United States District Court, S.D. Ohio, Western Division
MEMORANDUM OPINION AND ORDER
Stephanie K. Bowman United States Magistrate Judge.
ago, Plaintiff Set Shahbabian, M.D., filed suit against
Defendants TriHealth, Inc., Trihealth G, LLC doing business
as TriHealth Physician Partners (jointly referenced as
“TriHealth”), and Mayfield Clinic, Inc.
(“Mayfield”). The case has been referred to the
undersigned magistrate judge for ruling on all
non-dispositive motions, and for a report and recommendation
on any dispositive matters. (Doc. 3). Presently pending and
ripe for disposition are three discovery-related motions: (1)
Mayfield's motion to quash and for a protective order,
(Doc. 74); (2) Plaintiff's Motion to Compel discovery
from Navigant and from Sullivan Cotter & Associates; and
(3) TriHealth's motion to quash the third-party subpoenas
served upon Navigant and Sullivan Cotter & Associates.
Plaintiff recently filed two additional motions to compel
discovery from one of TriHealth's law firms and its
attorney, but those motions are not yet ripe.
in this case has been extremely contentious, and the parties
have enlisted the Court's assistance in multiple
telephonic conferences prior to filing the current set of
motions. Fact discovery is scheduled to conclude by December
2, 2019, with a dispositive motion deadline of January 10,
2020. In lieu of setting forth a more complete background,
the undersigned incorporates by reference the Background set
forth in the Memorandum Opinion and Order filed on October 8,
2019, which addressed a closely related informal discovery
dispute. (Doc. 78).
primary issue in dispute is the scope of discoverable
documents relating to “fair market value”
(“FMV”) determinations. Plaintiff's
employment contract explicitly states that his compensation
must not exceed FMV. (Doc. 21-1 at 19). That contractual term
arises from federal laws (the Stark Act and the Anti-kickback
law) that impose limitations on physician compensation
relative to FMV, with FMV compensation often expressed as a
salary range. The FMV determinations were made by accounting
and valuation consultants at the request of either corporate
general counsel and/or outside counsel for
contracted salary is based upon a work relative value unit
(“wRVU”). The calculation of the wRVU requirement
was based, at least in part, upon regulatory FMV standards.
Plaintiff alleges that he was fraudulently induced to agree
to the wRVU requirement. It is undisputed that
Plaintiff's wRVUs declined over time. Although the
reasons for that decline remain at the heart of this lawsuit,
TriHealth has filed a counterclaim relating to the decline in
Plaintiff's wRVUs. In its counterclaim, TriHealth invokes
a claw-back provision that TriHealth asserts entitles it to
reimbursement of more than $679, 000 paid in salary to
Plaintiff based upon the reduction of his wRVUs.
(See Doc. 51).
argues that because the foundation of the contractual wRVU
requirement rests on TriHealth's FMV analysis, and
because TriHealth takes the position that a failure of
Plaintiff to reimburse TriHealth for the reduced wRVUs would
result in Plaintiff's salary exceeding FMV in violation
of federal law, Plaintiff is entitled to discovery of the
underlying FMV-related documents. In the October Order, the
undersigned wrote that “TriHealth does not dispute that
the FMV valuation is highly relevant to Plaintiff's
breach of contract claim, as well as to TriHealth's
affirmative defense and counterclaim.” (Doc. 78 at 11,
PageID 526). In addition to the FMV documents relating to his
own compensation, Plaintiff seeks similar FMV-related
documents concerning the Co-Management Agreement between
TriHealth and Mayfield, which (according to Plaintiff) led to
the reduction of Plaintiff's wRVUs. Plaintiff initially
sought those documents directly from Defendant TriHealth, but
subsequently issued subpoenas to two business consultants
used by TriHealth to provide FMV analyses.
Analysis of Pending Motions
Motion to Quash/Motion to Compel documents from Navigant
Consulting, Inc. and Sullivan, Cotter & Associates,
addition to seeking FMV documents directly from TriHealth,
Plaintiff has sought the documents from two business
consultants employed directly or indirectly by TriHealth to
help determine FMV physician compensation. Plaintiff issued a
subpoena to Navigant on August 13, 2019, seeking numerous
documents relating to FMV determinations made by a physician
compensation group that was headed up by a non-lawyer
consultant, Patty Bohney. Ms. Bohney and her team
subsequently left Navigant and began working for another
business consulting group, Sullivan Cotter & Associates,
Inc., taking the TriHealth FMV records with them. Plaintiff
later issued a subpoena to Sullivan Cotter, seeking the same
TriHealth refused to produce any FMV records, arguing that
all such records were subject to an attorney-client
privilege. Upon receipt of the respective subpoenas, the
attorneys for Navigant and Sullivan Cotter similarly objected
to production based upon their client's assertion of the
same attorney-client privilege. Plaintiff has now moved to
compel Navigant and Sullivan Cotter to produce the documents,
while TriHealth has filed a separate motion to quash the
third-party subpoenas. For the reasons discussed below, the
undersigned will compel Navigant and Sullivan Cotter to
produce documents responsive to the subpoenas and will deny
TriHealth's motion to quash.
October 8, 2019 Order, the undersigned pointed out that the
party asserting the privilege bears the burden to prove its
application, and that claims of attorney-client privilege
will be narrowly construed because they “reduce the
amount of information discoverable during the course of a
lawsuit.” Humphreys, Hutcheson and Moseley v.
Donovan, 755 F.2d 1211, 1219 (6th Cir.1985) (quoting
United States v. Goldfarb, 328 F.2d 280, 281 (6th
Cir.), cert. denied, 377 U.S. 976, 84 S.Ct. 1883
(1964)). Thus, courts apply the privilege “only when
‘necessary to achieve its purpose' and only to
protect legal disclosures that ‘might not have been
made absent the privilege.'” Cooey v.
Strickland, 269 F.R.D. 643, 648 (S.D. Ohio 2010)
(quoting Fisher v. United States, 425 U.S. 391, 403,
96 S.Ct. 1569 (1976)).
insists that all FMV-related documents are subject to
attorney-client privilege because both Navigant and Sullivan
were agents of TriHealth, engaged by TriHealth's counsel
in order to provide legal advice. “The privilege
applies to factual investigations conducted by counsel at a
corporate client's request (to provide legal advice to
that client), and also to agents of an attorney who are
assisting in rendering legal advice to the client.”
In re Behr Dayton Thermal Products, LLC, 298 F.R.D.
369, 373 (S.D. Ohio 2013) (internal citation omitted).
However, as the October Order explained:
assess whether the privilege applies in any given situation,
the Sixth Circuit has instructed courts ...