## Facts

- Barbara Brannan’s estate and survivors brought a medical-malpractice/wrongful-death action arising from her death after receiving medical care through a health maintenance organization (HMO) arrangement.
- Plaintiffs alleged that Brannan’s primary care physician, Dr. Mike G. Lin, failed to order an evaluation of her cardiovascular condition and possible heart pathology.
- Plaintiffs contended that HMOs may use financial incentives that discourage physicians from making referrals or ordering diagnostic tests, and that such incentives could have affected Lin’s treatment decisions.
- During Lin’s deposition, plaintiffs sought information about whether his employment contract included incentive provisions tied to referrals or diagnostic testing.
- Lin testified that he did not know how his bonus was determined.
- Plaintiffs moved to compel the HMO-affiliated defendant entity to produce Lin’s employment contract and other documents concerning any bonus plan and the method used to calculate bonuses.
- Defendants opposed the request, arguing that Lin’s motives and compensation were irrelevant because the malpractice claim turned only on whether Lin breached the medical standard of care and caused injury.

## Issues

1. Whether a treating physician’s employment contract and bonus/bonus-calculation materials are discoverable under Federal Rule of Civil Procedure 26 in a medical-malpractice case where plaintiffs claim financial incentives may have influenced referrals and diagnostic testing decisions.

## Decision

- The court granted the motion to compel and ordered production of Dr. Lin’s employment contract and documents relating to any bonus program and how bonuses were calculated.
- The court rejected the argument that compensation-related materials were categorically irrelevant in a malpractice action, concluding that the requested information fell within Rule 26’s broad scope of discovery given plaintiffs’ allegations about incentive-based decision-making.

## Legal Principles

- Discovery under Federal Rule of Civil Procedure 26 is broad and permits nonprivileged information that is relevant to a claim or defense and may lead to admissible evidence.
- At the discovery stage, information need not be admissible at trial to be discoverable; the question is whether it may bear on the parties’ claims or defenses.
- Where a plaintiff alleges that an HMO compensation structure may have influenced medical decision-making (such as referrals or diagnostic testing), employment and bonus-related documents may be relevant to those allegations and therefore subject to discovery.
- A party resisting discovery bears the burden to show why requested materials fall outside the proper scope of Rule 26 or are otherwise protected.

## Conclusion

Brannan held that, in a malpractice case alleging that an HMO’s financial incentives may have affected a physician’s referral and testing decisions, the physician’s employment contract and bonus-related records were within the broad scope of Rule 26 discovery and had to be produced.


Brannan v. Northwest Permanente, P.C., 2006 WL 2794881 (2006)