Judge Michelle Williams Court, Case 19STCV30239 2022-08-12 Tentative Ruling

Judge: Michelle Williams Court, Case: 19STCV30239, Date: 2022-08-12 Tentative Ruling

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Case Number: 19STCV30239 Hearing Date: August 12, 2022 Dept: 74

19STCV30239 THE WONDERFUL COMPANY LLCvs ANTHEM BLUE CROSS LIFE AND HEALTH INSURANCE COMPANY

Defendant Anthem Blue Cross Life and Health Insurance Company’s Motion to Compel: (1) Deposition of Person Most Knowledgeable on Topic Nos. 4, 7, 8, 10, 12, 15 and 17; (2) Completion of Deposition of Person Most Knowledgeable on Topic Nos. 6, 9, 11 and 16; (3) Testimony and Relevant Documents Related to the UCLA Review; and (4) Completion of Deposition of Stephen Howe

TENTATIVE RULING: Defendant Anthem Blue Cross Life and Health Insurance Company’s Motion to Compel: (1) Deposition of Person Most Knowledgeable on Topic Nos. 4, 7, 8, 10, 12, 15 and 17; (2) Completion of Deposition of Person Most Knowledgeable on Topic Nos. 6, 9, 11 and 16; (3) Testimony and Relevant Documents Related to the UCLA Review; and (4) Completion of Deposition of Stephen Howe is GRANTED in part.

The motion is GRANTED as to Topics Nos. 4, 6, 7, 8, 10, 12, 15, 16, and 17. The motion is DENIED as to Topics Nos. 9 and 11.

The motion is DENIED to the extent it seeks to overrule TWC’s privilege objections.

The motion is GRANTED as to the request to compel Howe to complete his deposition as a percipient witness.

Plaintiff TWC is ordered to produce a person or persons most qualified as to Topics Nos. 4, 6, 7, 8, 10, 12, 15, 16, and 17, as well as Howe in his individual capacity, for deposition no later than September 15, 2022.

Background

On August 22, 2019, Plaintiff The Wonderful Company LLC (“TWC”), on behalf of itself and other similarly situated, filed a complaint against Defendants Anthem Blue Cross Life and Health Insurance Company (“ABCLH”) and Lucile Packard Children’s Hospital Standard. The operative First Amended Complaint asserts causes of action for: (1) breach of the implied covenant of good faith and fair dealing; (2) breach of fiduciary duty; (3) accounting; (4) violation of the Cartwright Act (price fixing) (Bus. & Prof Code, § 16720, et seq.); (5) unreasonable restraint of trade (Bus. & Prof Code, § 16720, et seq.); (6) combination to monopolize in violation of the Cartwright Act (Bus. & Prof. Code, § 16720, et seq.); and (7) violation of Cal. Bus. & Prof. Code Section 17200, et. seq.

TWC alleges Defendant ABCLH violated the implied covenant of good faith and fair dealing and its fiduciary duties by inflating medical bills to TWC’s detriment, failing to disclose negotiated rates, and threatening to remove TWC from the insurance network. TWC also alleges the Defendants unlawfully control, fix, or tamper with the prices for acute care services for children by entering into secret price agreements and consolidating healthcare practices.

Motion

Defendant ABCLH moves the Court to compel Plaintiff TWC to provide a Person Most Qualified to testify as to Topics Nos. 4, 7, 8, 10, 12, 15 and 17, provide further testimony as to Topics Nos. Topic Nos. 6, 9, 11 and 16, responses to questions to which the witness was instructed not to answer, and the completion of the deposition of Stephen Howe.

Opposition

In opposition, TWC contends it met its obligations to produce a person most qualified as to the topics it produced a witness for, the remaining topics are impermissibly overbroad, its privilege objections are meritorious, and it never refused to produce Howe for his continued deposition.

Reply

In reply, ABCLH argues the topics meet the standard of reasonable particularity, TWC failed to adequately inform Howe as its designated witness, the privilege objection lacks merit, and TWC must produce Howe for his continued deposition.

Improper Citations to Superior Court Orders

In support of its motion and reply, ABCLH cites numerous California Superior Court rulings. (Mot. at 8:16-9:8; Reply at 4:18, 8:4-10, 8:17-20.) The Court disregards these citations. (Aguirre v. Amscan Holdings, Inc. (2015) 234 Cal.App.4th 1290, 1299 n.5 (“Rule 8.1115 of the California Rules of Court prohibits the citation of unpublished opinions of California state courts, with certain limited exceptions. (Cal. Rules of Court, rule 8.1115(a).) We shall disregard the unpublished superior court opinions cited and relied upon by plaintiff.”); (See City of Bakersfield v. West Park Home Owners Assn. & Friends (2016) 4 Cal.App.5th 1199, 1210 (“trial court orders hold no precedential value. Accordingly, we will neither rely upon, nor take judicial notice of, these orders.”) (internal citation omitted).)

Discussion

Standard

ABCLH brings its motion pursuant to Code of Civil Procedure section 2025.450(a), which provides: “[i]f, after service of a deposition notice, a party to the action or an officer, director, managing agent, or employee of a party, or a person designated by an organization that is a party under Section 2025.230, without having served a valid objection under Section 2025.410, fails to appear for examination, or to proceed with it, or to produce for inspection any document, electronically stored information, or tangible thing described in the deposition notice, the party giving the notice may move for an order compelling the deponent’s attendance and testimony, and the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.”

The motion must be accompanied by a meet and confer declaration and “shall set forth specific facts showing good cause justifying the production for inspection of any document, electronically stored information, or tangible thing described in the deposition notice.” (Code Civ. Proc. § 2025.450(b).) “[W]hen the deponent fails to attend the deposition and produce the documents, electronically stored information, or things described in the deposition notice, [the motion must be accompanied] by a declaration stating that the petitioner has contacted the deponent to inquire about the nonappearance.” (Code Civ. Proc. § 2025.450(b)(2).) “Implicit in the requirement that counsel contact the deponent to inquire about the nonappearance is a requirement that counsel listen to the reasons offered and make a good faith attempt to resolve the issue.” (Leko v. Cornerstone Bldg. Inspection Serv. (2001) 86 Cal.App.4th 1109, 1124.) The opposing party bears the burden to justify any objections. (See e.g. Kirkland v. Superior Court (2002) 95 Cal. App.4th92, 98.)

While not cited by ABCLH, some of the relief sought in ABCLH’s motion is more properly based upon Code of Civil Procedure section 2025.480(a), which provides “[i]f a deponent fails to answer any question or to produce any document, electronically stored information, or tangible thing under the deponent's control that is specified in the deposition notice or a deposition subpoena, the party seeking discovery may move the court for an order compelling that answer or production.” The “motion shall be made no later than 60 days after the completion of the record of the deposition, and shall be accompanied by a meet and confer declaration under Section 2016.040.” (Code Civ. Proc. § 2025.480(b).) “If the court determines that the answer or production sought is subject to discovery, it shall order that the answer be given or the production be made on the resumption of the deposition.” (Code Civ. Proc. § 2025.480(i).) The motion must be accompanied by a separate statement. (Cal. R. Ct., rule 3.1345.)

“Because of the similarity of California and federal discovery law, federal decisions have historically been considered persuasive absent contrary California decisions.” (Liberty Mutual Ins. Co. v. Superior Court (1992) 10 Cal.App.4th 1282, 1288.)

Background of Discovery and Meet and Confer

On January 12, 2022, ABCLH served the Third Amended Notice of Taking the Videotaped Deposition of Stephen Howe in his individual capacity with the deposition set for March 23, 2022. (Braje Decl. ¶ 3, Ex. B.) On January 31, 2022, ABCLH served the Notice of Taking the Videotaped Deposition of The Wonderful Company LLC’s Person(s) Most Qualified with the deposition set for March 9, 2022. (Id. Ex. C.)

On March 23, 2022, TWC served objections to the person most qualified deposition notice objecting to every deposition topic and document request. (Id. Ex. D.) The parties met and conferred regarding the objections and agreed Howe would appear in both his individual and representative capacity on March 23, 2022. (Id. ¶ 6.) Howe appeared in response to Topics Nos. 1, 2, 3, 5, 6, 9, 11, 13, and 16 and the parties agreed to keep the deposition open with the next Howe deposition to take place on May 9, 2022. (Id. ¶ 9.)

On April 5, 2022, ABCLH sent a meet and confer letter arguing TWC must produce a witness as to the other topics listed in the notice, TWC must properly educate Howe to testify regarding Topics Nos. 1, 2, 3, 6, 9, 11, 13, and 16, and TWC improperly instructed Howe not to answer questions regarding the UCLA review. (Id. Ex. E.) TWC sent a responsive letter on April 27, 2022. (Id. Ex. F.) Despite TWC’s previous agreement to resume Howe’s deposition on May 9, 2022, TWC informed ABCLH on May 4, 2022 that it would not make Howe available on that date because the parties had not yet resolved their disagreement regarding the scope and substance of his PMQ testimony. (Id. Ex. I.) ABCLH disagreed that the deposition needed to be postponed pending the resolution of their disputes. (Id. Ex. J.) The parties conducted a further meet and confer via telephone on May 9, 2022. (Id. ¶ 18.) On May 12, 2022, TWC sent a letter indicating its position that it satisfied its obligations and would stand on its objections. (Id. Ex. K.) The parties satisfied the meet and confer requirement as to the issues raised in the motion.

Topics Nos. 4, 7, 10, 12, 15 and 17

Topics Nos. 4, 7, 10, 12, 15, and 17 all seek “All COMMUNICATIONS” regarding the following:

Topic 4 – the Administrative Services Agreement between TWC and ABCLH effective January 1, 2014, and/or any amendment to the agreement.

Topic 7 – stop loss coverage at any time since 2014.

Topic 10 – patient J.J.

Topic 12 – patient I.C.

Topic 15 – any and all complaints and/or criticisms of ABCLH’s performance under the Administrative Services Agreement between TWC and ABCLH effective January 1, 2014, and/or any amendment to the agreement

Topic 17 – any audit related to patient claim(s) processed by ABCLH pursuant to the Administrative Services Agreement including, but not limited to the NBAS audit.

(Braje Decl. Ex. C.) “COMMUNICATIONS” are defined as “any transmission or exchange of information, ideas or thought(s), between or among two or more PERSONS, orally or in writing, and includes any conversation or discussion, whether face-to-face or by means of a telephone, telegraph, telex, telecopier, facsimile transmission, general mail, email, instant messaging, electronic device, or other any other medium.” (Ibid.)

TWC did not produce a witness for these topics, concedes their relevance in its opposition, argues it produced Howe to testify as to similar topics, but objects to being required to produce a witness to testify as to “all communications.” (Opp. at 5:17-7:27.) TWC argues “[t]he obligation rests on Anthem, not TWC’s PMQ, to review all communications in its own records and those produced by TWC in the action. It is not the obligation of TWC’s PMQ to review all such communications as to every topic in the notice, so that he can be prepared to answer questions as to any email on any of the topics.” (Opp. at 7:18-21.)

As noted by ABCLH in reply, (Reply at 4:19-21), TWC does not support its arguments regarding these topics with citations to any relevant authority. ABCLH’s topics are reasonably particularized, seeking communications related to limited topics, and it is the TWC’s burden to educate its witnesses. (Maldonado v. Superior Court (2002) 94 Cal.App.4th 1390, 1395–1396 (“[i]f the subject matter of the questioning is clearly stated, the burden is on the entity, not the examiner, to produce the right witnesses. And, if the particular officer or employee designated lacks personal knowledge of all the information sought, he or she is supposed to find out from those who do!”).) Nothing prevents TWC from designating different individuals for different topics to lessen the burden upon natural persons. (Maldonado, supra, 94 Cal.App.4th at 1396 (“Certainly, no single person is expected to be familiar with the total contents of a corporation's files.”); Code Civ. Proc. § 2025.230.)

Under similar circumstances, federal courts overrule objections based upon burden such as those asserted by TWC here. (See e.g. MedImmune, LLC v. PDL Biopharma, Inc. (N.D. Cal., Dec. 17, 2009, No. C08-05590 JF (HRL)) 2009 WL 5069142, at *2 (“As other courts have noted, ‘it is not uncommon’ for a company to claim that a Rule 30(b)(6) deposition would cause an undue burden because it no longer employs anyone with personal knowledge of the events at issue. [Citation.] Yet PDL is not relieved of its obligation to prepare one or more designees on this ground alone.”); Sprint Communications Co., L.P. v. Theglobe.com, Inc. (D. Kan. 2006) 236 F.R.D. 524, 528 (“Although the Court readily acknowledges that the requirements listed above may be onerous, the burden upon such a responding entity is justified since a corporation can only act through its employees.”).)

The motion is GRANTED as to Topics Nos. 4, 7, 10, 12, 15, and 17.

Topic No. 8

Topic No. 8 seeks testimony regarding “Any and all reports and/or invoices provided by ABCLH to TWC at any time during the time period 2014-19 including, but not limited to, enrollment reports, claims reports, high cost claimant reports, lag reports, OOP reports, transplant reports, health condition reports and monthly reports.” (Braje Decl. Ex. C.) TWC contends “neither Howe nor any other individual at TWC can testify as to these incredibly broad categories of documents, for the thousands of insureds covered by TWC’s benefits plans, over a five year period. Since the request is not described with reasonable particularity, Anthem is not entitled to depose TWC’s PMQ on this topic.” (Opp. at 8:7-10.) TWC does not cite any specific authority or evidence supporting this argument and therefore has failed to meet its burden. The Court finds the topic meets the standard of reasonable particularity.

The motion is GRANTED as to Topic No. 8.

Topics Nos. Topic Nos. 6, 9, 11 and 16

As relevant here, TWC produced Howe as its person most qualified to testify as to Topics Nos. 6, 9, 11, and 16. ABCLH contends Howe was not adequately prepared to testify as required. TWC has a duty to produce “the most knowledgeable person currently in its employ and making sure that that person has access to information and documents reasonably available within the corporation.” (Maldonado, supra, 94 Cal.App.4th at 1398.)

Topic No. 6 sought testimony regarding “[a]ny and all stop loss coverage in place with respect to TWC’s self-funded health benefit plan(s) at any time since 2014.” (Braje Decl. Ex. C.) ABCLH cites a portion of Howe’s testimony wherein he responded to the question “Did The Wonderful Company discuss the stop loss issue with Anthem back in 2015?” with “I don’t know,” and also admitted to not knowing whether TWC communicated “with Mercer about these things by email.” (Id. Ex. G, Howe Depo. at 264:14-23.) In opposition, TWC attempts to place the burden upon ABCLH to identify the deposition topics with more specificity than is required. (Opp. at 10:4-10 (“If Anthem wanted to know more specific information about the identity of TWC’s carrier in 2014 or the substance of any communications with stop-loss carriers in 2015 (which, in any event, is better memorialized by documents), then Anthem could have specifically identified those as topics in its PMQ deposition notice.”).) The testimony indicates TWC failed to adequately inform its designated deponent as to Topic No. 6 and further testimony is warranted. The motion is GRANTED as to Topic No. 6.

Topic No. 9 sought testimony regarding “[t]he treatment provided by Lucile Packard Children’s Hospital to patient J.J. and the claim(s) associated with that treatment” and Topic No. 11 sought testimony regarding “[t]he treatment provided by Lucile Packard Children’s Hospital to patient I.C. and the claim(s) associated with that treatment.” (Braje Decl. Ex. C.) In its separate statement, ABCLH cites testimony in which it asked whether “the Wonderful Company contend[s] that J.J.’s transplant surgery wasn’t necessary from a medical perspective” and Howe responded that he was not a doctor and “can’t tell people what’s medically necessary or not.” (Braje Decl. Ex. G, Howe Depo. at 245:5-18.) TWC indicates there is no person most qualified to testify regarding treatment and it did not have access to their medical records. (Opp. at 10:24-11:9.) In reply, ABCLH argues it is “asking about TWC’s contentions in this case, it is not asking TWC’s witness to offer a medical opinion.” (Reply at 9:2-3.) However, ABCLH’s contention questions are not the proper subject of deposition discovery. (See e.g. Rifkind v. Superior Court (1994) 22 Cal.App.4th 1255, 1262 (“If the deposing party wants to know facts, it can ask for facts; if it wants to know what the adverse party is contending, or how it rationalizes the facts as supporting a contention, it may ask that question in an interrogatory.”).) The motion is DENIED as to Topics Nos. 9 and 11.

Topic No. 16 sought testimony regarding “[a]ny audit related to patient claim(s) processed by ABCLH pursuant to the Administrative Services Agreement including, but not limited to, the NBAS audit.” (Braje Decl. Ex. C.) ABCLH notes Howe did not know “how much time . . . NBAS spen[t] auditing the . . . J.J. claim” or “how much The Wonderful Company paid for the audit.” (Braje Decl. Ex. G, Howe Depo. at 188:17-24.) Howe admitted he did not “ask anybody about the fees or costs associated with the NBAS audit.” (Id. at 189:13-16.) While TWC argues “Anthem complains Howe was unable to answer only two questions about the NBAS audit” and “[a] PMQ deposition is not meant to be a memory test,” (Opp. at 11:16-20), the testimony demonstrates Howe did not inquire as to the cost or fees associated with the audit. Accordingly, Howe was not adequately prepared, and further testimony is warranted. The motion is GRANTED as to Topic No. 16.

The parties disagree whether Topic 16 seeking testimony about an “any audit” includes the UCLA review, which Howe testified was not an “audit.” (Opp. at 8:20-9:1; Traboulsi Decl. Ex. A, Howe Depo. at 217:10-13; Reply at 6:9-22.) The definition of “audit” includes a “review.” (See e.g. Graydon-Murphy Oldsmobile v. Ohio Cas. Ins. Co. (1971) 16 Cal.App.3d 53, 60 (“Webster's Seventh New Collegiate Dictionary (1969) defines ‘audit’ in the following manner: ‘1 a: a formal or official examination and verification of an account book; b: a methodical examination and review.”).) Accordingly, the Court agrees with ABCLH that the UCLA review falls within the scope of Topic No. 16. However, it is unclear, based upon the Court’s discussion below, whether a witness for TWC will be able to provide non-privileged testimony related to the review.

Privilege Instruction

“The party claiming the privilege has the burden of establishing the preliminary facts necessary to support its exercise, i.e., a communication made in the course of an attorney-client relationship. [Citations] Once that party establishes facts necessary to support a prima facie claim of privilege, the communication is presumed to have been made in confidence and the opponent of the claim of privilege has the burden of proof to establish the communication was not confidential or that the privilege does not for other reasons apply.” (Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 733.) “[T]he privilege attaches to any legal advice given in the course of an attorney-client relationship.” (Ibid.) “The attorney-client privilege attaches to a confidential communication between the attorney and the client and bars discovery of the communication irrespective of whether it includes unprivileged material.” (Id. at 734. See also Mitchell v. Superior Court (1984) 37 Cal.3d 591, 601 (“Neither the statutes articulating the attorney-client privilege nor the cases which have interpreted it make any differentiation between ‘factual’ and ‘legal’ information.”).)

ABCLH notes that TWC’s counsel instructed Howe not to answer certain questions about the UCLA review based upon the attorney client privilege. (Mot. at 12:1-13:17.) Howe testified that he believed “one of the lawyers called over to UCLA and asked them questions to someone over there about the bill.” (Braje Decl. Ex. G, Howe Depo. at 213:13-15.) ABCLH then asked whether Howe knew “what information the lawyer provided to UCLA” and TWC’s counsel instructed “I'm going to object to the -- well, just caution you, Steve, that any information that she asks you about that you received directly from an attorney tell her that you received that information from the attorney so that she -- so you don't testify about it.” (Id. at 213:21-214:1.) Howe then responded to various questions about the UCLA audit stating the information he had all came from an attorney. (Id. at 214:10-221:16.) Howe could only identify an attorney as the person from TWC who communicated with UCLA. (Id. at 217:4-6.)

The Court finds TWC’s objections meritorious. ABCLH contends TWC’s counsel maintained the instruction “despite the fact that counsel for Defendants emphasized that TWC was ‘misstating the law’ because the questions asked sought ‘factual matter’ rather than ‘legal advice.’” (Mot. at 12:24-26.) However, this is not a material distinction under California law. (Mitchell, supra, 37 Cal.3d at 601 (“Real parties' further contention that their inquiries about warnings to Ms. Mitchell from her attorney are not privileged since they involve “factual information” as opposed to “legal advice” must similarly be rejected.).) ABCLH also focuses upon case law involving the transmission of facts to an attorney, (Reply at 6:23-7:8), which is not the situation here. Howe testified the information he received regarding the UCLA review only came from TWC’s counsel. Accordingly, ABCLH’s statement that “these questions do not ask for Howe’s communications with the Roll Law Group nor his counsel’s conclusions,” (Reply at 7:16-18), is incorrect and requiring ABCLH to obtain information from UCLA does not “undermine[] any claim of privilege.” (Mot. at 13:11-13.) While facts are not privileged, if the only way a deponent learned of those facts is through counsel operating within the attorney-client relationship, the privilege applies to ABCLH’s questioning. (Mitchell, supra, 37 Cal.3d at 601; DP Pham, LLC v. Cheadle (2016) 246 Cal.App.4th 653, 666 (“The privilege therefore protects the confidential communication or transmission of information between an attorney and a client regardless of whether the information transmitted is otherwise privileged.”).) The motion is DENIED to the extent it seeks to overrule TWC’s privilege objections.

Howe Deposition

Finally, ABCLH notes TWC did not comply with its agreement to continue Howe’s deposition on May 9, 2022 and the parties’ dispute did not apply to Howe’s deposition as a percipient witness. (Mot. at 15:6-14.) In opposition, TWC contends it never refused to produce Howe as a percipient witness, but only sought to avoid having him appear separately after the ABCLH previously deposed him in both capacities on the same date. (Opp. at 11:26-12:3.) In reply, ABCLH contends “TWC is not entitled to hamstring ABCLH’s discovery in this case by conditioning the completion of Mr. Howe’s deposition on resolution of other discovery disputes” and failed to provide alternative dates for the continued deposition. (Reply at 9::16-10:11.) ABCLH requests the Court grant the motion and “require TWC to provide several, alternative dates for the completion of Mr. Howe’s deposition on or before September 15, 2022.” (Reply at 10:10-11.) Counsel for ABCLH is unavailable from August 15 through August 24. (Braje Reply Decl. ¶ 3.) The evidence is sufficient to demonstrate Howe refused to proceed with his deposition on May 9, 2022. Additionally, the Court has resolved the discovery disputes that served as the basis for this refusal.

The motion is GRANTED as to the request to compel Howe’s continued deposition as a percipient witness.