IU Health, nonparties entitled to attorney fees in blogger dispute

More than $250,000 in attorney fees and costs have been awarded to numerous nonparties and an Indiana healthcare giant against Lutheran Health Network in Fort Wayne after the Indiana Court of Appeals affirmed the nonparties were entitled to seek the fees to recoup costs of tracking down a harassing blogger.

In 2016, former Lutheran Health Network and Lutheran Hospital of Indiana CEO Brian Bauer and a group of Fort Wayne physicians made a failed attempt to buy out Lutheran.

After it fired Bauer, Lutheran filed a complaint in Tennessee state court against him and others alleging they were responsible for an anonymous online commenter posting under the pseudonym ‘Sajin Young’ who was “intimidating and harassing Lutheran’s employees and creating a hostile work environment to drive away qualified employees from Lutheran’s businesses in Fort Wayne … .” It also alleged they were “falsely portraying Lutheran and LHN” via the social media posts.

Meanwhile, Lutheran was also granted a petition to open an ancillary proceeding in Allen Superior Court pursuant to Indiana Trial Rule 28(E), where the health network was ultimately authorized to serve subpoenas issued by the Tennessee court for testimony and production of documents on various nonparties.

Following the eventual dismissal of the Tennessee case and Lutheran’s request to terminate the ancillary proceeding in Allen County, the trial court granted the nonparties’ requests for attorney fees. The trial court noted it had issued more than 36 orders for Lutheran stemming from the ancillary proceeding and that the “amount of time and effort the Non-Parties expended on Lutheran’s relentless search for ‘Sajin Young’ was immense.” As such, it concluded that the nonparties “could never have navigated Lutheran’s discovery demands of voluminous documents and other information on their own.”

The trial court therefore ordered Lutheran to pay more than $158,000 to the nonparties and nearly $94,000 to Indiana University Health for attorney fees and costs. Lutheran appealed, arguing the trial court lacked ancillary jurisdiction to make the awards after the underlying Tennessee action was dismissed.

The Indiana Court of Appeals declined to accept that argument in a Monday opinion, however, finding the trial court did not lack jurisdiction to award the costs and fees. It likewise found the trial court did not err in ruling that the nonparties were entitled to attorney fees pursuant to Trial Rule 34(C)(3).

“Lutheran insists that Trial Rule 34(C)(3) ‘governs the procedure of document production requests to nonparties in cases originating in Indiana courts.’ But, as the Non-Parties point out, nothing in Trial Rule 34 ‘limits its application to nonparties being served by in-state litigants, and there is no compelling reason why a nonparty served a subpoena from out-of-state should be somehow less protected than a nonparty served a subpoena,’” Judge Terry Crone wrote for the appellate court.

Additionally, it found the nonparties’ petitions for attorney fees were not untimely and that they were entitled the fees related to preparing for and attending depositions, finding it reasonable that the witnesses would be expected to consult with counsel to ensure compliance with the subpoenas.

Neither did the trial court err in ruling IU Health had standing to seek attorney fees and costs under Trial Rule 34(C)(3), the appellate court concluded, after IU Health was allowed to intervene in the ancillary proceeding to protect its interests with respect to information Lutheran requested from nonparties who were IU Health employees. However, the appellate court remanded after agreeing that Lutheran was never given an opportunity to challenge the reasonableness of the nonparties’ requested attorney fees.

The case is Lutheran Health Network of Indiana LLC, et al. v. Brian B Bauer, et al., 19A-MI-00654.