United States District Court, E.D. Pennsylvania
IN RE NIASPAN ANTITRUST LITIGATION THIS DOCUMENT RELATES TO ALL ACTIONS
multidistrict antitrust litigation, plaintiffs seek to
preclude defendants Barr Pharmaceuticals, LLC
(“Barr”) and Teva Pharmaceuticals USA, Inc., Teva
Pharmaceutical Industries, Ltd., Teva Women's Health,
Inc., and Teva Sales and Marketing, Inc. (together,
“Teva”), from using certain deposition testimony
on the ground that Barr and Teva improperly used the
attorney-client privilege as a “sword” and a
“shield” during the course of the deposition.
Because plaintiffs have not shown that Barr and Teva took
affirmative steps to place attorney advice at issue, their
request is denied.
multidistrict litigation concerns what has come to be known
as a “reverse payment, ” or “pay-for-delay,
” 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”)-allege that
the brand-name manufacturer of Niaspan, Kos Pharmaceuticals,
Inc. (“Kos”), entered into anticompetitive
reverse-payment settlement agreements in March of 2005 with
Barr, the generic manufacturer of that drug, 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 AbbVie Inc. (“AbbVie”); Barr was later
acquired by Teva.
March 26, 2018, the parties deposed Paul Bisaro, the former
President and Chief Operating Officer of Barr. During the
deposition, counsel for plaintiffs asked Bisaro about outside
counsel's “opinions in 2004 or 2005 regarding the
invalidity, unenforceability or noninfringement of Kos'
Niaspan patent.” Counsel for Teva objected on the
ground of attorney-client privilege and instructed Bisaro not
to answer. Bisaro Dep. 35:4-1. Counsel for Teva later asked
Bisaro during redirect, “Absent a settlement, would
Barr have launched generic Niaspan at risk,
” to which Bisaro responded,
“No.” Bisaro Dep. 174:10-20.
end of the deposition, counsel for DPPs asked Bisaro,
“Is your testimony today that Barr would not have
launched at risk based in any way on the patent
merits?” Bisaro Dep. 192:3-5. Bisaro responded:
I don't know what you're trying to get me to say. Yes
or no to what? I mean, if we decided to launch at risk, it
would be a number of factors. One of those factors would have
been the relative merits of the patent. But it also had to
take into effect a lot of other factors including risk,
including the potential for preliminary injunction, including
potential treble damages, our ability to pay those potential
damages if they happened. . . . [I]t's based on enormous
number of factors.
Bisaro Dep. 192:6-21. When counsel for DPPs asked,
“What were the relative merits of the patents, ”
counsel for Teva objected on the basis of attorney-client
privilege and instructed Bisaro not to answer.
DPPs, on behalf of all plaintiffs, now ask the Court to
preclude defendants from using Bisaro's testimony that
Barr would not have launched a generic version of Niaspan
“at risk.” Plaintiffs argue that defendants made
an impermissible use of the attorney-client privilege as both
a “sword” and a “shield” by
“present[ing] arguments and factual assertions that
implicate attorney advice, while simultaneously preventing
Plaintiffs from exploring the basis behind those arguments
and assertions.” Letter-Brief for Plaintiffs at 4-5,
In re Niaspan Antitrust Litigation, No. 13-md-2460
(Apr. 13, 2018) [hereinafter Pls. Brief], Doc. No. 529. In
response, defendants Barr and Teva contend that the
“so-called 'sword and shield' doctrine applies
[only] where a party selectively waives privilege, ”
not done in this case, and at the same time asserts its
privilege as to unfavorable advice. Letter-Brief for
Defendants at 3, In re Niaspan Antitrust Litigation,
No. 13-md-2460 (Apr. 16, 2018) [hereinafter Defs. Brief],
Doc. No. 532. The Court heard oral argument on this issue in
a telephone conference on May 14, 2018. Plaintiffs'
request is ripe for decision.
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). However, a
party may not use the attorney-client privilege as
“both a sword and a shield” by selectively
“waiv[ing] its privilege for favorable advice while
asserting its privilege on unfavorable advice.” In
re EchoStar Communs. Corp., 448 F.3d 1294, 1301 (Fed.
Cir. 2006). Consequently, a party may not “rely upon
the legal advice it received . . . without permitting [the
opposing party] the opportunity to probe the surrounding
circumstances and substance of that advice.”
Berckeley Inv. Grp., Ltd. v. Colkitt, 455 F.3d 195,
222 (3d Cir. 2006) (citing Livingstone v. North Belle
Vernon Borough, 91 F.3d 515, 537 (3d Cir. 1996)).
is deemed to have waived the privilege where it “has
made the decision and taken the affirmative step in the
litigation to place the advice of the attorney in
issue.” Rhone-Poulenc Rorer v. Home Indem.
Co., 32 F.3d 851, 863 (3d Cir. 1994). Attorney advice
“is not in issue merely because it is relevant, and
does not necessarily become in issue merely because the
attorney's advice might affect the client's state of
mind in a relevant manner.” Id. at 863.
Instead, the “advice of counsel is placed in issue
where the client asserts a claim or defense, and attempts to
prove that claim or defense by disclosing or describing an
attorney client communication.” Id.