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In re Aggrenox Antitrust Litigation

United States District Court, D. Connecticut

November 29, 2017

IN RE AGGRENOX ANTITRUST LITIGATION THIS DOCUMENT RELATES TO Humana, No. 314-cv-00572 SRU, and Louisiana Health, No. 315-cv-00964 SRU

          RULING ON HUMANA'S MOTION TO COMPEL

          STEFAN R. UNDERHILL UNITED STATES DISTRICT JUDGE

         In this multidistrict litigation, plaintiffs Humana, Inc. and Louisiana Health Service Indemnity Co. (collectively, “Humana”)[1] have moved for an order compelling defendant Boehringer Ingelheim Pharmaceuticals (“Boehringer”) to produce 52 documents (the “FTC documents”) that Boehringer produced to the Federal Trade Commission (“FTC”) in response to an order of the United States District Court for the District of Columbia. For the following reasons, I grant the motion to compel in part and deny it in part.

         I. Standard of Review

         Where “a party fails to answer an interrogatory” or “fails to produce documents . . . as requested, ” Federal Rule of Civil Procedure 37 permits “[the] party seeking discovery . . . [to] move for an order compelling an answer, designation, production or inspection.” Fed.R.Civ.P. 37(a)(3)(B); see Scott v. Arex, Inc., 124 F.R.D. 39, 40 (D. Conn. 1989). Because “the Federal Rules . . . are to be construed liberally in favor of discovery, ” McCulloch v. Hartford Life & Accident Ins. Co., 223 F.R.D. 26, 30 (D. Conn. 2004), “the party resisting discovery bears the burden of showing why discovery should be denied, ” Cole v. Towers Perrin Forster & Crosby, 256 F.R.D. 79, 80 (D. Conn. 2009) (Smith, J.); see Penthouse Int'l v. Playboy Enters., 663 F.2d 371, 391 (2d Cir. 1981) (“Where, as here, the documents are relevant, the burden is upon the party seeking non-disclosure or a protective order to show good cause.”).

         All “[m]otions relative to discovery, ” including motions to compel, “are addressed to the discretion of the [district] court.” Soobzokov v. CBS, 642 F.2d 28, 30 (2d Cir. 1981). “Rule 26 vests the trial judge with broad discretion to tailor discovery narrowly and to dictate the sequence of discovery, ” Crawford-El v. Britton, 523 U.S. 574, 598 (1998), and the discovery orders “will only be reversed if [the district court's] decision constitutes an abuse of discretion, ” Daval Steel Prods. v. M/V Fakredine, 951 F.2d 1357, 1365 (2d Cir. 1991).

         II. Background

         The factual background to this case is set forth in greater detail in In re Aggrenox Antitrust Litigation, 94 F.Supp.3d 224 (D. Conn. 2015). Briefly summarized, in January 2000, Boehringer obtained a patent for Aggrenox, a brand-name anticoagulant “consisting of a particular combination of dipyridamole and aspirin.” See Id. at 236. Seven years later, Barr Laboratories (“Barr”), a generic drug manufacturer, filed an Abbreviated New Drug Application under the Hatch-Waxman Act that sought to market a generic equivalent of Aggrenox and challenged the validity of Boehringer's patent. Boehringer promptly sued Barr for patent infringement. Id.

         In August 2008, Boehringer and Barr entered into a settlement agreement. Under the terms of the settlement, “Barr agreed to drop its patent challenge and not market generic Aggrenox until July 2015 (eighteen months prior to the expiration of the patent), ” and also promised to promote the medication by using the “specialized sales force” of its subsidiary, Duramed, to “educate obstetricians and gynecologists about Aggrenox.” Id. Boehringer, in turn, dropped its claims of patent infringement and agreed to “compensate[] [Barr] based on several factors, including net sales of Aggrenox, regardless of whether its co-promotion generated any additional sales.” Id. That settlement agreement eventually led to the present case, in which the plaintiffs allege that the defendants illegally agreed to “delay entry of generic Aggrenox” by Barr in exchange for a “large and unjustified” payment from Boehringer. See Id. at 235, 237 (quoting FTC v. Actavis, Inc., __ U.S. __, 133 S.Ct. 2223, 2237 (2013)).

         A. The FTC investigation

         In January 2009-several years before this litigation began-the FTC began to formally investigate “whether, via the settlement, ” Barr and Boehringer “engaged in unfair methods of competition with respect to the sale of [Aggrenox] and [its] generic counterpart[].” See FTC v. Boehringer Ingelheim Pharm., 286 F.R.D. 101, 105 (D.D.C. 2012) (“Boehringer I”), aff'd in part, vacated in part, and remanded, 778 F.3d 142 (D.C. Cir. 2015) (“Boehringer II”), on remand, 180 F.Supp.3d 1 (D.D.C. 2016) (“Boehringer III”). Shortly after the investigation began, the FTC issued an investigative subpoena to Boehringer that requested “all relevant documents concerning the litigation between [Boehringer] and Barr; sales, profits, and marketing of the brand-name drugs; the settlement agreement; co-marketing with Barr and other firms; the marketing of the generic substitutes by Barr; and analyst reports on the drugs.” See Id. at 105-06. When Boehringer failed to comply with the deadline for production, the FTC filed a petition in the United States District Court for the District of Columbia in October 2009, seeking an “order [for Boehringer] to comply with the subpoena.” Id. at 105.

         1. Boehringer I

         Boehringer eventually certified compliance with the investigative subpoena, but withheld approximately one-quarter of the responsive documents “under claims of work product and attorney-client privilege.” Id. at 106. The FTC objected to Boehringer's withholding, arguing that (1) the documents were not protected as work product because they were “typical business forecasts not done by lawyers”; (2) the documents were not protected under the attorney-client privilege because they “contain[ed] no confidential communications between client and attorney”; and (3) any privilege that did exist was “overridden by the FTC's substantial need for the[] documents in order to conclude its law enforcement investigation.” See Id. The District Court reviewed a representative sample of the documents in camera and “issued a decision largely upholding Boehringer's work product claims.” See Boehringer II, 778 F.3d at 147.

         With respect to the documents at issue here-“financial analyses of the Aggrenox co-promotion agreement, forecasting analyses of alternative time lines for generic entry into the market, and financial analyses of the business terms of the settlement agreement, ” id.-the District Court held that the documents were work product because they were obviously “prepared ‘in anticipation of litigation'” or “‘integral' to the global settlement deal” between Barr and Boehringer. See Id. (discussing Boehringer I, 286 F.R.D. at 109-10). Moreover, the District Court deemed the materials to constitute highly-protected “opinion work product”: “although the materials resembled financial reports that might be prepared in the standard course of business, ” they “were prepared using ‘information and frameworks' provided by Boehringer counsel and reflected . . . counsel's opinions as to what data were important in determining an acceptable settlement.” See Id. Finally, the District Court concluded that the FTC “had not demonstrated the sort of ‘overriding and compelling' need required to pierce opinion work product protection.” See Id. at 148. The Court declined to order Boehringer to produce the documents.

         2. Boehringer II

         On appeal by the FTC, the D.C. Circuit affirmed in part and vacated in part. The D.C. Circuit agreed with the FTC that “the District Court applied an overly broad definition of opinion work product.” Id. at 151. “Much of what the FTC s[ought], ” the D.C. Circuit noted, consisted of “factual information produced by non-lawyers that, while requested by . . . attorneys, d[id] not reveal any insight into counsel's legal impressions or their views of the case.” Id. at 152. Rejecting the District Court's “implied [view] that an attorney's mere request for a document was sufficient to warrant opinion work product protection, ” the D.C. Circuit concluded that “general and routine” requests by in-house counsel did not create a “real, nonspeculative danger of revealing the lawyer's thoughts.” Id. (quoting In re San Juan Dupont Plaza Hotel Fire Litig., 859 F.2d 1007, 1015 (1st Cir. 1988)). “[C]ounsel's general interest in the financials of the deal, ” the court reasoned, “reveal[ed] nothing at all: anyone familiar with such settlements would expect a competent negotiator to request financial analyses like those performed here.” Id. Because “whether the agreements made financial sense w[as] a matter of business judgment, not legal counsel, ” any specific “information and frameworks” contained in the requests by Boehringer's counsel “ha[d] no legal significance.” Id. at 153. “Where an attorney's mental impressions are those that ‘a layman would have as well as a lawyer in these particular circumstances, and in no way reveal anything worthy of the description “legal theory, ”' those impressions are not opinion work product.” Id. (quoting In re John Doe Corp., 675 F.2d 482, 493 (2d Cir. 1982)).

         Thus, the D.C. Circuit held that “[w]here it appears that the focus or framework provided by counsel is obvious or non-legal in nature, it is incumbent upon the party claiming opinion work product protection to explain specifically how disclosure would reveal the attorney's legal impressions and thought processes.” Id. Because the District Court “failed to demand such a showing from Boehringer, ” the D.C. Circuit vacated the lower court's order and remanded for a “determin[ation] [of] which of the sampled documents may be produced, in full or redacted form, as factual work product.”[2] Id. at 153, 158.

         3. Boehringer III

         On remand, the District Court “conclude[d] that most of the documents [were] mere fact work product and [were] therefore not protected from disclosure.” Boehringer III, 180 F.Supp.3d at 6. “[T]he documents themselves convey[ed] no legal impressions or opinions, ” id. at 19, and “even assuming they were created at [Boehringer's counsel's] behest and analyze[d] variables she identified, ” they “d[id] not sufficiently reflect her mental impressions regarding which scenarios were legally feasible or desirable” to constitute opinion work product. Id. at 25. “[T]he mental impressions revealed by the[] documents [were], at best, those that a businessperson would have in the same situation, and “d[id] not reflect [in-house counsel]'s impressions as a legal advisor.” Id. at 26. Therefore, the Court held that the documents “qualif[ied] only as fact work product.” Id. at 28. “Because the Court of Appeals ha[d] already concluded that the FTC ha[d] shown sufficient need for the[] documents, ” the District Court ordered Boehringer to produce nonprivileged documents responsive to the subpoena.[3] Id.

         Boehringer moved for a stay of the District Court's order pending appeal. See FTC v. Boehringer Ingelheim Pharm., 241 F.Supp.3d 91, 94 (D.D.C. 2017) (“Boehringer IV”). The District Court denied the motion, holding that “Boehringer ha[d] demonstrated a very low likelihood of success on the merits of its appeal.” Id. at 98. Boehringer then moved the D.C. Circuit for a stay, which the Court of Appeals also denied. See Order, FTC v. Boehringer Ingelheim Pharm., No. 16-5357 (D.C. Cir. May 17, 2017) (per curiam), attached as Ex. 8 to Humana's Mot. Compel, Doc. No. 643-10, at 2.

         Boehringer thereafter produced 52 documents to the FTC.[4] See St. Philip Decl., Doc. No. 643-2, at 3.

         B. Humana's motion to compel

         After the D.C. Circuit denied Boehringer's motion to stay the District Court's order compelling production, Humana's counsel wrote to Boehringer's attorneys “requesting contemporaneous production of all documents that [Boehringer] was ordered to produce to the FTC.” See Id. at 2 (citing Letter from Peter D. St. Philip to Robert A. Milne & Peter J. Carney (May 24, 2017), attached as Ex. 5 to Humana's Mot. to Compel, Doc. No. 643-7, at 2). Boehringer refused to produce the documents, asserting that they were “privileged” and that “[t]he D.C. Circuit's decision regarding the documents' disclosure to the FTC rest[ed] specifically on the Circuit's holding that a government agency can make a lesser showing of substantial need to obtain work product in an investigation than is required in private litigation.” Letter from Matthew S. Leddicotte to Peter D. St. Philip (June 5, 2017), attached as Ex. 6 to Humana's Mot. Compel, Doc. No. 643-8, at 2. The parties conferred by phone on June 16, 2017, and Boehringer “reiterated . . . that the documents may be withheld pursuant to the work product doctrine.” See St. Philip Decl., Doc. No. 643-2, at 3. Humana then filed its motion to compel on July 24, 2017, asking that I order Boehringer to produce the documents. See Doc. No. 643.

         On September 18, 2017, I held a telephonic hearing on Humana's motion. I took the motion under advisement and determined that I should examine the documents in camera before ruling. See Conf. Mem. & Order, Doc. No. 686, at 1. At my request, Boehringer provided electronic and paper copies of the documents, which I have carefully considered in camera.

         III. Discussion

         “The work-product doctrine . . . is intended to preserve a zone of privacy in which a lawyer can prepare and develop legal theories and strategy ‘with an eye toward litigation, ' free from unnecessary intrusion by his adversaries.” United States v. Adlman, 134 F.3d 1194, 1196 (2d Cir. 1998) (quoting Hickman v. Taylor, 329 U.S. 495, 510-11 (1947)). First set forth by the Supreme Court in Hickman v. Taylor, the work product doctrine subsequently was “substantially incorporated in Federal Rule of Civil Procedure 26(b)(3).” Upjohn Co. v. United States, 449 U.S. 383, 398 (1981). That rule provides:

Ordinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent). But . . . those materials may be discovered if: (i) they are otherwise discoverable under Rule 26(b)(1); and (ii) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.

Fed. R. Civ. P. 26(b)(3). The “core” of the work product doctrine “shelters the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client's case.” In re Steinhardt Partners, 9 F.3d 230, 234 (2d Cir. 1993) (quoting United States v. Nobles, 422 U.S. 225, 238 (1975)). “The party invoking the privilege”-here, Boehringer-“bears the heavy burden of establishing its applicability.” In re Grand Jury Subpoena Dated July 6, 2005, 510 F.3d 180, 183 (2d Cir. 2007).

         As outlined by Hickman and Rule 26(b)(3), “work product” consists of “[t]angible material or its intangible equivalent” that was “prepared in anticipation of litigation . . . by or for another party or its representative.” Fed.R.Civ.P. 26(b)(3); Black's Law Dictionary (10th ed. 2014). The distinguishing feature of work product is that it is created “with an eye toward” or “in anticipation of” litigation. Hickman, 329 U.S. at 510-11; Fed.R.Civ.P. 26(b)(3). Materials are “subject to work-product protection . . . ‘if, in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation.'”[5]Schaeffler v. United States, 806 F.3d 34, 43 (2d Cir. 2015) (quoting Adlman, 134 F.3d at 1202). “[T]he ...


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