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Inc. v. Coventry Health And Life Insurance Company

United States District Court, W.D. Kentucky, Bowling Green Division

May 21, 2019




         Before the Court is the motion of Defendant Coventry Health and Life Insurance Company for sanctions against Plaintiff PremierTox 2.0 Inc. related to PremierTox's presentment of an unprepared corporate witness for deposition under Fed.R.Civ.P. 30(b)(6) (DN 57). PremierTox has responded in opposition at ¶ 58 and supplemented the response at ¶ 59. Coventry has replied at ¶ 60.

         On May 9, 2019, the undersigned conducted a hearing on the motion. Anna S. White appeared on behalf of PremierTox and Robert J. Fogarty and Todd P. Greer appeared on behalf of Coventry. This matter is ripe for determination.

         Nature of the Case

         PremierTox initiated this litigation approximately three and a half years ago (DN 1). It asserts that it provided drug testing laboratory services for Coventry's Medicaid members pursuant to a Medicaid provider agreement conferring “in-network” status (DN 28 Second Amended Complaint). PremierTox contends that Coventry has failed to make payments for services rendered and is in breach of contract (Id.). In the alternative, PremierTox claims that Coventry was unjustly enriched by the drug testing services and PremierTox should be compensated even in the absence of a contract (Id.).

         In response, Coventry denies the existence of a Medicaid provider agreement with PremierTox (DN 31). As to the unjust enrichment claim, Coventry contends that PremierTox never obtained necessary preauthorization for the tests, which Coventry would have denied given PremierTox's out-of-network provider status (Id.). PremierTox's services for which it demands payment encompasses a period between September 11, 2013 through September 16, 2015 (DN 28).

         Coventry's Motion

         Coventry issued a notice of deposition (DN 57-8) under Fed.R.Civ.P. 30(b)(6) identifying 31 topics of information upon which it wished to question a PremierTox corporate representative. On January 29, 2019 PremierTox produced Nathan Moore to testify as its designated corporate representative. Moore is employed by PremierTox as Senior Director of Operations. A complete transcript of the deposition is filed at ¶ 63.

         Coventry contends that Moore failed to perform any investigation or otherwise prepare to address the topics identified in the notice of deposition and was unable to offer any meaningful testimony (DN 57). Coventry requests that PremierTox be sanctioned by being precluded from offering evidence at trial on topics which Coventry sought to examine the corporate witness but was unable to do so because of the witness' lack of preparation and knowledge (Id.). These include matters related to PremierTox's claims for breach of contract, unjust enrichment, damages claimed and PremierTox's Medicaid investigations and suspensions (Id.).

         PremierTox's Response

         PremierTox contends that Moore was not to be the only witness it would present as a 30(b)(6) witness and that it had always planned to have PremierTox's former President Steve Klipp testify, and that Coventry was aware of this (DN 58). As to Moore, PremierTox notes that he “is able to testify to lab operations on a global level, to discuss individual claims in many cases, and to discuss company management during 2015-present. Mr. Moore also has knowledge of this action in his capacity as a member of the senior management team which runs the company and manages the litigation” (DN 58, p. 2-3). To the extent there was limitation on Moore's knowledge, PremierTox contends the information was “made known to Coventry months prior to the deposition and counsel for PremierTox made clear that Coventry would also need to depose Mr. Klipp as a 30(b)(6) witness” (Id. at p. 3).

         PremierTox contends that Moore “was extremely nervous and froze initially, and made ridiculous misstatements such as saying he hadn't talked to anyone about this case” (Id. at p. 4). PremierTox criticizes the nature of the questions posed to Moore, contending that Coventry should have asked him about specific documents rather than broad questions dealing with information contained in “two huge excel spreadsheets and six long banker boxes” (Id. at p. 5). PremierTox notes that all the information about the nature of its claims can be derived from documents it has provided in discovery and it is unable to provide a witness to testify to some of the topics because the events predate current management staff (Id. at p. 5-7).


         Fed. R. Civ. P. 30(b)(6) lies at the heart of this dispute. It provides:

(6) Notice or Subpoena Directed to an Organization. In its notice or subpoena, a party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must describe with reasonable particularity the matters for examination. The named organization must then designate one or more officers, directors, or managing agents, or designate other persons who consent to testify on its behalf; at it may set out the matters which each person designated will testify. A subpoena must advise a nonparty organization of tis duty to make this designation. The persons designated must testify about the information known or reasonably available to the organization. This paragraph (6) does not preclude a deposition by any other procedure allowed by these rules.

         In Janko Enters. v. Long John Silver's, Inc., No. 3:12-CV-345-S, 2014 U.S. Dist. LEXIS 185334 (April 3, 2014 W.D. Ky.) Magistrate Judge Dave Whalin set forth a thorough analysis of the duties imposed upon a corporation in designating and preparing a witness for deposition under Rule 30(b)(6). As to the duty imposed on the party providing a witness: “the representative witness must be adequately prepared by the corporation, which has an affirmative duty to provide a witness that is able to put forward binding answers on behalf of the corporation.” Id. at *15 (citations omitted). “Rule 30(b)(6) does not require that the corporate designee have personal knowledge as to all relevant facts within the subject matter of the deposition. . . . It is clearly required, however, that the Rule 30(b)(6) designee be educated and gain the requested knowledge to the extent that it is reasonably available to the corporation.” Id. at *13 (citations omitted). Education may be obtained from corporate documents, current or prior corporate employees, or “any other sources reasonably available to the corporation.” Id. at *14.

         Coventry contends that Moore was unprepared to offer testimony on the topics specified in the notice of deposition (filed at ¶ 57-8). Moore's testimony bears this out.

         First, he affirmed that he was designated to testify on the topics identified in the Rule 30(b)(6) notice:

Q. Now I have in front of you what's been marked as Exhibit Number 1 in your deposition which is a notice of 30(b)(6) video deposition of plaintiff PremierTox 2.0 Inc. And do I understand that you have been selected as the corporate representative to testify on the topics listed in this notice?
A. Yes.

(DN 57-1, p. 3, Moore Depo. at p. 7 ln. 15-21).

         Then he testified that he had not made any preparations to address the topics addressed in the notice of deposition.:

Q. Okay. What have you done to prepare yourself to testify as the corporate representative PremierTox 2.0 on the topics listed in Exhibit 1?
A. I haven't done anything.
Q. I'm sorry?
A. I haven't done anything to prepare ...

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