State Farm Mutual Automobile Insurance Co. v. Fayda

2016 U.S. Dist. LEXIS 119487 (March 24, 2016)

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Nature of the Case

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Facts

State Farm (P) brought an action alleging that various healthcare providers Fayda (Ds), including defendants Arkady Kiner and Contemporary Acupuncture, P.C. (Ds) submitted fraudulent insurance claims for unnecessary medical services. The complaint explains that Ds gained access to patients by paying kickbacks, sometimes disguised as rent for the subleasing of space at the facility, to non-physicians, including defendant Stanislav Lentsi, who actually controlled the facility and its main tenants' medical practice. P sought bank records and tax returns from Ds. Ds objected in that the information sought was irrelevant and private, that the tax returns were jointly filed with Ds wife, and that several of the bank accounts were jointly held with family members. The Magistrate Judge concluded that the bank records and tax returns were relevant and discoverable. The Magistrate Judge found that information regarding other businesses belonging to D was discoverable because analyzing the financial information from the other businesses would permit a factfinder to draw inferences regarding the legitimacy of the services provided by Contemporary Acupuncture. Ds appealed to the District Court.