## Facts

- Robin Houston slipped and fell in a Publix store in McDonough, Georgia, allegedly on liquid in the dairy aisle, and claimed serious injuries.
- Houston sued Publix; the case proceeded in federal court based on diversity jurisdiction.
- Houston received treatment from physicians who had agreements with ML Healthcare Services, LLC, a company that buys medical receivables at a discount and seeks repayment of the billed face amount from any tort recovery.
- Publix sought discovery and trial evidence regarding (1) ML Healthcare’s discounted payments for Houston’s care and (2) ML Healthcare’s financial arrangements with Houston’s treating physicians.
- Publix argued the evidence showed potential bias and affected the credibility of the physicians and the claimed amount of medical damages.
- Houston and ML Healthcare argued the evidence was barred by Georgia’s collateral source rule.
- The district court compelled limited production and testimony from ML Healthcare, admitted the evidence for limited purposes, and instructed the jury not to reduce damages based on collateral payments.
- After an eight-day trial, the jury returned a defense verdict for Publix.
- Houston sought spoliation sanctions based on alleged failure to preserve evidence (including surveillance video); the district court denied sanctions.

## Issues

1. Whether admitting evidence of ML Healthcare’s discounted payments and arrangements with treating physicians violated Georgia’s collateral source rule or otherwise was an abuse of discretion under the Federal Rules of Evidence.
2. Whether the district court abused its discretion by denying in part ML Healthcare’s motion to quash subpoenas seeking documents and testimony about its business arrangements.
3. Whether the district court abused its discretion by denying spoliation sanctions, including an adverse inference instruction and evidentiary exclusions.

## Decision

- The Eleventh Circuit affirmed the judgment for Publix.
- The court held the district court permissibly allowed discovery and admitted evidence of ML Healthcare’s payments and arrangements for limited purposes: showing possible bias and impeaching the claimed value of medical damages.
- The court upheld the partial denial of the motion to quash because the subpoenas sought relevant information and ML Healthcare did not show undue burden.
- The court affirmed denial of spoliation sanctions because the required showing—particularly bad faith—was not established.

## Legal Principles

- Under Georgia’s collateral source rule, collateral payments generally may not be used to reduce a tort plaintiff’s damages, but collateral-source-related evidence can be admissible for a limited, non-damages purpose such as impeachment or showing witness bias, especially with a clear limiting instruction.
- Evidence bearing on financial relationships between a plaintiff’s treating physicians and a medical-receivables purchaser may be relevant to (1) bias/interest and (2) the reasonableness or claimed value of medical expenses, and may be admitted if its probative value is not substantially outweighed by unfair prejudice under Fed. R. Evid. 401–403.
- Subpoenas seeking third-party business records and testimony are enforceable when the requests are relevant and the recipient fails to show the compliance burden is undue.
- Spoliation sanctions and adverse inferences generally require a duty to preserve, loss or destruction of evidence, bad faith or intentional misconduct, and resulting prejudice; absent bad faith, severe sanctions are typically unwarranted.

## Conclusion

The Eleventh Circuit affirmed a defense verdict, holding that evidence about a medical-factoring company’s discounted payments and physician arrangements was properly discoverable and admissible for bias and damages-valuation purposes with limiting instructions, and that spoliation sanctions were correctly denied for lack of bad faith and sufficient prejudice.


ML Healthcare Servs., LLC v. Publix Super Mkts., Inc., 881 F.3d 1293 (11th Cir. 2018)