production of documents
served upon defendants Keystone and Highmark.*fn7 Specifically,
plaintiffs contend that they served their discovery requests in September
2003 and have either received incomplete responses or no responses at
More specifically, plaintiffs contend that the Keystone defendants have
not provided all requested, discoverable documents in their possession,
or have provided them well after the March 1, 2003 class discovery
deadline. For example, plaintiffs contend that Keystone is withholding documents that they have allegedly unilaterally deemed "privileged",
"non-responsive" and "non-relevant". Moreover, in the case of privileged
documents, plaintiffs assert that the Keystone defendants have refused to
provide a privilege log.
Plaintiffs further assert that the Keystone defendants' withholding of
documents are in violation of the January 14, 2004 Order of Magistrate
Judge Rapoport and his letter dated January 27, 2004 which stated that
"all documents are to be produced". With regard to Highmark, plaintiffs
assert that the Highmark defendants have not produced any documents
pursuant to their discovery requests.
Plaintiffs seek to preclude defendants from opposing plaintiffs' claims
for commonality, typicality and predominance at the class certification
All defendants oppose plaintiffs' motions. Specifically, the Keystone
defendants contend that they have complied with plaintiffs' discovery
requests. Moreover, Keystone contends that over the past two months they
have produced over 52,000 pages of documents and tens of thousands more
on CD-ROM.*fn8 Furthermore, Keystone contends that certain categories of documents listed by plaintiffs have not been requested.
Counsel for Keystone asserts that it has been attempting to work
amicably with plaintiffs for months to work out discovery issues.
Specifically, counsel asserts that plaintiffs' counsel propounded numerous
interrogatories that were converted to document requests. Moreover,
plaintiffs' counsel agreed to provide a "top ten" list of categories of
the types of documents plaintiffs wanted most and defendants would
produce those categories, but no "top ten" list has ever been communicated
to defense counsel. In addition, Keystone contends that they have
properly asserted ...