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United States District Court, N.D. New York

November 17, 2004.

JOHN R. CAIOLA, Plaintiff,

The opinion of the court was delivered by: DAVID HOMER, Magistrate Judge


Plaintiff John Caiola ("Caiola") commenced this diversity action against defendants alleging medical malpractice for treatment rendered at Berkshire Medical Center ("Berkshire") in Massachusetts. Presently pending is defendants' request for an order referring this matter to a medical malpractice tribunal required under Massachusetts law and to stay discovery until the tribunal is convened and issues its findings. Caiola opposes these requests. For the reasons which follow, defendants' requests are granted in part and denied in part.

  I. Background

  On February 16, 2002, Caiola cut his right hand on a jagged piece of sheet metal at his home in Columbia County, New York and was treated at Berkshire. Compl. (Docket No. 1) at ¶¶ 17, 18, 20. Caiola's injury was sutured and diagnosed as a laceration. Id. at ¶ 21. On February 21, 2002, Caiola returned to the Berkshire emergency room with complaints of pain and a large lump near the sutured wound. Id. at ¶ 22. Defendants James Wheeler and Linda Perry, M.D. instructed Caiola to continue current treatment and return in five days for removal of the sutures. Id. at ¶ 23.

  Caiola visited his primary care physician on February 26 and March 7, 2002 with complaints of swelling to the sutured area. Compl. at ¶ 25. Caiola was referred to an orthopedist for a consultation. Id. at ¶ 24. The orthopedist diagnosed Caiola's injury as a laceration of the tendons of the right wrist and stated that surgery was the only possibility to gain full extension of the wrist. Id. at ¶ 25. On April 24, 2002, surgery was performed on Caiola's right hand to repair the tendons. Id. at ¶ 27. Caiola alleges that as a result of defendants' delay in the proper diagnosis and treatment of his injury, the tendons on his right hand developed scar tissue and could not be properly reattached. Compl. at ¶¶ 60-63. Caiola alleges that he does not have full strength in his right hand, experiences pain and discomfort, and is impaired from performing his occupation. Id. at ¶ 78.

  II. Discussion

  A. Rules Enabling Act

  The Rules Enabling Act provides that the Supreme Court has the "power to prescribe general rules of practice and procedure . . . [of the] district courts" and these rules "shall not abridge, enlarge, or modify any substantive right." 28 U.S.C. § 2072 (a)-(b) (1994). Any state laws that conflict with such federal rules shall have no force or effect. 28 U.S.C. § 2072 (b); Willy v. Coastal Corp., 503 U.S. 131, 134 (1992). When a federal procedural rule is valid, on point, and covers the point in dispute in a diversity case, the federal rule controls. Hanna v. Plummer, 380 U.S. 460, 468 (1965); Stewart Org. Inc. v. Ricoh Corp., 487 U.S. 22, 27 (1988); Sewell v. Jones, 95-CIV-6224(SAS), 1996 U.S. Dist. LEXIS 9192, at *2 (S.D.N.Y. July 3, 1996).

  The scope of a federal procedural law covers the point in dispute if it is "sufficiently broad" to cause a "direct collision" with the state law or if it controls the issue before the court, thereby leaving no room for operation of the state law. Burlington N.R.R. Co. v. Woods, 480 U.S. 1, 5 (1987); Morse v. Elmira Country Club, 752 F.2d 35, 38-39 (2d Cir. 1984); Argentina v. Emery World Wide Delivery Corp., 167 F.R.D. 359, 361-62 (E.D.N.Y. 1996). Federal rules should be interpreted "with sensitivity to important state interests and regulatory policies" and not with a "broad reading that would create a significant dis-uniformity between state and Federal courts." Gasperini v. Ctr. for Humanities, 518 U.S. 415, 427 n. 7 (1996); Stewart Org, 487 U.S. at 37-38. The federal rules are not "to be narrowly construed in order to avoid a `direct collision' with state law [and] should be given their plain meaning." Walker v. Armco Steel Corp., 446 U.S. 740, 750 (1980). State law falling outside the scope of a federal rule requires courts to ask whether conflicting laws are substantive or procedural. Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc., 133 F. Supp. 2d 162, 168 (E.D.N.Y. 2001).

  Here, defendants assert that the Massachusetts state law which requires medical malpractice actions to be heard by a tribunal before proceeding is a substantive rule of law and must be applied by this court in accordance with the Rules of Decision Act and the Erie doctrine. Erie v. Tompkins, 304 U.S. 64 (1938). Plaintiff argues that Rule 16 of the Federal Rules of Civil Procedure covers the point in dispute and, therefore, prohibits application of the Massachusetts law.

  In Massachusetts, a plaintiff who does not prevail before the medical malpractice tribunal is required to post a bond in the amount of six thousand dollars in order to proceed to trial. Mass. Gen. Laws ch. 231, § 60B (2004). The tribunal consists of a single justice of the Superior Court, and a physician and an attorney authorized to practice in the Commonwealth. Id. If the plaintiff does not then prevail at trial, the court will assess costs against the plaintiff, including the defendant's attorneys', witness, and expert fees. Mass. Gen. Laws ch. 231, § 60B; Turner v. Sullivan, 937 F. Supp. 79, 80 (D. Mass. 1996). The primary purpose of this section is to "guarantee the continued availability of medical malpractice insurance" at reasonable premiums and to discourage frivolous claims whose defense would tend to increase insurance premiums. Brodie v. Gardner Pierce Nursing & Rest Home, Inc., 9 Mass. App. Ct. 639, 641 (Suffolk 1980); Feinstein v. Massachusetts Gen. Hosp., 643 F.2d 880, 881 (1st Cir. 1981).

  This statute does not expressly require that the parties submit to the tribunal before a court can consider any of their claims or defenses. However, a party who does not submit proof to the tribunal must post a bond. Bohl v. Leibowitz, 1 F. Supp. 2d 67, 71 (D. Mass. 1997) (quoting Doyle v. Shubs, 717 F. Supp. 946, 947 (D. Mass. 1989)).The tribunal is designed to assess the sufficiency of the evidence and has no power to consider legal defenses or statutory bars to recovery. Bohl, 1 F. Supp. 2d at 71. Upon motion of either party, a judge has the discretion to reduce or increase the amount of the bond but may not eliminate the requirement completely. Feinstein, 643 F.2d at 881.

  The tribunal's function is to evaluate the evidence offered by plaintiff in the manner in which a judge presiding at a civil trial would do in ruling on a defendant's motion for directed verdict. Feinstein, 643 F.2d at 881 (quoting McMahon v. Glixman, 379 Mass. 60, 62 (1979)). Admissible evidence includes hospital and medical records, x-rays, and statements of fact or opinion from a published treatise, periodical, book or pamphlet. Mass. Gen. Laws ch. 231, § 60B. A plaintiff may waive the malpractice tribunal by declining to present any offer of proof and filing a bond with the court, but in that case, a judge may assume that the claim is frivolous and increase the amount of the bond. Denton v. Beth Israel Hosp., 392 Mass. 277, 278 (1984). If the tribunal decides in a defendant's favor and the plaintiff fails to file the bond, the action must be dismissed with prejudice. Mass. Gen. Laws ch. 231, § 60B; Farese v. Connolly 422 Mass. 1010, 1010 (1996). Caiola contends that Seck v. Hamrang, 657 F. Supp. 1074 (S.D.N.Y. 1987), and Burlington Northern R.R. Co. v. Woods, 480 U.S. 1 (1987), compel a finding that the Massachusetts law is not applicable to this case. Seck v. Hamrang held that a New York medical malpractice screening panel requirement directly conflicted with Fed.R. Civ. P. 16. The purpose of both laws was to aid in the settlement of pending lawsuits and to "facilitate the disposition of medical malpractice action," thereby infringing the broad power of Rule 16 to control and fashion techniques for settlement. Seck, 657 F. Supp. at 1075; Treyball v. Clark, 65 N.Y.2d 589, 590 (1985). In Burlington, an Alabama statute was held in direct conflict with Rule 38 of the Federal Rules of Appellate Procedure, which granted the federal appellate courts the authority to impose monetary penalties for frivolous appeals. Unlike the case here, the state law's purpose and effect in these cases was clearly the same as the federal procedural law, causing "direct collision" and requiring application of the federal rule.

  Fed.R. Civ. P. 16 does not directly collide with the Massachusetts medical malpractice statute. While Rule 16 gives a federal court the broad power to regulate pre-trial proceedings, it does not require a pretrial determination of sufficiency or that a bond be posted to cover a defendant's costs. A court retains the power to take appropriate action to formulate and simplify the issues, eliminate frivolous claims, and assess sanctions for failure to comply, but a court may not require a plaintiff to post a bond for expenses should he or she not prevail at trial.

  The primary purposes of Rule 16 and the Massachusetts law are different. The purpose of Rule 16 is to manage pre-trial proceedings to increase the efficiency and flexibility of the federal courts and simplify the issues. The purpose of the Massachusetts law is to reduce malpractice insurance premiums. While these statutes overlap, there is not necessarily a direct collision. Because there is no federal rule sufficiently in conflict with the Massachusetts law, the question becomes whether Erie dictates the application of the Massachusetts law.

  B. Erie v. Tompkins

  In Erie, the Supreme Court established the general principle that in diversity cases federal courts must apply state substantive law and federal procedural rules. Hogan v. Wal-Mart Stores, Inc., 167 F.3d 781, 783 (2d Cir. 1999). To determine whether a particular law is substantive or procedural, an outcome-determinative test may be applied by which "the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court." Guaranty Trust Co. v. York, 326 U.S. 99, 109 (1945). However, the outcome-determinative test cannot be mechanically applied and other relevant factors must be considered. Byrd v. Blue Ridge Rural Elec. Coop., 356 U.S. 525, 538 (1958). To determine whether rules and laws are substantive or procedural, several tests may be used drawn from the policies underlying the Erie rule. Hanna v. Plummer, 380 U.S. 460, 467 (1965). The application of Erie must be guided by "the twin aims of the Erie rule: discouragement of forum-shopping and avoidance of inequitable administration of the laws." Hanna, 380 U.S. at 471 (1965). In addition, federal courts must analyze state and federal interests in making a determination as to which particular rules should be applied. Byrd, 356 U.S. at 538; Alisandrelli v. Kenwood, 724 F. Supp. 235, 237 (S.D.N.Y. 1989).

  Caiola would not be required to submit proof to the medical malpractice tribunal or post a bond if the Massachusetts law were not applied. The Massachusetts law does not completely bar the entire action but places requirements on plaintiffs who do not prevail at the tribunal. This rule creates a substantive liability for costs in the amount of a bond. If the plaintiff fails to post a bond, the suit is dismissed. Although not always outcome-determinative, this law may have a significant effect on the outcome of the litigation if the plaintiff does not prevail at the tribunal and fails to post a bond, which would require dismissal of the claim. The application of federal law does not necessarily lead to a substantially different result if the plaintiff posts the bond. While the main action would take the same course, the Massachusetts law creates a new liability on the part of the plaintiff that does not exist in federal courts.

  Failure to apply the Massachusetts law would indeed encourage forum-shopping by out-of-state plaintiffs or out-of-state defendants on Massachusetts medical malpractice claims. Plaintiffs would be more likely to bring such claims in federal court under diversity to avoid the tribunal procedure and the bond requirement. Plaintiffs have an obvious interest in avoiding the screening procedure and bond requirement.

  Not applying the Massachusetts law would result in the inequitable administration of the law. A defendant sued in federal court would lose the protection and right to recovery of costs simply because of the fortuity of the diversity of citizenship of the parties. In addition, failure to apply the Massachusetts statute in diversity actions would undermine Massachusetts' efforts to curb the insurance costs that spurred the passage of the statute. This result would be inconsistent with the aims of Erie and there is no overriding federal policy to prevent application of the Massachusetts law. Thus, the interest in uniformity of outcome by applying the state rule in medical malpractice actions outweighs any burden imposed by the bond requirement, a conclusion consistent with cases in the First Circuit. See Joseph v. Sweet, 125 F. Supp. 2d 573 (D. Mass. 2000); Turner v. Sullivan, 937 F. Supp. 79 (D. Mass. 1996); Wilde v. Franklin City Pub. Hosp., No. 84-0179-F, 1985 U.S. Dist. LEXIS 12962, at *3 (D. Mass Dec.10, 1988); Pallazolla v. Rucker, 602 F. Supp. 459 (D. Mass. 1985); Lange v. Breslin, Civ. No. 84-2382-MA, 1984 U.S. Dist. LEXIS 22187, at *1 (D. Mass. Nov. 6, 1984); Byrnes v. Kirby, 453 F. Supp. 1014 (1978).

  Accordingly, under Erie, the Massachusetts law applies, defendants' request is granted, and this matter shall be referred to a medical malpractice tribunal in accordance with Mass. Gen. Law ch. 231, § 60B.

  C. Stay of Discovery

  Defendants also seek a stay of discovery in this action pending completion of the proceedings before the tribunal. Under Fed.R.Civ. P. 26(c), a district court may grant a stay of discovery upon a showing of good cause. Spencer Trask Software & Info. Servs., LLC v. Rpost Int'l Ltd., 206 F.R.D. 367, 368 (S.D.N.Y. 2002); In re Currency Conversion Fee Antitrust Litigation, No. MDL, 1409, M21-95, 2002 WL 88278, at *1 (S.D.N.Y. Jan 22, 2002). Good cause "requires a showing of facts militating in favor of the stay." American Booksellers Ass'n v. Houghton Mifflin Co., No. 94 Civ. 8566(JFK), 1995 WL 72376, at *1 (S.D.N.Y. Feb. 22, 1995).

  A stay is not automatic, however, even where a potentially dispositive motion is pending. See Spencer Trask Software & Info. Servs., LLC, 206 F.R.D. at 268. Rather, the determination of good cause for a stay requires examination of the facts of each case, including the likelihood that the case will be resolve in an alternate or parallel proceeding, the breadth of discovery, the burden of responding to discovery, and any prejudice to the party opposing the stay or others. In re Currency Conversion Fee Antitrust Litigation, 2002 WL 88278, at *1.

  Here, the tribunal proceedings appear unlikely to resolve this case and do not prohibit any party from proceeding with the litigation of this action. Thus, it remains reasonably certain that this case will proceed through discovery, motions and trial whatever the outcome of the tribunal proceedings. The breadth of discovery here will likely approximate that of other medical malpractice cases, involving the production of medical records, the depositions of the parties and possibly several non-parties, and expert discovery. There is no reason to believe that the burden of responding to this discovery will be obviated by the tribunal proceedings. Thus, defendants are unlikely to achieve any reduction in the costs associated with this case if a stay is granted.

  Finally, the tribunal proceedings appear protracted. The parties estimated during the conference on November 2, 2004 that the tribunal proceedings would be completed in no less than six months and were more likely to take up to two years. The guideline for completion of cases in this district is eighteen months. See N.D.N.Y. Gen. Order — Civil Case Management Plan at ¶ 5 (Jan. 18, 2004). This guideline serves the purpose stated by Congress in the Civil Justice Reform Act (CJRA), 28 U.S.C. §§ 471-82, that "promptitude in the completion of pretrial proceedings in civil cases is to be given priority." Wilson v. Oxford Health Plans, No. 01 CIV. 3417(MHD), 2002 WL 1770813, at *3 (S.D.N.Y. July 31, 2002). Thus, staying discovery here would cause significant prejudice both to Caiola and to the public interest articulated by Congress in the CJRA, that this case proceed promptly to resolution. Weighing and balancing these factors, then, the conclusion is compelled that in the circumstances presented here, good cause for a stay has not been established. Accordingly, defendants' request for a stay is denied and the case shall proceed according to the schedule established in the Uniform Pretrial Scheduling Order filed November 4, 2004 (Docket No. 15).

  III. Conclusion

  WHEREFORE, for the reasons set forth above, it is hereby

  ORDERED that:

  1. Defendants' request for an order referring this matter to a medical malpractice tribunal pursuant to Mass. Gen Laws ch. 231, § 60B is GRANTED; and

  2. Defendants' request for a stay of discovery pursuant to Fed.R. Civ. P. 26(c) is DENIED.


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