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New Life Homecare, Inc., et al v. Blue Cross of Northeastern Pennsylvania

February 22, 2012


The opinion of the court was delivered by: Judge Caputo


Before the Court are New Life Homecare's motion to extend the stay of the proceedings (Doc. 137) and motions to compel discovery from Blue Cross of Northeastern Pennsylvania, First Priority Health, and Express Scripts, Inc. (Doc. 138, 148, and 158), as well as Express Scripts' motion to quash subpoena and for sanctions (Doc. 153). New Life's motions will be denied because they received or already possess the materials they need to respond to Blue Cross' summary judgment motion. Express Scripts' motion to quash will be granted because the subpoenas were untimely, sought irrelevant documents, and violate Federal Rule of Civil Procedure 45. The Court will also schedule oral arguments on Express Scripts' related motion for sanctions.


Blue Cross provided health insurance to some New Life employees pursuant to a group insurance contract for several years. The last policy between the parties was in effect from January 1, 2006 through December 31, 2006. In November 2006, Blue Cross informed New Life it was terminating the group insurance policy on January 1, 2007 because New Life was in violation of the policy's underwriting requirements. New Life filed suit against Blue Cross and the other defendants in December 2006. Blue Cross and New Life then agreed to a temporary restraining order keeping the group insurance in place beyond the termination date. After the Court granted the restraining order, the parties entered into a contract. The parties agreed under the contract that Blue Cross would terminate the group insurance on March 31, 2007. They also agreed Blue Cross would provide the employees with individual conversion health insurance policies.

In August 2007, New Life filed an amended complaint against Blue Cross for: enforcement of the group policy (count I); clarification of its rights (count II); violation of HIPAA's non-discrimination provision (count III); breach of fiduciary duties (count IV); equitable estoppel (count V); ERISA violations (counts VI); violation of HIPAA's retaliation provisions (count VII); breach of contract (count VIII); and tortious interference with contractual relations (count IX). New Life essentially alleged that Blue Cross terminated the group insurance in retaliation for New Life's suing Blue Cross over an unrelated business dispute involving Express Scripts. Blue Cross filed a motion to dismiss and the Court granted it on most of the counts, including tortious interference After the close of discovery, Blue Cross and First Priority filed a motion for summary judgment in October 2009. New Life filed a motion to stay proceedings pending discovery in July 2010. New Life claimed they needed the group insurance policies and underwriting documents in Blue Cross' possession. The Court granted New Life's motion in September 2010 and ordered a sixty day stay. New Life then moved to extend the stay and compel discovery in November 2010. These motions were not ruled on by the Court. In March 2011, New Life moved to compel discovery as to Express Scripts. Express Scripts responded with a motion to quash New Life's subpoenas and a motion for sanctions. Finally, New Life moved for supplementary discovery as to Blue Cross in September 2011.

Blue Cross maintains that all the relevant documents New Life needs to respond to Blue Cross' motion for summary judgment and to pursue the remaining counts of its complaint have either been provided by Blue Cross (the underwriting documents and group insurance contracts) or were already in New Life's possession. Blue Cross contends New Life keeps improperly insisting on access to documents relating to the previously dismissed tortious interference claim. Express Scripts claims it is a non-party whom New Life is similarly forcing to provide information on the dismissed tortious interference claim. It also claims the subpoenas are untimely and were improperly filed in this Court because the requested documents are more than one hundred miles away. The motions have been briefed and are ripe for review.


I. New Life's Motion to Extend Stay and Motions to Compel Discovery -- (Docs. 137, 138, and 158)

Under Federal Rule of Civil Procedure 56(d): If a non-movant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may:

(1) defer considering the motion or deny it;

(2) allow time to obtain affidavits or declarations or to take discovery; or

(3) issue any other appropriate order.

New Life claims it still requires discovery of certain documents to respond to Blue Cross' summary judgment motion. But it has already received the group policies and underwriting documents it claimed it needed in its previous motion to stay. Additionally, Blue Cross' chief argument in its motion is that the contract the parties entered after the original complaint was filed precludes New Life's claims. New Life already has this contract and does not need additional discovery to respond to this argument. The Court will therefore deny the motion to stay the proceedings.

Under Federal Rule of Civil Procedure 26(b)(2)(C): On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these ...

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