Heartland Surgical Specialty Hospital, LLC v. Midwest Division, Inc . (D. Kan. Apr. 9, 2007)

1. Heartland Surgical Specialty Hospital, LLC v. Midwest Division, Inc.(D. Kan. Apr. 9, 2007) Andrew S. Lo E-Discovery 10/6/09

2. The Parties • Plaintiff – Heartland Surgical Specialty Hospital, LLC (“Heartland”) • Defendants – Midwest Division, Inc. (“Midwest”) • Original dispute: antitrust allegations that CIGNA and Midwest conspired by an exclusivity arrangement to prevent managed care companies from contracting with specialty hospitals like Heartland

3. Facts • Defendants gave Rule 30(b)(6) deposition notice to Heartland that identified 55 topics • CT granted Defendants’ request to split noticed topics into two depositions • Topics 1-17  11 hrs over 2 days • Topics 18-55  24 hrs over 4 days • Depositions over topics 1-17 commenced two weeks after deposition notice

4. Issue • Whether Heartland complied with requirements of Rule 30(b)(6) to produce a witness with knowledge of its production of documents and data • Heartland designated CEO, Ms. Holley, as witness to testify on behalf of the hospital

5. Discovery Rule 30(b)(6) • Notice or Subpoena Directed to an Organization • Deposing party must describe with “reasonable particularity” the matters for examination • Named organization must designate one or more officers, directors, managing agents or other persons who consent to testify on its behalf • Persons designated must testify about information known or reasonably available to the organization

6. Analysis of Rule 30(b)(6) 1. Does notice/subpoena describe with “reasonable particularity” the matters for examination? Y N Deposing Party’s Burden is Satisfied. Deponent must comply with notice/subpoena & produce a knowledgeable witness within bounds of Rule 30(b)(6) Deposing Party’s Burden Not Satisfied. Deponent need not comply with notice/subpoena

7. Deposition Topics Defendant’s motion compels Heartland to produce “knowledgeable” witness who can testify regarding: • Topic 8: Document retention of Financial Records/Reports, Patient Records • Topic 9: Destruction, alteration, loss of Financial Records/Reports, Patient Records • Topic 10: Capabilities of Heartland’s software AdvantX, Great Plains, and Softmed • Topic 16: Capabilities of computer systems and software used to create, transmit, store e-mail and e-documents • Topic 17: Heartland’s search for, ID, and production of documents responsive to discovery request

8. Deposition Questions • 1. What computer servers does Heartland use, and what data are stored on them? • Response: unable to identify servers nor know storage/retention policy of servers • 2. What computers, disk drives, and databases were searched for responsive documents? • Response: did not know which network drivers, individual user drivers, searched for discovery • 3. What are [Heartland’s] document retention policies with respect to e-mail, and what was done to prevent deletion of destruction of responsive e-mail? • Response: written polices related to document retention provided in packet

9. 4. Who is [Heartland’s] e-discovery vendor, what was the vendor instructed to do, and what did it do? • Response: did not know how e-discovery vendors searched servers or what was on CD database produced to Defendants • 5. What was done to eliminate non-responsive documents from [Heartland’s] production? • Response: did not know if counsel did anything to determine if produced documents were responsive to discovery request • 6. What are the reporting capabilities of [Heartland’s] Great Plains and AdvantX software, and can [Heartland] export its Great Plains and AdvantX databases to a file for production to defendants? • Response: did not know if software could export data for varying means of production Overall showing that Ms. Holley was unprepared to answer questions on topics 10, 16, and 17

10. Heartland’s Arguments • Defendants have opportunity to take fact witness depositions of other Heartland employee’s, including CFO and Director of Information Technology • CT distinguishes difference between fact witness v. Rule 30(b)(6) deposition which presents testimony of corporation itself

11. Precedent • Starlight Int’l Inc. v. Herlihy. 186 F.R.D. 626 (D. Kan. 1999) • Judge Rushfelt • For Rule 30(b)(b) deposition to operate effectively: • Must designate and adequately prepare witnesses testifying on behalf of company to address deposition matters • not only produce such number of people to satisfy request, but prepare them to give “complete, knowledgeable and binding answers on behalf of the corporation” • Policy: make deposition meaningful & prevent sandbagging an opponent by conducting a half-hearted inquiry

12. Conclusion • Heartland failed to designate a knowledgeable person regarding Topics 10, 16, 17 • Ms. Holley did not possess personal knowledge of these topics and was not prepared to give knowledgeable answers regarding topics on behalf of corporation • CT granted Defendants additional deposition of Heartland re: topics 10, 16, 17 • Limited to questions 1, 2, 4, 5, and 6 • Deposition limited to 6 hrs

13. Take-away • Depositions of the “person most knowledgeable” are nothing new in discovery • No rule change to Rule 30(b)(6) in the 2006 Rule Amendments • With E-discovery, case emphasizes importance of counsel’s efforts to understand creation, ID, and retention of relevant ESI & adequately preparing witness

14. Discussion Questions • With regard to e-discovery, should parties presented with a Rule 30(b)(6) deposition notice automatically designate the CIO to testify on behalf of the organization? • Should an organization designate the “person most knowledgeable” to be a person/entity outside of litigation, such as a storage vendor or third-party? • Considerations: company cannot refuse to designate a witness on the ground that the deponents are beyond the control or direction of the company