United States District Court, E.D. Pennsylvania
IN RE NIASPAN ANTITRUST LITIGATION THIS DOCUMENT RELATES TO: ALL ACTIONS Master No. 13-MD-2460
multi district litigation concerns what has come to be known
as a "pay-for-delay, " or "reverse payment,
" settlement-a practice in which a brand-name drug
manufacturer brings a patent-infringement action against a
generic drug manufacturer and then compensates the generic
drug manufacturer for its agreement to refrain from entering
the market with a competing generic version of the brand-name
drug until a specified date. In this case, two putative
classes-the Direct-Purchaser Plaintiffs ("DPPs")
and the End-Payor Plaintiffs ("EPPs")-aver that the
brand-name manufacturer of Niaspan, Kos Pharmaceuticals, Inc.
("Kos"), entered into anticompetitive settlement
agreements in March of 2005 with the generic manufacturer of
that drug, Barr Pharmaceuticals, Inc. ("Barr"), in
order to terminate patent-infringement litigation brought by
Kos against Barr in the United States District Court for the
Southern District of New York. Kos was later acquired by
defendant Abb Vie Inc. ("Abb Vie"), and Barr was
later acquired by defendant Teva Pharmaceuticals, Inc.
DPPs, on behalf of both putative classes, now move to compel
the defendants to produce certain documents that defendants
claim as privileged. By agreement, the parties have selected
32 documents as a representative sample. The Court
agreed to examine the selected documents in camera
and rule on the validity of defendants' privilege claims,
and directed the parties to attempt to resolve
plaintiffs' challenges to other entries in
defendants' privilege logs without the need for Court
intervention based on the guidance provided by such rulings.
Rule of Civil Procedure 26(b)(1) provides that
"[p]arties may obtain discovery regarding any
nonprivileged matter that is relevant to any party's
claim or defense." Two privileges are relevant for
purposes of this Motion-the attorney-client privilege and the
attorney-client privilege "protects from disclosure
confidential communications made between attorneys and
clients for the purpose of obtaining or providing legal
assistance to the client." In re Grand Jury
Subpoena, 745 F.3d 681, 687 (3d Cir. 2014). The
attorney-client privilege attaches to "(1) a
communication (2) made between privileged persons (3) in
confidence (4) for the purpose of obtaining or providing
legal assistance for the client." In re Chevron
Corporation, 650 F.3d 276, 289 (3d Cir. 2011) (internal
quotations omitted). "[T]he privilege exists to protect
not only the giving of professional advice to those who can
act on it but also the giving of information to the lawyer to
enable him to give sound and informed advice." In re
Processed Egg Prod. Antitrust Litig., 278 F.R.D. 112,
117 (E.D. Pa. 2011). However, "[b]ecause the
attorney-client privilege obstructs the truth-finding
process, it is construed narrowly. The privilege protects
only those disclosures-necessary to obtain informed
legal advice-which might not have been made absent the
privilege." Westinghouse Elec. Corp. v. Republic of
Philippines, 951 F.2d 1414, 1423-24 (3d Cir. 1991)
(internal citations omitted). Recognizing that lawyers
sometimes provide purely business advice, courts have held
that the privilege applies only where the communication was
made "the express purpose of securing legal not business
advice." Fed. Trade Comm 'n v. Abbvie, Inc.
("AbbVie I"), No. CV 14-5151, 2015 WL 8623076,
at *10 (E.D. Pa. Dec. 14, 2015) (citingdrawer v.
RaymondCorp., No. CIV. 90-5026, 1992 WL 122856, at *1
(E.D. Pa. May 29, 1992).
between attorney and client are not privileged if made in the
presence of or communicated to third parties." Barr
Marine Products, Co. v. Borg-Warner Corp., 84 F.R.D.
631, 634 (E.D. Pa. 1979). Further, "[d]isclosing a
communication to a third party unquestionably waives the
privilege." In re Teleglobe Commc 'ns
Corp., 493 F.3d 345, 361 (3d Cir. 2007), as
amended (Oct. 12, 2007). There numerous exceptions and
nuances to this general rule, four of which are relevant in
"intra corporate distribution of legal advice received
from counsel does not vitiate the privilege . . . ."
Baltimore Scrap Corp. v. David J. Joseph Co., No.
L-96-827, 1996 WL 72078, at *6 (D. Md. Nov. 20, 1996). This
exception stems from the "recognition that since the
decision-making power over the corporate client may be
diffused among several employees, the dissemination of
confidential communications to such persons does not defeat
the privilege." Id. (internal quotations
disclosures made to a third-party consultant do not
constitute a waiver when the disclosure is "necessary
for the client to obtain informed legal advice" or if
the disclosure is made "to an 'agent' assisting
the attorney in giving legal advice to the client."
Westinghouse, 951 F.2d at 1424. Consultants are
generally treated similarly to employees for purposes of the
waiver analysis. King Drug Co. of Florence v. Cephalon,
Inc., No. 2:06-CV-1797, 2013 WL 4836752, at *6 (E.D. Pa.
Sept. 11, 2013).
when privileged documents or communications are disclosed
inadvertently, there is no waiver if "the holder of the
privilege took reasonable steps to rectify the error."
Alers v. City of Philadelphia, No. 08-4745, 2011 WL
6000602, at *2 (E.D. Pa. Nov. 29, 2011). District Courts in
the Third Circuit consider the following five factors in
determining whether such disclosures are inadvertent:
(1) the reasonableness of the precautions taken to prevent
inadvertent disclosure in view of the extent of the document
production; (2) the number of inadvertent disclosures; (3)
the extent of the disclosure; (4) any delay and measures
taken to rectify the disclosure; and (5) whether the
overriding interests of justice would or would not be
serviced by relieving the party of its errors.
Ciba-Geigy Corp. v. Sandoz Ltd, 916 F.Supp. 404, 411
(D.N.J. 1995); Rotelli v. 7-UpBottling Co. of
Philadelphia, No. CIV. A. 93-6957, 1995 WL 234171, at *2
(E.D. Pa. Apr. 19, 1995).
"the community-of-interest privilege allows attorneys
representing different clients with similar legal interests
to share information without having to disclose it to
others." Teleglobe, 493 F.3d at 364.
"[M]embers of the community of interest must share at
least a substantially similar legal interest."
Id. at 365. Although the doctrine was conceived with
litigation in mind, it "comes into play when clients
with separate attorneys share otherwise privileged
information in order to coordinate [any] legal activities,
" and it applies "even in purely transactional
contexts." Id. at 359, 364.
second relevant privilege at issue in this case is the
work-product doctrine. A party may claim as privileged any
documents that contain attorney work product-"tangible
things that are prepared in anticipation of litigation or for
trial by or for another party or its representative
(including the other party's attorney, consultant,
surety, indemnitor, insurer, or agent)." Fed.R.Civ.P.
26(b)(3). "[A] document satisfies Rule 26(b)(3) where in
light of the nature of the document and the factual situation
in the particular case, the document can fairly be said to
have been prepared or obtained because of the prospect of
litigation." Martin v. Bally's Park Place Hotel
& Casino, 983 F.2d 1252, 1258 (3d Cir. 1993). In
contrast to the attorney-client privilege, which is waived
whenever a communication is disclosed to a third party,
"a disclosure to a third party does not necessarily
waive the protection of the work-product doctrine"
unless the third party is an adversary.
Westinghouse, 951 F.2d at 1428. As the party
claiming work-product privilege in this case, defendants have
the burden of establishing that the privilege applies.
Holmes v. Pension Plan of Bethlehem Steel Corp., 213
F.3d 124, 138 (3d Cir. 2000).
Abb Vie's Privilege Log Entries
DPPs selected 14 entries from AbbVie's privilege log for
in camera review, and Abb Vie selected an additional
five entries. The Court addresses each of these documents in
turn, categorizing them where possible.
Properly Withheld Documents
Court first concludes that sixteen of the documents at issue
were properly withheld in their entirety: Abb Vie privilege
log entries 427, 434, 581, 595, 596, 612, 624, 635, 645, 658,
1572, 2145, 2155, 4054, 4055, and 4398. The Court addresses
each such document in turn.
privilege log entries 434, 595, 596, 624, and 4398 were
properly withheld under the attorney-client privilege because
those entries consist of communications in which attorneys
request or are provided with information for the purpose of
providing legal advice. Entry number 434 is an email chain
between Kos's outside counsel, Kos's in-house
counsel, and Kos executives, in which the lawyers request
input and specific information from the executives to assist
them in drafting a declaration to attach to a legal filing.
Entry number 595 consists of a string of emails: first,
Kos's outside counsel sent a draft settlement agreement
to Kos's then-general counsel Andrew Koven; second, Koven
forwarded the draft to three Kos executives and requested
their input; and finally, the three executives responded with
their comments. Similarly, entry number 596 consists of an
email from Kos's Chief Financial Officer Chris Kiritsy to
Koven providing comments on a draft settlement agreement.
Entry number 624 is an email string between Kos's Vice
President for Marketing Aaron Berg, Kos's outside
counsel, and Kos's general counsel, in which Berg
provided detailed statistics and information regarding the
potential of marketing Niaspan to women's health
professionals. Koven asserted that the information was shared
so that outside counsel, White & Case, could provide
legal advice with respect to a co-promotion agreement
relating to that marketing that was part of the ongoing
settlement negotiations. See Abb Vie Defs' Resp.
to Mot. to Compel ("Abb Vie Resp."), Ex. 2, Decl.
of Andrew Koven ("Koven Decl.") at ¶¶
10-11. And entry number 4398 is an email chain between
Kos's outside counsel and Kiritsy, in which outside
counsel requests information from Kiritsy to assist ...