IN THE UNITED STATES DISTRICT COURT

 FOR THE SOUTHERN DISTRICT OF OHIO

 EASTERN DIVISION

OSU Pathology Services, LLC, :

et al., 

Plaintiffs, : Case No. 2:11-cv-005 

v. : JUDGE GEORGE C. SMITH 

 Magistrate Judge Kemp

Aetna Health, Inc., :

 

Defendant. :

OPINION AND ORDER

This case arises from an arbitration proceeding which was

initiated by the defendant Aetna Health, Inc. under the auspices

of the American Arbitration Association. The case is currently

before the Court to resolve a discovery dispute. For the

following reasons, the Court resolves the dispute in favor of

allowing Aetna to do a limited amount of discovery and to

supplement its response to the plaintiffs’ pending summary

judgment motion after that discovery has been completed.

I. The Background of the Dispute

By way of background, Aetna’s arbitration demand stems from

an agreement entered into by Aetna and plaintiff Ohio State

University Physicians, Inc. in 2005. In their complaint,

plaintiffs (Ohio State University Physicians, Inc. and a related

entity, OSU Pathology Services, LLC) claim that they are under no

obligation to arbitrate the issues in question, and they seek an

order from this Court directing that the proposed arbitration not

proceed. Plaintiffs moved for summary judgment on this issue on

January 28, 2011, arguing, among other things, that the

arbitration should not go forward because (at least according to

plaintiffs) the arbitration agreement which Aetna seeks to

enforce was revoked and superseded before Aetna made its demand

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for arbitration, and because plaintiff Pathology Services was not

a party to the agreement even if it is still in effect.

When the discovery issue arose, Aetna had not yet filed a

response to the motion for summary judgment. In the parties’

Rule 26(f) report (Doc. #12), Aetna indicated that it might need

limited discovery if Pathology Services took the position that it

was never bound by the 2005 agreement. In its initial Rule 16

order (Doc. #14), the Court set a deadline of February 28, 2011

for the completion of any discovery. 

According to the parties’ filings made in connection with

the present discovery dispute, on January 26, 2011, Aetna served

each plaintiff with a Rule 30(b)(6) notice of deposition and with

document requests. Plaintiffs’ counsel immediately contacted

Aetna’s counsel, objecting to the depositions as not reasonably

calculated to lead to the discovery of admissible evidence, and,

at the same time, filed a motion for a protective order. The

Court held a telephone conference on February 2, 2011. The issue

was not resolved at the conference or afterward by the parties. 

They have now briefed the motion for a protective order and

Aetna’s competing motion to compel discovery. In addition, Aetna

filed a motion to extend the time for responding to the summary

judgment motion, and, after plaintiffs responded to that motion,

filed a motion for a continuance of proceedings under

Fed.R.Civ.P. 56(d). It has also filed its own summary judgment

motion and a combined memorandum in support of that motion and in

opposition to plaintiffs’ motion. The Court will take all of

these filings into account in making its ruling.

II. The Parties’ Positions

Because Aetna is the party which served the discovery

requests and is the proponent of discovery going forward, the

Court will set out Aetna’s position first. 

As noted above, one of the issues raised by the plaintiffs’

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summary judgment motion is whether Pathology Services is bound to

arbitrate any issues with Aetna even though it did not sign the

agreement which contains the arbitration clause Aetna has

invoked. No one disputes the fact that Pathology Services did

not sign the agreement. However, Aetna contends that Pathology

Services may still be legally required to arbitrate with it. 

In its combined memorandum in support of its motion to

compel and in opposition to the motion for a protective order,

Aetna cites to, among other cases, Thomson-CSF, S.A. v. American

Arbitration Ass'n, 64 F.3d 773 (2d Cir. 1995) for the proposition

that, under the right circumstances, non-signatories to an

agreement containing an arbitration clause may still be obligated

to arbitrate issues arising under the agreement. In Thomson-CSF,

the court, while citing with general approval the notion that

arbitration agreements should not ordinarily be expanded to

include “claims and parties that were not intended by the

original contract,” also noted that the ordinary principles of

contract interpretation still apply to arbitration agreements. 

Id. at 776. It reasoned that under such concepts as “1)

incorporation by reference; 2) assumption; 3) agency; 4)

veil-piercing/alter ego; and 5) estoppel,” a non-signatory might

well be required to arbitrate. Id. Aetna argues that some of

these factors may be present here, and that they are factintensive issues, so that discovery directed to any of them is

directly relevant to the question of whether Pathology Services

is bound by the arbitration clause in question.

In its motion for a protective order, Pathology Services

does not take issue with the basic contention that there are

times when a non-signatory to a contract can be bound by an

arbitration clause found in that contract. However, it points

out that in this case, the contract in question contains an

integration clause (Section 9.13, which can be found attached to

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a sealed affidavit (#23) filed in support of plaintiffs’ motion

for summary judgment) which operates to prohibit the introduction

of parol evidence to vary or contradict the terms of the

agreement. The integration clause, as is typical of such

clauses, states that the agreement is the “complete and sole

contract between the parties” and that it “supersedes any and all

prior or contemporaneous oral or written representations,

communications, proposals or agreements not expressly included

herein and may not be contradicted or varied by evidence of

prior, contemporaneous or subsequent oral representations,

communications, proposals, agreements, prior course of dealings

or discussions of the Parties.” 

Taking this argument to the next step, Pathology Services

contends that although there may be circumstances where,

notwithstanding such a provision, extrinsic evidence might be

used to prove the existence of one of the five bases for binding

a non-signatory to an arbitration agreement, those circumstances

are not present here. That is so, it argues, because another

provision of the contract, section 8.4, states that the two

signing parties agreed that “any arbitration or other proceeding

related to a dispute arising under this Agreement shall be

conducted solely between them,” and section 9.6 says that the

agreement “does not apply to any other organization which ... is

an affiliate of” Ohio State University Physicians, Inc. 

Pathology Services (which does appear to be an affiliate of Ohio

State University Physicians, Inc.) then asserts that should the

Court find these provisions to be unambiguous (and it believes

that they are), and should the Court further find that they

answer definitively the question of who is bound to arbitrate

under the agreement, it would violate the Ohio parol evidence

rule to allow Aetna to introduce any extraneous evidence which

would vary or contradict these terms, even if that evidence might

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otherwise be admissible to show that one of the five bases for

holding a non-signatory to an arbitration clause is present here.

 III. Discussion

Much of Aetna’s argument in support of its motion to compel

discovery rests on Judge Marbley’s decision in MJR Intern., Inc.

v. American Arbitration Ass’n, 2009 WL 2824102 (S.D. Ohio August

26, 2009), aff’d 2010 WL 3927310 (6th Cir. September 21, 2010). 

Like this case, MJR involved a dispute about whether a nonsignatory to an agreement containing an arbitration clause could

be compelled to arbitrate disputes arising under the agreement. 

The non-signatory party, MJR, had been named as a party to the

arbitration proceedings on the theory that it was the principal

of one of the signatories to the agreement and that under agency

law, it was bound by the agreement. MJR was ordered by the

arbitrator to arbitrate the dispute. MJR then filed a complaint

in this Court seeking to be relieved of that obligation. The

Court, after conducting a one-day bench trial, agreed with the

arbitrator’s conclusion that an entity named Oxford, which was a

named party to the underlying agreement, had acted as MJR’s agent

in negotiating the agreement and that MJR was therefore bound by

its terms, including the arbitration provision contained in the

contract.

In opposing that result, MJR argued to Judge Marbley that

because the agreement between Oxford and YKI, the other party,

was fully integrated, the Court was limited in its inquiry to the

language of the agreement itself and could not consider either

pre-execution or post-execution acts or documents in construing

the agreement. Judge Marbley rejected that argument, finding

that it “completely misconstrues the relevant inquiry in this

case.” MJR, 2009 WL 2824102, at *7 n.6. The relevant inquiry,

as he viewed it, was whether an agency relationship existed

between MJR and Oxford, and the agreement simply did not address

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that question. Thus, evidence about the agency relationship was

not designed to alter or contradict any term of the contract, but

simply to determine if MJR was bound to honor the terms to which

its agent had agreed. To preclude the use of extrinsic evidence

in these circumstances would, as Judge Marbley noted, lead to the

“nonsensical” result that if a contract negotiated by an agent on

behalf of a principal did not expressly acknowledge, by language

in the contract itself, the existence of the agency relationship,

the principal “could almost always avoid liability for contracts

entered into on its behalf by an agent merely by refusing to sign

the contract itself.” Id. 

On appeal, the MJR decision was affirmed based on Judge

Marbley’s reasoning. Pathology Services does not (and could not)

argue that this Court is not bound to follow MJR, but only that

it is inapposite. It attempts to distinguish MJR because its

argument against the use of extrinsic does not rely solely on the

presence of an integration in the contract, but upon the fact

that the specific parol evidence which Aetna seeks to discover

would, if accepted by the Court, directly contradict a

contractual term (present here, but absent in MJR) specifying

that if an arbitration were to occur, only the signing parties -

and not anyone else, even if that “anyone else” stood in a

principal-agent relationship to one of the signing parties -

would participate in that arbitration. 

The Court has reviewed the agreement which Judge Marbley

construed in MJR (it can be found on the docket of Case No. 2:06-

cv-00937 as Exhibit 3 to Defendant’s Notice of Removal, Doc. #2)

and Pathology Services is correct that there is no language in

that agreement’s arbitration clause specifically limiting the

arbitration to the signing parties. That certainly distinguishes

MJR from this case, but the more pertinent question is whether it

is a distinction which makes a difference, especially when the

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Court considers that the present motion is a discovery motion and

not a motion which will be ultimately dispositive of any claim or

defense.

It is perhaps important to set forth the usual rules of

relevance as they relate to discovery, even though these rules

are well-known to the parties. The Federal Rules of Civil

Procedure authorize extremely broad discovery. United States

v. Leggett & Platt, Inc., 542 F.2d 655 (6th Cir. 1976). 

Therefore, Fed.R.Civ.P. 26 is to be liberally construed in favor

of allowing discovery. Dunn v. Midwestern Indemnity, 88 F.R.D.

191 (S.D. Ohio 1980). Any matter that is relevant, in the sense

that it reasonably may lead to the discovery of admissible

evidence, and is not privileged, can be discovered. The concept

of relevance during discovery is necessarily broader than at

trial, Mellon v. Cooper-Jarrett, Inc., 424 F.2d 499 (6th Cir.

1970), and "[a] court is not permitted to preclude the discovery

of arguably relevant information solely because if the

information were introduced at trial, it would be

'speculative' at best." Coleman v. American Red Cross, 23

F.3d 1091, 1097 (6th Cir. 1994).

 Information subject to disclosure during discovery need

not relate directly to the merits of the claims or defenses

of the parties. Rather, it may also relate to any of the

myriad of fact-oriented issues that arise in connection with

the litigation. Oppenheimer Fund, Inc. v. Sanders, 437 U.S.

340 (1978). On the other hand, the Court has the duty to

deny discovery directed to matters not legitimately within

the scope of Rule 26, and to use its broad discretionary

power to protect a party or person from harassment or

oppression that may result even from a facially appropriate

discovery request. See Herbert v. Lando, 44l U.S. 153

(1979). Additionally, the Court has discretion to limit or even

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preclude discovery which meets the general standard of relevance

found in Rule 26(b)(1) if the discovery is unreasonably

duplicative, or the burden of providing discovery outweighs the

benefits, taking into account factors such as the importance of

the requested discovery to the central issues in the case, the

amount in controversy, and the parties’ resources. See

Fed.R.Civ.P. 26(b)(2). Finally, the Court notes that the scope

of permissible discovery which can be conducted without leave of

court was narrowed by the December 1, 2000 amendments to the

Federal Rules. Rule 26(b) now permits discovery to be had

without leave of court if that discovery “is relevant to the

claim or defense of any party ....” Upon a showing of good

cause, however, the Court may permit broader discovery of matters

“relevant to the subject matter involved in the action.” Id.

A. The Agency Theory

Pathology Services’ position on the agency theory does

present an issue not directly addressed in MJR. Suppose, for

example, that Aetna succeeded in proving that Ohio State

University Physicians, Inc. was acting as an agent for Pathology

Services when it negotiated the agreement. However, according to

plaintiffs, one of the negotiated terms provides that any

arbitration proceeding would be confined to Ohio State University

Physicians, Inc. and Aetna. Under those circumstances, proof

that Ohio State University Physicians, Inc. was acting as

Pathology Services’ agent would not alter the terms of the

contract; even through an agent, Pathology Services could well

have negotiated a contract term that excludes it from

participation in an arbitration and leaves that function

exclusively to its agent.

This line of reasoning, while interesting, does not persuade

the Court that the discovery on the agency issue, or the

presentation of evidence concerning an agency relationship, would

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be barred by the parol evidence rule. It is still the case that 

the agreement does not address, or attempt conclusively to 

resolve, the question of whether Ohio State University

Physicians, Inc. was acting only for itself or on behalf of other

affiliates or principals such as Pathology Services. Therefore,

evidence of the existence of a principal-agent relationship

between Ohio State University Physicians and Pathology Services

would not contradict or vary any term of the agreement. However,

if plaintiffs are construing the contract correctly, such

evidence might well be irrelevant to the question of whom the

agreement includes within the scope of the arbitration clause. 

 The Court notes, however, that Aetna, in its response to the

summary judgment motion, provides an alternative interpretation

of the agreement - specifically, Section 2.4 - that would allow

the Court to determine that the agreement, by its language, binds

Pathology Services, as “Participating Group Physicians,” to all

the terms of the agreement, including the arbitration clause. It

suffices to say for the moment that under the broad standard of

relevance applicable to discovery issues, and taking into account

that the ultimate decision about how the agreement should be

construed is a merits decision left to the presiding District

Judge, discovery about the agency question, if properly limited

to that question, may be reasonably calculated to lead to the

discovery of relevant evidence even if it ultimately turns out

that the District Judge deems the evidence to be immaterial. 

This issue will be discussed further below after the Court has

considered whether there are any other theories which might

entitle Aetna to conduct discovery, so that the Court can then

address the question of what the proper scope of discovery might

be.

B. The Estoppel and Alter Ego Theories

As noted above, Aetna has not confined its argument to the

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issue of agency. Rather, it relies on three of the five

exceptions recognized in Thomson-CSF, namely agency, alter ego,

and estoppel. The Court will now examine those other theories to

determine if they also provide some basis for conducting

discovery.

Aetna’s estoppel theory, as set forth in its memorandum in

support of its motion to compel, is based on the proposition that

an entity which accepts the benefits of a contract to which it is

not a party should be deemed, on equity grounds, to have accepted

the obligations contained in the contract as well. Its alter ego

theory posits that if it can show that Ohio State University

Physicians was simply acting as a “front” for Pathology Services

(rather than as an agent, which is a different concept), the

Court can replace the “front” entity with the “real” entity

(here, Pathology Services). If that were to occur, Pathology

Services would be considered, in law, to be a party to the

agreement, and as a party, it would be bound to arbitrate. 

Neither of these theories, at least on their face, would appear

to suffer from the same infirmity as the agency theory, because

they would, by operation of law, rather than as a matter of

contract interpretation, bind Pathology Services to arbitrate.

Looking at these arguments in reverse order, one problem

with the alter ego theory is that Aetna has not cited to any

evidence that Ohio State University Physicians might be an alter

ego of Pathology Services. Courts are often reluctant to start

parties down a path of expensive discovery without at least some

plausible claim that the issue on which discovery is to be taken

is remotely viable. See, e.g., Bell Atlantic Corp. v. Twombly,

550 U.S. 554 (2007). Aetna does, in its summary judgment motion

and memorandum, suggest that the fact that Pathology Services is

a wholly-owned subsidiary of Ohio State University Physicians and

that it participated in some way in the creation of another

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physicians’ group (“Path Component” or “Pathology Components”)

which allegedly billed its services directly to Aetna even though

it was not a participating provider, raises a factual question

about whether the two plaintiffs are alter egos of each other. 

In order to determine if this fact, or other considerations,

constitute a good faith basis for requesting discovery on this

theory, the Court is required to explore in some depth the legal

structure of the alter ego theory under Ohio law.

Aetna cites the Ohio Supreme Court’s decision in Belvedere

Condominium Unit Owners' Assn. v. R.E. Roark Cos., Inc., 67 Ohio

St.3d 274 (1993), in support of its alter ego argument. In that

case, the court held that the alter ego theory, which allows a

creditor of a corporation to recover not only from a corporation

but also from its shareholders, “was developed to protect

creditors of a corporation from shareholders who use the

corporate entity for criminal or fraudulent purposes.” Id. at

287. It permits the courts to disregard the “fiction” of the

corporate entity when it would be unjust to recognize it. In

terms of the elements of such a claim, the Belvedere court did

not require proof that the corporation was formed for a

fraudulent or criminal purpose, but only proof that it was used

in that way. Of course, proof of fraud is not, by itself,

sufficient; there must also be evidence that the corporation was

dominated by its shareholder to the point that it had “no

separate mind, will, or existence of its own” and that this

domination was used to commit the fraud in question. Id. at 288. 

Further, the theory (at least as it relates to piercing the

corporate veil for the purpose of creating shareholder liability)

is usually limited to situations where the act giving rise to

liability was fraudulent, illegal, or similarly unlawful; garden

variety tort and contract claims do not suffice. See Dombrowski

v. WellPoint, Inc., 119 Ohio St. 3d 506, 513-14 (2008). The

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result of proving an alter ego theory in the creditor context is

that the shareholders of the corporation can be held liable for

corporate obligations to the same extent as the corporation

itself.

Ordinarily, this theory would not allow a creditor (or an

adverse contracting party) to proceed directly against someone

who is not the other corporation’s shareholder, but rather a

wholly-owned subsidiary of the corporation. However, Ohio law

would appear, at least in some circumstances, to use an alter ego

theory not just to permit the veil between a corporation and its

shareholders to be pierced, but also to allow a corporate parent

and its subsidiary to be treated as a single entity. Thus, for

example, in Danziger v. Luse, 103 Ohio St. 337 (2004), the court

allowed shareholders of a parent corporation to examine the books

and records of a wholly-owned subsidiary where the subsidiary was

the only asset owned by the parent, and the parent and subsidiary

shared common directors and officers. This same type of

reasoning has led the Court of Appeals to conclude that “alter

ego” and “veil piercing” are actually distinct concepts under

Ohio law, and that the “alter ego” theory can be used to treat

related corporations (or, as in that case, shareholders and

corporations) as if they were the same entity, thus allowing a

claim against a shareholder to become a claim against the

corporation as well. See In re Fisher, 296 Fed. Appx. 494 (6th

Cir. 2008). The Fisher court identified seven factors which, in

its view, Ohio courts would apply in determining if two legally

distinct entities can be treated as a single entity for purposes

of liability, including 

(1) grossly inadequate capitalization, (2) failure to

observe corporate formalities, (3) insolvency of the

debtor corporation at the time the debt is incurred,

(4) shareholders holding themselves out as personally

liable for certain corporate obligations, (5) diversion

of funds or other property of the company property for

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personal use, (6) absence of corporate records, and (7)

the fact that the corporation was a mere facade for the

operations of the dominant shareholder(s).

See id. at *10, quoting Taylor Steel, Inc. V. Keeton, 471 F.3d

598, 605 (6th Cir. 2005).

It seems unlikely that any of these circumstances apply

here. Certainly, Aetna has not argued strongly that they do. 

Its argument about piercing the corporate veil and/or alter ego,

as articulated it its summary judgment brief, is that Pathology

Services was involved with its parent, Ohio State University

Physicians, both in the creation of Path Component and the

billing of its physicians’ services to Aetna as if they were

preferred providers. Although Aetna describes this practice as

“fraudulent billing,” it has not argued that it would be unable

to obtain complete relief on its contract claim from Ohio State

University Physicians, or that Ohio State University Physicians

is either insolvent or undercapitalized. 

Here, to permit what appears to be extremely broad discovery

of the interrelationship of the two corporations based on nothing

more than the existence of a potential breach of contract claim

would, in the Court’s view, be a misuse of the parties’ resources

and be disproportionate to the single issue involved in this

case, which is whether arbitration or litigation (or some

combination of the two) will be the appropriate vehicle for

resolving the parties’ differences. Thus, even if the discovery

requested on this issue has some peripheral relevance, the Court

does not believe that, at this point, the potential cost and

delay in engaging in extensive discovery about it can be

justified. See Fed.R.Civ.P. (B)(2)(b)(iii) (“On motion or on its

own, the court must limit the frequency or extent of discovery

otherwise allowed by these rules or by local rule if it

determines that: ... the burden or expense of the proposed

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discovery outweighs its likely benefit, considering the needs of

the case, the amount in controversy, the parties' resources, the

importance of the issues at stake in the action, and the

importance of the discovery in resolving the issues”). 

The other argument advanced by Aetna is that Pathology

Services should be estopped from denying that it is bound to

arbitrate under the agreement because it accepted the benefits of

the agreement, i.e., it received payment from Aetna for services

billed to its patients who had insurance through Aetna. Again,

speaking only to the discovery aspect of this issue, the Court

sees two problems which militate against allowing discovery on

this issue.

First, the simple fact that Pathology Services, as a

provider of services under the contract negotiated between its

parent corporation and Aetna, gained the right to bill Aetna for

its services, may not be the type of direct benefit that triggers

the operation of equitable estoppel. The case cited by Aetna,

Javitch v. First Union Securities, Inc., 315 F.3d 619 (6th Cir.

2003), makes it clear that “a nonsignatory may be bound to an

arbitration agreement under an estoppel theory when the

nonsignatory seeks a direct benefit from the contract while

disavowing the arbitration provision.” Id. at 629, citing 

Thomson-CSF v. Am. Arbitration Ass'n,, 64 F.3d 773, 778-79 (2d

Cir. 1995). An indirect benefit will not do. As an example of a

direct benefit, the court pointed to the situation where the

nonsignatory had asserted breach of contract claims directly

under the contract. That is not the situation here, however;

Pathology Services is not seeking to enforce any provision of the

contract as if it were a signatory, yet at the same time

disavowing another provision of the contract. In fact, Javitch

is ordinarily cited in the context of a suit brought by a nonsignatory under the contract, and a claim, in response, that if

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the non-party is seeking to enforce the contract (the “direct

benefit”) it must take the contract in its entirety, including

the arbitration clause. See, e.g., Burgher v. Dansey, 2004 WL

842505 (Mich. App. April 20, 2004); see also Gerig v. Khan, 95

Ohio St. 3d 478 (2002) (allowing signatory to assert arbitration

clause against non-signatory who had sought a declaration of the

signatory’s rights and obligations under the contract).

However, there is some authority (although not in Ohio)

which holds that even when a non-signatory is not the party suing

under the contract, but the one being sued, if that party had

previously demanded and received substantial benefits under the

contract, and if the dispute is closely related to the contract,

the non-signatory may be compelled to arbitrate. See, e.g., Wood

v. PennTex Resources, L.P., 458 F.Supp. 2d 355 (S.D. Tex. 2006). 

Other courts have gone further, suggesting that even if the

benefits received are not substantial, as long as they flow

directly from the contract containing the arbitration clause, the

recipient of those benefits can be compelled to arbitrate. See,

e.g. World Group Securities, Inc. v. Allen, 2007 WL 4168572 (D.

Ariz. November 20, 2007). However, the exact parameters of this

doctrine are unclear, and, as noted in Wood v. PennTex Resources,

L.P., supra, there is little, if any, authority from any Courts

of Appeals on this issue - all of which would be merely advisory 

here, because the underlying issue is one of Ohio law. Further,

it would not appear that the payments made directly to Pathology

Services are the issue involved in the arbitration, but rather

the payments made to Path Component, so the dispute which has

been submitted to arbitration may well not have any relation to

whatever benefits Pathology Services received under the contract.

Even if there is some basis, however, for asserting

equitable estoppel in these circumstances, the Court concludes

that the discovery requested by Aetna is unnecessary in order for

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it to be able to pursue this theory. Any benefit derived by

Pathology Services was presumably paid by Aetna, and Aetna should

have complete records of such payments. It has been able to

quantify the amounts paid to Pathology Services under the terms

of the contract without the need for any discovery, and it is

difficult to see how discovery would add anything to this

particular argument. Again, when measured against the narrow

issue presented by the plaintiffs’ complaint and the need (based

in large part on Aetna’s apparent efforts to move the arbitration

forward) to resolve the issue speedily, discovery on this issue

would be both time-consuming and duplicative and therefore cannot

be justified.

C. Discovery Related to the Agency Theory

The Court now returns to the question of how much discovery

on Aetna’s agency theory is needed. In its summary judgment

memorandum, Aetna cites to representations made to it during the

course of negotiations for the 2005 contract and on provisions of

the contract itself as indicative of an agency relationship. 

While that evidence may speak in part to whether the plaintiffs

were in an agency relationship, this is an area where discovery

is needed because additional evidence on the agency question may

be known only to the plaintiffs and may not have been disclosed

to Aetna either during the course of contract negotiations or in

the contract terms. 

In order to define the proper scope of this discovery, the

Court has examined the affidavit filed by Aetna in support of its

request that the Court delay ruling on summary judgment until

after it obtains discovery. There, Aetna argues that it needs

access to certain communications between Ohio State University

Physicians and Pathology Services to determine if the former was

acting as the agent of the latter when it negotiated the

contract. It also identifies the “behavior of the parties” as

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something it wishes to discover, although it does not specify

exactly what type of behavior it believes to be relevant. In its

motion to compel discovery, it identified requests 1-5, 7, 9, 10,

12, and 15 of its document requests as pertinent to the agency

issue. Those requests seek production of all documents relating

to the 2005 agreement, all documents in which Pathology Services

acknowledged the agreement, any instructions given by any party

concerning compliance with the agreement (and particularly

paragraph 2.4), documents showing corporate ownership of the

plaintiffs, a listing of all physicians who received

reimbursements under the 2005 agreement, any contracts among the

plaintiffs and Pathology Components, documents showing

plaintiffs’ office and laboratory locations, documents relating

to reimbursement claims from Amy Gerwitz, communications relating

to Pathology Components, and directors’ minutes or resolutions

dealing with both the adoption of the 2005 agreement and the

creation or existence of Pathology Components.

Although the Court agrees that there may be some discovery

on the agency question which might shed light on whether, at the

time of the negotiation of the 2005 agreement, Ohio State

University Physicians was acting as an agent for Pathology

Services, it is clear that the discovery covered by these ten

requests is far too broad. Any actions taken after the agreement

was negotiated and signed (and especially actions related to the

formation of Pathology Components, its employees, and its

billings) might be relevant to the merits of the dispute which

Aetna is seeking to arbitrate, but they are not reasonably

calculated to lead to the discovery of relevant evidence on the

agency question. 

In short, the Court concludes that Aetna might not have

access to, or knowledge of, the exact relationship between the

two plaintiffs at or about the time of contracting or their

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communications with each other about the contract. Documents on

this topic could conceivably show whether or not there was some

type of agency relationship and on whose behalf Ohio State

University Physicians was acting when it negotiated and signed

the contract. It would not be appropriate to deny Aetna the

opportunity to conduct limited discovery in order to see if there

is some factual support for its agency theory. To that extent,

therefore, it makes sense both to permit this limited amount of

discovery, and to allow Aetna to supplement its response to the

summary judgment motion after the discovery has been completed.

IV. Conclusion and Order

For the following reasons, the Court grants in part and

denies in part plaintiffs’ motion for a protective order (#24)

and defendant’s motion to compel discovery (#27). Plaintiffs

shall produce, within seven days, documents relating to their

corporate structure and relationship at the time of negotiation

and signing of the 2005 agreement, and documents reflecting

communications between plaintiffs at the same time concerning the

agreement or the negotiation process, including any documents

dealing with Pathology Services’ knowledge or acceptance of the

terms of the agreement after it was signed. The parties shall

discuss, after these documents are produced, whether a short Rule

30(b)(6) deposition will be necessary to explore further the

subject of agency. If so, that deposition shall be scheduled and

completed within fourteen days of the production of the

documents. Aetna may file a supplemental memorandum on the issue

of summary judgment no later than seven days after any deposition

is completed or, if no deposition is scheduled, within fourteen

days after the documents are produced. To that extent, its

motions for an extension of time or to delay summary judgment

proceedings (#31 and #33) are both granted. Nothing in this

order shall prevent plaintiffs (1) from producing documents or

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scheduling a deposition more promptly than required by this

order, or (2) requesting emergency relief concerning the progress

of the arbitration.

V. Procedure on Reconsideration

Any party may, within fourteen days after this Order is

filed, file and serve on the opposing party a motion for

reconsideration by a District Judge. 28 U.S.C. §636(b)(1)(A),

Rule 72(a), Fed. R. Civ. P.; Eastern Division Order No. 91-3, pt.

I., F., 5. The motion must specifically designate the order or

part in question and the basis for any objection. Responses to

objections are due fourteen days after objections are filed and

replies by the objecting party are due seven days thereafter. 

The District Judge, upon consideration of the motion, shall set

aside any part of this Order found to be clearly erroneous or

contrary to law.

This order is in full force and effect, notwithstanding the

filing of any objections, unless stayed by the Magistrate Judge

or District Judge. S.D. Ohio L.R. 72.4.

/s/ Terence P. Kemp 

United States Magistrate Judge

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