In re HIV Antitrust Litigation

Filing 1357

Discovery Order by Judge Laurel Beeler addressing the discovery dispute in the letter brief at ECF No. 1332.(lblc4, COURT STAFF) (Filed on 8/30/2022)

Case 3:19-cv-02573-EMC Document 1357 Filed 08/30/22 Page 1 of 6

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United States District Court
Northern District of California

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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San Francisco Division

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PETER STALEY, et al.,

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Plaintiffs,
DISCOVERY ORDER

v.

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Case No. 19-cv-02573-EMC (LB)

Re: ECF No. 1332

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GILEAD SCIENCES, INC., et al.,
Defendants.

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INTRODUCTION

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The parties dispute whether Gilead must produce its March 2021 collaboration agreement with

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Merck (i.e., the Gilead-Merck Agreement) regarding certain long-acting HIV treatments.1 The

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court denies the plaintiffs’ request to compel the production of the Gilead-Merck Agreement.

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Local Rule 37-3 provides that motions to compel discovery must be filed within seven days after

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the discovery cut-off. The fact discovery cut-off date was December 17, 2021, and the plaintiffs

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have not established good cause to be excused from the usual deadline.

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Joint Disc. Letter – ECF No. 1332 at 2. Citations refer to material in the Electronic Case File (ECF);
pinpoint citations are to the ECF-generated page numbers at the top of documents.
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ORDER – No. 19-cv-02573-EMC (LB)

Case 3:19-cv-02573-EMC Document 1357 Filed 08/30/22 Page 2 of 6

STATEMENT

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The end-payor plaintiffs (EPPs) contend that the Gilead-Merck Agreement is relevant to their

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Northern District of California

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effort to refute the defendants’ argument that certain contractual restraints are “ancillary restraints”

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that should be judged under the rule of reason and not treated as per se antitrust violations.2

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Specifically, the plaintiffs argue that the Gilead-Merck Agreement will help disprove the

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defendants’ argument that certain horizontal restraints — like the “No-Generic Restraints” that

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prohibit the sale of competing fixed-dose combination products (FDCs) used to treat HIV — in the

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agreements between Gilead and defendants Janssen and BMS are ancillary restraints.3

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The plaintiffs requested the Gilead-Merck Agreement near the end of fact discovery in

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December 2021 in their Request for Production No. 127.4 Gilead objected on several grounds,

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including relevancy.5 At that time, Gilead purportedly assured the plaintiffs that whether the No-

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Generic Restraints are “reasonably necessary” to achieve procompetitive benefits depends on the

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specific facts of the collaborations.6 The plaintiffs, on that basis, did not move to compel Gilead to

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produce the Gilead-Merck Agreement.7 The plaintiffs assert that Gilead served an expert report on

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July 22, 2022, that revealed a new position.8
In the report, Gilead’s expert Dr. Louis Berneman opined “that the ‘rationale’ for the No-

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Generic[] Restraints is to ‘provide parties [to pharmaceutical alliance agreements] with confidence

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that co-parties will promote the goals of the alliance and will not act in a manner detrimental to the

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success of the alliance.’”9 He cited other alliance agreements, which he obtained from a public

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database, that supposedly share a “similar context” with the at-issue agreements, to support his

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Id.

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Id.

Id.; Gilead’s Resps. to Pls.’ Third Set of Reqs. for Produc., Ex A. to Joint Disc. Letter – ECF No.
1332 at 11.
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Gilead’s Resps. to Pls.’ Third Set of Reqs. for Produc., Ex A. to Joint Disc. Letter – ECF No. 1332 at
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Joint Disc. Letter – ECF No. 1332 at 2–3.

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Id.

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Id. at 3.

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Id.; Expert Report of Louis P. Berneman, Ex. C to Joint Disc. Letter – ECF No. 1332 at 25 (¶ 20).

ORDER – No. 19-cv-02573-EMC (LB)

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Case 3:19-cv-02573-EMC Document 1357 Filed 08/30/22 Page 3 of 6

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opinion that these kinds of restrictive provisions are “generally included in pharmaceutical alliance

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agreements.”10 The plaintiffs essentially contend that Gilead’s reliance on similar agreements to

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support its position regarding the necessity of these restrictive clauses is inconsistent with Gilead’s

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prior position that the necessity of including restraints in cooperation agreements depends on the

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specific facts of the cooperation arrangement.11
Gilead counters that because fact discovery closed on December 17, 2021, it cannot be

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Northern District of California

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compelled to produce the Gilead-Merck Agreement without an order from the trial judge

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reopening discovery.12 Gilead also argues that the plaintiffs’ decision to move to compel

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production of the Gilead-Merck Agreement now is strategic. Specifically, Gilead argues that in

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January 2022, the parties agreed that the plaintiffs would not have to produce materials created by

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the now-former plaintiff Peter Staley about this litigation and, in exchange, Gilead would not need

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to produce the Gilead-Merck Agreement.13 Both the Gilead-Merck Agreement and the Staley

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materials were presumptively outside the scope of discovery because they were created after the

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May 14, 2019, discovery cutoff date.14
Furthermore, Gilead contends that Mr. Berneman’s analysis is statistical and merely found that

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the kind of “noncompete provisions challenged by” the plaintiffs are “prevalent” in publicly

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available pharmaceutical agreements.15 Thus, Gilead contends that the analysis is not inconsistent

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with its prior position that the necessity of including these provisions depends on the specific facts

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of the cooperation arrangements.16

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Joint Disc. Letter – ECF No. 1332 at 3; Expert Report of Louis P. Berneman, Ex. C to Joint Disc.
Letter – ECF No. 1332 at 24 (¶ 18), 25 (¶ 20).
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Joint Disc. Letter – ECF No. 1332 at 3.

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Id. at 5 (citing Order – ECF No. 781).

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Id. at 5–6.

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Id.

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Id. at 6; Expert Report of Louis P. Berneman, Ex. C to Joint Disc. Letter – ECF No. 1332 at 24 (¶
18).
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Joint Disc. Letter – ECF No. 1332 at 6.

ORDER – No. 19-cv-02573-EMC (LB)

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United States District Court
Northern District of California

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Lastly, Gilead argues that the production of the Gilead-Merck Agreement now would disrupt

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the current case schedule, which sets a September 2022 deadline for filing motions for summary

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judgment.17 Gilead also claims that it and the other defendants would be prejudiced if the court

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compels the production of the Gilead-Merck Agreement. The defendants have already produced

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their expert reports and begun deposing the plaintiffs’ experts and, thus, would have no

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opportunity to question the plaintiffs’ experts on the Gilead-Merck Agreement or have their

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experts address the agreement.18

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ANALYSIS

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Local Rule 37-3 provides, in part, that “no motions to compel discovery may be filed more

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than 7 days after the discovery cut-off.” The plaintiffs must receive permission from the district

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court to bring a motion to compel outside the date given by Local Rule 37-3 and the district

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court’s case management order. McKinzy v. Amtrak, No. C 10-01866 CW (LB), 2011 U.S. Dist.

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LEXIS 74735, *1 (N.D. Cal. July 11, 2011). The close of fact discovery was December 17,

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2021.19 The Gilead-Merck Agreement falls within the scope of fact discovery. See Finjan, LLC v.

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Qualys Inc., No. 18-cv-07229-YGR (TSH), 2020 WL 6581836, at *1 (N.D. Cal. Nov. 10, 2020)

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(“Inspecting your opponent’s materials or obtaining or accessing data or information is fact

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discovery.”). Thus, the plaintiffs’ request to compel a further response to its Request for

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Production No. 127 is time-barred.

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There are some caveats to the time-bar provided by Local Rule 37-3, but none apply here.

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First, “Local Rule 37-3 does not bar motions to enforce the supplementation requirement in

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Rule 26(e), even if they are brought more than seven days after the close of discovery.” Gamevice,

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Inc. v. Nintendo Co., No. 18-cv-01942-RS (TSH), 2019 WL 5565942, at *3 (N.D. Cal. Oct. 29,

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2019). That exception does not apply here because the Gilead-Merck Agreement is not a new or

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newly discovered document that falls within the scope of a previous discovery request. Instead, the

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Id. (citing Order – ECF No. 1227 at 16).

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Id.

Order – ECF No. 781 at 6 (setting Dec. 12, 2021, as the fact discovery cut-off for non-BCBSA
related discovery).
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ORDER – No. 19-cv-02573-EMC (LB)

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plaintiffs specifically requested the document, Gilead objected to its production, and the parties

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met and conferred about the issue in January 2022.20
Second, some courts have suggested that the deadline provided by Local Rule 37-3 may be

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equitably tolled under certain circumstances. “For example, if your sweet-talking opponent

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promises to bring a prompt motion for a protective order and assures you that you therefore don’t

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need to move to compel, then if they don’t bring that motion by the deadline to move to compel

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and you rush into court claiming you were hoodwinked, you might have a good justification for

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missing the deadline in Local Rule 37-3 by a few days.” Illumina, Inc. v. BGI Genomics Co., No.

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19-cv-03770-WHO (TSH), 2021 WL 4305975, at *2 (N.D. Cal. Sept. 22, 2021); see also In re

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Apple iPhone Antitrust Litig., No. 11-cv-06714-YGR (TSH), 2021 WL 1267258, at *1 (N.D. Cal.

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Apr. 6, 2021) (holding that a motion to compel was time-barred under Local Rule 37-3 after

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finding that the court was “not faced with a situation where an otherwise diligent litigant was

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lulled into complacency by a sweet-talking opponent”). That is not the situation here.
The plaintiffs have not identified any evidence establishing that Gilead agreed not to rely on

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any other pharmaceutical agreements to support its position that the “No-Generic Restraint” is an

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ancillary restraint that should be judged under the rule of reason. And its expert’s reliance on other

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publicly available pharmaceutical agreements to support his position is not entirely surprising.

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Importantly, Gilead’s expert did not rely on the Gilead-Merck Agreement (and did not ignore it

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either) because it is not in the database he relied on for his analysis. 21

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Gilead also suggests that the plaintiffs did not press the issue in December 2021 or January

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2022 because they were trying to avoid a reciprocal obligation to produce materials created by

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former plaintiff Peter Staley.22 The plaintiffs claim that Gilead is “wrongly theoriz[ing]” in this

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respect, but do not provide a substantive rebuttal.23 Furthermore, Gilead’s contention that it would

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Joint Disc. Letter – ECF No. 1332 at 2; Gilead’s Resps. to Pls.’ Third Set of Reqs. for Produc., Ex
A. to Joint Disc. Letter – ECF No. 1332 at 11.
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Joint Disc. Letter – ECF No. 1332 at 6.

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Id. at 5–6.

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Id. at 3 n.1.

ORDER – No. 19-cv-02573-EMC (LB)

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Case 3:19-cv-02573-EMC Document 1357 Filed 08/30/22 Page 6 of 6

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be prejudiced by the production of the Gilead-Merck Agreement now is well-founded because the

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production would deprive the defendants’ experts of the opportunity to address the agreement in

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their reports or question the plaintiffs’ experts on the agreement.

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Thus, the plaintiffs’ request to compel the production of the Gilead-Merck Agreement is
untimely under Local Rule 37-3.

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CONCLUSION

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The plaintiffs’ request to compel the production of the Gilead-Merck Agreement is denied.

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This disposes of ECF No. 1332.

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IT IS SO ORDERED.

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Dated: August 30, 2022
______________________________________
LAUREL BEELER
United States Magistrate Judge

United States District Court
Northern District of California

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ORDER – No. 19-cv-02573-EMC (LB)

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