Law School Case Brief
United States ex rel. Guardiola v. Renown Health - No. 3:12-cv-00295-LRH-VPC, 2015 U.S. Dist. LEXIS 112511 (D. Nev. Aug. 25, 2015)
To decide whether good cause exists, the court must apply a "balancing test of the costs and potential benefits of the requested discovery under Rule 26(b)(2)(B)," taking into account seven factors: (1) the specificity of the discovery request; (2) the quantity of information available from other and more easily accessed sources; (3) the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources; (4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources; (5) predictions as to the importance and usefulness of further information; (6) the importance of the issues at stake in the litigation; and (7) the parties' resources.
Relator filed suit against Renown under the False Claims Act alleging that, while working at Renown from June 2006 through June 2014, she discovered the existence of a scheme whereby Renown knowingly submitted false inpatient reimbursement claims to Medicare that should have been billed on a less expensive, outpatient basis. Initially, Relator sent two document production requests to Renown. The Court set the relevant timespan for production as June 1, 2006 through June 30, 2014, an eight-year period. Renown did not produce emails for a so-called "gap period" between April 2011 and February 2013 due to technology, email retention policy, and cost restrictions. On the belief that the March 2011 tapes held the greatest number and scope of historical emails relevant to this litigation, Renown restored the March 2011 backup tapes, via a third-party vendor, and produced emails contained therein. Renown indicated that the restoration cost alone, i.e., excluding attorney review and production, exceeded $35,000. Including review and production, the cost surpassed $100,000. Due to time and expense, Renown has not attempted, and remained unwilling, to restore the gap-period tapes. It averred that its IT department cannot restore the gap-period emails in-house and having to outsource the work would amount to a total cost of at least $248,000, which included data processing and contract attorney review. Relator's position is that Renown should be ordered to produce them because they are highly relevant to her claims. Relator then filed suit to compel production of "gap period" emails.
Can Renown be compelled to produce the "gap period" emails?
Because the Court determined that the gap-period emails were not reasonably inaccessible due to undue burden or undue cost, Rule 26(b) required their production. The Court granted Relator's motion to compel. The Court added that even if the emails were not reasonably accessible, good cause supported their discovery. In that alternative instance, the relevant factors do not support shifting the cost of their restoration. The request for cost shifting was also denied.
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