Grider v. Keystone Health Plan Central, Inc.

Decision Date01 September 2009
Docket NumberNo. 08-3074.,No. 08-3075.,No. 08-3076.,No. 08-3077.,No. 08-3073.,08-3073.,08-3074.,08-3075.,08-3076.,08-3077.
Citation580 F.3d 119
PartiesNatalie M. GRIDER, M.D.; Kutztown Family Medicine, P.C. v. KEYSTONE HEALTH PLAN CENTRAL, INC.; Highmark, Inc.; John S. Brouse; Capital Blue Cross; James M. Mead; Joseph Pfister Capital Blue Cross; Keystone Health Plan Central, Inc., Appellants Natalie M. Grider, M.D.; Kutztown Family Medicine, P.C. v. Keystone Health Plan Central, Inc.; Highmark, Inc.; John S. Brouse; Capital Blue Cross; James M. Mead; Joseph Pfister Highmark, Inc., Appellant Natalie M. Grider, M.D.; Kutztown Family Medicine, P.C. v. Keystone Health Plan Central, Inc.; Highmark, Inc.; John S. Brouse; Capital Blue Cross; James M. Mead; Joseph Pfister Hangley Aronchick Segal & Pudlin; John S. Summers, Appellants Natalie M. Grider, M.D.; Kutztown Family Medicine, P.C. v. Keystone Health Plan Central, Inc.; Highmark, Inc.; John S. Brouse; Capital Blue Cross; James M. Mead; Joseph Pfister Stevens & Lee; Daniel B. Huyett; Jeffrey D. Bukowski, Appellants Natalie M. Grider, M.D.; Kutztown Family Medicine, P.C. v. Keystone Health Plan Central, Inc.; Highmark, Inc.; John S. Brouse; Capital Blue Cross; James M. Mead; Joseph Pfister Stradley, Ronon, Stevens & Young; Sandra A. Girifalco, Appellants.
CourtU.S. Court of Appeals — Third Circuit

Sandra A. Girifalco, Reed Smith, Pittsburgh, PA, for Appellant Stradley, Ronon, Stevens & Young, Nos. 08-3073/3074/3075/3076.

Thomas B. Fiddler, White & Williams, Philadelphia, PA, for Appellant James M. Mead, Nos. 08-3074/3075/3076/3077.

Malcolm J. Gross, Kimberly G. Krupka, Gross, McGinley, LaBarre & Eaton Allentown, PA, Patrick J. O'Connor, Matthew J. Siegel, Cozen & O'Connor, Philadelphia, PA, for Appellant James M. Mead, Nos. 08-3073/3074/3075/3076/3077.

Anthony J. Bocchino, (Argued), Haines & Associates Philadelphia, PA, Francis J. Farina, Devon, PA, Timothy M. Fraser, Ellen Meriwether, Michael J. Willner, Cafferty Faucher, Philadelphia, PA, Kenneth A. Jacobsen, Wallingford, PA, Joseph A. O'Keefe, O'Keefe & Sher Kutztown, PA, for Appellee Natalie M. Grider, Nos. 08-3073/3074/3075/3076/3077 & Appellee Kutztown Family Medicine, P.C., Nos. 08-3073/3074/3075/3076/3077.

Daniel I. Booker, Jeremy D. Feinstein, Sandra Girifalco, Mary J. Hackett, William T. Mandia, Mark L. Tamburri, Dianna C. Wyrick, Reed Smith, Pittsburgh, PA, for Appellee John S. Brouse, No. 08-3073, John S. Brouse, Nos. 08-3074/3075/3076/3077.

Norman E. Greenspan, Blank Rome, Philadelphia, PA, Malcolm J. Gross, Gross, McGinley, LaBarre & Eaton, Allentown, PA, Timothy D. Katsiff Morgan, Lewis & Bockius, Philadelphia, PA, for Appellant Joseph Pfister, Nos. 08-3073/08-3074/3075/3076/3077.

Joseph B.G. Fay, Marc J. Sonnenfeld, Morgan, Lewis & Bockius, Philadelphia, PA, Robert C. Heim, Dechert, Philadelphia, PA, for Amicus Curiae Appellant Philadelphia Bar Association, Nos. 08-3073/3074/3075/3076/3077.

Before SLOVITER, AMBRO, and JORDAN, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

The promulgation of the Federal Rules of Civil Procedure ushered in a new era of federal litigation, directed to the goal of securing "the just, speedy, and inexpensive determination of every action and proceeding." Fed.R.Civ.P. 1. It would be reasonable to expect, in light of all the applicable rules and governing precedents, that experienced attorneys, especially those who have handled major litigation, would be able to proceed through the discovery and pretrial stages with a conciliatory attitude and a minimum of obstruction, and that, under the guiding hand of the district court, the path to ultimate disposition would be a relatively smooth one. The record of the case before us shows exactly the opposite. The parties were unable to reach agreement on even minor matters and the discovery was noncompliant, delayed, or protracted, leading to the District Court's entry of the sanction orders that are the subject of these appeals. We conclude, without enthusiasm, that none of the players is without responsibility for the unfortunate state of affairs that developed, but we view with particular concern the lawyers' attitude and conduct toward the district judge who, if given more cooperation, would undoubtedly have been able to preside more effectively.

I. Factual Background

Keystone Health Plan Central, Inc., ("Keystone"), Capital Blue Cross ("Capital"), and Highmark Inc., ("Highmark"), together with three law firms that represented them in the class action law suit in the District Court, Hangley Aronchick Segal & Pudin, and its partner John S. Summers, and Stevens & Lee, P.C., its partners Jeffrey D. Bukowski and Daniel B Huyett, and Stradley, Ronon, Stevens & Young, LLP, and its partner, Sandra A. Girifalco, appeal two District Court orders imposing sanctions and the order denying the motion to vacate.

Natalie M. Grider, M.D., and her medical practice, Kutztown Family Medicine, P.C., filed the class action underlying this appeal on October 5, 2001, in Pennsylvania state court on behalf of a state-wide class of doctors and medical practices ("Plaintiffs") that were medical "providers with the Keystone health maintenance organization." Grider v. Keystone Health Plan Central, Inc., 500 F.3d 322, 324 (3d Cir. 2007). Plaintiffs alleged that Keystone failed to pay, or underpaid, Plaintiffs for medical services provided to Keystone's policyholders, in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., and Pennsylvania's "prompt pay" statute, 40 Pa. Cons.Stat. Ann. § 991.2101 et seq. Grider, 500 F.3d at 323. Plaintiffs also named as Defendants Capital and Highmark, each of which owned 50% of Keystone when the suit was filed, but now a wholly-owned subsidiary of Capital.1 Defendants removed the case to the United States District Court for the Eastern District of Pennsylvania on November 7, 2001.

The firm Hangley, Aronchick, Segal & Pudin and attorney Summers (together, "Hangley") represented Keystone from October 2003 to July 2006. The firm Stradley, Ronon, Stevens & Young LLP and attorney Girifalco (together, "Stradley") represented Highmark from January 2004 until at least July 24, 2007. The firm Stevens & Lee, P.C., and attorneys Bukowski and Huyett (together, "Stevens & Lee") represented Capital in these proceedings until October 3, 2006.

A. Discovery

Discovery began in 2003 and ended five years later with the parties' settlement in February 2008. The process involved District Judge James Knoll Gardner, Magistrate Judge Arnold C. Rapoport, and Special Discovery Master Karolyn Vreeland Blume. Defendants moved to dismiss the complaint on January 23, 2002. On December 19, 2002, the case was transferred to the Honorable James Knoll Gardner, who granted in part, and denied in part, the motion on September 18, 2003. It appears that the plaintiffs made no discovery requests during that time, filing their first such request (which was related to class certification) in September 2003. Defendants entered into a joint-defense agreement sometime between October and the end of December 2003 and, as the District Court found, Summers (representing Keystone) "took the lead in defending this case on behalf of all defendants and their counsel," App. at 75, a statement Stradley denies.

Between 2003 and 2005, proceedings and conferences concerning discovery and other matters were held before Magistrate Judge Arnold C. Rapoport, to whom the District Court delegated such matters. Plaintiffs served five sets of discovery requests "directed to all defendants," App. at 8977, seeking information regarding subjects such as "capitation, provider reimbursement, complaints by providers about reimbursement and information concerning the elements that would be required to be proved for class certification." App. at 75.2 Highmark estimates that the total number of requests it alone received (counting subparts) was over 422.

Highmark, Keystone and Capital responded to each request. They interposed general objections to many of Plaintiffs' discovery requests. Those objections included that Plaintiffs sought privileged or confidential material, that the requests were vague and/or overly broad, and that Plaintiffs sought documents not in Defendants' possession or whose production would impose on Defendants undue burden...

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