The opinion of the court was delivered by: McLaughlin, J.
The plaintiffs in these two class actions bring suits against the producers of Wellbutrin XL, Biovail Corp., Biovail Laboratories, Biovail Laboratories International (together, "Biovail"), and its distributors, SmithKline Beecham Corp. and GlaxoSmithKline PLC (together, "GSK"), for illegally conspiring to prevent generic versions of Wellbutrin XL, or buproprion hydrochloride, from entering the American market.
The Court is presented with motions affecting class representation in both actions. In the direct purchaser action, the current class representative Rochester Drug Co-Operative ("RDC") moves for voluntary dismissal without prejudice pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure. As a condition of dismissal, RDC seeks to be relieved of its duty to comply with a discovery order issued by the Court on March 11, 2010. The Court will dismiss RDC without prejudice, on the condition that RDC complies with the Court's March 11 Order.
In the indirect purchaser action, Aetna Inc. ("Aetna") moves for mandatory intervention pursuant to Rule 24(a)(2) of the Federal Rules of Civil Procedure and permissive intervention pursuant to 24(b)(1)(B). The Court denies Aetna's motion because Aetna has not fulfilled the requirements for mandatory intervention and permissive intervention is not warranted under these circumstances.
The direct purchaser action began on May 23, 2008, when Meijer Inc. and Meijer Distribution, Inc. ("Meijer") filed a class action complaint against Biovail and GSK. RDC filed its own class action complaint on May 27, 2008. Indirect purchaser Plumbers and Pipefitters Local 572 Health and Welfare Fund ("Local 572") also filed a class action complaint against the defendants on May 23, 2008. Four other indirect purchaser class action complaints were filed in the following two months.
The cases were consolidated into two separate actions in a Stipulated Order dated June 24, 2008. The plaintiffs filed consolidated class action complaints in both actions on July 10, 2008. Biovail and GSK each filed motions to dismiss in both the direct and indirect purchaser actions on September 10, 2008. The Court held a hearing on the motions on February 26, 2009. In a Memorandum and Order dated March 16, 2009, the Court denied the defendants' motions to dismiss the direct purchaser plaintiffs' complaint except for the direct purchaser plaintiffs' claims that Biovail engaged in substantive monopolization, which were dismissed.
The indirect purchaser plaintiffs amended their class action complaint on March 26, 2009. In the amended class action complaint, the indirect purchaser plaintiffs asserted claims arising out of the laws of 44 states and the District of Columbia. After the amendment, the Court denied the defendants' pending motions to dismiss as moot, and the defendants each filed a motion to dismiss the amended class action complaint on April 30, 2009.
In a Memorandum and Order dated July 31, 2009, the Court held that the indirect purchaser plaintiffs have standing only in those states where the named plaintiffs are located or their members reside or in which the named plaintiffs reimbursed purchases of Wellbutrin XL made by its members. As a result, the Court dismissed a number of the indirect purchaser plaintiffs' claims for lack of standing. The Court dismissed several remaining claims for failure to state a claim, including the indirect purchaser plaintiffs' claims arising under Florida's antitrust law and claims arising under the consumer protection laws of Illinois, Nevada, New York and Ohio. Finally, the Court dismissed the indirect purchaser plaintiffs' unjust enrichment claims and all claims against Biovail that relied on a theory of substantive monopolization. The Court allowed the indirect purchaser plaintiffs to move forward on six claims: antitrust claims arising under the laws of California, Nevada, Tennessee, and Wisconsin, and consumer protection claims arising under the laws of California and Florida.
After deciding the defendants' motions, the Court held a scheduling conference on August 4, 2009. At the conference, counsel for the direct purchaser plaintiffs urged the Court to establish "truly firm dates which only under extraordinary circumstances ought to be changed." Transcript of August 4, 2009, Scheduling Conference at 66:18-20. In an Order dated August 5, 2009, the Court established a joint schedule for both the direct and indirect actions. A class certification hearing covering both actions was scheduled for May 14, 2010. The Court stated in the Order that the "deadlines are set in stone and will not be continued except for extraordinary circumstances."
The parties then proceeded with discovery in both cases. During discovery, the direct purchaser plaintiffs moved to compel the defendants to produce documents from the underlying patent litigations that formed the basis of the plaintiffs' claim that the defendants engaged in sham litigations. The defendants and the third-party generic drug manufacturers involved in those litigations objected on the ground that the documents were covered by confidentiality or protective orders entered in the underlying litigations. Upon the agreement of the parties, the Court modified the parties' stipulated protective order to add extra protection to the materials produced from the underlying lawsuits and, in an Order dated December 7, 2009, ordered the defendants to produce documents responsive to the direct purchaser plaintiffs' requests in accordance with the modified protective order. The parties continued with discovery, and the plaintiffs filed their motion for class certification on December 14, 2009.
GSK filed two motions to compel discovery in the direct purchaser action in February of 2010. GSK's first motion, filed on February 18, 2010, was a motion to compel discovery regarding other antidepressants from both Meijer and RDC. The second motion, filed on February 24, 2010, was a motion to compel specifically directed at RDC. Both of GSK's discovery motions requested, in part, that the Court compel the direct purchaser plaintiffs to respond to requests for documents pertaining to their pricing and sales of Wellbutrin XL and other antidepressants. In order to prevail on their antitrust claims, GSK explained, the direct purchaser plaintiffs must show that the defendants possessed monopoly power or restrained trade in a relevant product market. The direct purchaser plaintiffs' complaint alleged a narrow product market, consisting of just Wellbutrin XL and its generic equivalents. GSK sought discovery relevant to showing that Wellbutrin and its generic equivalents compete in a broader product market. Such discovery included information regarding the direct purchaser plaintiffs' pricing and sale of antidepressants, including internal decision making documents, which GSK believed would show that the direct purchaser plaintiffs consider Wellbutrin XL to be interchangeable with various other drugs.
In response, the direct purchaser plaintiffs did not argue that such information was burdensome to produce. Instead, they objected on the ground that documents pertaining to their sales and pricing to their customers, including documents pertaining to their internal decision making on pricing and sales, comprised impermissible "downstream discovery." Such downstream resale information, the direct purchaser plaintiffs argued, is not relevant in a direct purchaser antitrust action in which the direct purchaser plaintiffs do not allege an overcharge theory of damages and do not seek damages relating to lost sales, profits or other "downstream" injury.
Before GSK had filed its motions, Biovail had filed a motion to compel discovery directed solely at Meijer. Its motion, filed on February 8, 2010, sought, in part, discovery similar to the discovery sought by GSK, including documents relating to sales, pricing and internal decision-making and strategy, from Meijer's assignor, Frank W. Kerr, Co. ("Kerr"). Meijer claimed to be the assignee of Kerr's claims arising out of purchases of Wellbutrin XL that Kerr made during the class period. Biovail's motion argued that the defendants were entitled to discovery from Kerr and that, apart from incomplete transactional data, Meijer had not produced a single document from Kerr.
Meijer never responded to Biovail's motion. Instead, while the defendants' motions were pending, the Court received a letter from Meijer's counsel dated March 1, 2010. The letter stated that Meijer intended to seek voluntary dismissal because Meijer's counsel was in the midst of a four week trial in Boston, Massachusetts. Counsel stated that Meijer sought voluntary dismissal to avoid disrupting the cases' schedule due to the trial.
The Court held an on-the-record telephone conference on March 3, 2010, and discussed the defendants' motions and Meijer's request for dismissal. During the call, GSK stated its position that Meijer's dismissal should be with prejudice, raising the concern that it would be prejudiced if it could not obtain timely discovery from Meijer and Kerr and that it had been prejudiced by the expense of producing hundreds of thousands of documents responsive to the indirect purchaser plaintiffs' discovery requests. Biovail, however, did not object to the Court's dismissing Meijer without prejudice, reasoning that the expense of pursuing further discovery from Meijer and Kerr and of defending against two class representatives outweighed any prejudice from dismissal. After some discussion on the issue of prejudice to the defendants, GSK and Biovail both agreed to allow Meijer to be dismissed without prejudice, on the condition that Meijer would not seek to re-enter the case as a ...