United States District Court, D. New Mexico
NEW MEXICO ONCOLOGY AND HEMATOLOGY CONSULTANTS, LTD., Plaintiff,
v.
PRESBYTERIAN HEALTHCARE SERVICES, et al., Defendants.
ORDER ADOPTING IN PART SPECIAL MASTER'S SECOND
REPORT & RECOMMENDATIONS
GREGORY B. WORMUTH UNITED STATES MAGISTRATE JUDGE
This
matter comes before the Court upon Plaintiff's Motion to
Adopt the Special Master's Second Report and
Recommendation (doc. 622) and Defendants' Motion
to Modify the Special Master's Second Report and
Recommendation (doc. 621). On December 29, 2016,
Plaintiff filed a Motion to Compel and Objection to
Presbyterian Clawback (doc. 575). In its Motion,
Plaintiff requests that the Court compel Defendants to
produce all unredacted iterations of an email sent to
Presbyterian President and CEO Jim Hinton on April 12, 2013
(hereinafter, the “Hinton Email”). Doc.
575 at 1, 9. On November 16, 2016, in anticipation of
the filing of Plaintiff's motion, the Court appointed
Special Master Alan C. Torgerson to address the motion.
Doc. 551.
On
February 27, 2017, the Special Master filed his Second Report
and Recommendation. Doc. 609. The Court has reviewed
it and has considered the Special Master's
recommendations that the Court: (1) find that the Hinton
email was not produced as a result of
“inadvertence;” (2) deny Defendants' request
to clawback the Hinton Email; (3) order that all iterations
of the Hinton Email be produced in un- redacted form; (4)
order Defendants to pay Plaintiff for its reasonable costs
and fees for having to file the motion; and (5) order
Defendants to pay the Special Master's fee in connection
with the Second Special Master Report. See Id. at
17.
In its
Motion, Plaintiff asks the Court to adopt each of the Special
Master's recommendations. See generally doc.
622. For their part, Defendants object solely to the
Special Master's recommendation that Defendants pay
Plaintiff's reasonable costs and fees associated with its
motion. Doc. 621 at 1-2. Defendants object to this
recommendation by the Special Master arguing that (1) the
Special Master was not authorized to recommend an award of
costs and fees and (2) Defendants' clawback request was
substantially justified and therefore costs should not be
awarded. For the following reasons, the Court adopts the
Special Master's Second Report and Recommendation in
part.
A.
The Special Master was authorized to recommend an award of
costs and fees associated with the motion.
On
August 11, 2016, the Court issued its initial order
appointing Special Master Torgerson to review Defendants'
privilege designations. Doc. 470. Defendants argue
that the Court's statement that “[t]he Special
Master's recommendation on costs is limited to
responsibility for payment of the Special Master's
costs” withholds authority to recommend an award of
costs and fees associated with Plaintiff's motion.
Doc. 621 at 4. However, on November 16, 2016, the
Court issued a Supplemental Order Appointing Special Master,
which expanded the scope of the Special Master's
assignment to include Plaintiff's Motion to Compel on the
clawback issue. Doc. 551. Notably, this supplemental
order did not contain a similar restriction on the Special
Master's consideration of costs. See generally
Id. The question of whether the Special Master could
consider an award of costs associated with Plaintiff's
motion is thus not expressly resolved in the orders
appointing the Special Master. However, the Court did state
in its supplemental order that it “hereby expands the
Scope of Work . . . to also include consideration of
[Plaintiff's] Motion [to Compel].” Doc.
551 at 2.
Motions
to compel are brought pursuant to Rule 37 of the Federal
Rules of Civil Procedure. See Fed. R. Civ. P. 37(a).
That rule specifically requires that the “losing”
party must be required to pay the reasonable expenses
incurred in making or opposing the motion unless (i) the
prevailing party failed to make a good faith effort to obtain
the disclosure without court action; (ii) the
“losing” party's grounds were
“substantially justified” or (iii) the
“circumstances make an award of expenses unjust.”
Fed.R.Civ.P. 37(a)(5).[1] Consequently, consideration of a motion to
compel necessarily includes ruling on the matter of costs.
This truism is particularly apt here where the motion
referred to the Special Master for his consideration included
a Plaintiff's request for an “award [of] reasonable
costs and fees … for having to file this
Motion.” Doc. 575 at 17. Therefore, referral
of the motion to compel to the Special Master included the
authority to make a recommendation regarding awarding costs
and fees associated with filing the motion.[2]
B.
Review of Special Master's Recommendation
With
respect to the sole contested issue, the Special Master
recommended “that NMOHC be awarded reasonable costs and
fees for having to file this Motion….” Doc.
609 at 17. As with all factual findings and legal
conclusions of a special master, this recommendation is
reviewed de novo.[3] Fed.R.Civ.P. 53(f). Because the Special
Master did not expressly state the basis for this
recommendation, the Court will assume that he was applying
the standards of Rule 37. As noted above, expenses associated
with a motion to compel are not assessed to the
“losing” party if their arguments against
disclosure were “substantially justified.”
Fed.R.Civ.P. 37(a)(5). While the Special Master never
explicitly found that Defendants' arguments were not
“substantially justified, ” such a finding is
implied in his final recommendation. The Court disagrees.
According
to the Special Master, the matter at issue in his Second
Report and Recommendation boiled down to two arguments: (1)
did Defendants waive any privilege by allowing
Plaintiff's attorney to use the email during the Hinton
deposition, and (2) if not, was the email subject to
clawback? On the first of the questions (addressed second by
the Special Master), the Special Master agreed with
Defendants. See doc. 609 at 12-17. On the second
question, Defendants were not so fortunate. In ruling against
Defendants, the Special Master rejected two related
arguments.
First,
the Special Master ruled that Defendants' right to
clawback was governed by Fed.R.Evid. 502(b). Id. at
5-9. This ruling rejected Defendants' argument that their
right to clawback was governed by the parties' stipulated
protective order. This distinction was important because,
under Rule 502(b), a clawback is only permitted for
“inadvertent” disclosures where the party also
satisfies certain pre- and post- disclosure duties. Under the
protective order, clawback was permitted for disclosures
through “inadvertence, mistake or other
error….” Doc. 93, ¶25. Because the
Special Master found that Defendants' disclosure of the
email was not “inadvertent, ” he held that
clawback under Rule 502(b) was not permitted. Next, the
Special Master opined that, even if the protective order
standard applied, the email was not produced as a result
“inadvertence, mistake or other error.” See
doc. 609 at 9-12.
While
the Court herein adopts these conclusions, it finds
Defendants' contrary arguments were substantially
justified. The Court finds that they were justified to argue
that the protective order applied and gave broader clawback
protection than provided for in Rule 502(b), and that the
Hinton email disclosure was a
"mistake"[4] and subject to clawback under the
protective order. Therefore, expenses for the underlying
motion to compel will not be assessed to them.
WHEREFORE
IT IS HEREBY ORDERED that the Plaintiff's Motion
to Adopt the Special Master's Second Report and
Recommendation (doc. 622) is GRANTED IN PART and
Defendants' Motion to Modify the Special Master's
Second Report and Recommendation (doc. 621) is
GRANTED. The Second Special Master Report (doc. 609)
is ADOPTED IN PART by the Court. Plaintiff's Motion to
Compel (doc. 575) is GRANTED with the exception of
the request for fees and costs which is DENIED.
Defendants' request to clawback the Hinton Email is
DENIED. Defendants shall produce all iterations of the Hinton
Email in its un-redacted ...