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Andrew S. Gordon (003660) Roopali H. Desai (024295) COPPERSMITH SCHERMER & BROCKELMAN PLC 2800 North Central Avenue, Suite 1200 Phoenix, Arizona 85004 Telephone: (602) 381-5460 Facsimile: (602) 772-3760 agordon@csblaw.com rdesai@csblaw.com

Brett W. Johnson (021527) Michael T. Liburdi (021894) SNELL & WILMER, LLP 400 East Van Buren Street, Suite 1900 Phoenix, Arizona 85004-2202 Telephone: (602) 382-6000 Facsimile: (602) 382-6070 bwjohnson@swlaw.com mliburdi@swlaw.com

Paul F. Eckstein (001822) D. Andrew Gaona (028414) PERKINS COIE LLP 2901 North Central Avenue, Suite 2000 Phoenix, Arizona 85012-2788 Telephone: (602) 351-8000 Facsimile: (602) 648-7000 peckstein@perkinscoie.com agaona@perkinscoie.com

Attorneys for Intervenor Mercy Maricopa Integrated Care

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

MAGELLAN HEALTH SERVICES OF ARIZONA, INC. and MAGELLAN COMPLETE CARE OF ARIZONA, INC.,

Appellants, v. ARIZONA DEPARTMENT OF HEALTH SERVICES,

Respondent. MERCY MARICOPA INTEGRATED CARE, and ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM,

Intervenors.

)))))))))))))))))))))))

Docket No. 13F-006-ADM

No. Solicitation: ADHS13-00002257 MERCY MARICOPA INTEGRATED CARE’S RESPONSE IN OPPOSITION TO MAGELLAN’S MOTION TO QUASH AND OBJECTION TO SUBPOENA DUCES TECUM (Assigned to Hon. Diane Mihalsky)

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Mercy Maricopa Integrated Care (“MMIC”) respectfully requests that the Office of

Administrative Hearings (“OAH”) deny Magellan Complete Care of Arizona, Inc.’s (“Magellan

Complete Care”) and Magellan Health Services of Arizona, Inc.’s (“Magellan Health Services”),

(collectively, “Magellan”) motion to quash the subpoena (“Motion”) served by MMIC. The

subpoena was brief and narrowly drawn. See Attachment A, MMIC Subpoena to Magellan. The

subpoena seeks just ten categories of documents that directly relate to the claims presented by

Magellan in its initial bid protest. This is in contrast to the over one hundred categories contained

in the subpoenas Magellan served on ADHS, AHCCCS, MMIC and MIHS, which, for the most

part, have absolutely no relevance to the narrow legal and factual scoring issues that are actually

before OAH for review and recommendation related to Magellan’s initial bid protest. See

Attachment B, Magellan’s Initial Bid Protest (w/out exhibits).

The standard of review applicable to Magellan’s Motion involves a threshold question of

whether MMIC’s subpoena seeks production of documents that are relevant to Magellan’s initial

bid protest claims. As discussed below, this is established. Beyond that, Magellan must show that

the subpoena is “unreasonable or oppressive” or the “desired testimony or evidence may be

obtained by an alternative method.” A.A.C. § R2-19-113(B), (E). Magellan does not make either

showing, and its Motion should be denied. OAH should require Magellan to finally produce and

identify all factual documents supporting its purely speculative claims that the procurement

process was somehow tainted by alleged violations of applicable statutes or rules or by improper

conduct that led the Arizona Department of Health Services (“ADHS”) Chief Procurement

Officer (“CPO”) to legally and factually err in denying Magellan’s initial bid protest.

I. THE SUBPOENA IS NARROWLY TAILORED AND SEEKS RELEVANT DOCUMENTS THAT SHOULD BE READILY AVAILABLE.

MMIC’s subpoena request is narrowly tailored to seek only those relevant documents that

particularly pertain to Magellan’s allegations. Specifically, the ten categories are narrowly drawn

and go directly to issues left outstanding in the case by the denial of the MMIC’s motion to

dismiss. For instance, Category 1 seeks documents Magellan possesses regarding the supposed

illegality of the structure of MMIC under A.R.S. §36-3410(C). Magellan opposed MMIC’s

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motion to dismiss on that issue on the ground that there are outstanding fact issues. This category

seeks to obtain whatever documents Magellan has that speak to this supposed fact issue. The

other categories seek similar records.

Magellan also objects to categories 7-10 on the grounds that the documents sought are

not relevant and somehow constitute an impermissible attempt to force Magellan to marshal all

of its evidence. Categories 7-10, however, request documents that are clearly relevant. Category

7 seeks documents relating to RFP Amendments 7 and 9—a central part of Magellan’s bias

claims. See Attachment B, Magellan’s Initial Bid Protest, at 13-16. Likewise, documents in

Magellan’s possession showing when it became aware of these amendments are relevant to the

ADHS CPO’s finding that this argument is time-barred and, therefore, (1) not “properly raised in

Magellan’s Initial Protest,” and (2) not actually referred to OAH by ADOA as referenced in the

referral order. See Attachment D, ADOA June 13, 2013, Referral Order at 3; see also A.A.C.

R2-7-A901(C) and (D).

Similarly, category 8 relates to Magellan’s failed efforts to partner with Maricopa County

Special Health Care District dba Maricopa Integrated Health System (“MIHS”) as a co-venturer

and partner for responding to the Solicitation. Magellan has previously mentioned such efforts in

its filings before ADOA. Specifically, Magellan alleges that on October 18, 2011, representatives

MIHS and Magellan met about the possibility of partnering for the RHBA contract and,

according to Magellan, specifically discussed the statutory framework upon which it is now

belatedly basing its initial protest. See Magellan’s Response to MMIC’s Motion to Dismiss at 25.

In its Notice of Claim to MIHS, Magellan also asserts that MIHS notified Magellan directly that

MIHS was going to become one of the MMIC sponsors on November 6, 2012. On November

16, 2012, Richard T. Clarke, Ph.D., on behalf of Magellan, sent a letter to Betsey Bayless,

MIHS’ President and CEO, concerning Magellan’s previous attempts to partner with MIHS.

Therefore, as the ADHS CPO determined, documents related to Magellan’s plan to

partner with MIHS are relevant regarding Magellan’s corporate structure argument against

MMIC and MIHS and are also probative as to timeliness. See Attachment C, CPO Decision, at 5-

6 (“Additionally, the CPO finds it interesting that Exhibit C appears to evidence Magellan’s

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desire to partner with MIHS instead of having MIHS partner with Mercy Care Plan. Magellan

should not now be heard to complain about a relationship issue that it tried to establish as well.”);

Attachment B, Magellan’s Initial Bid Protest, at 1-9; see also A.A.C. R2-7-A901. As such, all

documents requested in Category 8 are relevant to these proceedings and Magellan should be

required to produce such documents.

MMIC has withdrawn Category 9.

Category 10 relates to a specific meeting attended by several Magellan representatives,

including its CEO, Dr. Clarke, where all attendees were told that the RFP would be amended to

include RFP amendments 7 and 9. This information is both relevant and not burdensome, as it

relates to issues (1) not “properly raised in Magellan’s Initial Protest, and (2) not actually

referred to OAH by ADOA as referenced in the referral order. See Attachment C, ADOA June

13, 2013, Referral Order at 3; see also A.A.C. R2-7-A901(C) and (D).

II. MMIC’S SUBPOENA IS LIMITED, REASONABLE, AND NOT OPPRESSIVE BECAUSE IT SIMPLY REQUESTS THAT MAGELLAN PRODUCE RECORDS SUPPORTING ITS LEGAL THEORIES.

MMIC’s subpoena is not unreasonable or oppressive. Specifically, Magellan objects to

categories 1-10, claiming the descriptions of the documents sought are too vague because it uses

the phrase “relating to” certain claims or events. See Motion, at 3. What the subpoena actually

says in relevant part is: “[a]ll documents evidencing, supporting or relating to Magellan’s claim”

and then the specific claim is described or a specific event is described. See Attachment A. In

any case, Magellan cites Helge v. Druke, 136 Ariz. 434, 666 P.2d 534 (App. 1983), for the

proposition that this is not sufficiently specific. That case does not support Magellan’s position.

The test actually set forth in Helge is, “[t]he designation of documents sought to be discovered

must have sufficient particularity to enable a person who has possession, custody or control

thereof to know what is required.” 136 Ariz. at 440, 666 P.2d at 540 (emphasis added). The court

held that a blanket request for all documents in defendant’s possession lacked specificity and

was too sweeping and undetailed. That is hardly the case here.

The subpoena does not make a “blanket” document request. Again, each of MMIC’s

categories are specifically tied to a claim or defense that is directly related to Magellan’s initial

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bid protest. Simply, in its Response to MMIC’s motion to dismiss (“Response”), Magellan

alleged there were certain facts in dispute, without providing any actual, disputed facts, other

than speculation. Since Magellan did not provide genuine facts in its Response, MMIC is

requesting that Magellan produce specifically the documents supporting its claims and responses

to the other interested parties’ defenses. MMIC cannot identify by name particular documents

because MMIC does not know which documents Magellan has, and certainly Helge v. Druke

contains no such requirement.

Magellan also objects to the subpoena to the extent it seeks a privilege log because of,

“the abbreviated time frames under which this matter is proceeding.” Motion, at 2. Having now

convinced the OAH to continue this hearing by more than a month, that basis for objection no

longer exists. Magellan should be required to provide an appropriate privilege log.

To the extent Magellan’s objections are based on the fact that many responsive

documents are contained within the documents submitted with the exhibits in this matter,1 there

is no need for Magellan to produce them a second time. MMIC assumes, however, that

Magellan’s exhibit list is the product of self-selection; that it will only identify documents that

support its positions. The purpose of a subpoena is for a party to obtain those documents that are

not on the exhibit list. Accordingly, MMIC’s subpoena is not limited to documents Magellan

intends to use as exhibits. If Magellan has additional documents on the specified subject and

decided for whatever reason not to disclose such documents as an exhibit, it needs to produce

them pursuant to MMIC’s subpoena. If Magellan has already produced the specifically requested

documents as an exhibit, Magellan is required to identify the exhibit numbers that are responsive

to each of the individualized requests to ensure there no confusion as to whether or not Magellan

is compliant with the subpoena request.

1 Magellan also argues that “marshaling evidence” is unauthorized and that MMIC’s subpoena somehow is improper or a violation of Case Management Order No. 3. As indicated herein, if Magellan has produced documents responsive to the subpoena in its filed exhibits, it does not need to produce those documents a second time. But, it should reference the documents already produced as to each category and should not be able to rely on MMIC having to guess that Magellan has provided as an exhibit a document that is responsive to each category. This also responds to Magellan’s objection under A.A.C. R2-19-113(E).

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III. CATEGORY 3 IS WITHDRAWN AS LONG AS MAGELLAN HAS STIPULATED THAT IT NO LONGER CLAIMS THAT MMIC FAILED TO TIMELY FILE WITH CMS.

Magellan objects to category 3 (documents supporting Magellan’s claim that MMIC

failed to make a timely filing with CMS), stating that it is not a basis for its bid protest.

However, Magellan’s initial bid protest Argument V states, “MMIC Did Not Comply with

AHCCCS Directive to Timely and Completely File with CMS.” Magellan Bid Protest, at 12.

MMIC notes, however, that Magellan’s appeal does not contain that claim, and MMIC has filed

a separate motion in limine on this specific issue. Therefore, as it appears Magellan has

abandoned this claim and in good faith reliance on such withdrawal, MMIC withdraws Category

3 from the subpoena. If MMIC is incorrect as to Magellan’s withdrawal, Magellan should

respond to the request for the reasons set forth herein.

IV. CONCLUSION

Due to the need of the government to procure services in an expeditious matter, bid

protests require that the OAH and the parties concentrate on the specific issues raised in the

initial bid protest and relevant defenses and not transgress into speculation or innuendo. As a

result, OAH is empowered to take necessary steps to ensure an expedited hearing. A.A.C. R2-19-

116(F). MMIC’s subpoena to Magellan is carefully crafted to assist in the expeditious hearing

process. Documents responsive to the subpoena will make possible dispositive motions on issues

where Magellan simply cannot meet its burden because it lacks the factual support to (1)

overcome its delayed initial bid protest and (2) satisfy the applicable burden of proof. Magellan’s

Motion should therefore be denied. OAH should require Magellan to finally produce factual

documents to support its purely speculative claims or to show why the majority of the arguments

it raises are not purely legal issues and instead require seven days of evidentiary hearings.

…

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Respectfully submitted this 1st day of August, 2013.

COPPERSMITH SCHERMER & BROCKELMAN PLC By /s/ Brett W. Johnson

Andrew S. Gordon Roopali H. Desai

Perkins Coie LLP Paul F. Eckstein D. Andrew Gaona 2901 North Central Avenue, Suite 2000 Phoenix, Arizona 85012-2788

Snell & Wilmer Brett W. Johnson Michael T. Liburdi 400 East Van Buren Street, Suite 1900 Phoenix, Arizona 85004-2202

Attorneys for Intervenor Mercy Maricopa Integrated Care

Copy emailed this 1st day of August, 2013, to all parties and interested persons, By: autogenerated and posted to https://portal.azoah.com/oedf/documents/13F-006-ADM /s/ Tracy Hobbs

ATTACHMENT A

ATTACHMENT B

JNT-0040-0001

JNT-0040-0002

JNT-0040-0003

JNT-0040-0004

JNT-0040-0005

JNT-0040-0006

JNT-0040-0007

ATTACHMENT C

JNT-0041-0001

JNT-0041-0002

JNT-0041-0003

JNT-0041-0004

JNT-0041-0005

JNT-0041-0006

JNT-0041-0007

JNT-0041-0008

JNT-0041-0009

JNT-0041-0010

JNT-0041-0011

JNT-0041-0012

JNT-0041-0013

JNT-0041-0014

ATTACHMENT D

JNT-0047-0001

JNT-0047-0002

JNT-0047-0003

JNT-0047-0004

JNT-0047-0005

JNT-0047-0006