United States District Court, W.D. Kentucky, Louisville Division
UNITED STATES OF AMERICA ex rel. STEVEN SCOTT, Plaintiff,
HUMANA, INC., Defendant.
MEMORANDUM OPINION AND ORDER
H. Lindsay, Judge
the Court is Relator's motion to compel Defendant Humana
Inc. to fully comply with Relator's 30(b)(6) deposition
notice as briefed in DNs 201, 208, and 211. Also before the
Court are the corresponding motions to seal the motion,
response and reply to Relator's motion to compel Humana
to fully comply with Relator's 30(b)(6) deposition
notice. (DNs 200, 207, 210.)
reasons set forth below, Relator's motion to compel
Defendant Humana Inc. to fully comply with Relator's
30(b)(6) deposition notice (DN 201) is GRANTED IN
PART AND DENIED IN PART.
200, 207 and 210 are DENIED WITHOUT
PREJUDICE. DNs 201, 208, and 211 shall remain
PROVISIONALLY UNDER SEAL pending further
orders from the Court.
MOTION TO COMPEL
courts have wide discretion in dealing with discovery
matters. See S.S. v. E. Ky. Univ., 532 F.3d 445, 451
(6th Cir. 2008) (quoting Chrysler Corp. v. Fedders
Corp., 643 F.2d 1229, 1240 (6th Cir. 1981)).
Fed.R.Civ.P. 26(b)(1) provides that "[p]arties 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...." Fed.R.Civ.P. 26(b)(1).
This language is broadly construed by the federal courts to
include "any matter that bears on, or that reasonably
could lead to other matter[s] that could bear on, any issue
that is or may be in the case." Oppenheimer Fund,
Inc. v. Sanders, 437 U.S. 340, 351 (1978) (citing
Hickman v. Taylor, 329 U.S. 495, 501 (1947)). The
scope of discovery is not without limits, however. In
assessing whether information is within the scope of
discovery, the Court is directed to consider "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." Fed.R.Civ.P. 26(b)(1).
Civ. P 37(a)(3)(B)(ii) permits a party to compel discovery
when "a corporation or other entity fails to make a
designation under Rule 30(b)(6)." Under Rule 30(b)(6),
when a corporation is served with notice of a deposition, it
is obligated "to produce a witness or witnesses
knowledgeable about the subject or subjects described in the
notice and to prepare the witness or witnesses to testify not
simply to their own knowledge, but the knowledge of the
corporation." Schall v. Suzuki Motor of Am.
Inc., 2017 WL 4050319, at *5 (W.D. Ky. Sept. 13, 2017).
"A 30(b)(6) witness testifies as a representative of the
entity, his answers bind the entity and he is responsible for
providing all the relevant information known or reasonably
available to the entity." Smith v. General Mills,
Inc., 2006 Wl 7276959, at *5 (S.D. Ohio April 13, 2006.)
corporation has a duty to prepare its witnesses to testify
"fully, completely, and unevasively to the
questions...as to the relevant subject matters."
Weber Mfg. Techs., Inv. v. Plasan Carbon Composites,
Inc., 2016 Wl 8114507, at *5 (E.D. Mich. July 26, 2016.)
The inability of a designee to answer every question on a
particular topic does not necessarily mean that the
corporation or agency has failed to comply with its
obligations under the Rule. Consumer Fin. Prot. Bureau v.
Border & Border, 2016 WL 9460471, at *3 (W.D. Ky.
June 29, 2016.) Should it become apparent during the course
of the deposition that the designee is unable to adequately
respond to relevant questions on the listed subjects
contained in the deposition notice, then the responding
entity has a duty to timely designate additional or
supplemental witnesses as substitute deponents. Only if the
corporation is unable to provide an appropriate designee
because "it does not have the requested information;
cannot reasonably obtain it; and, lacks sufficient knowledge
after a good faith, thorough review of all available
information, will its obligations under Rule 30(b)(6)
a party fails to educate its 30(b)(6) witness with respect to
the corporation's full knowledge of the topics noticed
for deposition, this failure is effectively a failure to
appear for purposes of Rule 37." Brooks v.
Caterpillar Glob. Mining Am., LLC, 2016 WL 5213936, at
*2 (W.D. Ky. Sept. 20, 2016). The designative party
"must substitute an appropriate deponent when it becomes
apparent that the previous deponent is unable to respond to
certain relevant areas of inquiry." Wicker v.
lawless, 278 F.Supp.3d 989, 1000 (S.D. Ohio 2017).
a deponent has already been deposed in a case, then a party
must obtain leave of court in order to take the deposition.
The court must grant leave to resume the deposition to the
extent consistent with Rule 26(b)(1) and (2)." Smith
v. Old Dominion Freight line, Inc., 2017 WL 2371825, at
*3 (W.D. Ky. May 31, 2017), citing Fed.R.Civ.P.
corporation may not "circumvent its obligations to
prepare its Rule 30(b)(6) witness to answer fully and without
evasion all questions about the designated subject matter
simply by producing a witness without knowledge of the
subject believed to be irrelevant." Brooks at
*2, (quoting Champion Foodservices, LLC v. Vista
FoodExch., Inc., 2016 WL 44680000, at *14n.35 (N.D. Ohio
Aug. 23, 2016.) Thus, "arguments as to the relevance of
the topics do not weigh on the question of whether [an
entity] fully complied with the Rule 30(b)(6) deposition
notice. The inquiry must focus solely on whether the 30(b)(6)
witnesses were prepared to testify regarding information
known or reasonably available to [the entity]."
Civ. P 27 permits Courts to issue a protective order if
justice requires and to protect individuals from annoyance,
embarrassment, oppression, or undue burden or expense.
"The burden of establishing good cause for a protective
order rests with the movant." Nix v. Sword, 11
Fed.Appx. 498, 500 (6th Cir.2001) (citing General
Dynamics Corp. v. Selb Mfg. Co., 481 F.2d 1204, 1212
(8th Cir.1973)). "To show good cause, a movant for a
protective order must articulate specific facts showing a
'clearly defined and serious injury' resulting from
the discovery sought and cannot rely on mere conclusory
statements." Id. (citing Avirgan v.
Hull, 118 F.R.D. 252, 254 (D.D.C.1987)).
November 30 and December 1, 2018, Relator served his initial
and first amended Rule 30(b)(6) deposition notices. (DN 208-2
¶3.) On December 26, 2018, Humana served its objections
and responses to Relator's First Amended Notice. (DN
208-2 ¶6.) Relator served a Second Amended Notice on
January 9, 2019. (DN 208, at PageID # 12268.) Counsel for
both parties exchanged meet and confer correspondence from
January 3, 2019 to January 17, 2019. (DN 208-2 ¶7.)
Humana served its objections and responses to the Second
Amended Notice on February 10, 2019. (DN 208 at PageID
#12268.) The deposition notice included a list of 28
documents that contain the relevant bid assumptions and 20
documents containing the relevant budget-at-bid assumptions.
(DN 201-1.) Relator argues Humana has failed to designate a
deponent for some topics, and failed to adequate prepare its
deponents as to other topics.
opposition, Humana contends that deposition notice was
far-reaching, overbroad, unintelligible and so expansive that
no corporation could have reasonably provided responsive
testimony. (DN 208, at PageID #12264.) Humana contends that
Relator moves to compel testimony that he never sought in his
notice, or was never expressly subject to the parties'
agreement on the scope of testimony. (DN 208, at Page
#12265.) In its response Humana moves for a protective order
under Rule 26(c)(1). (DN 208, at PageID # 12266.)
the meet and confer process, Relator contends he agreed to
narrow his list of budget-at-bid documents to four specific
documents for Contract Years 2011-2013. (DN 201, at PageID #
11701.) For Contract Years 2014-2018, the parties agreed that
the relevant "Budgets-at-Bid" for each year were
identified in Humana's previous interrogatory responses.
(DN 201, at PageID # 11702.) Relator states the parties
agreed Milliman would provide the preferred pharmacy
utilization assumptions reflected in Humana's bids, and
that Humana would "designate one or more corporate
representatives to testify on relevant topics based on the
values that Milliman identifies in its response to these
three specific requests from Relator." (DN 201, at Page
ID # 11702.) Relator argues that in advance of the Rule
30(b)(6) depositions, Relator and Humana had agreed that
Humana's corporate witnesses would at a minimum provide
testimony regarding the preferred utilization, membership,
and member cost share assumptions in a limited set of
budgets-at-bid documents and a set of preferred use
assumptions provided by Milliman. (DN 201, at PageID #11702.)
argues it never agreed to provide Rule 30(b)(6) testimony
about the specific preferred use assumptions that Milliman
supplied. (DN 201-1 ¶13.) However, Humana concedes it
stipulated to the preferred utilization assumptions that
Milliman identified. (Id.)
Failure to Provide Testimony
argues Humana has refused to designate a witness to testify
as to Topic No. 1(1), (m), (n), (o), and (p), and refused to
provide testimony on certain issues relating to Topic Nos.
1(k), (q), 3, 6, 8, 9, and 10.
Testimony Relating to Profit Margins
each Contract Year for the Walmart Plan from 2011 through
k. Humana's actual aggregate gain/loss margins for its
Part D plans, as measured by percentage of revenue.
1. Humana's actual aggregate gain/loss margins for all
non-Medicare health insurance lines of business, as measured
by percentage of revenue.
m. Humana's aggregate gain/loss margins for its Part D
plans based on its Bids, as measured by percentage of
n. Humana's aggregate gain/loss margins for all
non-Medicare health insurance lines of business based on its
Bids, as measured by percentage of revenue.
o. Humana's aggregate gain/loss margins for its Part D
plans based on its Budgets, as measured by percentage of
p. Humana's aggregate gain/loss margins for all
non-Medicare health insurance lines of business based on its
Budgets, as measured by percentage of revenue.
q. The identity of all Humana employees who were aware and
when they became aware of the information in subtopics (k)
(DN 201-1.) Relator contends Humana flatly refused to provide
deposition testimony about Humana's profit margins as
stated in Topic No. l(k) through (p). (DN 201-1, at PageID #
argues that though Humana agreed to designate a witness to
testify only to the actual gain/loss margin for the Walmart
Basic Plan, it has refused to provide any financial
information relating to Humana's other Part D business
and has refused to provide any information relating to the
gain/loss margin in its bids or budgets, based solely on its
contention these topics are irrelevant and unduly burdensome.
(DN 201, at Page ID # 11703.)
has refused to designate any witness to testify regarding
Topic No. l(1)-(p) on the ground that these topics are
irrelevant. (DN 201-5, at PageID# 11788-11793.) Humana has
agreed to provide only limited testimony for Topic No. l(k)
and (q) also on the ground that these topics seek irrelevant
information. (DN 201-5, at PageID #11789, #11794; DN 201, at
Page ID # 11712.)
argues the discovery is relevant since the gain/loss margins
reported in Humana's bids, budgets, and actual experience
for both its Part D business and non-Medicare business are
central to the fraud alleged in the Complaint because they
show Humana knowingly misrepresented its eligibility for Part
D contracts by asserting that its bids complied with core
requirements for eligibility, including a profit cap test,
when Humana knew that the Walmart Plan did not comply. (DN
201, at PageID # 11714.) Relator argues the information
sought is relevant because the profit margin for a Part D
sponsor's plans must be within 1.5% of the profit margin
for the sponsor's non-Medicare lines of business. (DN
201, at PageID #11703, 11712.) Relator argues that
Humana's false statements included assertions to CMS that
it was complying with the profit caps at the same time it was
budgeting profits exceeding that cap. (DN 201, at PageID #
argues that the fact that these topics are relevant to
CMS's profit cap test does not show why that test if
relevant to Relator's complaint, since a profit margin
test compares the profit margin across all 104 of
Humana's Part D bids to other non-Medicare lines of
business, while Relator's FC A claims specifically
concern only Humana's Walmart Plan bids. (DN208, at
PageID #12280.) Humana argues even if Relator could show
variances between external- and internal-facing profit
targets for all of Humana's Part D plans combined, it
would not be probative evidence that the Walmart Plan bids
themselves contained these false assumptions. (DN 208, at
states it agreed for topic 1(k) to testify regarding the
Walmart Plan's actual underwriting margin for contract
years 2011 through 2017, and for Topic 1(q) it would identify
the Humana employees who were aware of the actual
underwriting margin and when they became aware. (DN 208-2
¶8(b); DN 208, at PageID #12270.) Humana contends that
when Relator failed to seek relief from the Court it believed
that Relator had accepted Humana's "offer of
compromise." (DN 208, at PageID # 12282.) Humana states
the parties continued to discuss Topics l(1)-(p), but reached
an impasse and Humana believed that Relator did not intend to
pursue testimony on Topics 1(1) through (p) because Relator
did not seek relief from the Court. (DN 208, at PageID
#12271.) Humana further argues that Relator did not assert a
direct violation of the profit cap in his Complaint.
reply, Relator also points out that in order to adequately
respond to Topic No. 1(k)-(p) Humana would be required to
identify a total of six data points for each contract year,
each of which is directly relevant to Humana's bids for
the Walmart Plan. (DN 211, at PageID #12765.)
on Relator's representation that CMS requires a part D
sponsor to pass a profit test requiring "a Part D
sponsor's aggregate margin across all bids [to] be within
1.5% of the entity's non-Medicare business," the
Court finds the information requested in l(k)-(q) regarding
Humana's gain/loss margins for all Part D plans and all
non-Medicare health insurance lines of business is relevant
as it could lead to the discovery of admissible evidence
regarding whether Humana knowingly made false representations
on the foregoing, the Court finds Topic Nos. 1 (k)-1 (q) are
relevant to the claims asserted by Relator and that the scope
of the Topic is neither overbroad nor unduly burdensome.
Humana is ordered to designate a person or persons to testify
about information known ...