Tholen v. Assist America, Inc.

Background

Assist America appealed Magistrate Judge Steven E. Rau’s August 13, 2018 order granting Richard H. Tholen, M.D.’s renewed motion for permission to amend his complaint to assert punitive damages. Magistrate Judge Rau concluded that, under the current state of Minnesota law, it could not yet be determined that Tholen could obtain no relief under any set of facts. He found that Tholen’s allegations plausibly claimed that Assist America was negligent in providing medical services and willfully disregarded Tholen’s rights while caring for him.

The allegations identified in the order included claims that Assist America’s representatives misrepresented themselves as physicians, failed to obtain medical records from a hospital in Mexico that would have helped it make an informed choice about Tholen’s care, and failed to contact the proper clinical directors—or received no timely review from them—regarding Tholen’s medical case. Magistrate Judge Rau stated that more complete briefing could show that Minnesota law barred the punitive-damages claim, but concluded that the issue was better left for summary judgment after development of the factual record.

Defendant’s Objection

Assist America argued that Magistrate Judge Rau’s order was contrary to law because Minnesota law requires a plaintiff to submit affidavits showing the factual basis for a punitive-damages claim before asserting it. Assist America also argued that the order did not properly consider the evidence and that the claim was futile when evaluated using only the amended complaint and its referenced exhibits.

Tholen argued that Assist America had waived its objection and had failed to disclose important authority. He also argued that Assist America had not shown that Magistrate Judge Rau’s use of the plausibility standard for amendment was clearly erroneous or contrary to law.

Court’s Ruling

The district court reviewed the magistrate judge’s order under the standard requiring it to modify or set aside a ruling that is clearly erroneous or contrary to law. The court described that standard as extremely deferential.

Judge Donovan W. Frank found that Magistrate Judge Rau’s August 13, 2018 order was neither clearly erroneous nor contrary to law. The court therefore overruled Assist America’s appeal and affirmed the order in all respects. The court specifically agreed that the punitive-damages issue would be more appropriately considered on summary judgment.

Disposition

1. Assist America’s appeal of Magistrate Judge Rau’s August 13, 2018 order was overruled. 2. Magistrate Judge Rau’s August 13, 2018 order was affirmed.