McFarland v. Florida Pharmacy Solutions et alRESPONSE in Opposition re MOTION to Compel Production of Documents MOTION for sanctionsM.D. Fla.June 7, 2018 1 UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION UNITED STATES OF AMERICA, ex rel. BRADY MCFARLAND, Plaintiff v. CASE NO. 8:15-CV-1708-T-23T6W FLORIDA PHARMACY SOLUTIONS, INC., et al. Defendants. DEFENDANT MEDIVERSE’S RESPONSE TO RELATOR’S SECOND MOTION TO COMPEL PRODUCTION OF DOCUMENTS Defendant Mediverse, LLC (“Mediverse”), by and through undersigned counsel, hereby responds to the second Motion to Compel Production from Relator BRADY MCFARLAND (“McFarland”), pursuant to Local Rule 3.01(b), this 7th day of June, 2018, as follows: RELEVENT FACTS 1. As a threshold matter, the Defendant maintains its general objections to the Relator’s Requests for Production, as follows: Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 1 of 19 PageID 2526 2 a) Objection to the definition of the term “Communication” to the extent that it refers to an unrecorded verbal communication. Rule 34, Fed.R.Civ.P. is expressly limited to communications that have been recorded. b) Objection to the inclusion of independent contractors in the definition of the term “Helix.” Independent contractors that as a matter of Florida law are not a part of Helix Management Solutions, LLC are not “Helix.” c) Objection to the inclusion of “independent third-party marketing agents” in the term Defendant Mediverse LLC. Independent third-party marketing agents are as a matter of Florida law not the named Defendant Mediverse LLC. d) Objection to the definition of the term “Mediverse” to the extent that it refers to any person or entity that is not the named Defendant Mediverse. Objection to any agents, brokers, representatives, servants or contractors that are not directly representing Defendant Mediverse’s interests in this litigation. Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 2 of 19 PageID 2527 3 e) Objection to the instruction that there is any responsibility of the Defendant to conduct third-party discovery on behalf of the Relator pursuant to Rule 34, Fed.R.Civ.P. Independent persons and entities that are not owners, employees, or agents directly representing Defendant are not a “party,” and are not subject to discovery under Rule 34(a), Fed.R.Civ.P. Relator will not be prejudiced by Rule 34(a), and is entirely free to conduct proper third-party discovery as permitted pursuant to Rules 34(c) and 45. f) Objection that any claim of privilege in this case is subject to review of the “Panel.” g) Objection to the production of any “software” to the extent that such production would violate the Defendant’s third- party proprietary software licensing limitations. h) Objection to the request for production of any and all documents that in any manner refer to a produced document if such production is not made via an electronic database that would permit “word search,” as such demand is overly Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 3 of 19 PageID 2528 4 burdensome and expensive, under Rule 26(b)(2), Fed.R.Civ.P. i) Objection to the characterization of independent third parties or entities that are not named defendants in this case as employees, consultants, representatives, servants or agents of the Defendant, to include 1stCareMD, Helix Management Solutions, LLC, Christopher O’Hara, or Wayne Moore. 2. Regardless, as a professional courtesy, and for the avoidance of unnecessary discovery disputes, while not waiving any general objections to the Requests for Production, counsel for the Defendant agreed to produce responsive non-party documents that are in the possession of Defendant under Rule 34, Fed.R.Civ.P.1 3. Secondly, counsel for the Defendant and counsel for the Relator had verbally agreed, on multiple occasions, that the parties would each 1 Even though Defense counsel maintains that such non-party discovery should be obtained directly from the non-party by means of a subpoena under Rules 34(c) and 45, Fed.R.Civ.P. See e.g., U.S. v. 25 Acres of Land, Douglas County, Colorado, 495 F.2d 1398, 1402 (10th Cir. 1974) (A “party may not be compelled to produce papers or things which are not in his possession, custody, or control, or the possession, control, or existence of which the party denies under oath.”). Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 4 of 19 PageID 2529 5 generate “rolling” production, in order to produce less-accessible information as it became available. 4. Third, both parties’ Requests for Production require ongoing production as responsive materials are newly found or produced. Specifically, the Defendant’s instruction was: “This request for production of documents is continuing in nature; please submit later produced or discovered materials subject to this request for production immediately upon production or discovery.” 5. Clearly, both parties anticipated ongoing production subsequent to the discovery deadline, up to the date of trial (or such bi-lateral discovery instructions would be nonsensical). 6. Defendant was merely a third-party independent consultant for the lead defendant, Florida Pharmacy Solutions, Inc. (“FPS”), and the pharmaceutical records, reimbursement claims, pharmacy business records, and pharmacy electronic mail is, upon belief and understanding, in the sole custody of FPS. 7. Fourth, the information sought in Relator’s Requests for Production dates back to 2012, and the Defendant was incorporated in May 2014, and initially had little to no documents or document retention. Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 5 of 19 PageID 2530 6 8. Fifth, while the Defendant instituted a “litigation hold” on its records upon being served this lawsuit in or around March 2017, prior to that date, Defendant had not been maintaining or archiving historical records that were not specifically needed for on-going operations, to include records pertaining to FPS operations which ended in mid- 2015. 9. Sixth, the Defendant’s work for FPS terminated in approximately July 2015, and until Defendant was served with this lawsuit, Defendant had limited necessity to retain records related to FPS. 10. Counsel for Relator argues in the Motion to Compel that Defendant has not produced documents pursuant to the Court’s Order of April 19, 2018. 11. In response, Defendant produced additional documents and emails on April 30, 2018 and May 3, 2018. 12. Curiously, Relator’s counsel perpetually argues that Defendant has failed to detail the Defendant’s search criteria, while concurrently admitting that Defendant has reported that the Defendant has searched electronically as to the following terms: “Jose Otero, Lindsay Fladd, FPS, Florida Pharmacy Solutions, Wes Moss, Art Moss, Jeff Moss, Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 6 of 19 PageID 2531 7 Craig Woodruff, Ali Polak, TDS, Dave Copeland, and Melonie Kotchey.” 13. Relator’s counsel noted that the undersigned countered Relator’s counsel threats of sanctions against defense counsel personally as a direct violation of Rule 3.04(c)(1), Texas Disciplinary Rules of Professional Conduct, and that continued personal threats would be met with a Texas Bar grievance and/or defense counsel resignation from the case. 14. That is quite accurate - in the event Realtor’s counsel continues to personally threaten defense counsel, defense counsel will indeed resign and/or report the matter to the Texas Bar. 15. At this time, Defendant’s production is substantially complete, with the exception of tax returns that are currently being prepared by Defendant’s accountant. Defendant has requested an opinion letter from the accountant as to the details of the status of the tax returns, as well as relevant workpapers/draft returns that might be provided in discovery for the time being. 16. Relator’s counsel alleges that he conferred with the undersigned prior to filing this Motion - he did not. The undersigned first became Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 7 of 19 PageID 2532 8 aware of this Motion upon electronic service, and therefore this Motion should be denied on those grounds in and of themselves, under Local Rule 3.01(g): A certification to the effect that opposing counsel was unavailable for a conference before filing a motion is insufficient to satisfy the parties’ obligation to confer. The moving party retains the duty to contact opposing counsel expeditiously after filing and to supplement the motion promptly with a statement certifying whether or to what extent the parties have resolved the issue(s) presented in the motion. [emphasis added] 17. Relator’s counsel admits that non-party 1stCare MD has not produced any emails between 1stCareMD and Defendant pursuant to a Rule 45 subpoena, with the exception of “several emails that it exchanged with Mediverse in 2016 and 2017,” while concurrently alleging that certainly Defendant can produce emails between itself and 1stCareMD for that same period, and that such failure to so produce is good cause for this Motion. 18. It is patently absurd that Relator’s counsel pleads as grounds for this Motion that Defendant certainly must have emails between itself and 1stCareMD, where 1stCareMD has not produced any such emails either under subpoena. Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 8 of 19 PageID 2533 9 19. Defendant reports that it duly searched for emails to and from personnel from 1stCareMD that pertained in any manner to FPS and none were found, and thus none were produced. Defendant’s litigation hold began in March of 2017 when it was served with this lawsuit, but prior to that, Defendant routinely deleted emails pertaining to terminated marketing engagements such as FPS. By definition, deleted emails were not saved, so it is literally not possible at this point in time to determine what emails were deleted or to produce copies of deleted emails. Defendant is and was under no obligation whatsoever to maintain records pertaining to FPS prior to March 2017 (particularly given that relevant FPS operations had been dormant for nearly two years). 20. Further, Realtor concurrently demands production of emails between Defendant and 1stCareMD, while denying that same production to Defendant. 21. Defendant’s Requests for Production from Relator #4 and #5 were as follows: 4. All documents that demonstrate that Mediverse put Tricare beneficiaries in contact with doctors who were willing to simply rubber-stamp FPS-branded compounded pharmacy prescriptions, as alleged in Section 15 of the Second Amended Complaint in this case. Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 9 of 19 PageID 2534 10 5. All documents that demonstrate that the physician-patient consultations arranged by Mediverse lacked a bona fide doctor-patient relationship and were in violation of state licensing regulations, as alleged in Section 16 of the Second Amended Complaint in this case. 22. Given that the Defendant’s Request for Production instructions included a demand to continually produce responsive documents (see Paragraph 5 above), Relator has trapped himself in his own pleadings. 23. Relator must choose: either a) the 1stCareMD emails regarding Defendant are not responsive to discovery in this lawsuit and need not be produced by Defendant; or alternatively b) such emails are responsive and Relator has knowingly and intentionally not produced such responsive discovery to Defendant (in which case Defendant hereby moves for costs and fees against Relator for failure to respond to Defendant’s Request for Production #4 and #5). 24. As communicated in detail to Relator’s counsel, Defendant Mediverse, LLC did not interpret the Request for Production to Mediverse (a medical services marketing and consulting company) to encompass Helix Management Solutions, LLC (a medical claims coding, billing and collections company). Mediverse and Helix share no employees, work space, or business operations. Regardless, Mediverse owner Chris White is also an owner of Helix, and White Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 10 of 19 PageID 2535 11 will agree to produce responsive Helix emails that pertain to FPS. Necessarily, the timing of this entirely new production is not made pursuant to the Court’s Order of April 19, 2018, which set the deadline for “Mediverse” discovery at May 3, 2018. Certainly, Defendant Mediverse should not be sanctioned for non-party Helix’s failure to comply with an Order that does not pertain to non-party corporations. 25. Relator notes that other defendants in this case produced emails between them and Mediverse that Mediverse did not produce. Again, the electronic search terms utilized by Mediverse are set out in Paragraph 12 above. All emails that were identified pursuant to such electronic search were produced. If Relator has other specific electronic search terms in mind, the Defendant suggests that instead of making Defendant guess what those terms might be (given that Relator moves the Court yet again to sanction Defendant for its failure to guess well enough to satisfy Relator’s counsel), that Relator simply provide the Defendant with such search criteria. 26. And indeed, if in fact Relator’s demands for other specific electronic search terms is bona fide, Defendant would expect Relator to Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 11 of 19 PageID 2536 12 welcome such a common-sense solution to this circular game of “keep away.” If instead, Relator’s objective is to merely antagonize the Defendant and waste the Court’s scarce time and resources, perhaps such suggested search terms will not be forthcoming. 27. In its Motion, Relator dramatically alleges that Defendant was a “sprawling” operation that received $12.3 million in “kickbacks” from FPS and therefore must have been “anything but a one-man shop.” Defense counsel interprets such opinions from Relator as self-serving argument to demonstrate that there certainly must be more discovery to be had, and that such is the so-called good cause for this Motion. 28. In response, Defendant has never had any W2 employees - literally no employees ever. The company has had many 1099 independent marketing agents under contract (most are separate one-owner LLCs such as Defendant), and that’s exactly where almost all the FPS payments went (as detailed on Mediverse000714 and Mediverse000715). 29. From 2014 through 2017, Defendant had total aggregate net income of $126,836.69, as detailed on Mediverse000721. Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 12 of 19 PageID 2537 13 30. Relator is free to characterize an average annual net income to the Defendant of $31,709.17 over the life of the company to demonstrate that it is a “sprawling” epicenter of crime, but that does not mean that the Defendant has additional discovery, or that this Motion has substantive merit. 31. And in the spirit of resolution, given that Rule 34(a)(1), Fed.R.Civ.P. provides for physical inspection of original records in lieu of production of copies, Defendant Mediverse hereby offers Relator access to Mediverse’s corporate records (i.e., a computer and file cabinet conveniently located in the guest bedroom of Chris White’s apartment in Panama City Beach). 32. Relator argues as cause for this Motion that there was no production of “Mediverse” Blanket Letters of Authorization or Topical Compounding Therapy Questionnaires. 33. As demonstrated repeatedly to Relator (Mediverse000037; Mediverse000049), “Mediverse” has never had any Blanket Letters of Authorization or Topical Compounding Therapy Questionnaires.2 2 And such production is entirely consistent with the other defendants’ production of FPS Blanket Letters of Authorization and Topical Compounding Therapy Questionnaires. Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 13 of 19 PageID 2538 14 The Defendant was an independent contractor and consultant for FPS (as well as for multiple other pharmacies and clinical laboratories) and as such the Defendant necessarily used its clients’ forms. As for FPS, such client forms, if they still exist, are likely with the client, FPS. 34. Relator argues that as cause for this Motion, there are no “Mediverse” emails relating to FPS’s Blanket Letters of Authorization or Topical Compounding Therapy Questionnaires. Again, the search terms employed by Defendant are listed in Paragraph 4 above. Given that all common usages of the name “Florida Pharmacy Solutions” and “FPS” as well as all the contacts at FPS were included on the search list (and noting of course, that an email necessarily is directed to a person, with a name, regardless of the subject matter of the email), Defendant responds that its email production was made in good faith. Again, Relator continues to request the Court to penalize the Defendant for not guessing what search terms Relator finds acceptable, after the fact. 35. Relator requests confirmation that Defendant Mediverse used the search terms at issue as to any text messages and social media. In response, the corporate Defendant Mediverse does not text or post on Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 14 of 19 PageID 2539 15 Facebook. In the alternative, Mediverse’s owner Chris White indeed used the same search terms set out in Paragraph 12 above for his mobile phone and any social media. 36. Relator moves the Court to compel production of Defendant’s tax returns. As detailed in Paragraph 15 above, Relator is entitled to any production that can be obtained from Defendant’s third-party accountant (to include 1099 forms for Mediverse’s third party independent contractors), and the same will be produced upon Defendant’s receipt. 37. Defendant produced voluminous bank records for Relator (Mediverse 000734 - Mediverse000873). 38. Relator questions the significant redactions of such records, but Defendant has consistently maintained that FPS was but one client of Defendant, and bank records pertaining solely to clients other than FPS are Defendant’s confidential business records and are necessarily not responsive to Relator’s Requests for Production. 39. In the event Relator seeks assurances that the records that have been redacted are indeed unrelated to FPS, Defendant suggests that Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 15 of 19 PageID 2540 16 unredacted bank records be submitted to the Court for in camera review or submitted to a Special Master for such evaluation. MEMORANDUM OF LAW 40. The grant of motions to compel under Rule 37(a)(3)(B)(iv), and the imposition of sanctions under Rule 37(a)(5)(A), should be limited to circumstances where a party is intentionally abusing the discovery process. Dotson v. Bravo, 321 F.3d 663, 667 (7th Cir. 2003). 41. The grant of a Motion to Compel, and the grant of sanctions, for a Rule 37 violation is typically reserved for those instances where a party literally fails to respond to a Request for Production. Reitman v. Pleasure Point Marina, LLC, Case No. CC-15-1030, pp. 16 - 17 (9th Cir. 2015). SUMMARY 42. Defendant has responded to the Relator’s Requests for Production on a rolling basis, to include substantive productions prior to the May 3, 2018 production deadline, and will continue to do so in good faith, as supplementary documents become available, as required by Relator’s instructions to the Requests for Production. Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 16 of 19 PageID 2541 17 43. As argued above, the fact that Relator included an instruction in Relator’s Requests for Production that untimely-obtained responsive materials are to be used to supplement discovery even after discovery cut off (such as Defendant’s tax returns), demonstrates that the Court may deny this meritless Motion without generating any prejudice to Relator. 44. Relator’s Motion to Compel is unnecessary, without merit and should be summarily denied. 45. As well, given the lack of merit to the Motion, and the unnecessary costs incurred by the Defendant in responding to such meritless Motion, Defendant requests an award of costs and fees expended. CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the forgoing has been furnished by electronic mail this 7th day of June, 2018 to: Joel Ewusiak EWUSIAK LAW, P.A. 66001 Memorial Highway, Suite 311 Tampa, FL 33615 727-286-3559 (telephone) 727-286-3219 (facsimile) joel@ewusiaklaw.com Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 17 of 19 PageID 2542 18 P. Jason Collins Craig A. Boneau Ryan M. Goldstein REID COLLINS & TSAI LLP 1301 S. Capital of Texas Highway Building C, Suite 300 Austin, TX 78746 512-647-6100 (telephone) 512-647-6129 (facsimile) jcollins@rctlegal.com cboneau@rctlegal.com rgoldstein@rctlegal.com COPY NOT FURNISHED TO OTHER COUNSEL: A. Lee Bentley, III Benjamin C. Mizer Charles T. Harden, III United States Attorney 400 North Tampa Street, Suite 3200 Tampa, FL 33602 813-301-3075 (telephone) 813-274-6200 (facsimile) Michael D. Granston Jamie A. Yavelberg Nathan P. Green US Department of Justice Civil Litigation Branch P.O. Box 261, Ben Franklin Station Washington, DC 20044 202-305-3669 (telephone) 202-305-2073 (facsimile) Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 18 of 19 PageID 2543 19 Faith E. Gay QUINN EMANUEL URQUHART & SULLIVAN, LLP 51 Madison Avenue, 22nd Floor New York, NY 10010 212-849-7000 (telephone) 212-849-7100 (facsimile) Sam S. Sheldon QUINN EMANUEL URQUHART & SULLIVAN, LLP 777 6th Street, NW, 11th Floor Washington, DC 20001 202-538-8000 (telephone) 202-538-8100 (facsimile) Valerie S. Roddy QUINN EMANUEL URQUHART & SULLIVAN, LLP 865 South Figueroa Street, 10th Floor Los Angeles, CA 90017 213-443-3000 (telephone) 213-443-3100 (facsimile) /Mark S. Thomas/_____ Mark S. Thomas Florida Bar No. 0001716 THOMAS HEALTH LAW GROUP, P.A. 5200 SW 91st Terrace, Suite 101-B Gainesville, FL 32608 (352) 372-9990 (office) (855) 629-7101 (fax) mark@thomashlg.com Counsel for Defendant Mediverse LLC Case 8:15-cv-01708-SDM-TGW Document 391 Filed 06/07/18 Page 19 of 19 PageID 2544