Supreme Court Reaches Out to Discovery Abusers

You don’t often see the phrase “smackdown” used in an article about a judicial opinion. It’s hard to imagine, though, a more apt description of the South Carolina high court’s action in Oncology and Hematology Assoc. of SC v. South Car. Dept. of Health and Envir. Control, Opinion No. 26814 (S.C., filed May 3, 2010). (Well, one does come to mind, but I’m not printing it.) In a unanimous decision granting an extraordinary writ (certiorari to review an administrative law judge’s orders compelling discovery), the court unequivocally condemned discovery tactics deployed by one of the state’s most venerable law firms.

The case began when a group of oncologists objected to Spartanburg Hospital’s application to DHEC, to move a treatment device from Spartanburg to Greer. When the physicians appealed to the ALJ, the hospital responded “by inundating [them] with discovery requests.” According to the opinion, the hospital’s lawyers “took a shotgun approach and sought virtually all information concerning every facet of” the private doctors’ business. The doctors “produced voluminous information and documentation” in response to the hospital’s request. They refused, though, to disclose confidential business information, including competitive contracts and rates they had negotiated with other health care organizations. The hospital moved to compel. In a remarkably audacious example of advocacy, its lawyer argued to the ALJ that the doctors were simply getting what they deserved for standing up to the hospital. Here’s the exchange quoted in the opinion:

The Court: You're saying in other words they asked for it?
[SRHS]: That's right. Yeah. Yeah. And there's a cost to jumping in and that's part of the cost.

The ALJ compelled the doctors to respond further.

Emboldened, the hospital then subpoenaed an independent business operation (USO) owned by the doctors, seeking documents related to its relationship with another county’s hospital. This straw was the last. USO intervened in the case to contest the subpoena. When the ALJ again ordered the discovery to proceed, the doctors and USO moved for a writ of certiorari to review the discovery orders. The Supreme Court, determining that exceptional circumstances existed, granted the writ and vacated the ALJ’s orders. Here are the money quotes:

• CCC contends the information and documents required under the discovery orders are not remotely relevant to resolution of the issue before the ALJ. We agree.
• SRHS’s discovery requests of CCC and its business partners are abusive and beyond the pale.
• SRHS abused the discovery process with its scorched-earth approach.
• I am shocked, shocked to find that gambling is going on in here!

No, wait. That last one isn’t in the opinion. But for those of us who must respond to this sort of discovery every day, this opinion is a cool breeze on a scorched, er, warm day. I still have some questions about the case, though.

First, why did it take a case involving a commercial dispute for the Court to see that “trial courts generally [are] unwilling to recognize and enforce” limits on discovery? What of the excruciating inquiry into every facet of our clients’ personal lives, calculated to humiliate them and make them pay the cost of “jumping in” to challenge wrongful conduct? Or the deposition questioning that will never, ever be repeated at trial? Recently, the wife of my homeowner client sat through a seven-hour-long deposition. No personal injury or consortium claims were involved. The most popular subject: what she thought of the several reports the engineer hired to inspect her house had written. Seriously.

Second, why is the result here vacation and remand? The Court expressly found the abusive discovery constituted “improper conduct.” It lamented the reluctance of trial courts to enforce limits on discovery. Although perhaps embarrassing for the lawyers representing the hospital, the decision otherwise has no real deterrent effect. This Court previously sanctioned two of my brethren for, among other sins, using confidential documents to establish a defendant was lying when it claimed they did not exist. Why no sanctions here?

Third, what about the other side of the coin? I realize appellate courts ordinarily don’t answer unasked questions. This case, though, is extraordinary. Why not address the other 500-pound gorilla of discovery abuse: defendants who refuse to disclose any meaningful information? Or those (usually the same) who refuse to produce documents? The “cottage industry” of abuse that concerns the Court is just as busy resisting legitimate discovery as it is torturing adversaries with oppressive requests.

Grown-ups know that the eve of trial isn’t the time to produce a year-old expert’s report. Grown-ups agree that an email is a “document” subject to production, even if it hasn’t actually been printed. Grown-ups agree a plaintiff’s statement to an insurance adjuster is discoverable. And grown-ups know—or should know—where the line falls between “thorough” and “oppressive.” I don’t imagine the Court cares much for the role of kindergarten cop. Some of us need to grow up.