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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 [email protected] [email protected]
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 [email protected] [email protected]
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 [email protected] [email protected]
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