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Park West Radiology v. Carecore National LLC

December 3, 2009

PARK WEST RADIOLOGY AND PARK WEST CIRCLE REALTY, LLC, PLAINTIFFS,
v.
CARECORE NATIONAL LLC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: VICTOR Marrero, United States District Judge

DECISION AND ORDER

Before the Court are eighteen motions in limine (the "Motions") submitted by plaintiffs, Park West Radiology and Park West Circle Realty, LLC (collectively, "Plaintiffs"), and defendants, CareCore National LLC, et al. (collectively, "Defendants"), in connection with the trial of this matter, scheduled to begin on November 30, 2009.

Six of the Motions were brought by Plaintiffs. A summary of Plaintiffs' requests and the Court's rulings thereon follow.

(1) Pursuant to Federal Rules of Evidence ("FRE") 402 and 403, to exclude an email chain, dated October 9, 2006, between Donovan Spamer ("Spamer") and Thomas Varvaro ("Varvaro") (the "Spamer and Varvaro Email Chain"): GRANTED

(2) Pursuant to FRE 402, 403, 501, 608, and 609, to exclude an email written by Spamer to Andrew Marcus ("Marcus") (the "Spamer and Marcus Email") and an email chain, dated November 27, 2006,(the "November 2006 Email Chain"): GRANTED in part and DENIED in part

(3) Pursuant to FRE 402 and 403, to exclude any reference to the Court's ruling on Plaintiffs' motion for a preliminary injunction (the "Preliminary Injunction Ruling"): GRANTED

(4) Pursuant to FRE 402 and 403, to exclude references to malpractice allegations, lawsuits, and other disputes involving doctors associated with Park West Radiology, (collectively, "References to Prior Disputes"): GRANTED

(5) Pursuant to FRE 802 and 403, to exclude a letter from the New York Department of Health to Robert Shapiro of Pinnacle Health Consultants ("DOH Letter"): GRANTED

(6) Pursuant to FRE 402 and 403, to exclude documents, reference, and testimony related to allegations of fraud by nonparties: GRANTED Twelve of the Motions were brought by the Defendants. A summary of Defendants' requests and the Court's rulings thereon follow.

(1) Pursuant to FRE 702 and Federal Rule of Civil Procedure 26 ("FRCP 26"), to exclude certain reports and testimony of Plaintiffs' economic expert Robert Maness ("Maness"): DENIED

(2) Pursuant to FRE 402 and FRCP 26, to exclude certain testimony of Plaintiffs' witness Robert Powell ("Powell"): GRANTED in part and DENIED in part

(3) Pursuant to FRE 408 and 802, to exclude the amended verified complaint in the litigation entitled CareCore National, LLC v. New York State Association of Medical Imaging Providers (the "NYSAMIP Complaint"): GRANTED

(4) Pursuant to FRE 402, 403, 801, and 802, exclude Plaintiffs' trial exhibit PX259, the Lenox Hill Radiology and Medical Imaging Associates, P.C. v. New York Medical Imaging, IPA, Inc. arbitration decision (the "Arbitration Decision"): GRANTED

(5) Pursuant to FRE 403 and 802, exclude any documents or references to other litigations brought against CareCore National, LLC ("CareCore"): GRANTED

(6) Pursuant to FRE 403 and 802, exclude a document entitled Business Plan Support Documentation prepared for East River Medical Imaging PC (the "ERMI Business Plan Document"): GRANTED

(7) Pursuant to FRE 402, 403, 801, and 802, to exclude Plaintiffs' trial exhibit PX39, an application for an order in bankruptcy court (the "Bankruptcy Filing"), filed on behalf of Manhattan Imaging Associates, P.C. ("Manhattan Imaging"): GRANTED

(8) Pursuant to FRE 402, 403, 801, and 802, to exclude any documents or testimony specific to Dutchess County, including Plaintiffs' trial exhibits PX215, 216, 217, 256, 323, and 324: DENIED

(9) Pursuant to FRE 701 and 802, to exclude a chain of emails between doctors at East River Medical Imaging PC ("ERMI Doctor Emails"): DENIED

(10) Pursuant to FRE 802 and 403, to exclude a document entitled Response to Key Diligence Items Requested By Goldman Sachs ("Diligence Response to Goldman Sachs"): DENIED

(11) To exclude any evidence alleging that Defendants spoliated evidence: GRANTED

(12) Pursuant to 401, 402, 702, 703 and 801, to exclude the testimony of certain of Plaintiffs' witnesses: DENIED

I. SPAMER AND VARVARO EMAIL CHAIN

FRE 402 states that relevant evidence is generally admissible, and FRE 403 states that evidence that is relevant may nonetheless be excluded if its probative value is substantially outweighed by, among other considerations, the danger of unfair prejudice, confusion of the issues, or misleading the jury. Plaintiffs assert that the email chain between Spamer, a shareholder in Park West Circle Realty, LLC, and Varvaro, Plaintiffs' accountant, regarding the need for Dr. Mona Darwish ("Darwish") to sign a non-compete agreement, is irrelevant to the issues raised in this litigation and should be excluded pursuant to FRE 402. Plaintiffs further assert that even if the Spamer and Varvaro Email Chain was relevant, it should be excluded because its probative value is substantially outweighed by the danger of unfair prejudice pursuant to FRE 403.

Defendants counter that because Darwish will be called by Plaintiffs as a witness, the evidence is relevant to Darwish's credibility. FRE 608 states that the credibility of a witness may be attacked by evidence regarding character for truthfulness or untruthfulness. Defendants assert that Spamer's email statement, "I do not trust her," (Declaration of Sacha Boegem in Support of Memorandum of Law to Exclude Email from Donovan Spamer to Thomas Varvaro, dated November 3, 2009, Ex. A.), in reference to the importance of getting Darwish to sign a non-compete agreement, is directly related to Darwish's reputation for truthfulness and thus should not be excluded pursuant to FRE 608. Defendants further assert that the Spamer and Varvaro Email Chain is relevant to CareCore's defense of this action. Defendants assert that Plaintiffs' insistence on non-compete agreements is relevant to the claims underlying this antitrust action, and that the email chain is relevant because it demonstrates a close relationship among Plaintiffs, Lenox Hill Radiology ("LHR") and New York Private Medical Imaging.

The Court is not persuaded that the Spamer and Varvaro Email Chain is relevant to the claims at issue in this case. Contractual issues involving Darwish have no bearing on whether or not Defendants are liable in this case. Nor is the Court persuaded that the Spamer and Varvaro Email Chain, based solely on Spamer's one statement expressing lack of trust in Darwish, constitutes sufficient evidence regarding Darwish's character or reputation for truthfulness or untruthfulness. Accordingly, the Plaintiffs' motion is GRANTED.

II. NOVEMBER 2006 EMAIL CHAIN

Plaintiffs move pursuant to FRE 402, 403, 608, and 609, to exclude the Spamer and Marcus Email. The email reads in part, "I was hoping that her friends would want to have sex with [sic] me after they saw the ring." (Declaration of Sacha Boegem in Support of Park West's Motion to Exclude the Email from Donovan Spamer to Andrew Marcus, dated November 3, 2009, Ex. A.) Plaintiffs also move to exclude the remainder of the November 2006 Email Chain because it contains attorney-client privileged communications.

Plaintiffs first argue that the Spamer and Marcus Email is irrelevant to this litigation and that even if it was relevant, its probative value is substantially outweighed by the risk of unfair prejudice. Defendants argue that the Spamer and Marcus Email is relevant to the testimony of one of Plaintiffs' trial witnesses, Dr. Craig Antell ("Antell"). Defendants assert that the email shows Antell's bias in favor of Plaintiffs, specifically his relationship to his medical group, on the one hand, and Park West Radiology, on the other. Evidence of "bias is almost always relevant because the jury, as finder of fact and weigher of credibility, has historically been entitled to assess all evidence which might bear on the accuracy and truth of a witness' testimony." United States v. Abel, 469 U.S. 45, 52 (1984). The relationship between Antell and his group and Plaintiffs is relevant to whether Antell is a biased witness. The Spamer and Marcus Email, however, is only nominally probative of bias and Defendants may use other evidence (including the remainder of the November 2006 Email Chain) to show bias. Further, the Spamer and Marcus Email could elicit a strong negative reaction from the jury for reasons not at all relevant to this litigation. The Court finds that the relevancy of the Spamer and Marcus Email to bias is substantially outweighed by the risk of unfair prejudice. Accordingly, Plaintiffs' motion to exclude the Spamer and Marcus Email is GRANTED and the email should be redacted to reflect this ruling.

Lastly, Plaintiffs argue that the November 2006 Email Chain --- other than the Spamer and Marcus Email discussed above --- is privileged and therefore inadmissible under FRE 501. Defendants argue that the November 2006 Email Chain does not contain any attorney-client privileged communications and is relevant to show bias. But the Court finds that the November 2006 Email Chain does not contain attorney-client advice. The November 2006 Email Chain contains only an email forwarding a document for signature from an attorney, followed by a mix of (1) strictly ministerial communications relating to the signature and delivery of a declaration and (2) social communications. Accordingly, Plaintiffs' motion to exclude the remainder of the November 2006 Email Chain as privileged is DENIED.

III. PRELIMINARY INJUNCTION RULING

Plaintiffs move to exclude any references to the Court's Preliminary Injunction Ruling as irrelevant and prejudicial pursuant to FRE 402 and 403. Defendants seek to introduce evidence related to the Preliminary Injunction Ruling, but not the ruling itself, to support a standing defense. Defendants argue that because Plaintiffs requested injunctive relief that would preclude CareCore from denying Plaintiffs access to reimbursement from commercial payors that contract with CareCore, they essentially "were seeking to join CareCore, the very organization that [Plaintiffs] allege is an illegal cartel." (Memorandum of Law in Opposition to Plaintiffs' Motion in Limine to Preclude Preliminary Injunction Ruling, dated November 10, 2009, at 1-2.) The Court agrees with Plaintiffs and finds that even if Defendants show that the Preliminary Injunction Ruling is relevant, any references to the Court's Preliminary Injunction Ruling are likely to unduly influence the jury. Considering the risk of undue influence on the jury pursuant to FRE 403, references to the making of the motion, as opposed to the Preliminary Injunction Ruling itself, will also not be permitted without prior ruling by the Court sought at sidebar or in the jury's absence. Accordingly, Plaintiffs' motion is GRANTED.

IV. REFERENCES TO PRIOR DISPUTES

Plaintiffs move pursuant to FRE 402 and FRE 403, to exclude the References to Prior Disputes because they are (1) irrelevant and (2) to the extent that they are relevant, their probative value is substantially outweighed by unfair prejudice, the likelihood that their presentation will lead to jury confusion on the relevant issues, and that the review of such evidence would be a waste of time.

Defendants counter that the References to Prior Disputes are relevant and that their probative value outweighs any possible unfair prejudice, jury confusion on the relevant issues, or waste of time. Defendants assert that the References to Prior Disputes are relevant to damages because the evidence goes to the issue of whether Plaintiffs' knowledge of Defendants' business shows that Plaintiffs' injuries were self-inflicted and unmitigated. Defendants also assert that the References to Prior Disputes (when coupled with CareCore's failure to dissuade health plans from continuing to do business with it) are relevant in that they undermine Plaintiffs' assertion that CareCore has control over the networks that it manages.

Any probative value of the References to Prior Disputes is substantially outweighed by the likelihood of unfair prejudice, confusion of the issues, misleading the jury, and waste of time. Accordingly, Plaintiffs' motion to exclude the References to Prior Disputes is GRANTED.

V. DOH LETTER

Plaintiffs move to prevent Defendants from introducing the DOH Letter to Robert Shapiro ("Shapiro"). Shapiro had complained to the New York State Department of Health ("DOH") that women were unable to timely access mammography services in New York City. The letter response from DOH, the subject of Plaintiffs' motion, indicates that no backlogs existed. Plaintiffs argue this response is inadmissible hearsay, and further argue that the response is not admissible under the government agency report exception to the hearsay rule, Fed. R. Evid. 803(8), because it is unreliable as its investigative methods are not explained. Plaintiffs also argue the response is unfairly prejudicial to the Plaintiffs because the jury will give undue weight to DOH's conclusions, and thus should be excluded under FRE 403. The response is also not relevant, Plaintiffs suggest, because the letter addresses the backlog situation only as it existed in 2009 and this lawsuit concerns an earlier period.

Defendants contend that the DOH Letter is admissible as a government report because DOH made its own independent investigation into the complaint and was authorized to do so by law. Defendants further argue that admitting the response letter is actually the most efficient way for Defendants to show they were compliant with DOH regulations and that the response is probative of Plaintiffs' lack of damages in this case.

The Court concludes that while the letter may not be admissible as a report of a government investigation, it must be excluded under FRE 403. See Paolitto v. Brown, 151 F.3d 60, 64-65 (2d Cir. 1998) (admissibility of state-agency findings is left "to the sound discretion of the district court.") Defendants will have ample opportunity at trial to present other evidence to the jury on the question of whether backlogs existed. Admitting the response letter from DOH would therefore add unnecessary evidence that would only lengthen the trial. Further, the letter is of limited probative value given that it covers a time period outside of the scope of the lawsuit. Plaintiffs' motion to preclude the letter is GRANTED.

VI. ALLEGATIONS OF FRAUD BY NONPARTIES

Plaintiffs move to preclude Defendants from introducing any documents, references, and testimony related to allegations of fraud or other unlawful or unethical conduct by nonparties LHR and New York Private Medical Imaging ("NYPMI") as irrelevant and prejudicial pursuant to FRE 402 and 403. Defendants disagree, arguing that alleged unlawful and unethical conduct by NYPMI and LHR is relevant to prove damages, to undermining Plaintiffs' allegation that CareCore ...


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