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Government Employees Insurance Co. v. Trnovski

United States District Court, D. New Jersey

October 23, 2018

GOVERNMENT EMPLOYEES INSURANCE CO., et al., Plaintiffs,
v.
STEFAN TRNOVSKI, M.D. et al, Defendant.

          OPINION AND ORDER

          JAMES B. CLARK, III UNITED STATES MAGISTRATE JUDGE.

         THIS MATTER comes before the Court on a motion by Defendants to quash two subpoenas served by Plaintiffs [ECF No. 58]. Plaintiffs oppose Defendants' motion [ECF No. 61]. For the reasons set forth below, Defendants' Motion to Quash [ECF No. 58] is DENIED.

         I. FACTUAL BACKGROUND & PROCEDURAL HISTORY

         Plaintiffs Government Employees Insurance Co., Geico Indemnity Co., Geico General Insurance Company, and Geico Casualty Co. (collectively “Geico” or “Plaintiffs”) initiated this action on August 2, 2016 by filing their Complaint against Stephen Trnovski, M.D. (“Dr. Trnovski”), Roman Kosiborod, D.O. (“Dr. Kosiborod”), Aron Rovner, M.D. (“Dr. Rovner”), Albert Akkerman, M.D., Alliance Spine Associates, LLC (“Alliance Spine”), (collectively the “Alliance Defendants”), and New Horizon Surgical Center, LLC (“New Horizon”). See Complaint, ECF No. 1. According to Plaintiffs' Complaint, New Horizon and the Alliance Defendants were wrongfully compensated after they submitted hundreds of fraudulent no-fault insurance charges to Geico. Id. ¶ 1. Based on these allegations, Plaintiffs assert a claim for a declaratory judgment, seeking a declaration that Alliance Spine and New Horizon have no right to receive payment for any pending bills submitted to Geico. Id. ¶ 332. Plaintiffs also assert various claims for violations of the New Jersey Insurance Fraud Prevention Act (“NJIFPA”) and the Racketeer Influenced and Corrupt Organizations Act (“RICO”), for common law fraud, for aiding and abetting fraud, and for unjust enrichment. See Id. at 123-138.

         In September of 2016, New Horizon and the Alliance Defendants, with the exception of Dr. Rovner, filed motions to dismiss Plaintiffs' Complaint. See ECF Nos. 13, 20. Before a decision could be rendered on the motions, the Court administratively terminated the motions to allow the parties time to engage in meaningful settlement discussions. See ECF No. 37. Shortly thereafter, New Horizon and Plaintiffs reached an agreement to settle their claims, and in January of 2018, New Horizon was dismissed from the case. See ECF No. 40. Plaintiffs and the Alliance Defendants were not able, however, to resolve their issues. Therefore, all claims against the Alliance Defendants are still pending.

         On March 29, 2018, the Alliance Defendants filed the present Motion to Quash. ECF No. 58. The Motion to Quash relates to two subpoenas (the “Subpoenas”) served by Plaintiffs on non-parties TD Bank and Bank of America (the “Non-Party Banks”). The Subpoenas seek the production of documents related to any account that has been maintained by Alliance Spine. See ECF No. 61-2 at 3, 6. Specifically, the Subpoenas seek copies of “all deposit and/or withdrawal slips, canceled checks, transaction statements, electronic fund transfers, account ledgers, account information and governance documents, corporate resolutions, signature cards, powers of attorney and all correspondence related to the accounts.” Id.

         In support of their Motion to Quash, the Alliance Defendants argue that the Subpoenas are improper, overbroad, and are “wholly irrelevant to the claims of fraudulent billing and lack of medical necessity that are asserted by Plaintiffs in this action.” ECF No. 58-1. In opposition to the Motion to Quash, Plaintiffs argue that: (1) Alliance Spine's corporate financial records are highly relevant to the claims and defenses asserted in this action; (2) the Subpoenas are not overbroad; and (3) the Alliance Defendants have failed to meet their burden of establishing that the materials sought by the Subpoenas are privileged and confidential. See ECF No. 61.

         II. LEGAL STANDARD

         Federal 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 benefit. 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.” Fed.R.Civ.P. 26(c)(1).

         Discovery sought via a subpoena issued pursuant to Rule 45 must fall within the scope of discovery permissible under Rule 26(b). OMS Investments, Inc. v. Lebanon Seaboard Corp., 2008 WL 4952445 (D.N.J. Nov. 18, 2008). Federal Rule of Civil Procedure 45(c)(3)(A)(iii) provides that “the issuing court must quash or modify a subpoena that . . . requires disclosure of privileged or other protected matter, if no exception or waiver applies . . ..” Moreover, an “issuing court may . . . quash or modify the subpoena if it requires disclosing a trade secret or other confidential research, development, or commercial information.” Fed.R.Civ.P. 45(c)(3)(B).

         III. DISCUSSION

         A. ...


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