United States District Court, E.D. Pennsylvania
IN RE GENERIC PHARMACEUTICALS PRICING ANTITRUST LITIGATION THIS DOCUMENT RELATES TO ALL ACTIONS
MEMORANDUM OPINION
On
October 24, 2019, the Court entered a Case Management Order
as Pretrial Order No. 105 (“PTO 105” or
“CMO”), substantially approving the Report and
Recommended Order of Special Master David Marion and setting
an initial schedule for discovery, class certification,
summary judgment, and Daubert motions applicable to
all cases pending in the Multi-District Litigation as of
September 1, 2019. Moving Defendants objected to certain
provisions of the CMO and have filed a motion in this Court
to stay discovery while they seek a writ of mandamus from the
Court of Appeals to argue that the CMO does not comply with
the Federal Rules of Civil Procedure. Plaintiffs oppose the
stay. Because the provisions of the CMO are appropriate in
the context of this exceedingly large and complex antitrust
MDL, the motion for a stay will be denied.
I.
Procedural Background of the MDL
This
MDL concerns allegations that numerous pharmaceutical
companies engaged in an unlawful scheme or schemes to fix,
maintain, and stabilize prices, rig bids, and engage in
market and customer allocations of certain generic
pharmaceutical products. There are five distinct sets of
Plaintiffs: The State Attorneys General, three proposed
class-action Plaintiff groups (the Direct Purchaser
Plaintiffs (“DPPs”), the End-Payer Plaintiffs
(“EPPs”), and the Indirect Reseller Plaintiffs
(“IRPs”)), and the Direct Action Plaintiffs, who
have opted not to proceed as part of one of the class
actions. More than two dozen corporations and individuals
have been named as Defendants. The MDL initially involved
allegations of individual conspiracies as to 18 separate
generic drugs, but has expanded to encompass allegations of
overarching conspiracies that include dozens of
pharmaceuticals. The Court has ruled on numerous motions to
dismiss, and has determined that federal and state claims can
proceed both as to individual drugs[1] and as to the alleged
existence of an overarching multi-drug conspiracy in separate
complaints brought by the Plaintiff groups.[2]
A
particular challenge in this MDL has been the need to balance
the conduct of discovery in an orderly, proportional fashion
in accordance with the Federal Rules of Civil Procedure with
due regard for the investigations conducted by the State
Attorneys General and the United States Department of
Justice, which is an Intervenor in the MDL. Discovery thus
has proceeded in gradual, targeted stages.[3]
In
recognition of the scope of the MDL, the Court has appointed
three highly-qualified Special Masters to assist the Court
and to work with the parties to resolve disputes informally,
where possible, and to provide the Court with recommendations
when agreement cannot be reached. Special Master Marion,
Special Discovery Master Bruce Merenstein, and a specialist
in electronically stored information, Special Discovery
Master for ESI Daniel Regard, have many years of experience
in cases with complex discovery.
The
Court has entered orders designed to protect the parties'
interests with regard to sensitive information. PTO
45[4]
set forth the procedure for designating information as
confidential or highly confidential and also set forth a
separate category of non-privileged material generated or
disclosed in connection with investigations by State
Attorneys General. As different needs for protecting
information were identified, PTO 45 was modified by PTO 53,
to permit highly competitive or highly sensitive information
likely to have a significant effect on business strategies or
decisions, product plans or development, or pricing to be
designated for “outside counsel eyes
only.”[5]
Before
and after filing suit, several State Attorneys General, and
in particular the Connecticut State Attorney General,
conducted investigations pursuant to state law. The other
Plaintiff groups sought access to the material obtained
through such investigations, and by Order dated November 14,
2018[6], the Court explained at length why such
access was warranted as long as there were procedures to
protect confidentiality and comply with Connecticut state
law. As a result of this Order, and under the auspices of
Special Master Marion, the parties agreed to a stipulated
protocol implementing the Court's Order, which the Court
entered as PTO 70.[7] PTO 70 provided for a “claw
back” procedure, whereby:
if Defendants believe the procedures outlined [in PTO 70 and
protective orders] are insufficient to protect (a)
competitively sensitive or trade secret information; (b)
business information unrelated to allegations in any MDL
pleading; or (c) personal or embarrassing information
unrelated to any allegation in the MDL, Defendants can submit
an objection to Plaintiffs seeking to “claw back”
such documents. Absent good cause (including for such issues
as document volume), objections will be made within 30 days
after the provision of access to a Defendant's documents.
Objections shall identify the documents at issue, together
with the grounds for objection. If Plaintiffs disagree with
such an objection, it will be considered by the Special
Master. Defendants may not seek to claw back documents based
on grounds other than those described above or as set forth
in PTO 53 pertaining to inadvertent production of privileged
material.[8]
II.
The CMO is Consistent with the Federal Rules of Civil
Procedure and the Court's Earlier Orders
The
protections established in PTO 70, as just explained, have
been expressly incorporated into the CMO, including Paragraph
3, to which Defendants particularly object. Paragraph 3 of
PTO 105 governs the production of custodial files, and
provides that search terms for the files shall be
established, after which
Defendants shall apply the agreed search terms to the agreed
custodial files and may review the identified documents for
privilege, but may not withhold prior to production any
documents based on relevance or responsiveness.[9]
Defendants
contend that they should be permitted to withhold documents
they determine to be irrelevant or nonresponsive before
production.
The
agreed custodial files are defined in the ESI Protocol as the
files of “any individual of a Producing Party as
identified and agreed by the parties during a meet and confer
as having possession, custody, or control of potentially
relevant information, Documents, or ESI.”[10] Thus, there
is no dispute that these custodial files are likely to
contain relevant information. Importantly, the agreed
custodial files are not produced wholesale; instead, the
files are to be searched for specific terms. These search
terms provide the initial screen for relevance. Once the
information has been produced it is not irretrievable; the
“claw back” procedures established in PTO 70 for
confidential information are expressly incorporated into the
CMO: documents are stamped “Outside Counsel Eyes
Only” for 120 days, with requests to claw back made
within 120 days of production.[11] Claw back disputes are to be
“resolved promptly with assistance from Special
Discovery Master Merenstein and Special Master Marion, as
necessary.”[12]
The
procedures outlined above establish a path forward fully
commensurate with Federal Rule of Civil ...