hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52:18 Main Document Pg 1 of 18

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1 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 1 of Louis R. Strubeck, Jr. (SBT ) Elizabeth Boydston (SBT ) NORTON ROSE FULBRIGHT US LLP 2200 Ross Avenue, Suite 3600 Dallas, Texas Telephone: (214) Facsimile: (214) louis.strubeck@nortonrosefulbright.com liz.boydston@nortonrosefulbright.com COUNSEL FOR EL PASO COUNTY HOSPITAL DISTRICT d/b/a UNIVERSITY MEDICAL CENTER OF EL PASO IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION In re: El Paso Children s Hospital Corporation, Debtor. ) ) ) ) ) Chapter 11 Case No HCM AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER TO THE HONORABLE UNITED STATES BANKRUPTCY JUDGE: El Paso County Hospital District D/B/A University Medical Center of El Paso ( UMC ) files this objection to El Paso Children s Hospital Corporation s (the Debtor ) motion to compel (Dkt. No , the Motion to Compel ) and, in the alternative, request for protective order. In support thereof, UMC states as follows: I. SUMMARY 1. The Debtor s Motion to Compel is moot. In its Motion to Compel the Debtor argued that the documents at issue were necessary for two reasons: (i) to defeat UMC s request 1 Unless noted otherwise, Dkt. No. will refer to the docket in the above-captioned bankruptcy case (the Case ). AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 1 of

2 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 2 of to terminate the Debtor s exclusive period to file a chapter 11 plan; and (ii) to challenge the feasibility of any plan UMC may file. The Court denied UMC s request to terminate exclusivity on August 13. There are no pending motions or hearings on exclusivity. And no motions or hearings are pending to determine the feasibility of any plan that UMC may or may not file at some future date. Accordingly, the documents at issue are not relevant to any pending matter in the Debtor s bankruptcy case, and the Motion to Compel should be denied as moot. 2. Out of an abundance of caution, however, UMC seeks a protective order covering the documents sought by the Motion to Compel pursuant to 11 U.S.C. 107(b)(1) and Federal Rule of Bankruptcy Procedure As supported by the attached affidavits, the requested documents are protected from disclosure by the medical committee and medical peer review committee privileges. Furthermore, as supported by the attached affidavits, the requested documents also contain confidential, proprietary, and commercially sensitive information, the disclosure of which would substantially harm UMC. Thus, even if the documents at issue were relevant and necessary to a pending matter which they are not and if the Debtor could establish that its need for the documents outweighed the harm associated with disclosure which it cannot any disclosure of such documents should be subject to a protective confidentiality order substantially similar to the attached proposed protective order. II. BACKGROUND 3. On July 10, 2015, the Debtor served amended notices of Rule examinations (the Rule 2004 Notices ) on UMC s President and CEO James Valenti and on UMC s CFO Michael Nunez, as UMC s designated corporate representative. 3 The Rule 2004 Notices further 2 3 Rule or Rules, as appropriate, will refer to the Federal Rules of Bankruptcy Procedure. The Rule 2004 notices are attached as Exhibit A to the Motion to Compel. Dkt. No AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 2 of

3 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 3 of purported to require Mr. Valenti and Mr. Nunez to produce documents responsive to seventyseven (77) document requests, including documents related to any consultant UMC retained On August 4, 2015, the Debtor filed its Motion to Compel, seeking an order compelling UMC to produce certain documents requested by the Rule 2004 Notices. Specifically, the Motion to Compel seeks the production of a report created by a consultant retained by Norton Rose Fulbright (the Halsa Report ) and documents relevant to mock inspections performed by consultants for UMC in preparation for its inspections by the Joint Commission (the UMC Joint Commission Documents, 5 and collectively with the Halsa Report, the Privileged and Proprietary Documents ). 5. The Motion to Compel sought the Privileged and Proprietary Documents in connection with a dispute concerning the Debtor s exclusive period to file a chapter 11 plan under 11 U.S.C The Motion to Compel argued that the Privileged and Proprietary Documents likely directly impact feasibility of any UMC-proposed plan... and therefore were necessary for the August 11, 2015 hearing on the Exclusivity Motion and Objection (the Exclusivity Hearing ). 7 Indeed, the bulk of the Debtor s Exclusivity Motion focused on 4 Id. 5 The UMC Joint Commission Documents are comprised of the Intra Cycle Monitoring Survey (UMC_ ) and the Internal Summary of Joint Commission Resources Recommendations (UMC_ ). 6 On July, 15, 2015, the Debtor filed its Motion for Entry of an Order Extending its Exclusivity Periods to File and Solicit a Plan of Reorganization (the Exclusivity Motion ), seeking an 120 day extension of its exclusive period to file a plan, and an additional 60 day period following the extended exclusivity period to solicit a plan. Dkt. No On July 20, 2015, UMC filed its (I) Objection to Debtor s Motion for Extension of Exclusivity Periods and (II) Motion to Terminate Exclusivity Periods Pursuant to 11 U.S.C. 1121(D) (the Exclusivity Objection ), contesting the Debtor s request to extend exclusivity and requesting the Court to terminate exclusivity so that UMC could file its own chapter 11 plan for the Debtor. Dkt. No Dkt. No AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 3 of

4 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 4 of feasibility objections to any hypothetical plan that UMC may propose, 8 and the Debtor sought expedited consideration of the Motion to Compel so it could view, and possibly use, the Privileged and Proprietary Documents as evidence at the Exclusivity Hearing, which was scheduled for seven (7) days later On August 5, 2015, the Count entered its Order denying the Debtor s request for expedited consideration of the Motion to Compel. 10 The Court explained that the Privileged and Proprietary Documents do not appear to be directly relevant and necessary to the hearings regarding plan exclusivity set for August 11, The Order further gave UMC until August 21, 2015 to file a response to the Motion to Compel and ordered the parties to confer and file a motion requesting a hearing on the Motion to Compel after UMC filed its response On August 13, 2015, the Court issued an oral ruling, denying both the Debtor s Exclusivity Motion and UMC s request for termination of the Debtor s exclusive period to file a chapter 11 plan. The next day, the Court entered Orders with respect to the denials Pursuant to the Orders, the Debtor has the exclusive right, through September 15, 2015, to file a plan. Therefore, UMC has not and cannot file a plan, and UMC has not and cannot file a motion seeking to confirm any such proposed plan Dkt. No Dkt. No Dkt. No Id. Id. Dkt. Nos AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 4 of

5 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 5 of III. ARGUMENTS & AUTHORITIES A. The Motion to Compel Is Moot. 9. This Court should deny the Motion to Compel, as it is moot. The Motion to Compel sought the Privileged and Proprietary Documents solely in connection with the Exclusivity Hearing. See Dkt. No ( Given UMC s pending and expedited Motion to Terminate Exclusivity... the Debtor requests that the Court compel UMC to comply with the Debtor s related document requests. ). The Debtor contended that the Privileged and Proprietary Documents were relevant because they likely directly impact feasibility of any UMC-proposed plan The Exclusivity Hearing was held and concluded on August 11, 2015, and the Court denied UMC s request for termination of exclusivity on August 13, There is no pending exclusivity hearing, and there is no hearing on the feasibility of any plan that UMC may or may not propose at some future date. Based on the Court s August 13 ruling, UMC does not even have the right to file a proposed plan at this time. 11. Accordingly, the Privileged and Proprietary Documents are not relevant to any pending matter and the Motion to Compel is now moot. For this reason alone, the Motion to Compel should be denied as moot. B. The Privileged and Proprietary Documents Are Outside the Scope of Rule This Court can also deny the Motion to Compel because Rule 2004 does not authorize the production of documents that, at most, may relate to a motion that has not yet been filed. See White v. Allstate, No CV-1773-R, 2003 U.S. Dist. LEXIS 7089, at *7 (N.D. Tex. Apr. 25, 2003) (parties should not be allowed to roam in the shadow zones of relevancy and to 14 See Dkt. No AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 5 of

6 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 6 of explore matter which does not presently appear germane on the theory that it might conceivably become so ) As set forth above, UMC does not have authority to file a proposed chapter 11 plan, disclosure statement, or move for approval of the same. Until any such plan, disclosure statement, and related motion is filed, any objection to the feasibility of any such plan is speculative, premature, and not permitted by Rule In addition, the UMC Joint Commission Documents, though ostensibly sought in relation to the Exclusivity Hearing, are directed to the pending adversary proceeding filed by the Debtor against UMC, Adv. No (the Adversary Proceeding ) on May 19, The Motion to Compel contends that the UMC Joint Commission Documents related to UMC s performance under various agreements with the Debtor and implies that UMC is somehow in breach of the agreements. See Motion to Compel 19. Issues related to the agreements between UMC and the Debtor and their respective obligations under the same are at the heart of the pending Adversary Proceeding, not the Case. 15. Rule 2004 permits any party in interest to inquire into the debtor s financial affairs and assets, but may not be used by a debtor to obtain discovery in support of a pending adversary proceeding or contested matter. Once an adversary proceeding or contested matter has been triggered, any discovery related to the matter must be sought under the discovery devices provided under Rules Fed. R. Bankr. P. 2004; 9 Collier on Bankruptcy [1] (Alan Resnick & Henry J. Sommer eds., 16th ed. 2011) ( [I]f an adversary proceeding or 15 See also In re Santa Fe Int l Corp., 272 F.3d 705, (5th Cir. 2001); Haines v. Liggett Grp. Inc., 975 F.2d 91, 94 (3d Cir. 1992). 16 The UMC Joint Commission Documents are further irrelevant in that such documents relate to a preliminary denial of accreditation. Subsequent to any preliminary decisions, UMC received full accreditation and remains fully accredited by the Joint Commission as of the date of this response. AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 6 of

7 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 7 of contested matter is pending, the discovery devices provided for in Rule , which adopt various discovery provisions of the Federal Rules of Civil Procedure, apply and Rule 2004 should not be used. ); Intercontinental Enters., Inc. v. Keller (In re Blinder, Robinson & Co., Inc.), 127 B.R. 267, (D. Col. 1991) (Rule 2004 is improper when the discovery provisions of the federal rules of civil procedure have been triggered) The Debtor commenced the Adversary Proceeding prior to serving the Rule 2004 Notices, and any discovery related to the Adversary Proceeding must be sought within that Adversary Proceeding and pursuant to the appropriate adversary proceeding rules. Because Rule 2004 is not the proper procedural avenue to seek discovery in the Adversary Proceeding, this Court should deny the Motion to Compel. C. The Rule 2004 Notice Is Procedurally Defective. 17. Rule 2004(c) requires a party seeking documents from a non-debtor to obtain a subpoena pursuant to Rule 9016 (incorporating Federal Rule of Civil Procedure 45). Fed. R. Bankr. P. 2004(c); Raynor v. Greenlight Capital Qualified, L.P., No , 2008 WL , at *4 (Bankr. D. Neb. May 23, 2008) (applicable rules required a subpoena to be served upon non-debtor party before production of documents was required); In re Fred Ayers Co., Inc., 266 B.R. 557, 561 (Bankr. D. Ga. 2001) (compulsion under Rule 2004(c) requires a subpoena).. The Debtor served the Rule 2004 Notices on July 10, 2015 but failed to obtain a subpoena from the Court complying with Rule 9016 and L.B.R. 2004(c). 17 See also Snyder v. Soc y Bank, 1 B.R. 40, 42 (S.D. Tex. 1994) (Rule 2004 is inappropriate where discovery relates to a pending lawsuit); In re Drexel Burnham Lambert Grp., Inc., 123 B.R. 702, (Bankr. S.D.N.Y. 1991) ( The cases are in agreement that once an adversary proceeding is in progress a creditor/party does not have a right to a 2004 examination. ). AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 7 of

8 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 8 of 19. Accordingly, the Rule 2004 Notices are procedurally defective and cannot support a motion to compel. D. The UMC Joint Commission Documents Are Privileged. 20. The UMC Joint Commission Documents are protected from discovery under the medical committee and medical peer review committee privileges. See Tex. Health & Safety Code , ; Tex. Occ. Code , The medical committee privilege extends to all committees established by a health care entity, including medical peer review committees. Tex. Health & Safety Code (defining a medical committee as includ[ing] any committee... of a hospital ). The medical peer review committee privilege protects entities authorized by a hospital s governing body to participate in the peer review activities of evaluat[ing] the quality of medical and health care services or the competence of physicians. Tex. Occ. Code (8), (a). 21. All records and proceedings of a medical committee or of a medical peer review committee are privileged. Tex. Health & Safety Code (a) ( The records and proceedings of a medical committee are confidential and are not subject to court subpoena. ); Tex. Occ. Code (a) ( Each proceeding or record of a medical peer review committee is confidential, and any communication made to a medical peer review committee is privileged. ). In accordance with these statutes, the Texas Supreme Court consistently defines privileged committee records as all documents that have been prepared by or at the direction of the The UMC Joint Commission Documents are also privileged on their own through the medical committee privilege. See Tex. Gov t Code ; Tex. Health & Safety Code (a),(c); Humana Hosp. Corp. v. Spears-Peterson, 867 S.W.2d 858, 862 (Tex. App. San Antonio 1993, no pet.) ( We think it is clear from the evidence... that the Joint Commission is a joint committee made up of representatives of various medical organizations and thus fits within the statutory definition. ) (citing (a)(2)). See also OR (2009); OR (2009); OR (2009); OR (2009); OR (1996). AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 8 of

9 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 9 of committee for committee purposes. Jordan v. Ct. of Appeals for Fourth Judicial Dist., 701 S.W.2d 644, (Tex. 1985). Therefore, a record is protected by the medical committee and medical peer review committee privileges if it was (1) prepared by or at the direction of a medical committee or medical peer review committee, and (2) created for a committee purpose. 22. The affidavit of Francisco J. Gonzalez (the Gonzalez Affidavit ), attached as Exhibit A, and the affidavit of Darlene Robles (the Robles Affidavit ), attached as Exhibit B, indisputably establish that the UMC Joint Commission Documents constitute privileged medical committee and medical peer review committee records. 23. As established by the affidavits, all of the UMC Joint Commission documents were either prepared by or at the direction of the Performance Improvement Council ( PIC ), 19 which was formally established as a hospital medical committee and medical peer review committee by UMC s Board of Directors. 20 Jordan, 701 S.W.2d at ; Tex. Occ. Code (a)(7)-(8), (a); TEX. HEALTH & SAFETY CODE , Specifically, the PIC expressly directed the Joint Commission to prepare the Intra Cycle Monitoring Survey, 21 and Ms. Robles, as a member of the PIC, personally prepared the Internal Summary of Joint Commission Resources Recommendations. 22 The Intra Cycle Monitoring Survey and Internal Summary of Joint Commission Resources Recommendations were also exclusively created for the PIC s medical peer review committee purpose of supervising, Gonzalez Aff. 3 8; Robles Aff Gonzalez Aff. 3 4, Robles Aff Gonzalez Aff Robles Aff AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 9 of

10 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 10 of investigating, and maintaining the quality and compliance standards of the medical practice and patient care provided by UMC The medical committee and medical peer review committee privileges are applicable within this Court pursuant to Federal Rule of Evidence 501. Rule 501 provides that the common law as interpreted by United States courts in the light of reason and experience governs a claim of privilege. Fed. R. Evid When a party asserts a privilege that is not existent in the common law but enacted by the (state) legislature based upon unique considerations of government policy, the Fifth Circuit instructs a federal court to uphold a state privilege after balancing the policies behind the privilege against the policies favoring disclosure. ACLU of Miss. v. Finch, 638 F.2d 1336, 1343 (5th Cir. Unit A Mar. 1981). The Fifth Circuit s balancing test requires a federal court to consider (1) whether the fact that the [state] courts would recognize the privilege itself creates good reason for respecting the privilege in federal court, regardless of [the federal court s] independent judgment of its intrinsic desirability; and (2) whether the privilege is intrinsically meritorious in [the federal court s] independent judgment. Id. at Here, Texas s medical committee and medical peer review committee privileges satisfy both elements. 25. The medical committee and medical peer review committee privileges are vital to Texas law and policy. Both privileges are highly respected by the Texas Supreme Court, which has repeatedly recognized their breadth and importance. See, e.g., In re Living Ctrs. of Tex., Inc., 175 S.W.3d 253 (Tex. 2005); Romero v. KPH Consol. Inc., 166 S.W.3d 212 (Tex. 2005); In re Univ. of Tex. Health Sci. Ctr. at Tyler, 33 S.W.3d 822 (Tex. 2000); St. Luke s Episcopal Hosp. v. Agbor, 952 S.W.2d 503 (Tex. 1997); Brownwood Reg l Hosp. v. Eleventh Ct. of Appeals, Gonzalez Aff. 4; Robles Aff. 4. AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 10 of

11 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 11 of S.W.2d 24 (Tex. 1996); Mem l Hosp.-The Woodlands v. McCown, 927 S.W.2d 1 (Tex. 1996); Irving Healthcare Sys. v. Brooks, 927 S.W.2d 12 (Tex. 1996); Barnes v. Whittington, 751 S.W.2d 493 (Tex. 1988). 26. Furthermore, the Fifth Circuit has acknowledged that there is a strong policy of comity between state and federal sovereignties [that] impels federal courts to recognize state privileges where this can be accomplished at no substantial cost to federal substantive and procedural policy. Finch, 638 F.2d at Here, Texas s medical committee and medical peer review committee privileges may be recognized by this Court at zero cost to federal substantive and procedural policy because the UMC Joint Commission Documents do not threaten or even tangentially implicate federal substantive and procedural policy. Moreover, as discussed above, the privileged UMC Joint Commission Documents are not relevant to any pending matters and are outside the scope of Rule The medical committee and medical peer review committee privileges are also intrinsically meritorious. Courts determine whether a state privilege is intrinsically meritorious by considering the following elements: (1) the communications must originate in a confidence that they will not be disclosed ; (2) this element of confidentiality must be essential to the full and satisfactory maintenance of the relation between the parties ; (3) the relation must be one which in the opinion of the community ought to be sedulously fostered ; and (4) the injury that would inure to the relation by the disclosure of the communications must be greater than the benefit thereby gained for the correct disposal of litigation. Id. at Texas s medical committee and medical peer review committee privileges satisfy all four elements. First, every record prepared by or at the direction of a medical committee or medical peer review committee for a committee purpose, including the UMC Joint Commission AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 11 of

12 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 12 of Documents, 24 is created pursuant to Texas s statutory promise of nondisclosure. See Tex. Health & Safety Code (a); Tex. Occ. Code (a). Second, the confidentiality of a medical committee or medical peer review committee record is essential to ensuring that physicians and hospitals candidly and thoroughly evaluate quality of care. 25 United States v. Harris Methodist Fort Worth, 970 F.2d 94, 103 (5th Cir. 1992) (finding that the medical peer review process is a sine qua non of adequate hospital care ); see also Texarkana Mem l Hosp., Inc., 551 S.W.2d at 35. Third, the Fifth Circuit has recognized that peer review materials are sensitive and inherently confidential, and protecting that confidentiality serves an important public interest. Harris Methodist, 970 F.2d at 103; see also Bredice v. Doctors Hosp., Inc., 50 F.R.D. 249, (D.D.C. 1970) (holding that peer review documents are entitled to a qualified privilege on the basis of the overwhelming public interest in the peer review process). Fourth, this proceeding will receive zero benefit from the production of the UMC Joint Commission Documents that are not relevant to any pending matter, and UMC will be greatly harmed if the documents are disclosed Accordingly, this Court should apply Texas s well-established medical committee and medical peer review committee privileges and deny the Motion to Compel Gonzalez Aff. 4 8; Robles Aff Gonzalez Aff. 9; Robles Aff Gonzalez Aff. 9; Robles Aff The Debtor s amended Rule 2004 Notices were served only on July 10, The parties agreed to a rolling production of documents, and UMC produced 61,488 pages of documents between June 23, 2015 and August 5, UMC produced a privilege log on August 3, Given the parties agreement as to a rolling production and UMC s production of a privilege log less than a month after the amended Rule 2004 Notices were served, any contention that UMC waived a privilege assertion is unavailing. AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 12 of

13 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 13 of E. The UMC Joint Commission Documents Are Outside the Scope of the 2004 Notices. 30. The Rule 2004 Notices request for production cited by the Debtor concern only documents related to consultants. Specifically, Request 1-4 seek invoices, agreements, reports or analysis, and communications from consultants The affidavit testimony of Mr. Gonzalez and Ms. Robles conclusively establishes that the UMC Joint Commission Documents are not invoices, agreements, reports, analysis, or communications from or with a consultant. The Intra Cycle Monitoring Survey was created exclusively by the Joint Commission, which is an independent accreditation organization that does not engage in consulting. 29 Similarly, the Internal Summary of Joint Commission Resources Recommendations was prepared exclusively by Ms. Robles, the Regulatory Compliance Coordinator for UMC s Quality Management Department, on behalf of UMC. 30 Neither Ms. Robles nor UMC are consultants. Moreover, neither Ms. Robles nor UMC shared the Internal Summary of Joint Commission Resources Recommendations with any consultants, including Joint Commission Resources Accordingly, the UMC Joint Commission Documents are Outside the Scope of the 2004 Notices. Thus, this Court should deny the Motion to Compel Dk. No Gonzalez Aff Robles Aff. 8. Robles Aff. 5, 8. AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 13 of

14 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 14 of F. UMC Would be Substantially Harmed by Disclosure of the Confidential, Proprietary, and Commercially Sensitive Halsa Report. 33. In March, after mediation and in connection with a proposed settlement between UMC and the Debtor, Norton Rose Fulbright retained Halsa advisors to assist Norton Rose Fulbright in a due diligence analysis related to a proposed acquisition of the Debtor by UMC The Halsa report contains highly confidential, proprietary, and commerciallysensitive business information, data, and analysis by experts who were commissioned and paid for their work work that was used to assist UMC in its due diligence related to the proposed (a proposal made by both the Debtor s and UMC s Boards during pre-bankruptcy settlement discussions) acquisition of the Debtor by UMC. 35. As this Court is aware, the Debtor has filed a motion seeking authority to hire Miller Buckfire as an investment banker to run a sale process to find either a strategic partner or to sell the Debtor s assets. UMC would be substantially harmed if the highly confidential, proprietary, and commercially-sensitive information, data, and analysis contained in the Halsa report were leaked, shared, or otherwise disclosed. denied. 36. For all the foregoing reasons, the Motion to Compel should be dismissed or IV. REQUEST FOR PROTECTIVE ORDER 37. Out of an abundance of caution, however, if this Court decides to grant, even partially, the Motion to Compel, UMC respectfully requests that the Court issue a protective 32 Retention of a consultant by an attorney rather than the client augments the assertion that the consultant s services were necessary to provide legal advice. See Silverman v. Hidden Villa Ranch (In re Suprema Specialties, Inc.), No , 2007 WL , at *4 n.5 (Bankr. S.D.N.Y. July 2, 2007) (holding that when an accountant is retained directly by the attorney rather than by the client, such a retention may augment an argument based on Kovel that the accountant, having been retained by counsel has a role here that may be analogous to that of an interpreter ). AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 14 of

15 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 15 of order to protect UMC from being harmed by disclosure of the privileged, confidential, proprietary, and commercially sensitive information contained within the Privileged and Proprietary Documents. 38. Federal Rule of Civil Procedure 26(c) permits the Court to issue protective orders precluding or limiting the disclosure of confidential or commercially-sensitive information upon a showing of good cause. Fed. R. Bankr. P. 7026(c)(1). Entry of a protective order to protect confidential business information has long been recognized as appropriate. 8A Federal Practice and Procedure 2035 (Charles A. Wright et al. eds., 3d. ed. 2010). In 1981, Judge Becker noted that he was unaware of any case in the past half dozen years of even a modicum of complexity where an umbrella protective order... has not been agreed to by the parties and approved by the Court. Protective orders have been used so frequently that a degree of standardization is appearing. Id. (internal footnote and citation omitted) Similarly, 11 U.S.C. 107 and Federal Rule of Bankruptcy Procedure 90 authorize the Court to enter an order protecting confidential and sensitive commercial information. 11 U.S.C. 107(b)(1); Fed. R. Bankr. P. 90. Section 107 was designed to protect entities from disclosures of confidential or commercial information that could reasonably be de expected to cause the entity commercial injury. In re Meyrowitz, No , 2006 WL , at *2 (Bankr. N.D. Tex. Oct. 27, 2006); In re Northstar Energy, Inc., 315, B.R. 425, 428 (Bankr. E.D. Tex. 2004). Accordingly, confidential or commercial information does not need to rise to the level of trade secret in order to obtain protection under 33 The burden is on the moving party to establish that the information to be protected is confidential and disclosure would cause harm, but once that burden is satisfied, the opposing party bears the burden of establishing that the information is sufficiently relevant and necessary to its case to outweigh the harm that disclosure may cause. M-I LLC v. Stelly, 733 F. Supp. 2d 759, 801 (S.D. Tex. 2010) (quoting Wright & Miller 2043). AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 15 of

16 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 16 of 107. In re Meyrowitz, 2006 WL , at *2. Rather, courts have defined commercial information subject to protection under section 107 and Rule 90 as including information that would cause an unfair advantage to competitors. Id. Upon a showing that documents or information fall within 107, the court is required to protect a requesting interested party and has no discretion to deny the request. In re Faucett, 438 B.R. 564, 567 (W.D. Tex. 2010) (quoting Video Software Dealers Ass n v. Orion Pictures Corp. (In re Orion Pictures Corp.), 21 F.3d 24, 27 (2d Cir. 1994)). 40. It cannot be disputed that disclosure of the Halsa report would put UMC, who paid for the experts at Halsa to investigate, collect, and analyze commercially-sensitive data, at a significant economic disadvantage amongst any other prospective or potential strategic partners, investors, or purchasers of the Debtor s assets. 41. Further, and as set forth in the Robles Affidavit, the Privileged and Proprietary Documents contain confidential, proprietary, and commercially sensitive information, the disclosure of which would substantially disadvantage UMC vis a vis its competitors and harm UMC Accordingly, even if the Debtor could meet its burden to establish that the Privileged and Proprietary Documents are relevant and necessary to a pending controversy which the Debtor cannot as there is no live or pending relevant hearing at the very least, disclosure of those documents should be subject to a protective confidentiality order substantially similar to the attached proposed order, attached as Exhibit C. 34 Robles Aff. 9. AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 16 of

17 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg 17 of V. CONCLUSION WHEREFORE, UMC respectfully requests the Court to dismiss or deny the Motion to Compel in its entirety or, in the alternative, grant an appropriate protective order, and grant any such other and further relief to which this Court deems UMC is entitled at law or in equity. Dated: August 21, 2015 Dallas, Texas Respectfully submitted, NORTON ROSE FULBRIGHT US LLP By: /s/ Elizabeth Boydston Louis R. Strubeck, Jr. (SBT ) Elizabeth Boydston (SBT ) 2200 Ross Avenue, Suite 3600 Dallas, Texas Telephone: (214) Facsimile: (214) COUNSEL FOR EL PASO COUNTY HOSPITAL DISTRICT d/b/a UNIVERSITY MEDICAL CENTER OF EL PASO AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page 17 of

18 hcm Doc#279 Filed 08/21/15 Entered 08/21/15 15:52: Main Document Pg of CERTIFICATE OF SERVICE The undersigned attorney hereby certifies that a true and correct copy of the foregoing was served electronically through the Bankruptcy Court s Electronic Case Filing System on those parties that have consented to such service and by electronic mail to the Debtor s counsel on the 21st day of August, /s/ Elizabeth Boydston AND, IN THE ALTERNATIVE, REQUEST FOR PROTECTIVE ORDER Page of