United States Court of Appeals, District of Columbia Circuit
November 15, 2017
Appeals from the United States District Court for the
District of Columbia (No. 1:09-mc-00564)
S. Hegedus, Attorney, Federal Trade Commission, argued the
cause for appellant. With him on the briefs were David C.
Shonka, Acting General Counsel, and Joel Marcus, Deputy
General Counsel for Litigation.
Lawrence D. Rosenberg argued the cause for appellee. With him
on the briefs were Michael Sennett and Nicole C. Henning.
P. Elwood, Zachary J. Howe, Kate Comerford Todd, Sheldon
Gilbert, and Amar D. Sarwal were on the brief for amicus
curiae Chamber of Commerce of the United States of America
and Association of Corporate Counsel in support of Boehringer
Ingelheim Pharmaceuticals, Inc. Warren D. Postman entered an
Before: Kavanaugh and Pillard, Circuit Judges, and Randolph,
Senior Circuit Judge.
KAVANAUGH, CIRCUIT JUDGE.
pharmaceutical company Boehringer claimed attorney-client
privilege over certain documents subpoenaed by the Federal
Trade Commission. The attorney-client privilege applies to a
communication between attorney and client if at least
"one of the significant purposes" of the
communication was to obtain or provide legal advice. In
re Kellogg Brown & Root, Inc., 756 F.3d 754, 758
(D.C. Cir. 2014). Under that standard, the attorney-client
privilege applies to the documents at issue here. We affirm
the judgment of the District Court.
manufacturer that holds a patent has a market advantage. When
a generic drug company challenges the validity of that
patent, it threatens the patent holder's monopoly. Such a
challenge can result in a settlement in which the patent
holder pays the challenger to drop the challenge. That
scenario is known as a "reverse payment" settlement
- so labeled because the settlement requires the patent
holder to "pay the alleged infringer, rather than the
other way around." FTC v. Actavis, Inc., 570
U.S. 136, 141 (2013).
Actavis, the Supreme Court analyzed the legality of
reverse payments. If the payments are made simply to avoid
litigation costs, they may be lawful. But if "the basic
reason is a desire to maintain and to share patent-generated
monopoly profits, " then "the antitrust laws are
likely to forbid the arrangement." Id. at 158.
2008, a patent negotiation occurred between Boehringer (the
name brand with the patent) and Barr (the generic seeking to
challenge the patent). Ultimately, the parties reached a
reverse payment settlement.
Federal Trade Commission pays close attention to reverse
payment settlements to ensure that they do not run afoul of
antitrust law. In 2009, the Commission began investigating
the Boehringer-Barr settlement. During the investigation, the
Commission subpoenaed documents from Boehringer. Boehringer
claimed that the subpoenaed documents were created by
Boehringer employees for Boehringer's general counsel,
Marla Persky, at her request. The documents allowed Persky to
analyze and navigate the treacherous antitrust issues
surrounding reverse payment settlements. Other documents
reflected communications between Persky and Boehringer
executives regarding the possible settlement. Boehringer
asserted attorney-client privilege over the documents.
burden is on the proponent of the privilege to demonstrate
that it applies. See United States v. Legal Services for
New York City, 249 F.3d 1077, 1081 (D.C. Cir. 2001). In
a thorough and careful opinion, the District Court agreed
with Boehringer that the documents at issue here are covered
by the attorney-client privilege. To the extent the
Commission challenges the legal test employed by the District
Court, our review is ...