Court Opinion

ID: 5128157
Source: CourtListenerOpinion
Date Created: 2021-11-22 08:14:35.967125+00
Date Added: 2024-06-11T08:23:05.443711
License: Public Domain

Supreme Court of Texas
                            ══════════
                             No. 20-0849
                            ══════════

                    In re ExxonMobil Corporation,
                                 Relator

   ═══════════════════════════════════════
           On Petition for Writ of Mandamus
   ═══════════════════════════════════════

                             PER CURIAM
      JUSTICE LEHRMANN and JUSTICE BLACKLOCK did not participate
in this opinion.

      Evidence of a medical provider’s negotiated rates for private
insurers and public payers is relevant, though not dispositive, when
considering the reasonableness of its chargemaster rates.        In re N.
Cypress Medical Ctr. Operating Co., 559 S.W.3d 128 (Tex. 2018). This
is true regardless of whether a party is challenging the reasonableness
of rates secured by a medical lien, as in North Cypress, or the
reasonableness of rates supporting a claim for personal-injury damages.
In re K & L Auto Crushers, LLC, 627 S.W.3d 239, 244-45 (Tex. 2021).
The facts of this case closely parallel those of K & L Auto, and that
opinion is dispositive of the issues presented here. Applying K & L Auto
to this case, we hold that the trial court abused its discretion by denying
ExxonMobil’s discovery requests and that ExxonMobil has no adequate
remedy on appeal. We therefore conditionally grant mandamus relief
and order the trial court to vacate its order to the extent it conflicts with
our holdings in K & L Auto.
       The underlying personal-injury claims arose from a fire and
explosion at ExxonMobil’s Baytown Olefins Plant.              Nearly sixty
plaintiffs sued ExxonMobil, seeking, in part, millions of dollars in
reimbursement for past medical expenses. Many were treated by the
same medical providers, pursuant to “letters of protection” provided by
the plaintiffs’ attorneys.    Through discovery, ExxonMobil obtained
billing codes for the specific services the plaintiffs received, and it used
this information to formulate discovery requests for the amounts and
rates these providers have accepted from the majority of their patients
for the same procedures performed around the same time.
       ExxonMobil served subpoenas to nine providers whose charges
represent the bulk of the medical expenses claimed.1 It did not seek
individual patient records; instead, it requested broad discovery of the
amounts and rates the providers accepted from a majority of their
patients for the same services around the same time.
       ExxonMobil filed a motion to enforce compliance with its
discovery requests. The providers filed motions for protection, arguing

       1 The nine providers from which ExxonMobil initially requested
discovery are Texas Brain Center; Advanced Medical Group; Memorial
MRI & Diagnostic; Neurosurgery, PA; Advanced Diagnostics Hospital East;
Altus Hospital; National Brain Injury Institute; Woodlake MRI & Diagnostic
Imaging; and Elite Medical Wellness.

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that the requests sought irrelevant information, were unduly
burdensome, and sought trade secrets and confidential information.
       While ExxonMobil’s motion to enforce was pending, the
Fourteenth Court of Appeals issued In re Memorial Hermann Health
System, holding that a request for documents related to a medical
provider’s rates for services not received by the plaintiff is impermissibly
overbroad. 607 S.W.3d 913, 920-21 (Tex. App.—Houston [14th Dist.]
2020, orig. proceeding). ExxonMobil supplemented its motion to narrow
its requests accordingly, limiting discovery to the same services the
plaintiffs received and the same time period during which those services
were provided and eliminating requests for rate information beyond the
services the plaintiffs received.    Specifically, ExxonMobil no longer
sought testimony from the providers on eight of the eighteen deposition
topics or documents in response to fourteen of the twenty-six document
requests. It also no longer sought to enforce its requested discovery
against two providers.2     In response to the motions for protection,
ExxonMobil argued that the providers’ undue-burden objections were
unsupported and, at a minimum, did not justify protection against all of
the discovery requests.
       The trial court denied ExxonMobil’s motion to enforce and
granted motions for protection filed by the plaintiffs and four providers3
without explanation. ExxonMobil sought mandamus relief from the

       The two providers from which ExxonMobil no longer seeks discovery
       2

are Memorial MRI & Diagnostic and Elite Medical Wellness.
       3The three providers who did not move for protection are Neurosurgery,
PA; Altus Hospital; and National Brain Injury Institute.

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court of appeals, which denied the petition in a nonsubstantive
memorandum opinion.
         ExxonMobil now seeks mandamus relief from this Court. For the
reasons set out below, we conclude that ExxonMobil has demonstrated
the trial court abused its discretion and that it lacks an adequate
remedy on appeal. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124,
135-36 (Tex. 2004).
         First, ExxonMobil contends that the trial court abused its
discretion by denying ExxonMobil’s motion to enforce and granting the
motions for protection. As in K & L Auto, we first address whether the
evidence sought is relevant.        627 S.W.3d at 248.        Given that
reasonableness is a well-settled common-law limitation on recoverable
expenses, here, evidence of the providers’ rates is relevant to
determining whether they are reasonable, and thus recoverable. See id.
at 250. Because an overbroad discovery request is, essentially, one
seeking irrelevant information, ExxonMobil’s discovery requests are not
overbroad. See In re Allstate Cnty. Mut. Ins. Co., 227 S.W.3d 667, 670
(Tex. 2007). Not only are ExxonMobil’s modified discovery requests
narrowly tailored to focus on rates for the same services at the same
times, like the requests in K & L Auto, they are “nearly identical to those
we approved of in North Cypress.” 627 S.W.3d at 253 (noting that “K & L
Auto expressly sought to narrow the requested discovery to the time
period, devices, and services at issue in this case and approved by North
Cypress,” which ensured its requests were “not overbroad as a matter of
law”).

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      Further, the requests are not unduly burdensome. The providers
failed to establish, beyond conclusory assertions, why the burden or
expense entailed in responding to the requests outweighs the likely
benefit, or why the requests are “unreasonably cumulative or
duplicative.” TEX. R. CIV. P. 192.4. And as in K & L Auto, ExxonMobil
acted to substantially narrow the scope of its requests, and the providers
failed to show why the narrowed requests, apart from the original
requests, present an undue burden. See 627 S.W.3d at 253-54.
      While the providers are not parties to this suit—a relevant fact
when considering whether discovery requests present an undue burden,
id. at 254—our rules expressly authorize discovery of relevant
information from nonparties. See TEX. R. CIV. P. 205.3(c). And here, the
letters of protection under which the providers have secured a financial
interest in the resolution of these claims offset the providers’ nonparty
status when balancing the burdens and benefits of discovery. See id.
And as to proportionality, ExxonMobil’s requests are not unduly
burdensome considering the high stakes in this case. Far beyond the
$8,278.31 claimed in North Cypress, see 559 S.W.3d at 141, and even the
$1.2 million claimed in K & L Auto, see 627 S.W.3d at 257, the plaintiffs
here are seeking tens of millions of dollars in the underlying litigation,
much of which consists of claims for past medical expenses. Given the
amount of money damages claimed in this case, the providers’ financial
interest in the form of letters of protection, and ExxonMobil’s narrow,
supplemented motion limiting its requests to the specific amount and
type of discovery we permitted in North Cypress, the discovery requests
do not present an undue burden.

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      Finally, the providers’ objection that the requests seek
confidential information or protected trade-secret information also fails.
A protective order could easily shield the information from unnecessary
disclosure, and the providers failed to establish why such an order would
be insufficient to protect their interests. The trial court did not state its
reasons for denying ExxonMobil’s motion, but to the extent it relied on
concerns about confidentiality or trade secrets, it abused its discretion
by failing to consider whether it could have permitted discovery while
issuing a protective order. See K & L Auto, 627 S.W.3d at 255-56; North
Cypress, 559 S.W.3d at 136-37.
      In addition to showing the trial court abused its discretion,
ExxonMobil has also shown it has no adequate remedy on appeal. See
Prudential, 148 S.W.3d at 135-36. The denied discovery was necessary
to develop a defense that goes to the heart of ExxonMobil’s case—that
the providers’ rates were unreasonable. See K & L Auto, 627 S.W.3d at
256-57. Additionally, the effects of the trial court’s denial of discovery
will evade review by any higher court because the discovery ExxonMobil
cannot obtain is from third parties, the providers, and thus cannot be
included in the appellate record. Id. at 257. Under these circumstances,
we conclude that ExxonMobil lacks an adequate remedy on appeal.
      Because the trial court abused its discretion by denying
ExxonMobil’s discovery requests and ExxonMobil has no appellate
remedy, ExxonMobil is entitled to mandamus relief. Pursuant to Texas
Rule of Appellate Procedure 52.8(c), without hearing oral argument, we
conditionally grant mandamus relief directing the trial court to vacate
its orders granting the motions for protection and denying ExxonMobil’s

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motion to enforce and to reconsider the issues in light of our opinion in
K & L Auto. Our writ will issue only if the court fails to comply.

OPINION DELIVERED: November 19, 2021

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