Sovereign Health of Fla., Inc. v. City of Fort Myers, Case No: 2:15-cv-265-FtM-29CM

• Decision Date: 07 October 2016
• Docket Number: Case No: 2:15-cv-265-FtM-29CM
• Parties: SOVEREIGN HEALTH OF FLORIDA, INC., a Delaware corporation Plaintiff, v. CITY OF FORT MYERS, Defendant.
• Court: U.S. District Court — Middle District of Florida

SOVEREIGN HEALTH OF FLORIDA,INC., a Delaware corporation Plaintiff, v. CITY OF FORT MYERS, Defendant.

Case No: 2:15-cv-265-FtM-29CM

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA FORT MYERS DIVISION

October 7, 2016

ORDER

This matter comes before the Court upon review of Plaintiff's Motion for Entry of a Confidentiality Order (Doc. 25) filed on June 7, 2016; Defendant's, City of Fort Myers', Motion (1) to Compel Plaintiff to Produce Documents, (2) to Determine the Sufficiency of Plaintiff's Responses and Objections to Request for Admissions, (3) to Compel Plaintiff to Produce Two of Their Officers, Directors and Managing Agents in Fort Myers for Depositions, and (4) for the Award of Reasonable Attorney's Fees (Doc. 26) filed on June 7, 2016; and Defendant's Unopposed Motion to Enlarge Deadlines for Disclosure of Defendant's Experts, Discovery, Mediation and Dispositive Motions and Daubert Motions (Doc. 29) filed on September 21, 2016. Defendant opposes Plaintiff's motion for a confidentiality order (Doc. 25), and Plaintiff opposes Defendant's motion to compel (Doc. 26). Doc. 25 at 8; Doc. 26 at 19.

I. Background

Plaintiff Sovereign Health is an affiliate of a national organization that operates multiple treatment facilities. Doc. 1 ¶ 1. The facilities provide rehabilitative mental health treatments in a residential setting to people who have addictions to alcohol or controlled substances. Id. ¶ 3. In April 2014, Plaintiff entered into a lease with Florentine Holding Company (the "Lease") to open a residential treatment facility on the property located at 3331 E. Riverside Drive (the "Riverside Property"). Id. ¶¶ 14, 17. The property is zoned as Multifamily Residential ("RM-16"), which allows the operation of "Assisted Living Facilities"¹ and "Residential Care Facilities."² Doc. 26 at 3.

Before Plaintiff entered into the Lease, Defendant City of Fort Myers (the "City") issued two zoning verifications that Plaintiff could operate an Assisted Living Facility or Residential Care Facility on the Riverside Property. Id. at 3-4. On September 14, 2014, Plaintiff obtained a license to operate a residential treatment facility from the Florida Department of Children and Families ("DCF") on the Riverside Property. Doc. 1 ¶ 30. On November 19, 2014, Plaintiff also obtained alicense to operate a residential treatment facility from the Florida Agency for Health Care Administration on the Riverside Property. Id. ¶ 32.

The dispute arose between the parties when Defendant refused to process Plaintiff's application for a business tax receipt. Id. ¶ 36. Plaintiff alleges that Defendant's decision was based on complaints from Plaintiff's neighbors, who expressed "irrational" fears of Plaintiff's residents. Id. ¶¶ 34-36. Defendant, on the other hand, states that Plaintiff began operating without a business tax receipt in violation of the City's requirement to obtain a business tax receipt before beginning operations. Doc. 26 at 4. Defendant also learned that the DCF's license allowed Plaintiff to provide residential detoxication services and that Plaintiff advertised its detoxication services on its website. Id. Defendant claims that Plaintiff's conduct violated the City's zoning code because Plaintiff cannot provide "Social Services," defined as "[u]ses that primarily provide treatment of those with psychiatric, alcohol, or drug problems, and transient housing related to social service programs," on the Riverside Property. Id.; Doc 26-1 at 9. Therefore, in processing Plaintiff's application for a business tax receipt, Defendant requested Plaintiff to submit information regarding the nature of its business operations. Doc. 26 at 6. Plaintiff has not provided such information to Defendant. Id.

On January 14, 2015, Defendant issued a Notice of Violation, which Plaintiff describes as a Cease and Desist Order, based on Plaintiff's operation without a business tax receipt and a certificate of use and Plaintiff's use of the Riverside Property in violation of the RM-16 zoning category. Doc. 28 at 5; Doc. 26 at 5. OnMarch 12, 2015, the City's Code Enforcement Board held a hearing and found that Plaintiff was guilty of the violations. Doc. 26 at 5. Plaintiff claims that the board found Plaintiff in violation of the code because of neighbors' objections. Doc. 28 at 5. On March 13, 2015, Plaintiff met with a City official who told Plaintiff that Defendant would not issue a business tax receipt until Plaintiff forfeited its DCF license. Id. at 6. Soon after, Plaintiff filed an administrative appeal of the board's decision and a petition seeking an emergency writ of mandamus. Doc. 26 at 5.

On April 28, 2015, Plaintiff filed a Complaint against Defendant in this Court on the grounds that Defendant has unlawfully discriminated against Plaintiff under the Fair Housing Act and Title II of the Americans with Disabilities Act. Doc. 1 ¶ 3. Defendant defends itself on the ground that Plaintiff illegally operated a facility in violation of the City's code. Doc. 4 at 9.

II. Defendant's Motion to Compel Plaintiff's Response to Defendant's First Request for Production (Doc. 26) and Plaintiff's Motion for Entry of a Confidentiality Order (Doc. 25)

On June 7, 2016, Defendant filed a motion to compel Plaintiff (1) to produce documents responsive to Defendant's First Request for Production of Documents, (2) to determine the sufficiency of Plaintiff's responses to Defendant's First Requests for Admissions, (3) to take depositions of Plaintiff's two officers in Fort Myers, and (4) to request reasonable attorney's fees. Doc. 26. Plaintiff simultaneously moved for a confidentiality order regarding Defendant's First Request for Production of Documents and First Set of Interrogatories. Doc. 25.

First, Defendant seeks to compel Plaintiffs to produce documents in response to Defendant's First Requests for Production Nos. 48, 57, 58, 59, 61, 68, 72, and 73:

48. Any and all documents relating to procedures, tests, and test results to verify that residents at the Riverside Property are not using illegal drugs or alcoholic beverages during their residency.

57. Any and all documents reflecting prices or charges for services at the Riverside Property.

58. Any and all documents relating to an agreement with potential patients, insurance companies, or other third-party payors reflecting prices or charges for services at the Riverside Property.

59. Copies of any and all federal and state corporate tax returns for Sovereign Health of Florida, Inc. for the past ten (10) years.

61. Any and all billing statements, invoices, or statements of services rendered to a resident or patient at the Riverside Property or to an insurance company or payer for a resident or patient at the Riverside Property.

68. Any and all periodic or onetime operations reports, reports to management, or reports to shareholders which would indicate the services being provided at, the revenues being generated at, and the costs being incurred at the Riverside Property.

72. Any and all periodic or onetime operations reports, reports to management, or reports to shareholders which would indicate the services being provided at, the revenues being generated at, and the costs being incurred at the Riverside Property.

73. Any and all documents showing the number of residents or patients at the Riverside Property.

Doc. 26 at 8-9; Doc. 26-9 at 14-17. To all of the requests above, Plaintiff answered, "[s]ubject to entry of an order to protect confidentiality, [it] agrees to produce responsive non-privileged documents at a mutually convenient time and place." Doc. 26-9 at 14-17. Plaintiff seeks to produce documents under a confidentiality order inresponse to the above requests as well as Request No. 60 and Defendant's First Interrogatories Nos. 6 and 7. Doc. 25 at 3-5. Plaintiff states that these requests seek the two overarching categories of information: Plaintiff's confidential financial information and patient data. Id. at 7.

Plaintiff argues that they can produce the requested documents only pursuant to a protective order because its financial information and patient records are private in nature, and state and federal laws protect Plaintiff's patient records. Doc. 25 at 5-6. Plaintiff submitted a proposed confidentiality order and asks the Court to adopt it. Doc. 25-1. Defendant asserts that it cannot agree or stipulate to the proposed confidentiality order because as a public agency, it is bound by Chapter 119 of the Florida Statutes. Doc. 26 at 9. Defendant states that once Defendant receives documents from Plaintiff, under Section 119.07 of the Florida Statutes,³ Defendant only acts as a pass-through and cannot decide independently whether the documents are exempt from the Public Records Act. Doc. 27 at 3.

The parties state that before filing the motions (Docs. 25, 26), they had good faith discussions on filing a stipulated protective order. Doc. 25 at 5. When Plaintiff proposed a confidentiality order, however, the parties could not reach an agreement on several clauses within the proposed order. Doc. 25 at 7; Doc. 27 at 4. Defendant argues that the proposed order allows Plaintiff to unilaterally designate information as confidential. Doc. 27 at 4; Doc. 25-1 at 2 ("All designations ofConfidential Information shall be made in good faith by the Producing Party at the time of Disclosure, production, or tender."). Defendant also finds problematic that the proposed order limits the use and disclosure of confidential information as the information may "be used solely for the purposes of this litigation and for no other purpose" and "may be disclosed to and viewed by the following 'Authorized persons.'" Doc. 25-1 at 5; Doc. 27 at 4.

The most contentious clause is the following:

5. (c) No one who has access to these documents identified as Confidential Information shall distribute, disclose, divulge, publish or otherwise make available any portion, extracts or summaries thereof or disclose the subject matter to any

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