United States District Court, D. New Jersey
OPINION AND ORDER
B. CLARK, III United States Magistrate Judge
MATTER comes before the Court on a motion by
Plaintiff Cost Containment Express, LLC (“CCE” or
“Plaintiff”) to compel Defendant Horizon
Healthcare Services, Inc. (“Defendant” or
“Horizon”), to produce documents in response to
Plaintiff's discovery requests [Dkt. No. 39]. Defendant
opposes Plaintiff's motion [Dkt. No. 43]. For the reasons
set forth below, Plaintiff's motion to compel [Dkt. No.
39] is GRANTED in part and DENIED in part.
action arises from a Complaint filed by CCE on December 30,
2015, alleging that Horizon used its position as the insurer
for Passaic County, New Jersey, and as the largest health
insurer in the State of New Jersey, to prevent CCE from
entering the New Jersey market, and asserting two causes of
action against Horizon for tortious interference with
prospective business advantage and unjust enrichment arising
out of Horizon's alleged actions. See Dkt. No.
1. CCE is a Tennessee Corporation that provides medical
out-of-network claims cost containment services to employers
who have self-funded benefit plans to provide health
insurance coverage to their employees. Id. at ¶
10. According to CCE, when contracted by an employer, CCE
works to reduce the out-of-network charges the self-funded
benefit plan incurs when an employee who is covered under the
plan goes to an out-of-network provider and is charged a fee
for services that is not controlled by the terms of the
plan's insurance agreement. Id. CCE utilizes its
“Fair Market Re-Pricing Methodology” to review
out-of-network claims, and based upon the result of that
review, CCE sends the out-of-network provider an Explanation
of Review and a check for the re-priced amount. Id.
at ¶ 12. If the provider questions or appeals the
Explanation of Review or demands a higher payment, CCE
provides answers to the providers' questions and defends
the appeals. Id.
County maintains a self-funded employee benefit plan (the
“Plan), of which Horizon is the Third-Party
Administrator. Id. at ¶ 14. During the relevant
time period, all in-network services provided to Passaic
County employees were done through Horizon's preferred
provider network and paid from the Plan. Id.
Additionally, as Third-Party Administrator for the Plan,
Horizon was responsible for settling claims involving
out-of-network providers. Id. at ¶ 15. In early
2014, Passaic County issued a “Request for Proposal
Competitive Contracting” inviting qualified vendors to
submit proposals for “Medical Out-of-Network Claims
Cost Containment Services.” Id. at ¶ 16.
CCE submitted a proposal, and as a result of being the lowest
bidder, on March 24, 2014, the contract was awarded to CCE.
Id. at ¶ 17. Horizon also submitted a bid,
which was rejected. Id. at ¶ 18.
to CCE, immediately after its bid was accepted, it began to
make the necessary arrangements to perform its services under
the contract, which required CCE having access to data
related to out-of-network charges that were submitted to
Horizon for payment from the Plan. Id. at ¶
19-20. CCE claims that while Horizon initially indicated that
it would cooperate in providing CCE access to such data,
Horizon later stated that CCE would only be given access to
the data in exchange for a fee paid to Horizon. Id.
at ¶ 21. Although CCE asserts that the data belonged to
Passaic County, and Horizon had no legitimate right to
withhold it, Passaic County agreed to allow Horizon to charge
an administrative fee to cover Horizon's cost to send
billing information to CCE and CCE agreed to pay the fee in
exchange for the data. Id.
after Horizon and CCE had purportedly resolved their dispute
regarding the cost of allowing CCE to access the necessary
data, CCE claims that Horizon, in an effort to prevent CCE
from performing the contracted services for Passaic County,
falsely claimed that the process employed by CCE in handling
out-of-network claims was in violation of New Jersey law and
used an outstanding debt owed to Horizon by Passaic County to
persuade Passaic County to terminate its arrangement with CCE
and instead allow Horizon to continue performing the services
for which CCE had won the bid. Id. at ¶ 23-25.
Allegedly as a result of Horizon's conduct, Passaic
County rescinded its award of the out-of-network cost
containment services contract to CCE and instead contracted
with Horizon, which had lost the bid, to perform those
present motion, which was filed by Plaintiff after several
failed attempts to resolve the parties' discovery
disputes, Plaintiff seeks an Order compelling Defendant to
provide information in response to Plaintiff's requests
for information related to “Horizon's contracting
with other third parties to perform the work promised to
CCE.” Dkt. No. 39 at p. 2. Defendant opposes
Plaintiff's motion. See Dkt. No. 43.
Rule of Civil Procedure 26 governs the scope of discovery in
federal litigation and provides that:
Parties may obtain discovery regarding any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case, considering the
importance of the issues at stake in the action, the amount
in controversy, the parties' relative access to relevant
information, the parties' resources, the importance of
the discovery in resolving the issues, and whether the burden
or expense of the proposed discovery outweighs its likely
Information within this scope of discovery need not be
admissible in evidence to be discoverable.
Fed. R. Civ. P. 26(b)(1). Rule 26 is to be construed
liberally in favor of disclosure, as relevance is a broader
inquiry at the discovery stage than at the trial stage.
Tele-Radio Sys. Ltd. v. De Forest Elecs., Inc., 92
F.R.D. 371, 375 (D.N.J. 1981). While relevant information
need not be admissible at trial in order to grant disclosure,
the burden remains on the party seeking discovery to
“show that the information sought is relevant to the
subject matter of the action and may lead to admissible
evidence.” Caver v. City of Trenton, 192
F.R.D. 154, 159 (D.N.J. 2000). Upon a finding of good cause,
a court may order discovery of any matter relevant to a
party's claims, defenses or the subject matter involved
in the action. “Although the scope of discovery under
the Federal Rules is unquestionably broad, this right is not
unlimited and may be circumscribed.” Bayer AG v.
Betachem, Inc., 173 F.3d 188, 191 (3d Cir. 1999).
Discovery requests may be curtailed to protect a person from
whom discovery is sought from “annoyance,
embarrassment, oppression, or undue burden or expense.”
Rule of Civil Procedure 37 allows a party who has received
evasive or incomplete discovery responses to seek a court
order compelling additional disclosure or discovery.
“The party seeking the order to compel must demonstrate
the relevance of the information sought. The burden then
shifts to the opposing party, who must demonstrate in
specific terms why a discovery request does not fall within
the broad scope of discovery or is otherwise ...