United States District Court, E.D. Pennsylvania
MEMORANDUM AND ORDER CONCERNING DOC. NOS. 56 &
RICHARD A. LLORET U.S. MAGISTRATE JUDGE
No. 56: Plaintiffs' motion to quash the subpoena to Dr.
plaintiffs (referred to collectively as “Aetna”)
have filed a motion to suppress or quash a subpoena directed
to their expert witness, Dr. Makuch. Doc. No. 56. I have
reviewed the parties' submissions. I have also reviewed
in camera the engagement letter concerning Dr. Makuch's
services. Dr. Makuch supplied a regression analysis of
defendants' billing practices. The primary motivating
purpose behind the creation of this analysis was to aid in
negotiations and potential litigation with defendants. This
means that Dr. Makuch's analysis is protected by the
attorney work-product doctrine. See United States v.
Rockwell Intern., 897 F.2d 1255, 1266 (3d Cir. 1990)
(file was maintained to aid in future negotiations and
potential litigation with IRS). I find that Aetna has
produced significant discovery concerning the regression
analysis performed by Dr. Makuch. That regression analysis
formed a basis for the plaintiffs' complaint, and is
therefore discoverable, as discussed below. While some
discovery into the data used to prepare the regression
analysis is appropriate, discovery will be conducted between
the parties, not by subpoena directed to Dr. Makuch. I will
order that the subpoena be quashed.
Doc. No. 64: Defendants' cross-motion to compel
production of discovery.
defendants (collectively referred to as “Mednax”)
filed a cross-motion to compel discovery pursuant to Fed. R.
Civ. Pro. 37(a). Doc. No. 64. They seek information
concerning Dr. Makuch's regression analysis, performed
for Aetna, which forms a basis for the complaint. I have
reviewed the parties' submissions, and I will grant the
cross-motion in part, and deny the rest.
Documents and information previously produced will be
identified by Aetna.
objects that it has provided much of the information to
Mednax concerning Dr. Makuch's study. Doc. No. 66 at 3-4.
Additionally, Aetna objects that some of the information
sought in Mednax's cross-motion has never been requested
before the time of the cross-motion. Before and at the time
of the meet and confer ordered below, Aetna may simply
identify compliance with a particular request by supplying
the specific Bates stamp number(s) where the information can
Makuch's analysis is subject to the attorney work-product
reviewed in camera the retainer agreement signed by Dr.
Makuch, as well as the other relevant circumstances. I find
that Dr. Makuch was retained and did his analysis in
“the course of preparation for possible
litigation.” Haines v. Liggett Group Inc., 975
F.2d 81, 94 (3d Cir. 1992) (quoting Hickman v.
Taylor, 329 U.S. 495, 505 (1947)); see United States
v. Rockwell Intern., 897 F.2d 1255, 1266 (3d Cir. 1990)
(a file maintained to aide in future negotiations and
potential litigation was protected work-product). At the time
Dr. Makuch was retained there may well have been insufficient
proof to justify filing a complaint alleging fraud. That does
not mean his analysis cannot be subject to the attorney
work-product doctrine. This was not a routine, in-house
review of records. A party can anticipate possible litigation
without having a sufficient basis, then and there, to satisfy
the pleading standards of Fed. R. Civ. Pro. 8, 9 and 11.
the required factual basis to file a complaint alleging fraud
may require a complex and time-consuming investigation that
involves attorneys, their work, and the work of experts hired
by the attorneys to assist them in the task. A complex,
long-term business relationship is not like an automobile
accident. Fraudulent billing may not be obvious. If it were,
it likely would not be fraud, which inherently relies upon
concealment and deception to succeed. Unlike an automobile
accident, there may be substantial doubt at the outset of a
fraud investigation about whether a fraud occurred, or
whether a loss was caused by fraud. Notwithstanding the
suspicions or facts that triggered the investigation, a party
may conclude, after conducting such an investigation, that no
fraud occurred, or that litigation alleging fraud is not
warranted. The fact that litigation is not initiated, in that
instance, does not mean the investigative work was not in
anticipation of litigation.
where, as here, a complaint is filed, there should be no
penalty attached to pre-suit investigation of whether there
is an adequate factual basis for alleging fraud. An
alternative rule would tend to encourage parties to file suit
on mere suspicion, rather than proper investigation. That is
not a tendency that should be encouraged. The rule Mednax
suggests would force a choice between two unacceptable
alternatives: violating an attorney's professional
obligation to diligently represent a client by ensuring that
“factual allegations have evidentiary support”
(Fed. R. Civ. Pro. 11(b)(3)) or surrendering work-product
protection. I find that Dr. Makuch's regression analysis
was prepared in anticipation of possible litigation and is
subject to protection under the attorney work-product
doctrine. That, however, is not the end of the matter.
“at issue” exception applies and requires
production of some, but not all, of the information sought by
have used Dr. Makuch's regression analysis as a basis for
filing their complaint, and therefore have put the regression
analysis at issue. There is a compelling need for discovery,
because the regression analysis and its data are within
Aetna's sole possession and are the basis of Aetna's
claims against Mednax. In re Sunrise Securities
Litigation, 130 F.R.D. 560, 568-69 (E.D.Pa. 1989).
Nevertheless, plaintiffs have not waived all work-product
protection, only the protection that extends to the
information put “at issue.” Financial
Guaranty Insurance Company v. Putnam Advisory Company,
LLC, 314 F.R.D. 85, 90-91 (S.D.N.Y. 2016). Plaintiffs
have conceded that the regression analysis itself must be
produced, and allege they have produced it, though Mednax
contends the production has been deficient in some respects.
The defendants want additional information that ties the
regression analysis clearly to Aetna's underlying data,
so that the accuracy of the analysis can be tested against
scope of the “at issue” waiver is committed to
the sound discretion of the trial judge. Id. I find
that the scope of the waiver is limited to needs that are
“compelling, ” that is, information that bears
directly on the reliability of the regression analysis and is
within the exclusive control of the plaintiffs. See In re
Sunrise Securities Litigation, 130 F.R.D. at 568-69;
Bird v. Penn Central Co.,61 F.R.D. 43, 47 (E.D.Pa.
1973) (excluding information from waiver where it did not
bear directly on the legal theory put at issue by the
pleadings). I have applied this standard to the information
sought by Mednax and have granted discovery ...