Oprex Surgery (Baytown), L.P. v. Sonic Automotive Employee Welfare Benefit Plan
704 F. App'x 376
| 5th Cir. | 2017Background
- Oprex Surgery (Baytown), an out-of-network medical provider, sued Sonic Automotive Employee Welfare Benefits Plan under ERISA § 1132(a)(1)(B) to recover plan benefits for services provided to plan members.
- The district court issued discovery orders requiring Oprex to produce documents, including the program/algorithm used to set billable rates (2011–2014) and spreadsheets of co-payments/deductibles.
- Oprex’s current counsel produced documents, sought to confer with Sonic about any gaps, and requested a short extension which the court granted; Oprex asserts timely supplemental production and offered to explain calculations.
- Sonic raised concerns about the adequacy of Oprex’s production only one hour before a scheduled October 4 status conference and requested court intervention and sanctions.
- At the October 4 conference the district court cut off Oprex, declared it would dismiss the complaint for purported noncompliance, entered dismissal with prejudice, and denied Oprex’s motion for relief in a one-sentence order.
- The Fifth Circuit concluded the record did not show willfulness, bad faith, client-caused misconduct, substantial prejudice to Sonic’s trial preparation, or consideration of lesser sanctions, and therefore reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal with prejudice was justified as a Rule 37 discovery sanction | Oprex says it complied with court orders, supplied documents, sought to explain algorithms, and requested brief extensions; defects were not willful | Sonic says Oprex’s production failed to disclose algorithms, comparator list, and adequate analysis, warranting dismissal | Reversed: dismissal was an abuse of discretion because Conner factors were not shown |
| Whether refusal to comply was willful or in bad faith | Oprex contends any delay was inadvertent, partly due to recent change in counsel | Sonic contends omissions were deliberate and obstructive | Held: record lacks evidence of willfulness or contumacious conduct |
| Whether deficiencies were attributable to the client (not counsel) | Oprex argues issues may be attributable to prior counsel or to its new counsel’s transition | Sonic attributes failures to Oprex itself | Held: insufficient facts to attribute misconduct to client rather than counsel |
| Whether lesser sanctions would suffice | Oprex proposed supplementation and explanation; no prior lesser sanctions were imposed | Sonic urged dismissal as appropriate deterrent | Held: court failed to consider lesser sanctions; dismissal was too drastic |
Key Cases Cited
- Natl. Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639 (U.S. 1976) (dismissal is a severe sanction but available in appropriate cases)
- FDIC v. Conner, 20 F.3d 1376 (5th Cir. 1994) (four-factor test for dismissal as a discovery sanction)
- Moore v. CITGO Refining & Chem. Co., L.P., 735 F.3d 309 (5th Cir. 2013) (dismissal implicates due process and is a drastic remedy)
- Batson v. Neal Spelce Assocs., Inc., 765 F.2d 511 (5th Cir. 1985) (dismissal as last resort; consider lesser sanctions)
- Topalian v. Ehrman, 3 F.3d 931 (5th Cir. 1993) (appellate review requires adequate record support for sanctions)