Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

New Jersey Physicians United Reciprocal Exchange v. Medical Protective Co., Inc.

United States District Court, D. New Jersey

August 23, 2017

NEW JERSEY PHYSICIANS UNITED RECIPROCAL EXCHANGE Plaintiff,
v.
THE MEDICAL PROTECTIVE COMPANY, INC., Defendants.

          MEMORANDUM OPINION

          TONIANNE J. BONGIOVANNI UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court upon The Medical Protective Company, Inc. d/b/a Princeton Insurance Company's (“Princeton”) motion to strike New Jersey Physicians United Reciprocal Exchange's (“NJPURE”) economic expert reports. [Docket Entry No. 134]. NJPURE opposes Princeton's motion. The Court has reviewed all arguments raised in support of and in opposition to Princeton's motion and considers same without oral argument pursuant to L.Civ.R. 78.1(b). For the reasons set forth more fully below, Princeton's motion to strike is GRANTED in part.

         I. Background and Procedural History

         NJPURE is a not-for-profit reciprocal interinsurance exchange which provides medical malpractice insurance to physicians and other potential policyholders. (Compl. ¶1). Princeton is a for-profit entity organized for the purpose of engaging in the insurance business, including medical malpractice insurance. (Id. ¶¶ 2, 17; Princeton Answer ¶¶ 2, 17).

         On April 10, 2013, NJPURE filed suit against Princeton. Through its Complaint, it claims that Princeton has and continues to make false or misleading written and oral statements to the public about NJPURE's business operations and insurance services.[1] The only false or misleading statements referenced in the Complaint are Princeton's annual “Marketplace Updates, ” which NJPURE refers to as the “False Comparative Advertisements.” (Id. ¶ 28). NJPURE alleges that the “Marketplace Updates” offer misleading or false comparisons between its financials and those of its for-profit competitors, such as Princeton. (Id. ¶ 30). Based on Princeton's distribution of the “Marketplace Updates, ” NJPURE has asserted a claim against Princeton for violations of the Lanham Act, Section 43, 15 U.S.C. § 1125(a) (Unfair Competition) as well as New Jersey common law claims for libel, libel per se, trade libel and tortious interference with prospective contractual relationships. (Id. ¶¶ 4-6; 72-108).[2]

         Prior to filing suit against Princeton, NJPURE filed a Complaint, since twice amended, against Boynton & Boynton, Inc. (“Boynton”) and Kevin Byrne (“Byrne”) (collectively, the “Boynton Defendants”). (See Civil Action No. 12-5610). Boynton is an insurance agency in the business of selling medical malpractice insurance. (See Second Am. Compl. ¶2 in Civil Action No. 12-5610; Answer to Am. Compl. ¶ 2 in Civil Action No. 12-5610).[3] Byrne is a licensed agent of Boynton. (See Id. ¶ 3; Answer to Am. Compl. ¶3 in Civil Action No. 12-5610). Through its Second Amended Complaint, NJPURE claims that Boynton and Byrne have and continue to make false or misleading written and oral statements to the public about NJPURE's business operations and insurance services. As examples of the Boynton Defendants' false or misleading statements, NJPURE relies on email exchanges between Byrne and two specifically identified prospective clients of NJPURE, as well as on “Marketplace Updates” issued by the Boynton Defendants to NJPURE's prospective clients. NJPURE alleges that the “Marketplace Updates” offer misleading or false comparisons between its financials and those of its for-profit competitors served by the Boynton Defendants. (Second Am. Compl. ¶ 24 in Civil Action No. 12-5610). Given the Boynton Defendants' alleged scheme to disseminate libelous and slanderous information about NJPURE to the public via email and other media, NJPURE has asserted claims against Boynton and Byrne for violations of the Lanham Act, Section 43, 15 U.S.C. § 1125(a) (Unfair Competition), as well as New Jersey common law claims for libel, libel per se, slander, slander per se, trade libel and tortious interference with prospective contractual relationships. (Id. ¶¶ 5-7; 92-139).[4]

         While NJPURE sought to consolidate the matters it separately filed against Princeton and the Boynton Defendants, the District Court determined that it would not be appropriate, at least at that juncture, to consolidate both cases for trial purposes. In reaching this conclusion, the District Court found:

[W]hile both cases involve allegations of the “Market Updates, ” the Boynton Action clearly contains unrelated claims and allegations based on false written and oral statements made by the Boynton Defendants to customers in an effort to s[ell] malpractice insurance policies that are not present in the Princeton Action. These additional factual and legal issues predominate the Boynton Action, and significantly, they are irrelevant to the Princeton Action; as such, it would not be appropriate to try these cases at the same time.

(Letter Order of 3/23/2015 at 2; Docket Entry No. 72). Nevertheless, given the overlap between the two cases, “both actions concern allegations of Princeton's false advertisement campaign and how those false publications affected NJPURE[, ]” the District Court consolidated the matters for discovery purposes. (Id.) Since that time, discovery in the two cases has proceeded along the same schedule and the Court's discovery orders have been simultaneously entered in both cases. Two such orders are primarily relevant to Princeton's pending motion to strike.[5]

         First, on October 19, 2015, the Court entered a Letter Order addressing the damages related discovery NJPURE was to produce:

With respect to Princeton's request for discovery concerning NJPURE's damages, the Court agrees that the time has come for NJPURE to identify, with some specificity, what its damages are. Rule 26(a)(1)(A)(iii) requires a party to provide “a computation of each category of damages claimed by the disclosing party - who must also make available for inspection and copying as under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based, including materials bearing on the nature and extent of injuries suffered[.]” While the precise amount of damages allegedly suffered by NJPURE may be determined at trial, NJPURE is obligated to produce damages related discovery. As a result, to the extent it has not done so, NJPURE is directed to supplement its Initial Disclosures regarding damages as well as its responses to Princeton's damages related discovery requests, such as RPDs # 31 & 44, and Interrogatory # 13. NJPURE must complete this supplementation no later than October 30, 2015.

(Letter Order of 10/19/2015 at 2; Docket Entry No. 93).

         Second on December 10, 2015, in response to a dispute raised by Princeton regarding the sufficiency of the damages related discovery produced by NJPURE, the Court entered a Letter Order finding:

The Court is underwhelmed by NJPURE's response / production regarding damages. It is clear that at this juncture that its claim of damages is speculative. While the Court appreciates that precision with respect to damages may come via expert discovery and that a damages calculation may evolve over time and become fine-tuned by the time of trial, at this instant, to speak colloquially, N.J. Pure appears to have nothing. Indeed, NJPURE's supplementation of its Initial Disclosures with respect to damages stated in total:
Plaintiff has asserted in Counts Four and six of the Second Amended Complaint claims of Libel per se and Slander per se for which damages are presumed as a matter of law. See d.g, MacKay v. CSK Publ. Co., Inc., 300 N.J.Super. 599 (App. Div. 1997). Plaintiff seeks all such presumed damages against defendants in this matter.
In addition to the foregoing, plaintiff seeks all damages pursuant to the Lanham Act, 15 U.S.C. § 1051, et seq., including but not limited to plaintiff's lost profits, the profits of defendants attributable to the actionable conduct, and corrective advertising expenses. Plaintiff's investigation into the full scope of damages is ongoing and continuing. To date, plaintiff has identified the following insureds/potential insureds whose business was lost in substantial part due to defendants' wrongful conduct as described in the complaint and discovery exchanged: Dr. Mary Anne Fury; Dr. Babak Behin; Dr. Ghassan Khani; Dr. Marc Levine; Dr. Joshua Wolpert; Dr. Mark Ditmar; Dr. Pavlinka Dundeva-Baleva; Dr. Aravinda Reddy; Dr. Sandra Ann Mead; Dr. Babatunji Omotoso; Dr. Mansoora Chaudry; Dr. Mainish Saini; Dr. Julie Lorber; Dr. Fauzia Hameed; Dr. Patricia Graham; Dr. James Schlesinger; Dr. Eugene Jerome Lind; Dr. Phillip Paparone; Dr. Lisa Simone Vernon, Pulmonary & Allergy Associates, P.A. and University Radiology Group.
Plaintiff believes that the amount of monetary damages caused by the defendants' wrongful conduct as described in the complaint and discovery to be in excess of $2, 000, 000. Plaintiff has not yet retained expert witnesses with regard to the exact quantum of damages.
Plaintiff reserves the right to amend and/or supplement the foregoing responses as discovery continues in this matter.

(Letter from Manuel J. Almeida, Jr. to James M. Nardelli of 10/30/2015).

NJPURE's cases have been collectively pending for over 2½ years. They need to move. Any information NJPURE seeks to rely upon either directly or through an expert for the purposes of establishing damages that is in NJPURE's possession, custody or control needs to be produced NOW. If it is not, and the Court determines that it should have been, then NJPURE shall be precluded from later relying on it to establish its damages claim. In other words, if nothing else is produced/identified, the Court shall presume that NJPURE's current production of facts/documents/information is complete and NJPURE shall be limited to same. While the Court appreciates that depositions can be used to elucidate the parties' positions, they are not a substitute for adequate paper discovery.
Under these circumstances, the Court finds that the March 1, 2016 end date for fact discovery remains sufficient. The parties should be able to take the 7 depositions they previously anticipated and had scheduled as well as any additional depositions in that time period. NJPURE shall produce its expert report(s) by April 15, 2015. NJPURE is reminded that all facts or data considered by its expert in forming his opinions must be disclosed with its expert report(s). See Fed.R.Civ.P. 26(a)(2)(B)(ii). If, after reviewing NJPURE's expert report(s), Princeton believes that information considered by the expert was not timely produced, Princeton may seek to preclude the District Court's consideration of all or a portion of the report(s).

(Letter order of 12/10/2015 at 2-4; Docket Entry No. 104).

         On April 29, 2015, NJPURE served Princeton with Mr. Michael Soudry's preliminary analysis report, which addressed NJPURE's alleged damages. On May 20, 2016, NJPURE served Princeton with a supplemental report on damages. Upon receipt and review of same, Princeton wrote the Court asking that both Mr. Soudry's preliminary analysis report and supplemental report (collectively, the “Soudry Reports”) be stricken because in same, in contravention of the Court's Orders, Mr. Soundry relied on documents and information never produced by NJPURE during discovery. (Letter from Walter J. Fleisher Jr. to Hon. Tonianne J. Bongiovanni of 6/7/2016 at 1-3). After receiving additional informal letter briefing on Princeton's request to strike the Soudry Reports, the Court determined that in light of the significance of the issues raised, “not only in terms of the numbers of issues raised, but also based on the impact a decision regarding those issues could have on NJPURE[, ]” the question of whether the Soudry Reports should be stricken “should be the subject of formal motion practice.” (Letter Order of 7/11/2016 at 9; Docket Entry No. 133). As a result, Princeton filed the instant motion to strike in accordance with the briefing scheduled outlined in the Court's July 11, 2016 Letter Order. (Id. at 10).

         II. The Parties' Arguments

         A. Princeton's Arguments

         Princeton argues that the Soudry Reports should be stricken under Fed.R.Civ.P. (“Rule”) 37(b)(2) and 37(c) because they rely on documents and information never produced in discovery. Princeton also notes that the Court has the power to enforce its own Orders and, consequently, could strike the Soudry Reports based on the October 19 and December 10, 2015 Letter Orders.

         With respect to the documents and information NJPURE failed to produce, Princeton identifies the following four pieces of information: (1) an email from NJPURE to a physician group known as University Radiology Group (“URG”) that disclosed a May 18, 2012 rate indication; (2) a December 2010 rate indication NJPURE provided to Dr. Shen as well as a “View Activity History” for Dr. Chen; (3) NJPURE's policy retention rates and group retention rates for 2004-2014; and (4) NJPURE's Annual Statements for 2013-2015. Princeton argues that NJPURE's failure to produce the aforementioned information during discovery warrants the Court striking the Soudry Reports based on the factors outlined in Wachtel v. Health Net, Inc., 239 F.R.D. 81 (D.N.J. 2006); Ford Motor Co. v. Edgewood properties, Inc., No. 06-1278, 2011 WL 5828661 (D.N.J. Nov. 18, 2011); and Ware v. Rodale Press, Inc., 322 F.3d 218 (3d Cir. 2003).

         In this regard, Princeton argues that it has been prejudiced by NJPURE's failure to produce the aforementioned discovery, which is clearly material to NJPURE's damages calculation. Specifically, Princeton argues that NJPURE's failure to produce the relevant discovery caused Princeton to waste time and resources determining whether the information had, in fact, been produced, and then, after determining it had not, waste additional time and resources bringing NJPURE's failure to the Court's attention, first informally and then through the instant formal motion to strike. Importantly, Princeton contends that had it timely been given access to the withheld information, it would have sought additional discovery. For example, Princeton claims it would have sought additional discovery regarding the retention rates the Soudry Reports rely upon in determining NJPURE's damages. Princeton argues that it would have sought both paper and Rule 30(b)(6) testimony on the retention rates to determine what the retention rates were, how they factored into NJPURE's business, whether the retention rates used in the Soudry Reports are appropriate to use in analyzing whether NJPURE would have retained the at-issue accounts, etc. Further, Princeton maintains that it could not have sought said information from the witnesses it deposed after the Soudry Reports were served both because, as this Court recognized, depositions “‘are not a substitute for adequate paper discovery'” (Princeton Reply Br. at 8 (quoting Letter Order of 12/10/2015 at 3)), and because when it attempted to do so, NJPURE's Chief Marketing and Business Development Officer and designated Rule 30(b)(6) witness, Eric Poe, testified he was “uncertain how such rates are measured, did not know what these rates were for N.J. PURE in any particular year, and did not know if N.J. PURE's retention rates had been produced in discovery.” (Id.)

         Further, Princeton argues that discovery cannot be reopened to cure the prejudice caused by NJPURE's failure to produce the damages related discovery relied upon in the Soudry Reports because doing so would substantially disrupt the completion of this litigation. Princeton notes that at the time it filed its motion to strike, this matter had already been pending for 39 months and the Boynton matter for 46 months. Princeton argues that the cases have languished for so long in large part due to NJPURE's discovery deficiencies. Princeton claims that given how this matter has proceeded to date, reopening discovery would likely cause significant further delay and cost significant additional resources. Moreover, Princeton argues that based on the case history it would be inconsistent for the Court to reopen fact discovery now. In this regard, Princeton notes that twice before the Court refused to extend the March 1, 2016 fact discovery deadline. (See Letter Orders of 12/10/2015 and 5/4/2016; Docket Entry Nos. 104; 111).

         In addition, Princeton claims that the prejudice caused by NJPURE's failure to timely produce damages related discovery as ordered by this Court cannot be cured by a sanction other than striking the Soudry Reports. For example, Princeton claims that a monetary fine is insufficient because such a fine is incapable of replacing its lost opportunity to gain relevant discovery. Further, Princeton argues that based on NJPURE's past history of dilatoriness, there is no reason ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.