Antitrust Law Daily Wrap Up, ANTITRUST—D. Colo.: Physical therapy provider denied bid to compel production of text messages in Vail rehab case, (Apr 21, 2025)

By Martin A. Steinberg, J.D.

The filing party waited a year and a half after discovery closed to seek text messages from Vail Clinic's current CEO, former CEO, and former board member.

A party that did not have custody or control of text messages from the personal devices of nonparties to a suit could not be compelled to produce them, according to the federal district court in Denver, Colorado. Sports Rehab Consulting LLC (SRC) and principal Lindsay Winninger filed suit in 2019 alleging that Vail Clinic, Inc. violated Section 2 of the Sherman Act by exercising monopoly power to control the pricing and availability of physical therapy services in the Vail Valley and had undertaken various anticompetitive acts to discourage competition from other physical therapy providers. Because of the parties’ numerous discovery disputes, the court appointed a special master. The court overruled Plaintiffs’ Objections, sustained Vail Health’s Objections, adopted in part the Special Master’s Recommendation, and denied the Sixth Motion to Compel. In addition, because discovery in this matter is closed, the court further ordered that the responsible parties pay any outstanding invoices issued by the Special Master on or before May 19, 2025 (Sports Rehab Consulting LLC v. Vail Clinic Inc., No. 1:19-cv-02075-WJM-SBP (D. Colo. Apr. 18, 2025)).

Background. Vail Health is a Colorado nonprofit community health system that offers physical therapy (PT) services through a department of Vail Health Hospital under the name Howard Head Sports Medicine. Vail Health provides PT services at ten locations in the Vail Valley area. As a condition of employment, Vail Health employees, including physical therapists, sign an offer letter containing a “Non-Solicitation” provision.

From January 2008 to May 2012, Winninger provided PT services to patients at the Vail Health Hospital. In spring 2014, Winninger founded SRC and opened a PT clinic in Vail Valley in December 2015.

The Steadman Clinic (Steadman) is a private orthopedic surgery physician practice with some locations in the Plaintiffs’ alleged Vail Valley market. Vail Summit Orthopedics (VSO) is another private group of orthopedic surgeons practicing in Vail Valley. Steadman leases clinical space in the Vail Health Hospital; the lease contains restrictions on Steadman’s use of the leased space, including a prohibition on rendering PT services in that space.

On August 17, 2016, Winninger signed consulting agreements with Steadman and the Steadman Philippon Research Institute (SPRI) focused on developing a wellness program and assisting with research. In May 2017, Winninger signed amended consulting agreements with Steadman and SPRI. Steadman surgeons referred patients to SRC in 2017 and 2018. SRC closed the clinic in Vail in September 2018, but currently operates a clinic in Denver.

Plaintiffs filed suit on July 17, 2019. Three months later, Plaintiffs issued their First Set of Requests for Production of Documents, which do not reference the terms “text,” “device,” or “cell [or cellular] phone.” However, Vail Health did not immediately respond to these requests because the court had not entered a scheduling order authorizing discovery for some months. On January 30, 2020, Vail Health filed a motion to stay discovery pending resolution of its motion to dismiss. The court granted that motion on April 21, 2020. On August 21, 2020, the court denied the motion to dismiss and lifted the stay of discovery.

On June 28, 2021, the court issued a Notice and Order Regarding Appointment of Special Master, observing that numerous hearings and discovery disputes had occurred and that the parties’ inability to confer had hindered this case from progressing on time. Plaintiffs filed “a barrage of discovery motions” immediately after the Special Master was appointed. Before fact discovery closed, Plaintiffs filed five motions to compel.

Fact discovery closed on December 20, 2021, with no text messages directly requested in any request for production and no references to text messages in any of the five pending motions to compel. Vail Health pointed out that it had not searched for text messages and did not consider that issue to be properly before the Special Master at the time.

Text messages. The record showed that the first explicit articulation of Plaintiffs’ demand for the text messages of three third-parties emerged sometime between late April 2023 and June 21, 2023, during counsels’ communications about Vail Health’s efforts to provide additional discovery and to comply with the court’s order on the first five motions to compel. Plaintiffs filed a motion after discovery had closed demanding that Vail Health produce text messages from the personal devices of three individuals who are not parties to this action: Michael Shannon, a former board member of Vail Health; Doris Kirchner, a former CEO and Executive Director of Vail Health; and Will Cook, the current CEO of Vail Health. The Special Master recommended that the Motion be denied, finding it untimely. The court first found that the text messages on these personal devices of third parties are not within Vail Health’s custody or control, and therefore, Vail Health cannot be compelled to produce them.

Consequently, the correct procedure for Plaintiffs to have obtained this information was through subpoenas issued pursuant to Federal Rule of Civil Procedure 45. Plaintiffs could have issued such subpoenas years ago. Yet, the record showed that they deliberately elected not to avail themselves of that readily available procedure for obtaining third-party discovery. Second, because Plaintiffs did not file the Sixth Motion to Compel until after the expiration of the discovery deadline, the Motion should be denied for the additional reason that it was untimely. Finally, in light of these conclusions, good cause was lacking to reopen discovery to allow for service of the subpoenas now.

The parties have mounted objections to all aspects of the Recommendation. The crux of the matter was whether this court has the authority to compel Vail Health to produce the personal devices of its employees and board members.

Vail has no legal right to obtain texts from third parties' personal devices. Under Rule 34(a)(1), “parties have a right to request documents within the opposing party’s possession, custody, or control.” Plaintiffs failed to demonstrate that Vail Health could influence these non-parties or their attorneys to persuade them to turn over their personal devices to Vail Health. There was no evidence in the record that Vail Health could compel Cook, as its employee, to turn over his cell phone. The idea that Vail Health could exert such authority, absent some formal contractual obligation not found here, is wholly inconsistent with the commonly accepted understanding that an employer or former employer does not control the devices that its employees personally own.

However, this conclusion does not mean that the personal devices of third-party employees, former employees, or board members are immune from discovery. A subpoena under Fed. R. Civ. P. Rule 45 is the better route to address the privacy and property concerns raised than a document request to an employer. Plaintiffs had ample opportunity to issue Rule 45 subpoenas, and they were explicitly informed by counsel for Vail Health that it would be necessary for them to do so. The decision by counsel not to take that action two years ago does not entitle Plaintiffs to third-party texts now, two years after they were informed that Vail Health could not produce them.

Timeliness. The record clearly showed that, by the close of discovery in December 2021, Plaintiffs failed to take affirmative steps to obtain the texts of Shannon, Kirchner, or Cook. They had not issued a request for production expressly seeking the text messages; had not raised the issue of text messages in any of the five pending motions to compel; and had information demonstrating that Vail Health had not undertaken a search for text messages on their personal devices. The court was not obliged to undertake a factor-by-factor analysis, but observed that Plaintiffs did not file the Sixth Motion to Compel until July 30, 2023, more than a year and a half after the close of discovery. Thus, the court deemed it appropriate to exercise its discretion to find that the Sixth Motion to Compel, filed eighteen months after a discovery deadline that expired more than four years ago, was untimely.

Good cause. The court rejected the Special Master’s findings regarding relevance and proportionality about the text messages. It declined to permit service of subpoenas on the three witnesses at this advanced stage of the case. In its sound discretion, the court may modify a scheduling order upon showing good cause. While the Special Master found that Vail Health lacked custody or control over the texts of third parties, and that the Sixth Motion to Compel was untimely because Plaintiffs could have served Rule 45 subpoenas during the discovery period, he nevertheless recommended that Plaintiffs be allowed to serve Rule 45 subpoenas on them.

The court gave four reasons for denying the request. First, an eight-day trial is set in February 2026. Given the busy docket of the court, a time-consuming fight involving subpoenas seeking access to the personal cell phones of third parties likely will result in the loss of this trial date and the probable postponement of the trial for a significant period. Second, Vail Health opposed the reopening of discovery. Third, the court found that Vail would be prejudiced by further prolonging this six-year-old case by deferring resolution of Vail’s fully briefed motion for summary judgment and further delaying the trial. Fourth, the Plaintiffs have not diligently attempted to meet discovery deadlines.

The Case is No. 1:19-cv-02075-WJM-SBP.

Judge: Prose, S.

Attorneys: Jesse L. Wiens (Jesse Wiens Law, LLC) for Sports Rehab Consulting LLC. Colin Michael O'Brien (Arnold & Porter Kaye Scholer LLP) for Vail Clinic, Inc.

Companies: Sports Rehab Consulting LLC; Vail Clinic, Inc.

Cases: Antitrust ColoradoNews GCNNews