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State Farm Mut. Auto. Ins. Co. v. Fayda - 2015 U.S. Dist. LEXIS 162164 (S.D.N.Y. Dec. 3, 2015)


Any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering 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.


In this action, plaintiff State Farm Mutual Automobile Insurance Company (State Farm) alleges that various healthcare providers, including defendants Arkady Kiner and Contemporary Acupuncture P.C., submitted fraudulent insurance claims for services that were not medically necessary. State Farm has filed a motion to compel the Defendants to produce financial records as well as documents from other acupuncture practices he controls. Defendants objected, arguing that they should not be required to produce the records because the discovery is disproportionate to the needs of the case and because the records are private.


Was plaintiff State Farm’s Motion to Compel disproportionate to the needs of the case?




The federal district court granted plaintiff State Farm's motion to compel. Rule 26(b)(1) instructs parties and courts to evaluate whether the benefit of the discovery sought is proportional to the burden of producing it, taking into account issues like access, importance, and available resources.  While Defendants' argument that State Farm only had paid them approximately $12,000 and thus, the discovery requested was of little value, the court noted that Defendants failed to rebut State Farm's showing that the financial records were relevant and material to its case. Moreover, defendants did not establish that the plaintiff has an alternative source for the information or that producing it would be particularly burdensome. A court will order tax returns and other sensitive financial information produced where it is relevant to the action and there is a compelling need for the documents because the information is not otherwise readily available. The party resisting disclosure should bear the burden of establishing alternative sources for the information.

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