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In re Niaspan Antitrust Litigation

United States District Court, E.D. Pennsylvania

May 23, 2018

IN RE NIASPAN ANTITRUST LITIGATION THIS DOCUMENT RELATES TO ALL ACTIONS

          MEMORANDUM

          DuBois, J.

         I. INTRODUCTION

         In this 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.

         II. BACKGROUND

         This 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.

         On 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, ”[1] to which Bisaro responded, “No.” Bisaro Dep. 174:10-20.

         At the 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.

         The 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.

         III. APPLICABLE LAW

         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). 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)).

         A party 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.

         IV. ...


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