In re Generic Pharmaceuticals Pricing Antitrust Litigation

          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 ...