STATE v. OPTUMRX INC (2025)

In this appeal, two Medicaid service providers challenge the trial court's discovery judgment compelling them to produce certain discovery to the State of Louisiana (Discovery Judgment), the trial court's later judgment finding they violated the discovery judgment and were liable for sanctions (Sanctions Judgment), and the trial court's additional later judgment ordering them to pay $112,500 in attorney fees to the State as the sanction for the discovery violation (Attorney Fee Judgment).

After the appeal was lodged, the State of Louisiana filed a motion to strike portions of the Medicaid service providers’ briefs and certain documents in the record. Also, after the appeal was lodged, we granted the Medicaid service providers’ motion to stay the Discovery Judgment. Herein, after review, we grant the State of Louisiana's motion to strike. Further, we lift the stay of the Discovery Judgment, reverse the Discovery Judgment in part, reverse the Sanctions Judgment in part, vacate the Attorney Fee Judgment, and remand.

FACTUAL AND PROCEDURAL BACKGROUND

The Louisiana Department of Health (LDH) administers the Louisiana Medicaid Program. In 2012, the LDH implemented a “managed care” model to provide healthcare benefits to Medicaid beneficiaries. Under this model, the LDH contracts with Managed Care Organizations (MCOs), who act as insurance plans for Medicaid participants, and the State pays each MCO for each enrollee that participates in the MCO's plan. Since 2012, the LDH has contracted with UnitedHealthcare of Louisiana, Inc. d/b/a UnitedHealthcare Community Plan (UnitedHealthcare) as one of the MCOs providing services in Louisiana. As allegedly allowed by the LDH/UnitedHealthcare contract, UnitedHealthcare subcontracts with OptumRx, Inc. (OptumRx), a pharmacy benefit management organization (PBMO), to provide prescription drug coverage to Medicaid enrollees. In turn, OptumRx, as a PBMO, contracts with drug manufacturers, wholesalers, and pharmacies. It is undisputed that UnitedHealthcare and OptumRx are both owned by UnitedHealth Group, Inc. It is also undisputed that these entities contract with other states to provide MCO and PBMO services.

In September 2021, the Louisiana Attorney General's Office began a review of LDHMCO contracts and MCO-PBMO contracts, including contracts involving UnitedHealthcare and OptumRx. After several months of negotiation, in January 2022, the Louisiana Attorney General's Office and UnitedHealthcare negotiated a confidentiality agreement pertaining to certain contracts to be provided by UnitedHealthcare. In February 2022, UnitedHealthcare provided the Louisiana Attorney General's Office with certain contracts. The produced contracts were heavily redacted, and, according to UnitedHealthcare, the redactions consisted of information that did not pertain to Medicaid services in Louisiana, but instead pertained to such services in other states.

On April 13, 2022, the State of Louisiana, through the Attorney General (State), filed a Petition for Injunctive Relief and Restitution against UnitedHealthcare and OptumRx (collectively, United) “to recover billions of dollars in inflated prescription drug prices charged by [United] to the Louisiana Medicaid Program.” The State alleged causes of action against United for breach of contract, violations of the Louisiana Unfair Trade Practices Act (LUTPA), La. R.S. 51:1401, et seq., violations of the Louisiana Medical Assistance Programs Integrity Law (LMAPIL), La. R.S. 46:437.1, et seq., and, alternatively, unjust enrichment. The State alleged United had fraudulently concealed the true costs of pharmaceutical products provided under its contracts with the State and had refused to comply with contractual provisions allowing the State access to records and data that would show the overpayments United had caused the State to pay. As part of its requested relief, the State sought a judgment ordering United to immediately turn over requested records as allegedly mandated by the parties’ contracts. Along with the petition, the State served United with interrogatories and requests for production of documents.¹

Relevant to discovery, on August 5, 2022, the trial court signed a Stipulated Protective Order (SPO) governing the parties’ discovery procedure which allowed the parties, among other things, to designate discovery records as confidential. And, on August 10, 2022, the trial court signed a separate order adopting the parties’ Joint Stipulated Order Regarding the Discovery and Production of Electronically Stored Information (SPOESI). Thereafter, despite the protections afforded by the SPO and SPOESI, the parties engaged in limited discovery and had contentious discussions as to what discovery records United was required to produce. After the parties continued to disagree, United filed a Motion for Protective Order on December 13, 2022, and the State filed a Motion to Compel Delinquent Discovery on January 6, 2023. Each side filed oppositions to the other's motions. The trial court held a hearing on the motions on January 30, 2023.

On March 13, 2023, the trial court signed the Discovery Judgment granting the State's Motion to Compel Delinquent Discovery and denying United's Motion for Protective Order. The Discovery Judgment specified what discovery records United was required to produce and deadlines for such production. United's subsequent writ applications challenging the Discovery Judgment were denied by this Court and the Louisiana Supreme Court. State v. OptumRx, Inc., 2023-0272 (La. App. 1 Cir. 3/23/23), 2023 WL 2609637 ² and State v. OptumRx, Inc., 2023-00474 (La. 5/2/23), 360 So.3d 12.

On April 10, 2023, the State filed a Motion for Discovery Sanctions, acknowledging that United produced some supplemental discovery records on March 23, 2023, but contending that such did not comply with the Discovery Judgment. United opposed the State's sanctions motion. After a hearing, the trial court signed the Sanctions Judgment on August 3, 2023, finding United failed to comply with the Discovery Judgment, ordering United to comply, and, as a sanction, ordering United to pay reasonable expenses, including attorney fees, caused by United's failure to comply, pursuant to La. C.C.P. art. 1471. The Sanctions Judgment stated the award of expenses would be made after submission of evidence relative to the time and expenses incurred in filing and arguing the sanctions motion. After another hearing, and consideration of evidence filed by the State, the trial court signed the Attorney Fee Judgment on October 9, 2023, quantifying the amount of the sanction against United as $112,500 in attorney fees.

United appeals the Sanctions Judgment in part and the Attorney Fee Judgment and, as part of the appeal, also challenges portions of the Discovery Judgment in part. In three assignments of error, United contends the trial court abused its discretion as follows:

(1) in the Discovery Judgment, by ordering United to produce highly sensitive out of state information with no relevance to Louisiana's Medicaid Program;

(2) in the Sanctions Judgment, by sanctioning United (a) for failing to produce information that United does not have in its possession, control, or custody, (b) for marking highly confidential documents with watermarks that no prior court order forbade, and (c) based on rubber-stamped findings of fact that are clearly erroneous; and

(3) in the Attorney Fee Judgment, by calculating attorney fees based on an hourly rate in excess of the Attorney General's Maximum Hourly Fee Schedule.

DISCUSSION

Motion to Strike

Before reaching the merits of the appeal, we address the State's motion to strike portions of United's appellate briefs and to strike certain documents from the appellate record. The State's objection is that both United's briefs and the challenged documents mainly relate to events that post-date the judgments appealed in this case.

Under La. C.C.P. art. 2164, this Court shall render any judgment that is just, legal, and proper upon the record on appeal. The record on appeal is that which the trial court sends to the appellate court and includes the pleadings, court minutes, transcript(s), jury instructions, judgments, and other rulings, unless otherwise designated. Parent v. Louisiana Department of Public Safety and Corrections, 2021-0897 (La. App. 1 Cir. 3/3/22), 341 So.3d 804, 806. Appellate review is limited strictly to the record as it existed at the time the underlying judgment was rendered. Cortez v. Cortez, 2011-1485 (La. App. 1 Cir. 3/29/12), 2012 WL 1079201, *2. Thus, any reference to substantive ³ events, facts, or judgments that occurred after the trial court signed the appealed judgment is clearly improper, because substantive post-judgment events, facts, and judgments are not a part of “the record on appeal.” See Rathe v. Rathe, 2017-1326 (La. App. 1 Cir. 8/21/18), 256 So.3d 1001, 1007-08. Further, an appellate court cannot review evidence that is not in the appellate record, cannot receive new evidence, and cannot take judicial notice of another court's suit record. Id. at 1007.

Thus, to the extent United's briefs reference substantive events, facts, or judgments that post-date the Attorney Fee Judgment, we strike those references and will not consider them. Accord Misita v. St. Tammany Parish Government, 2018-1595 (La. App. 1 Cir. 9/11/19), 286 So.3d 440, 443, writ denied, 2019-01877 (La. 1/28/20), 291 So.3d 1060. Similarly, we will not consider any documents physically contained in the appellate record that pertain to substantive events, facts, or judgments that post-date the Attorney Fee Judgment, whether those documents were sent as part of the original appellate record or added later by trial court supplement.

The Discovery Judgment 4

In its first assignment of error, United contends the trial court abused its discretion in the Discovery Judgment by ordering United to produce highly sensitive out of state information with no relevance to this litigation and which contains non-discoverable trade secrets.⁵ In opposition, the State first argues the trial court's Discovery Judgment is not appealable or reviewable as part of this “restricted” appeal of the Sanctions Judgment. Alternatively, the State argues that, even if the Discovery Judgment is reviewable on appeal, the trial court did not abuse its discretion in rendering it, because the discovery records the State seeks are indeed relevant to the State's suit and United did not prove the records contain trade secrets.

A sanctions judgment for discovery violations under La. C.C.P. art. 1471 constitutes a partial final judgment subject to immediate appeal under La. C.C.P. art. 1915(A)(6). See Stevens v. St. Tammany Parish Government, 2016-0534 (La. App. 1 Cir. 1/18/17), 212 So.3d 568, 575.⁶ The appeal from a sanctions judgment is a restricted appeal, but on review of that judgment, the appellant may also challenge an interlocutory judgment involving related issues, e.g., a related interlocutory judgment compelling discovery. Id.; also see Pontchartrain Natural Gas System v. Texas Brine Co., LLC, 2018-1249 (La. App. 1 Cir. 12/30/20); 317 So.3d 715, 742, writs denied, 2021-00382, 2021-00386 (La. 6/8/21), 317 So.3d 323.

Here, the trial court's Discovery Judgment is indeed an interlocutory judgment that is generally not appealable; but, because the Discovery Judgment is interrelated with the Sanctions Judgment and the Attorney Fee Judgment, this Court may review the propriety of the Discovery Judgment as part of this appeal. See Pontchartrain Natural Gas System, 317 So.3d at 742. The State's contrary argument has no merit. We now address whether the trial court abused its discretion in the Discovery Judgment by compelling United to produce out of state discovery records.

Relevancy of Out of State Information

Generally, parties may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action. See La. C.C.P. art. 1422. “Relevant evidence” means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. La. C.E. art. 401. It is not ground for objection that the information sought will be inadmissible at the trial, if the information sought appears reasonably calculated to lead to the discovery of admissible evidence. La. C.C.P. art. 1422. The party seeking an order compelling discovery has the burden of proving that the discovery sought is relevant to the subject matter of the pending action. Myers v. Houston Specialty Insurance Company, 2022-0773 (La. App. 1 Cir. 4/14/23), 366 So.3d 616, 624.

The basic objectives of the Louisiana discovery process are to afford all parties a fair opportunity to obtain facts pertinent to the litigation, to discover the true facts and compel disclosure of these facts wherever they may be found, to assist litigants in preparing their cases for trial, to narrow and clarify the basic issues between the parties, and to facilitate and expedite the legal process by encouraging settlement or abandonment of less than meritorious claims. Hodges v. Southern Farm Bureau Cas. Ins. Co., 433 So.2d 125, 129 (La. 1983). The discovery statutes are to be liberally construed to achieve these intended objectives. Id.; Hicks v. USAA Gen. Indem. Co., 2021-00840 (La. 3/25/22), 339 So.3d 1106, 1112. A trial court has broad discretion in discovery matters, and this Court will not disturb such on appeal absent an abuse of that discretion. See Crosstex Energy Services, LP v. Texas Brine Company, LLC, 2022-00375 (La. 4/13/22), 336 So.3d 457 (per curiam).

Generally, the subject matter in this suit is United's provision of prescription drug coverage to Louisiana Medicaid recipients and whether United's administration of the prescription drug program caused the State to overpay for these drugs. In its Discovery Judgment, the trial court concluded that certain requested discovery records, even though related to United's activities in other states, were relevant herein, because the State alleged: (1) that “defendants’ pricing scheme employed in Louisiana is part of a nationwide effort by the defendants to obtain improper Medicaid payments[,]” and (2) the existence of “a long-term and broad-based scheme to improperly increase charges imposed upon the ․ Louisiana Medicaid program[.]” The trial court determined the requested discovery records “would relate to the pricing schemes implemented in Louisiana and the propriety or impropriety of those methods.”

After review, we find the trial court abused its discretion in finding United's out of state discovery records relevant. We first note that, contrary to the trial court's Discovery Judgment, the State's petition does not explicitly allege that the pricing scheme employed by United in Louisiana is part of a “nationwide effort” by United to obtain improper Medicaid payments. Although the petition vaguely alleges there are “problems with the prescription drug pricing structure as a whole,” the State's suit is limited to United's alleged improper inflation of prescription drug prices in Louisiana, not in other states. The State is not seeking redress from United for any improperly inflated pricing in other states. Further, United's pricing structure and contracts with other states regarding Medicaid coverage are governed by United's unique contracts with those states. Those contracts presumably were the result of state-specific negotiations and concessions by those parties, just as United's contracts with LDH were the result of Louisiana-specific negotiations and concessions between United and LDH. Thus, based on the uniqueness of each contract, we reject the speculative notion that evidence of United's similar or different pricing structures and contracts with other states would tend to make it more probable that United is improperly administering Louisiana's Medicaid program and causing the State to overpay for prescription drugs. See Gary v. Hollier's Specialty Roofing, Inc., 2023-260 (La. App. 3 Cir. 12/27/23), 389 So.3d 109, 120-21 (finding trial court abused its discretion in compelling roofing company to produce records regarding other customers, because the success of the plaintiffs’ claims did not depend on showing that roofing company committed unfair practices with other customers). Stated differently, the out of state records are not “relevant” to the subject matter of this litigation and are thus not discoverable. See La. C.C.P. art. 1422; La. C.E. art. 401.

Even under a liberal construction of the applicable discovery statutes, we conclude the State failed to prove that discovery of out of state records is reasonably calculated to lead to the discovery of admissible evidence and would fulfill the basic objectives of Louisiana's discovery process. See Hodges, 433 So.2d at 129. We conclude the trial court abused its discretion, in the Discovery Judgment, by compelling United to produce out of state discovery records; in the context of discovery, out of state discovery records are not relevant. Based on this determination, we need not address United's alternative argument that, even if relevant, the trial court abused its discretion in ordering United to produce out of state discovery records, because such records contain non-discoverable trade secrets. United's first assignment of error has merit, and we reverse the Discovery Judgment insofar as it compelled production of out of state discovery records.

The Sanctions Judgment

In its second assignment of error, United contends the trial court abused its discretion by sanctioning United: (1) for failing to produce documents and data that do not exist, (2) for applying watermarks to highly confidential documents, and (3) based on rubber-stamped factual findings that are erroneous.⁷

A trial court has the authority to impose sanctions on a party for discovery misconduct under both its inherent power to manage its own affairs and the discovery articles found in the Louisiana Code of Civil Procedure. See La. C.C.P. art. 1471; Lathan Company v. Department of Education, Recovery School District, 2023-0309 (La. App. 1 Cir. 2/21/24), 384 So.3d 399, 414. Refusal to comply with court-ordered discovery is a serious matter. Horton v. McCary, 635 So.2d 199, 203 (La. 1994); Matter of Succession of Morris, 2019-0562 (La. App. 1 Cir. 6/17/20), 312 So.3d 285, 294, writ denied, 2020-01180 (La. 12/8/20), 306 So.3d 435. Under La. C.C.P. art. 1471(A), if a party fails to obey a judgment compelling discovery, the trial court may address the failure by making such orders as are just. Matter of Succession of Morris, 312 So.3d at 292. In lieu of specified sanctions listed in La. C.C.P. art. 1471(A)(1-5), or in addition thereto, the trial court shall require the party failing to obey the order, or the attorney advising him, or both, to pay the reasonable expenses, including attorney fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make the expense award unjust. See La. C.C.P. art. 1471(C). The party who fails to comply with a discovery order bears the burden of proving its failure was justified or that special circumstances would make an expense award unjust. See Allen v. Smith, 390 So.2d 1300, 1302 (La. 1980).

In considering sanctions, the trial court assesses the prejudice to the requesting party and willfulness of the noncompliant party. Matter of Succession of Morris, 312 So.3d at 293; Bancorpsouth Bank v. Kleinpeter Trace, L.L.C., 2013-1396 (La. App. 1 Cir. 10/1/14), 155 So.3d 614, 637, writ denied, 2014-2470 (La. 2/27/15), 159 So.3d 1067. We review a trial court's factual findings that a party failed to obey an order compelling discovery under the manifest error standard of review. Lathan, 384 So.3d at 413. We review a trial court's imposition of discovery sanctions for such failure to obey under the abuse of discretion standard of review. Id. at 412.

Documents that “Do Not Exist”

United contends the trial court abused its discretion by sanctioning United for failing to produce documents that do not exist, including: claims and rebate data from January 2012 to 2015, claims data in NCPDP (National Council for Prescription Drug Programs) format, and a comprehensive data dictionary of each of the fields in OptumRx's claims database.

The Discovery Judgment pertinently stated:

IT IS FURTHER ORDERED that, regarding Request for Production No. 7 for “clean claims data” from January 1, 2012, to present, no later than 10 days after the date of this Judgment[,] the defendants shall identify all sources of prescription claims, pharmacy payments or remittances, billing, and accounting data related to each prescription claim for Louisiana Medicaid enrollees maintained by each defendant. In this response, the defendants shall each separately identify all data fields and include a data dictionary or detailed description of each data field for all data maintained in any of its respective systems, whatever the source. Within 14 days of receipt of this information from each defendant, the plaintiff will confer with the defendants and confirm the data sources and data fields to be produced. Within 14 days of the plaintiff confirming the requested data is the data needed to evaluate its claims, defendants shall produce the requested data in the [NCPDP] format in an Excel or CSV file unless the parties mutually agree to another reasonably usable format.

In support of its opposition to the State's Motion for Discovery Sanctions, United filed, among other evidence, the affidavit of David Yerich, the Director of eDiscovery for United Health Group Incorporated. In his affidavit, Mr. Yerich attested to the efforts United undertook to comply with the Discovery Judgment and specifically described the discovery records that were produced. Relevant to the above categories of discovery that United claims do not exist, Mr. Yerich attested: on May 30, 2023, OptumRx produced claims data from the Louisiana Medicaid Program from January 1, 2015, to present; on May 23, 2023, OptumRx produced a data report reflecting the rebate dollars it collected and disbursed to UnitedHealthcare for Louisiana Medicaid from 2017 to present; on March 31, 2023, OptumRx produced over 1,800 pages of rebate agreements, amendments, and exhibits from manufacturers; on April 20, 2023, OptumRx produced two additional data reports reflecting rebate dollars it collected and disbursed to UnitedHealthcare for Louisiana Medicaid from 2015 and 2016; and, on May 6, 2023, OptumRx additionally produced over 1,200 pages of rebate agreements, addendums, and exhibits from manufacturers. Mr. Yerich attested OptumRx produced claims data in Excel and CSV files, and UnitedHealthcare produced encounter data in Excel and CSV files. Mr. Yerich's affidavit does not reference the NCPDP format or a data dictionary of the fields in OptumRx's claims database.

United also introduced the affidavit of Shelton Dennis Blunt, one of its attorneys. In his affidavit, Mr. Blunt outlined the procedural history of this suit as it pertained to discovery, both before and after the trial court rendered the Discovery Judgment. Mr. Blunt also attached several exhibits, including some of United's discovery responses as well as related correspondence exchanged by counsel for the parties. In a March 23, 2023 letter to the State's counsel, Mr. Blunt explained the scope of United's supplemental production as to several categories of discovery records, including claims data and rebate data. Regarding claims data from 2012 to 2015, Mr. Blunt explained that OptumRx could only identify claims from the Louisiana Medicaid program beginning from 2015, because OptumRx did not start providing pharmacy management services to the Louisiana Medicaid Program until 2015. Regarding the claims data format, he explained, “The data fields available in the claims data include standard fields, which may correspond to certain [NCPDP] fields[,] but are not always stored according to NCPDP field.” He then stated that “producing data in NCPDP format [was] unduly burdensome and not practical.” As to a comprehensive data dictionary of each of the fields in OptumRx's claims database, Mr. Blunt explained that OptumRx had some data dictionaries, but that a single, comprehensive data dictionary did not exist, because the meaning and use of data fields may change over time and from system to system; instead, Mr. Blunt explained that a list of potentially relevant fields (containing 84 fields) was attached to his letter as Appendix A. As to rebate data, Mr. Blunt explained that United was providing three reports: an OptumRx-prepared report showing all rebate dollars collected and disbursed to United for Louisiana Medicaid from 2017 to present and two additional reports by which UnitedHealthcare reported collected rebates to Louisiana Medicaid. As to all referenced data sources, Mr. Blunt advised that United was “prepared to confer with [the State] ․ within 14 days of the date of [this March 23, 2023] letter, per the Court's [Discovery Judgment].”

1. Claims and rebate data from January 2012 to 2015

In its appellate brief, the State points to no evidence showing that claims and rebate data from 2012 to 2015 existed, such that United violated the Discovery Judgment by failing to produce such. Thus, no identified evidence contradicts Mr. Blunt's March 23, 2023 letter stating that United only began providing pharmacy management services in 2015 and, therefore, could not produce pre-2015 claims and rebate data. Under La. C.C.P. art. 1461, a party upon whom a discovery request is served is only responsible for producing discovery records that are in its “possession, custody, or control[.]” Logan v. Madison Parish Detention Center, C.A. 3:12CV-2221 (W.D. La. 10/25/13), 2013 WL 5781313, *2-3 (refusing to compel production of documents when requestor provided no credible evidence showing the requested documents existed or were in defendant's possession). With Mr. Blunt's letter, United carried its burden of proving its failure to comply with the Discovery Judgment as to pre-2015 claims and rebate data was justified. See Allen, 390 So.2d at 1302. Absent contrary evidence showing that United had these discovery records in its possession, custody, or control, we conclude the trial court manifestly erred in factually finding United had claims and rebate data from 2012 to 2015 and abused its discretion by sanctioning United for failing to produce such.

2. Claims data in NCPDP format

As to claims data in NCPDP format, the State argues such existed in United's possession because pharmacies are required to submit claims to United in the NCPDP format. As support for its argument, the State cites to a February 9, 2023 email exchange between counsel wherein the State's counsel identifies the NCPDP format as “industry standard” for claims files. Further, the State argues United violated the Discovery Judgment by failing to confer with the State to reach a mutual agreement as to another reasonably usable format. Lastly, the State claims United failed to explain why claims data production in NCPDP format was “unduly burdensome and not practical,” so as to justify violation of the Discovery Judgment ordering such.

After reviewing the evidence referenced by the parties, we conclude United did not prove its failure to provide at least some claims data in NCPDP format was justified. Without explanation from either Mr. Yerich or Mr. Blunt (or other identified record evidence) as to why claims data production in NCPDP format was “unduly burdensome and not practical,” Mr. Blunt's statement that United may not always store data in NCPDP format is insufficient to merit United's serious action of disobeying a judgment compelling discovery. See La. C.C.P. art. 1462(C); Matter of Succession of Morris, 312 So.3d at 294. Further, on appeal, the parties cite to evidence showing that the other was at fault for refusing or failing to confer as to an otherwise reasonable format than NCPDP. Apparently, the trial court reviewed the conflicting evidence and determined it was United who failed to reasonably confer on this issue. We find no manifest error in this factual determination nor in the trial court's finding that United violated the Discovery Judgment by failing to provide claims data in NCPDP format. See Lathan, 384 So.3d at 413. We further conclude the trial court did not abuse its discretion by sanctioning United for these failures.

3. Comprehensive data dictionary

As to the existence of a comprehensive data dictionary of each of the fields in OptumRx's claims database, the State argues that United's timely production of only a limited list of 84-potentially relevant fields from only one data source justifies the trial court's sanction. The State argues that United belatedly produced a 900-field dictionary, and, even more belatedly, produced a “whopping” 11,000-field dictionary from the same data source. The State argues United's second production was “suspicious,” because United produced the 900-field dictionary just before the sanctions hearing, and that the third production of the 11,000-field dictionary, which United produced after the trial court rendered the Sanctions Judgment, “clearly” would not have been made had the State not sought sanctions. The State appears to argue that the two belated productions show a comprehensive data dictionary did exist and that United's failure to produce such by the Discovery Judgment's March 20, 2023 deadline was unjustified.

In his affidavit, Mr. Blunt justified United's failure to timely provide a comprehensive data dictionary on March 20, 2023, by explaining that such did not exist. In its brief, the State did not support its above referenced argument by properly pointing to record evidence demonstrating United's two later productions. Assertions in brief do not constitute evidence. Morse v. Louisiana Veterinary Referral Center, LLC, 2021-0965 (La. App. 1 Cir. 2/25/22), 340 So.3d 1130, 1135. And, even if the State had pointed to such evidence, such would not prove that United was in possession of a “single, comprehensive” data dictionary of each of the fields in OptumRx's claims database on March 20, 2023, and that United violated the Discovery Judgment by producing only an 84-field dictionary on that date, rather than a single, comprehensive dictionary.⁸ Thus, with Mr. Blunt's letter, United carried its burden of proving its failure to comply with the Discovery Judgment's order to produce a single, comprehensive data dictionary of each of the fields in OptumRx's claims database was justified. The State failed to prove otherwise.

In sum, as to the discovery records that United claims do not exist, we conclude the trial court abused its discretion in sanctioning United for failing to produce claims and rebate data from January 2012 to 2015 and for failing to produce a single, comprehensive data dictionary of each of the fields in OptumRx's claims database. United pointed to evidence in the record justifying its failure to comply with the Discovery Judgment as to this discovery, and the State, on appeal, has argued but failed to prove with countervailing evidence that United's failure was unjustified. Insofar as the Sanctions Judgment is based on these purported violations, we reverse the Sanctions Judgment. However, we conclude the trial court did not abuse its discretion in sanctioning United for failing to timely produce at least some claims data in NCPDP format, because there is a reasonable factual basis for the trial court's finding that United could have produced claims data in NCPDP format. Insofar as the Sanctions Judgment is based on this violation, we affirm the Sanctions Judgment.

Applying Watermarks to Discovery Records

United next contends the trial court abused its discretion by sanctioning it for applying a watermark to discovery records it produced, because the Discovery Judgment neither addressed nor prohibited the use of a watermark. In opposition, the State argues United's watermark application violated the Discovery Judgment, because the watermark obscured the text of the discovery records and violated La. C.C.P. art. 1462(C)’s requirement that a party producing discovery do so in a form “in which it is ordinarily maintained or in a form ․ that [is] reasonably usable.”⁹

A party who fails to provide discovery may be sanctioned only if he has failed to comply with a court order. See La. C.C.P. art. 1471(A); Cheatum v. Morris, 2000-2021 (La. App. 4 Cir. 5/23/01), 789 So.2d 660, 662. A trial court cannot sanction a party for disobeying a judgment compelling discovery unless the judgment specifically compelled the discovery records the party failed to produce. See Bancorpsouth Bank, 155 So.3d at 633 (finding a party's failure to implement a litigation hold in a case was not sanctionable when the judgment compelling discovery did not order that a litigation hold be implemented); see Cheatum, 789 So.2d at 662 (reversing sanctions judgment against a plaintiff for failing to appear at two independent medical examination appointments when judgment compelling her appearance at a third appointment did not specifically order her to be present for the first two). Thus, if the Discovery Judgment cannot reasonably be interpreted as requiring United to produce non-watermarked discovery records, then sanctions for United's production of watermarked discovery records were not warranted.

We have read the Discovery Judgment in its entirety and, based on a reasonable interpretation, we find no reference to the use of a watermark, much less a prohibition against the use of a watermark. The Discovery Judgment ordered United to produce “full and complete copies” of certain discovery records “without redactions based on relevancy, confidential information, commercially sensitive information, or trade secrets,” and “full and complete copies” of certain other discovery records “without any redactions other than those based on a legitimate privilege[.]” The Discovery Judgment also ordered United to produce certain “sufficient, complete, and accurate” data. But, a requirement to produce “full and complete” documents or “sufficient, complete, and accurate” data cannot reasonably be interpreted as a prohibition against application of a watermark. United's failure to interpret the Discovery Judgment as prohibiting a watermark cannot be construed as a willful violation of its terms. See Matter of Succession of Morris, 312 So.3d at 293. Further, the State has not explained, nor pointed to record evidence ¹⁰ showing, how the presence of a watermark makes the discovery records not “reasonably usable.” See State v. Louisiana Land & Expioration Company, 2017-755 (La. App. 3 Cir. 12/20/17), 258 So.3d 790, 802 (finding no abuse of discretion in denying motion to compel Excel spreadsheets when requestor failed to show PDF format was not satisfactory or reasonably usable).

Thus, we conclude the trial court manifestly erred in finding that United's application of a watermark to discovery records violated the Discovery Judgment and also abused its discretion by sanctioning United for applying a watermark. Insofar as the Sanctions Judgment is based on this purported violation, we reverse the Sanctions Judgment.

Factual Findings Adopted by Trial Court

We next address United's argument that the Sanctions Judgment, which adopts the State's proposed findings of fact, must be reversed because many of the adopted findings are manifestly erroneous.¹¹ United contends the trial court factually erred in finding that United failed to provide the State a log identifying the basis for certain redactions, failed to identify “all sources” of data for pharmacy claims processing, failed to meet and confer with the State on discovery matters, failed to remove redactions from network agreements and other contracts responsive to the State's requests for production, and refused to produce all accounting data/billing data.

We first note that, as an appellate court, we review judgments, not reasons for judgment. See La. C.C.P. arts. 2082 and 2083; Waiton v. State Farm Mutual Automobile Insurance Company, 2018-1510 (La. App 1 Cir. 5/31/19), 277 So.3d 1193, 1199. It is not improper, however, for an appellate court to consider reasons for judgment in determining whether the trial court erred. Bradley v. Hall, 2015-1297 (La. App. 1 Cir. 2/24/16), 2016 WL 759160, *3. Here, the trial court's factual findings are of limited value as they were entirely drafted by the State's counsel. See Matter of Trichell, 2023-0022 (La. App. 1 Cir. 12/27/23), 381 So.3d 791, 799. But, if some evidence supports the findings, we need not reject them totally. Id. The inquiry on appeal is whether the record contains sufficient evidence to support the trial court's factual conclusions. Bolton v. B E & K Const., 2001-0486 (La. App. 1 Cir. 6/21/02), 822 So.2d 29, 38.

As to the five above factual findings that United contends are manifestly erroneous, United has pointed to specific evidence in the record refuting each of the trial court's findings. Conversely, on appeal, except for United's failure to confer as to an otherwise reasonable format than NCPDP for claims data, the State has referenced no evidence in the record to support these five challenged factual findings. This Court is not required to sift through the record to unearth a reasonable factual basis for the trial court's factual findings - especially when those findings were drafted by the State's counsel. See Sanders v. Garcia, 29,473 (La. App. 2 Cir. 10/29/97), 702 So.2d 333, 336, writ denied, 1998-0007 (La. 3/13/98), 712 So.2d 880. Accordingly, since United has refuted the trial court's factual findings, and the State has not shown sufficient evidence to support them, we conclude the trial court manifestly erred in finding that United failed to provide the State a log identifying the basis for certain redactions, failed to identify “all sources” of data for pharmacy claims processing, failed to meet and confer with the State on discovery matters (except United's failure to confer on an otherwise reasonable format than NCPDP for claims data), failed to remove redactions from network agreements and other contracts responsive to the State's requests for production, and refused to produce all accounting data/billing data. Accordingly, we reverse the Sanctions Judgment insofar as it is based on these five factual findings.

In sum, we affirm in part and reverse in part the Sanctions Judgment. We affirm the Sanctions Judgment insofar as it sanctioned United for violating the Discovery Judgment by failing to produce claims data in NCPDP format. We reverse the Sanctions Judgment insofar as it sanctioned United for violating the Discovery Judgment by: (1) failing to produce claims and rebate data from January 2012 to 2015; (2) failing to produce a comprehensive data dictionary of each of the fields in OptumRx's claims database; (3) applying a watermark to discovery records; (4) failing to produce a log identifying the basis for certain redactions; (5) failing to identify “all sources” of data for pharmacy claims processing; (6) failing to meet and confer with the State on discovery matters (except United's failure to confer on an otherwise reasonable format than NCPDP for claims data); (7) failing to remove redactions from network agreements and other contracts responsive to the State's requests for production; and (8) refusing to produce all accounting data/billing data.

The Attorney Fee Judgment

In its third assignment of error, United contends the trial court abused its discretion, in the Attorney Fee Judgment, by calculating attorney fees based on an hourly rate in excess of the Attorney General's Maximum Hourly Fee Schedule. United argues the State should not be awarded higher attorney fees ($450/hour) than the maximum amount the Attorney General would pay private counsel engaged on an hourly basis ($225/hour).

In light of our partial reversal of the Sanctions Judgment herein, we are required to vacate the Attorney Fee Judgment, because the trial court will now be required, on remand, to reconsider United's sanctionable actions, minus the actions we have concluded are not sanctionable, and reassess the amount it awarded as a sanction under La. C.C.P. art. 1471(C). Thus, because we vacate the Attorney Fee Judgment, we pretermit discussion of this assignment of error.

In its appellate brief, the State requests additional attorney fees for responding to the appeal. This relief cannot be granted, because the State did not appeal nor answer the appeal. See La. C.C.P. art. 2133.

CONCLUSION

For the above reasons, we decide as follows:

We grant the State of Louisiana's Motion to Strike as to those portions of UnitedHealthcare of Louisiana, Inc. d/b/a UnitedHealthcare Community Plan and OptumRx, Inc.’s briefs referencing facts and documents that are not contained in the appellate record. Further, we do not consider any documents physically contained in the appellate record that pertain to substantive events, facts, or judgments that post-date the Attorney Fee Judgment, whether those documents were sent as part of the original appellate record or added later by trial court supplement.

We reverse the March 13, 2023 Judgment on Plaintiff's Motion to Compel and Defendants’ Motion for Protective Order (the Discovery Judgment) insofar as it compelled UnitedHealthcare of Louisiana, Inc. d/b/a UnitedHealthcare Community Plan and OptumRx, Inc. to produce out of state discovery records.

We lift this Court's October 17, 2024 Order staying the March 13, 2023 Judgment on Plaintiff's Motion to Compel and Defendants’ Motion for Protective Order (the Discovery Judgment).

We affirm the August 3, 2023 Sanctions Judgment insofar as it sanctioned UnitedHealthcare of Louisiana, Inc. d/b/a UnitedHealthcare Community Plan and OptumRx, Inc. for violating the Discovery Judgment by failing to produce claims data in NCPDP format.

We reverse the August 3, 2023 Sanctions Judgment insofar as it sanctioned UnitedHealthcare of Louisiana, Inc. d/b/a UnitedHealthcare Community Plan and OptumRx, Inc. for violating the Discovery Judgment by: (1) failing to produce claims and rebate data from January 2012 to 2015; (2) failing to produce a comprehensive data dictionary of each of the fields in OptumRx Inc.’s claims database; (3) applying a watermark to discovery records; (4) failing to produce a log identifying the basis for certain redactions; (5) failing to identify “all sources” of data for pharmacy claims processing; (6) failing to meet and confer with the State on discovery matters (except United's failure to confer on an otherwise reasonable format than NCPDP for claims data); (7) failing to remove redactions from network agreements and other contracts responsive to the State of Louisiana's requests for production; and (8) refusing to produce all accounting data/billing data.

We vacate the October 9, 2023 Attorney Fee Judgment, quantifying the sanction against UnitedHealthcare of Louisiana, Inc. d/b/a UnitedHealthcare Community Plan and OptumRx, Inc. as $112,500 in attorney fees.

We remand this matter to the trial court for further proceedings consistent with this opinion.

Costs of this appeal in the amount of $28,045 are assessed one-half to the State of Louisiana and one-half to UnitedHealthcare of Louisiana, Inc. d/b/a UnitedHealthcare Community Plan and OptumRx, Inc.

MOTION TO STRIKE GRANTED; ORDER STAYING MARCH 13, 2023 JUDGMENT ON PLAINTIFF'S MOTION TO COMPEL AND DEFENDANTS’ MOTION FOR PROTECTIVE ORDER LIFTED; MARCH 13, 2023 JUDGMENT ON PLAINTIFF'S MOTION TO COMPEL AND DEFENDANTS’ MOTION FOR PROTECTIVE ORDER REVERSED IN PART; AUGUST 3, 2023 JUDGMENT REVERSED IN PART; OCTOBER 9, 2023 JUDGMENT VACATED; REMANDED.

I respectfully disagree with this court's determination of the relevancy of the “out of state information” as to whether it would be relevant to the subject matter of the pending action. Without an in camera review of that discovery, it is unknown if those documents are reasonably calculated to lead to discovery of admissible evidence. See Lehman v. American Southern Home Ins. Co., 615 So.2d 925-26 (La. App, 1 Cir. 1993), writ denied, 617 So.2d 913 (La. 1993). This court could order a remand for the trial court to conduct an in camera review of the discovery to make that determination. See Frederick v. St. Charles Surgical Hospital, LLC, 24-526 (La. App. 5 Cir. 12/23/24), 2024 WL 5199832 *2, writ denied, 2025-00189 (La. 4/29/25), ––– So.3d ––––.

I would therefore reverse and remand as to the aforementioned issue.

I respectfully dissent from the majority's opinion herein. I do not believe the trial court abused its discretion in its initial review of United's discovery responses. The production that was required was set forth in the judgment on the motion to compel and both this court and the Louisiana Supreme Court denied United's writ applications challenging this ruling. See State v. OptumRx, Inc., 2023-0272 (La. App. 1st Cir. 3/23/23), 2023 WL 260963 7 and State v. OptumRx, Inc., 2023-00474 (La. 5/2/23), 360 So. 3d 12. The majority opinion gives short thrift to the finality of this judgment. However, in my view, that ship has sailed. Thus, I do not believe United was justified in arguing “relevance” at this stage of the process.

FOOTNOTES

1.   The State's original service of discovery requests with the petition included interrogatories to OptumRx, but not to UnitedHealthcare; however, the State later served UnitedHealthcare with such in September 2022.

2.   This Court's opinion denying United's writ application stated that the criteria set forth in Herlitz Construction Co., Inc. v. Hotei Investors of New Iberia, Inc., 396 So.2d 878 (La. 1981) (per curiam) were not met.

3.   The State notes that its Motion to Strike pertains to documents regarding substantive matters and concedes that its motion does not pertain to documents that “reflect the procedural steps taken by [United] to lodge this appeal,” even though these “procedural” documents post-date the Attorney Fee Judgment.

5.   On appeal, United's challenge to the Discovery Judgment is limited to the relevancy of out of state discovery records. To the extent the Discovery Judgment compelled United to produce other categories of discovery records, it remains enforceable.

6.   Although a sanctions judgment rendered under La. C.C.P. art. 1471 is not specifically listed as appealable under La. C.C.P. art. 1915(A)(6), this Court, as a result of Louisiana Supreme Court directives, has broadly read La. C.C.P. art. 1915(A)(6) to include such a judgment as appealable. See Stevens, 212 So.3d at 575; Triton Diving Services LLC v. Offshore Marine Service Association, Inc., 2023-0169 (La. App. 1 Cir. 9/21/23), 372 So.3d 832, 838-39. In a writ action, this Court granted United's motion for suspensive appeal from the Sanctions Judgment, noting that it was an appealable partial final judgment under La. C.C.P. art. 1915(A)(6). State v. OptumRx, Inc., 2023-0926 (La. App. 1 Cir. 11/6/23), 2023 WL 7318912. This Court also noted that the trial court retains jurisdiction while an appeal is pending to set and tax costs, expert witness fees, and attorney fees under La. C.C.P. art. 2088(A)(10). Id.; see Lathan Company v. Department of Education, Recovery School District, 2022-0215 (La. App. 1 Cir. 6/21/22), 2022 WL 2230376. In such a case of retained jurisdiction, the trial court's subsequently rendered judgment setting costs is a separate, final appealable judgment. Bridges v. Baton Rouge General Medical Center, 2020-0270 (La. App. 1 Cir. 12/30/20), 317 So.3d 662, 683, writ denied, 2021-00144 (La. 4/7/21), 313 So.3d 985.

7.   On appeal, United's challenge to the Sanctions Judgment is limited to these three issues. To the extent the Sanctions Judgment found United failed to comply with the Discovery Judgment as to discovery records other than these specific three categories, the judgment remains enforceable.

8.   We note, however, that La. C.C.P. art. 1428(2) imposes a duty on a responding party to seasonably amend a prior discovery response if he obtains information upon the basis of which he knows the response was incorrect when made, or he knows that the response though correct when made is no longer true and the circumstances are such that failure to amend the response is in substance a knowing concealment.

9.   The State also argues the trial court properly sanctioned United because the watermark violates the SPO and SPOESI. We decline to address this argument, because the State's motion for sanctions at issue in this appeal is limited to United's purported violation of the Discovery Judgment, not to violations of the SPO and SPOESI. The Sanctions Judgment sanctions United for failing to comply with the Discovery Judgment and the Discovery Judgment did not compel United's compliance with the SPO and SPOESI.

10.   United reproduced an excerpted sample of the purported watermark in its appellate brief. Even if the State could rely on its opponents’ reproduction of a sample watermark, an excerpt from a document that is merely cut, pasted, and embedded in an appellate brief is not evidence. See Robinson v. Cheng, LLC, 2022-1130 (La. App. 1 Cir. 7/10/23), 372 So.3d 7, 12.

11.   At the end of the July 10, 2023 hearing on the State's Motion for Discovery Sanctions, the trial court instructed the parties to submit proposed findings of fact, conclusions of law, and a proposed judgment. In the Sanctions Judgment, the trial court adopted the proposed findings of fact filed by the State. We note that such proposed factual findings are not actually reproduced in the Sanctions Judgment that the trial court signed nor are the proposed factual findings physically attached to the Sanctions Judgment.

GREENE, J.

Miller, J., dissents with reasons Lanier, J., dissents with reasons