Not a Lexis Advance subscriber? Try it out for free.

Steward Health Care Sys. LLC v. Blue Cross & Blue Shield of R.I.

United States District Court for the Eastern District of Pennsylvania

November 4, 2016, Decided; November 4, 2016, Filed

No. 15-272

Opinion

MEMORANDUM

ROBERT F. KELLY, Sr. J.

Presently before the Court are the briefs submitted by both Blue Cross & Blue Shield of Rhode Island ("BCBSRI") and Nemzoff & Company, LLC ("Nemzoff") (Doc. Nos. 1, 6, 9) and the correspondence addressed to this Court by Nemzoff and BCBSRI (Doc. Nos. 26, 27, 29, 30, 32, 33, 39, 40) addressing Nemzoff's request for cost-shifting. For the reasons set forth below, Nemzoff's request for cost-shifting is granted in part and denied in part.

I. BACKGROUND

The sole issue to be decided before [*2]  this Court in this matter is the request for cost-shifting by Nemzoff in response to a third-party subpoena issued by BCBSRI. Nemzoff's refusal to comply with the Subpoena led to over a ten month delay in the production of the documents. The delay was almost entirely based on the issue of whom should bear the costs of production. The dispute largely focused on the issue of attorneys' fees for a privilege and confidentiality review that Nemzoff felt BCBSRI should be held financially responsible. However, Nemzoff has failed to adequately show that a large majority of the expenses that it requested to be reimbursed for were a result of compliance with the subpoena; therefore, it will only be awarded a portion of its requested expenses.

The underlying case is an antitrust and tort case pending in the United States District Court for the District of Rhode Island, Steward Health Care System LLC, et al. v. Blue Cross & Blue Shield of Rhode Island, C.A. No. 13-405S (the "Rhode Island Litigation"). Steward Health Care System, LLC ("Steward") alleges that it sought to acquire Landmark Hospital ("Lankmark") in order to then create a network of community hospitals in Rhode Island. (BCBSRI's Mot. [*3]  to Compel at 3.) Steward contends that BCBSRI saw Steward as a competitive threat, and claims BCBSRI engaged in anticompetitive conduct to frustrate Steward's purchase of Landmark. (Id.)

BCBSRI alleges that Nemzoff, although not a party to the underlying case, was critically involved in the central events. (Id. at 3-4.) BCBSRI states that, at the time that Steward was negotiating to acquire Landmark, Landmark was operated by a Special Master appointed by the Rhode Island Superior Court for Providence County. (Id. at 3.) To find a strategic partner to operate and eventually purchase Landmark, the Special Master engaged Nemzoff to attract and deal with potential buyers. (Id.) BCBSRI alleges that due to this significant involvement, the documents and emails that Nemzoff created in its role as consultant to the Special Master were relevant to the underlying case. (Id. at 4.) As a result, BCBSRI served a third-party subpoena ("Subpoena") on Nemzoff on or about July 2, 2015, which commanded Nemzoff to produce documents by July 30, 2015.

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

2016 U.S. Dist. LEXIS 154313 *

STEWARD HEALTH CARE SYSTEM LLC, et al., Plaintiffs, v. BLUE CROSS & BLUE SHIELD OF RHODE ISLAND, Defendant.

Prior History: Steward Health Care Sys., LLC v. Blue Cross & Blue Shield, 997 F. Supp. 2d 142, 2014 U.S. Dist. LEXIS 20304 (D.R.I., Feb. 19, 2014)

CORE TERMS

vendor, Subpoena, compliance, non-party, cost-shifting, estimate, e-discovery, telephone, reimbursement, travel, confidentiality, emails