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Cooper Health System v. Virtua Health

August 4, 2009

THE COOPER HEALTH SYSTEM, PLAINTIFF,
v.
VIRTUA HEALTH, INC., DEFENDANT.



OPINION AND ORDER

This matter is before the Court on the "Motion of Non-Parties The Star Group and Plesser & Clifford for Protective Order" (hereinafter collectively "moving parties"). [Doc. No. 39]. The issue to be addressed is whether the non-parties' allegedly privileged and irrelevant documents must be produced to plaintiff. The Court has received plaintiff's opposition [Doc. No. 47] and the moving parties' reply [Doc. No. 57]. The Court has exercised its discretion to decide the moving parties' motion without oral argument (see Fed. R. Civ. P. 78 and L. Civ. R. 37.1(b)(3)). For the reasons discussed herein, the moving parties' motion is GRANTED in part and DENIED in part.*fn1

Background

By way of brief background, this case involves a dispute between a local hospital and health care system over their respective advertisements. The Star Group ("Star") is defendant's advertising agency of record. Star contends that Plesser & Clifford ("Plesser") is an independent research firm that performed "certain services" for Star related to Star's work for defendant. Moving Parties' Brief at 1, Doc. No. 39. This action was originally filed in New Jersey Superior Court, Camden County, Chancery Division, on February 11, 2009, and was removed to this court on February 20, 2009. While the action was pending in state court the Honorable Mary E. Colalillo entered a February 11, 2009 Order temporarily enjoining defendant from engaging in the publication and distribution of certain advertising. On February 18, 2009, Judge Colalillo modified her February 11, 2009 Order and entered temporary injunctive relief. Defendant removed the action to this court on February 20, 2009.

On February 11, 2009, Star was served with plaintiff's subpoena asking for the production of documents on February 16, 2009. On February 18, 2009, the moving parties produced documents. Star supplemented its production on February 19, 2009. On March 9, 2009, Plesser served additional documents in response to another subpoena plaintiff served. Brief at 2-3. On February 17, 2009, Judge Colalillo held a hearing on Star's motion to quash filed on February 13, 2009. Star contends it agreed at the hearing to produce documents from itself and Plesser by the next day, without waiving any of its objections. Star and Plesser allege that Judge Colalillo directed them to produce documents but to redact objectionable material "pending further determination." Brief at 2. After Plesser was served with plaintiff's subpoena in this case, it produced additional documents and a privilege log listing twelve documents "withheld by virtue of attorney client, work product, litigation strategy, and relevancy." Brief at 2-3.

The documents Star produced to plaintiff contained redactions. Star alleges its redactions fit into three categories (1) the amount of the monthly agency fee Virtua paid Star "which information is highly sensitive," (2) the amount Star charges Virtua for advertising and marketing work performed by vendors and media outlets "which are rates specially negotiated by The Star Group with such third parties and which information is highly sensitive," and (3) strategic recommendations from Star to Virtua for future advertising which is "highly sensitive." Brief at 3.

Plesser claims it withheld documents concerning (1) Cooper's attempt to obtain a temporary restraining order against Virtua, (2) Cooper's subpoena to Plesser, and (3) decisions regarding Plesser's representation and selection of counsel. Brief at 3. Plesser argues, "[b]ecause Cooper has criticized the work of Plesser performed for The Star Group, and The Star Group's work in turn for Virtua, both Plesser and The Star Group share a substantially similar legal interest in ensuring that Cooper's criticism's (sic) of the work are disproven." Brief at 3-4.

Plesser also objects to plaintiff's request for six reports prepared for Plesser's clients including Star. These reports were identified by Mr. Bernard Plesser during his April 29, 2009 deposition. The reports are: Medical Monitor Studies (2), TEVA Study, Tinea Pedis Study, St. Clair's Hospital Study and Cancer Cooperative Group Study. Brief at 4. Plesser claims "these reports are not the property of Plesser and Plesser does not believe that he has the authority to release them." Brief at 4. Star, which only owns the Medical Monitor Studies, objects to the production of the reports because they are irrelevant to plaintiff's claims. Id.

Plaintiff argues the withheld documents are not protected by the community of interest privilege. Plaintiff also argues that Star's redactions are excessive and exceed what was permitted by Judge Colalillo's February 18, 2009 Order and her February 17, 2009 ruling. Brief at 22, Doc. No. 47. In addition, plaintiff argues that Star and Plesser do not have standing to object on relevancy grounds to the production of the requested documents. The Court has reviewed in camera Star's redacted documents and Plesser's documents withheld on the grounds of privilege.

Discussion

Star's Redactions

Plaintiff's basic dispute with Star is its claim that Star's redactions "far exceed the advertising rate information." Brief at 21. Plaintiff also claims that Star's redactions "clearly far exceed that permitted by [Judge Colalillo in her] ... February 18, 2009 Order and as stated by the Court during the February 17,2009 hearing." Brief at 23. Plaintiff concludes "that this Court has no power to modify or alter the prior Order of Judge Colalillo" (id.) and, therefore, Star's motion should be denied. Star disputes that Judge Colalillo limited its redactions in the manner alleged by plaintiff.

In order to decide the present motion the Court does not have to determine the precise parameters of Judge Colalillo's directions to the parties. This is so because the Court will independently review Star's documents to decide what is discoverable and should be produced. Plaintiff is incorrect when it argues that the Court may not modify or alter Judge Colalillo's Orders.

After a state court action is removed to federal court the "case will then proceed as if it had been brought in the federal court originally." Tehan v. Disability Management Services, Inc., 111 F. Supp. 2d 542, 547 (D.N.J. 2000)(citations omitted). As to orders that were previously entered in the state case, they remain in full force and effect until dissolved or modified by the district court. 28 U.S.C. §1450. This statute does not set forth the standard a federal court should apply to determine if it should dissolve or modify orders or judgments entered in a state case. "Instead, the orders or judgments entered by the state court prior to removal should be treated as orders or judgments entered by the district court." Tehan, 111 F. Supp. 2d at 547. This means that a district court has the power to enforce, continue or modify orders of the state court as it would any such order it might itself have entered. Id. See also James Wm. Moore, Moore's Federal Practice, §107.31[3] (3d ed. 2008) ("[i]n general, the federal court takes the case on removal exactly as the case stood in state court. Accordingly, the state court pleadings, any discovery had, orders entered, or proceedings will be presumed valid by the district court." Also stating, "[s]tate court rulings (including discovery orders and all other orders up to and including judgment) remain in effect until modified or supplanted by the federal court").

Judge Colalillo's Orders and directions to the parties were interlocutory. An interlocutory order "may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." Fed. R. Civ. P. 54(b). Although a court has the power to revisit prior decisions, it should hesitate to do so absent a change in circumstances such as when new evidence is available. See Pub. Interest Research Group of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 116-17 (3d Cir. 1997). Although this Court has the utmost respect for Judge Colalillo, the Court finds it appropriate to re-examine her discovery Orders. This is necessary because the case is now subject to federal rather than state discovery rules. Also, ...


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