In re Administrat. Subpoena Blue Cross Blue Shield, 05-10041-PBS.

Decision Date18 November 2005
Docket NumberNo. 05-10041-PBS.,05-10041-PBS.
Citation400 F.Supp.2d 386
CourtU.S. District Court — District of Massachusetts

Sara A. Walker, Boston, MA, for Petitioner.


SARIS, District Judge.


This action arises out of a federal criminal investigation of a Massachusetts physician ("Doctor"), a provider with Blue Cross Blue Shield of Massachusetts, for health care fraud. The government suspects that the Doctor bills Medicare for an expensive specialized treatment for patients with a rare disease when the patients have not been properly diagnosed with the disease. The government served Blue Cross with an administrative subpoena under the Health Insurance Portability and Accountability Act of 1996, 18 U.S.C. § 3486(a)(1)(A), asking for documents reviewed as part of its internal medical peer review committee's ongoing (but incomplete) inquiry into the Doctor's activities in this area. Blue Cross refused to produce those documents, asserting a federal medical peer review privilege. The government filed a motion to compel production,1 which was referred to a magistrate judge. On July 28, 2005, the magistrate judge denied the motion, and the government objected.

After hearing on September 26, 2005, the government modified its document request to exclude any interim or final reports or opinions of the peer review committee. Instead, the government now seeks (1) documents related to statements and representations by the Doctor, his counsel or representatives, as part of the peer review process; (2) documents relied on by the Doctor to support any positions he took as part of the peer review process; (3) documents provided by anyone other than the Doctor for consideration by the peer review committee; (4) any settlement agreements between Blue Cross and the Doctor arising out of the peer review process; and (5) any reporting by Blue Cross to any national registries or databases regarding any action taken with respect to the Doctor.

After review of the magistrate judge's Order, the Court ALLOWS the government's motion to compel, subject to a protective order.

A. Standard of Review

An interesting threshold question is the proper standard of review under the Federal Magistrate's Act, 28 U.S.C. § 636. The answer turns on whether the motion to compel is dispositive under § 636(b)(1)(B) or nondispositive under § 636(b)(1)(A). If the motion is dispositive, as the government now contends, then the Court must engage in de novo review of the magistrate judge's order. Fed.R.Civ.P. 72(b). If the motion is nondispositive, then the Court may only modify the order to the extent that it is "clearly erroneous or contrary to law." Fed. R.Civ.P. 72(a). The Court referred the matter to the magistrate judge for ruling in a pro forma order, and the magistrate judge denied the motion.

Rule 72, which was adopted in 1983, refers to all matters which can be heard and determined by a magistrate judge as "nondispositive," and all motions as to which a magistrate judge may only make a recommendation as "dispositive." Phinney v. Wentworth Douglas Hosp., 199 F.3d 1, 5 (1st Cir.1999) (in a medical malpractice case, holding that discovery sanctions are ordinarily nondispositive unless they dispose of a claim or defense). However, one cannot merely refer to the list of dispositive motions which are exempted from the normal operation of § 636(b)(1)(A) to decide whether a particular motion is dispositive under Rule 72. Instead, "that enumeration informs the classification of other motions as dispositive or nondispositive." Id. at 5-6; Strong v. United States, 57 F.Supp.2d 908, 913 (N.D.Cal.1999) (holding that "a magistrate judge may not determine motions that are analogous to the enumerated motions, i.e., dispositive motions"). Since an administrative subpoena is not among the enumerated motions listed in § 636(b)(1)(A), the Court must decide whether the motion is "dispositive" under Rule 72 in order to determine the correct standard of review.

Many courts have treated similar motions to enforce or quash administrative subpoenas, or the like, as dispositive motions for purposes of review where the matter involving the subpoena constitutes the entire case before the Court. See, e.g., Nat'l Labor Relations Bd. v. Frazier, 966 F.2d 812, 817 (3d Cir.1992) (stating that an NLRB subpoena is "like a motion to dismiss" because "once the court grants a motion to dismiss or compels compliance with a subpoena, the court disposes of the entire case before it"); United States v. Mueller, 930 F.2d 10, 12 (8th Cir.1991) (treating an IRS summons as a dispositive matter and finding that de novo district court review palliated any problem with the magistrate judge's reference to his findings as an order); Aluminum Co. of Am., Badin Works v. U.S. Envtl. Prot. Agency, 663 F.2d 499, 501 (4th Cir.1981) (treating a motion to quash an EPA warrant as dispositive because the motion constituted the entire proceeding); Strong, 57 F.Supp.2d at 913-14 (treating a motion to quash an IRS summons as a dispositive motion because "[u]nlike a discovery motion, petitions to quash summonses are not ancillary to a larger proceeding"); In re Oral Testimony of a Witness Subpoenaed Pursuant to Civil Investigative Demand No. 98-19, 182 F.R.D. 196, 201 (E.D.Va. 1998).

In this case, the government's motion to compel production of documents pursuant to a subpoena is the entire proceeding before this Court. The only matter for this Court to decide is whether to enforce the subpoena. As such, the decision both "determines with finality the duties of the parties" and "seals with finality the district court proceeding and is subject to appellate review." See Frazier, 966 F.2d at 817-18. As such, it is of the "same genre" as the enumerated motions in § 636(b)(1)(A), and the Court will treat the motion as dispositive and will review the magistrate judge's findings de novo under 28 U.S.C. § 636(b)(1)(C). See Phinney, 199 F.3d at 6.

B. Federal Medical Peer Review Privilege

The Court must decide whether to recognize a federal medical peer review privilege. No court in the First Circuit or District of Massachusetts has yet done so under federal law, but Massachusetts state law does recognize the privilege.2 Mass. Gen. Laws ch. 111, § 204(a) (stating that "the proceedings, reports, and records of a medical peer review committee shall be confidential and ... not be subject to subpoena or discovery, or introduced into evidence in any judicial or administrative proceeding"). As Magistrate Judge Collings stated in his decision, "there is no extant federal peer review privilege and ... most federal courts, including the Supreme Court, have declined to recognize a state peer review privilege in a federal case." (Mem. & Order 4 (citations omitted).) See also Nilavar v. Mercy Health System-Western, 210 F.R.D. 597, 601 (S.D.Ohio 2002) (noting that "federal common law has not evolved to the point that it recognizes a de jure physician peer review evidentiary privilege"); Pagano v. Oroville Hosp., 145 F.R.D. 683, 692 (E.D.Cal.1993) ("There is no federal statutory basis for a medical peer review privilege.").

In federal question cases, federal common law controls the existence and application of evidentiary privileges. See Fed. R.Evid. 501 (stating that privilege "shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience"). The Supreme Court has directed that although courts have the power to be flexible and adaptive with regard to the law of privilege, they should not use the power to recognize new privileges expansively. See Univ. of Pa. v. EEOC, 493 U.S. 182, 189, 110 S.Ct. 577, 107 L.Ed.2d 571 (1990) ("We do not create and apply an evidentiary privilege unless it `promotes sufficiently important interests to outweigh the need for probative evidence'" (citing Trammel v. United States, 445 U.S. 40, 51, 100 S.Ct. 906, 63 L.Ed.2d 186 (1980))). Moreover, the Supreme Court has indicated that recognition of any privilege contravenes the "fundamental principle" that the public has a right to every person's evidence. Trammel, 445 U.S. at 50, 100 S.Ct. 906 (quoting United States v. Bryan, 339 U.S. 323, 331, 70 S.Ct. 724, 94 L.Ed. 884 (1950)).

When the forum state has recognized a particular privilege, a court may take that into account when deciding whether to recognize that privilege as part of federal law. See Jaffee v. Redmond, 518 U.S. 1, 12-13, 116 S.Ct. 1923, 135 L.Ed.2d 337 (1996) (observing that "the policy decisions of the States bear on the question whether federal courts should recognize a new privilege or amend the coverage of an existing one"). As a matter of comity, federal courts recognize state privileges "where this can be accomplished at no substantial cost to federal substantive and procedural policy." See United States v. King, 73 F.R.D. 103, 105 (E.D.N.Y.1976); see also 3 Joseph M. McLaughlin, Jack B. Weinstein & Margaret A. Berger, Weinstein's Federal Evidence § 501.03[5][b], at 501-25 (2d ed.1995).

Although this Court must take the Massachusetts statute into account, it must also heed the Supreme Court's directive in University of Pennsylvania that courts should be "especially reluctant to recognize a privilege in an area where it appears that Congress has considered the relevant competing concerns but has not provided the privilege itself." 493 U.S. at 189, 110 S.Ct. 577. In that case, a Title VII suit brought by a female professor denied tenure, the Supreme Court rejected the university's assertion of a peer review privilege with respect to documents produced by the tenure committee. Id. at 189-92, 110 S.Ct. 577. The Court noted that Congress could have created such a privilege for...

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