Advanced Reimbursement Solutions LLC v. Aetna Life Insurance Company ( 2021 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Advanced Reimbursement Solutions LLC, et No. CV-19-05395-PHX-DLR al., 10 ORDER Plaintiffs, 11 v. 12 Aetna Life Insurance Company, et al., 13 Defendants. 14 15 Before the Court is Aetna’s Motion to Limit Application of ARS & ASD’s Non- 16 Disclosure Agreements. (Doc. 419.) These issues were first raised in a discovery dispute 17 memorandum (Doc. 404)1 and discussed at a telephonic discovery dispute hearing on May 18 21, 2021 (Doc. 408). After the parties argued diametrically opposed positions on the state 19 of the law regarding informal discovery implicating non-disclosure agreements (“NDAs”), 20 the Court ordered supplemental briefing. The motion has been fully briefed and for the 21 reasons set forth below is denied. 22 The NDAs in dispute are those signed by the out-patient treatment centers (“OTCs”) 23 and third parties. ARS and ASD do not dispute that, despite the NDAs, the information 24 covered by the NDA’s may be disclosed to Aetna in formal discovery. However, Aetna 25 seeks an order permitting the signatories to the NDAs to speak freely with Aetna outside 26 of a deposition. (Doc. 419 at 2.) Aetna argues that the NDAs are exceptionally broad and 27 hamper its ability to obtain even basic information about ARS’s and ASD’s conduct outside 28 1 Samples of the NDAs were attached as exhibits to Doc. 404. 1 of formal discovery. The issue before the Court is how the NDAs impact Aetna’s request 2 to interview, outside formal discovery, the OTCs and third parties who signed them. 3 In its supplemental briefing, Aetna cites no case holding that NDAs are void as a 4 matter of law because they interfere with informal discovery in a civil case between private 5 parties. In Chambers v. Capital Cities/ABC, 159 F.R.D. 441, 444 (S.D.N.Y. 1995), the 6 district court found that public policy favors employees voluntarily participating in 7 investigations of federal law violations, despite an NDA, so long as the investigation of the 8 wrongdoing has nothing to do with trade secrets or other confidential business information. 9 The court refused, however, to adopt the plaintiff’s counsel’s proposal that he be allowed 10 to tell former employees “that they need not be concerned about any untoward 11 consequences of violating any agreement to keep silent which they may have entered into 12 with [the defendant].” Id. at 445. The court explained that “such a remedy . . . would 13 make plaintiff’s counsel the decisionmaker concerning what confidentiality requirements 14 were related to genuine trade secrets [and] other legitimately privileged information, and 15 which dealt with concealment of information relating to potential improprieties on the part 16 of the employer. . . . To permit such assurances to be given would put legitimate as well as 17 illegitimate confidentiality arrangements at risk.” Id. 18 The cases that have dealt with the question of the enforcement of NDAs during civil 19 litigation have generally found them enforceable. Although it did not find a public policy 20 exception to the enforcement of an NDA, the Ninth Circuit in United States ex rel. Cafasso 21 v. Gen. Dynamics C4 Sys., Inc. 637 F.3d 1047, 1062 (9th Cir. 2011), discussed what 22 protections for an employee removing documents in violation of a confidentiality 23 agreement in the context of a False Claims Act claim might look like. It noted that 24 protection of the employee violating the NDA would be limited and would require a 25 showing of justification, i.e., the necessity of the documents removed by the employee to 26 pursue the claim. The Court also noted that the protection would be limited to only those 27 necessary documents. 28 Agreements requiring a person to remain silent about the events leading up to a 1 || dispute or illegal practice, absent an otherwise valid reason to protect that information, are 2|| against public policy. However, NDAs that protect against disclosures of legitimately || confidential information, such as trade secrets, may be enforced, despite the interference 4|| or inconvenience they create to an investigation into a civil lawsuit. The burden is on the 5 || party seeking to interview those bound by the NDA to show need for the information, that || the information sought is not outside the scope of that need and does not involve areas of 7|| legitimate confidential business information. Aetna has not met that burden. 8 IT IS ORDERED that Aetna’s Motion to Limit Application of ARS & ASD’s Non- 9|| Disclosure Agreements (Doc. 419) is DENIED. 10 Dated this 15th day of July, 2021. 11 12 13 {Z, 14 {UO 15 Usted States Dictic Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 -3-