New Orleans Regional Physician Hospital Organization, Inc. v. United States, 122 Fed. Cl. 807

Background

PHN (Peoples Health Network) sues the United States for breach of Medicare Advantage contracts, alleging CMS unilaterally modified payments after Hurricanes Katrina/Rita (claims ~ $27M).
Extensive discovery disputes followed: phased discovery orders, multiple motions to compel, and contested e‑discovery efforts between 2012–2015.
PHN deposed key CMS witnesses (including former CMS plan manager Ruth Geisler); PHN discovered apparent gaps between CMS production and emails/documents referenced in those depositions.
CMS produced declarations from 23 custodians describing varying search methods; no consistent use of the 28 search terms CMS had represented it used; litigation hold implementation was late and uneven.
PHN moved to compel renewed searches under an agreed search protocol, permission to reschedule/retake depositions, discovery about other MAOs, and attorneys’ fees.
Court concluded CMS’s search efforts were inconsistent and inadequate in oversight/documentation, granted relief to develop new search protocols and production schedule, but denied discovery into other MAOs, denied compelled retakes of depositions as premature, and denied attorneys’ fees without prejudice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether PHN satisfied RCFC 37(a)(1) conferral requirement before filing motion	PHN attempted multiple conferences, requested postponement of depositions, and filed to preserve time before discovery cutoff	CMS says PHN failed to confer in good faith and filed prematurely	PHN complied with conferral requirement; motion considered on merits
Adequacy of CMS’s document search and whether CMS must redo searches under an agreed protocol	CMS production was incomplete given deposition testimony; requests joint custodian list, search terms, and native-format production	CMS contends searches were reasonable, some documents may have been destroyed per retention policy, and efforts were made	Court: CMS searches were inconsistent and lacked oversight; ordered parties to confer and produce a search protocol by Sept 21, 2015; searches to commence and produce results by Nov 23, 2015 in native format
Relevance/discovery into other Medicare Advantage Organizations (MAOs)	PHN seeks communications and treatment of other MAOs post-Katrina to support claims	CMS contends such discovery exceeds the scope of limited discovery and is not relevant	Denied: discovery into other MAOs is outside scope of the court's April 16, 2013 limited discovery order
Depositions — rescheduling and retaking already completed depositions	PHN requests postponement/rescheduling and permission to retake three completed depositions due to incomplete production	CMS argues parties should coordinate scheduling and that retakes are premature	Denied as premature. Parties must confer after new production; PHN may move later with specific justification if retakes are needed
Award of attorney’s fees under RCFC 37(a)(5)	PHN seeks fees for bringing motion and for costs of retaking depositions	CMS opposes fees	Denied without prejudice. Fees may be renewed later if retakes occur and PHN can document reasonableness

Key Cases Cited

Schism v. United States, 316 F.3d 1259 (Fed. Cir. 2002) (court exercises broad discretion in discovery matters)
Florsheim Shoe Co. v. United States, 744 F.2d 787 (Fed. Cir. 1984) (discussing discovery scope)
Hickman v. Taylor, 329 U.S. 495 (U.S. 1947) (broad but bounded discovery; mutual knowledge of facts essential)
Heat & Control Inc. v. Hester Indus., Inc., 785 F.2d 1017 (Fed. Cir. 1986) (courts must avoid depriving parties of necessary discovery)
William A. Gross Constr. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134 (S.D.N.Y. 2009) (need for careful, documented e‑discovery search methodology)
Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (burden on fee applicant to document reasonable hours and rates)