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Hage v. Unumprovident Corp.

January 5, 2006


The opinion of the court was delivered by: Tonianne J. Bongiovanni United States Magistrate Judge


This matter having been open to the Court by letter application by Plaintiff seeking discovery on the RICO allegations, See Plaintiff's Amended Complaint at 17-27 [Docket Entry #7-1]; and the Defendant having objected to the requested discovery as beyond the scope of that authorized by the Honorable Mary L. Cooper, United States District Judge, and this Court having conducted a telephone conference on November 29, 2005 to discuss Plaintiff's request and denying said application; and the Court, at the request of Plaintiff's Counsel, David M. Hoffman, Esq., permitting the parties to submit supplemental briefs; and the Court having reviewed the supplemental submissions of the parties; and the Court noting, pursuant to Fed. R. Civ. P. 26(b), that a court has the discretion to determine the scope and limits of discovery; and for the reasons set forth below, Plaintiff's request for discovery related to or under the RICO count of the Amended Complaint is DENIED.

RICO Discovery & Oral Argument before the Honorable Mary L. Cooper, U.S.D.J.

On July 29, 2005, a hearing was held by the Honorable Mary L. Cooper, U.S.D.J., addressing the Defendant's motion to dismiss; Plaintiff's cross motion for partial summary judgment; and Defendant's cross motion for summary judgment. During argument, Plaintiff sought to obtain discovery on the RICO claim. The dispute before this Court arises based on the parties differing interpretations of Judge Cooper's ruling. Having reviewed the transcript of the July 29, 2005 proceeding, it is this Court's conclusion that Judge Cooper denied Plaintiff's application for discovery having determined that "[the RICO count] would take the Discovery in this case to the stratosphere," (T21:4-6), and discovery on Plaintiff's RICO claim should therefore not be permitted at this time.

Relying on Ketzner v. John Hancock Mut. Life Ins. Co., 118 Fed. Appx. 594 (3d Cir. 2004), Judge Cooper determined that "[b]oth the magistrate judge, and the district court [in Ketzner], were correct in refusing to endorse a fishing expedition to justify the RICO claim when the initial bad faith claim had proved meritless." (T21:18-21). Comparing the instant case's RICO claim to the claims in Ketzner, Judge Cooper held that,

"RICO discovery is stayed, and in the event that plaintiff obtains summary judgment in plaintiff's favor on the bad faith claim, then we will open discovery on the RICO claim, and then we will also decide, with more specificity, whether the RICO claim, in fact, either as framed here, or in any amended pleading to include (indiscernible) cause of action, and we will make the cause of action determination on the RICO claim before we authorize discovery to go forward in this case." (T22:16-24).

This determination was also memorialized in Judge Cooper's order of July 26, 2005, which plainly states, "IT IS FURTHER ORDERED that discovery as to count 4 [the RICO count] of the amended complaint is STAYED pending further order of the Court." [Docket entry #26]. How Judge Cooper could make her ruling any clearer is beyond the ken of this Court.

Plaintiff, however, contends that by referring a discovery request to this Court, Judge Cooper modified her determination. Specifically, Plaintiff's attorney sought "leave to apply for two items of discovery [related to the RICO claim]". (T23:9-10). Plaintiff requested permission to "subpoena my witness, whose affidavit appears in the RICO case statement, Patricia Brownley," (T23:11-12), and also "to be able to subpoena the Georgia documents." (T23:16-17). In response, Judge Cooper stated:

"That sounds as if it's beyond the scope of the processing of this claim, and the company's treatment of the YO policy -- But, however, the magistrate judge will make that decision, at least, in the first instance. If you are aggrieved by the decision, then you always have the right to, in effect, ask for consideration of the magistrate's ruling there." (T23:18-25).

Plaintiff's counsel reiterated that he would only seek these two items and Judge Cooper reasserted her overall concern of the "judicial task" of grappling with a RICO claim when there are a number of threshold claims. (T24:1-9).

Plaintiff's Letters of August 26, 2005 and December 1, 2005

Plaintiff, by letter dated August 26, 2005, proposed "the allowance of limited RICO discovery." Arguing that "all but a few pieces of the discovery necessary to try the RICO aspect of Hage" had been assembled. Subsequent to the telephone conference, Plaintiff submitted a letter, dated December 1, 2005, requesting the issuance of subpoenas:

1. Subpoenas to third parties related to The Georgia Report, See RICO Case Statement (RCS), Exhibit F(d) and (e); including preliminary drafts, source documentation and analysis and related correspondence; together with preliminary drafts, source documentation and analysis and related correspondence regard related inquiry by or on behalf of the Georgia Department of Insurance after March 19, 2003.

2. Subpoenas to third party witnesses, including some who may be constrained by settlement or confidentiality agreements with UnumProvident ...

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