In re HIV Antitrust Litigation
Filing
1716
ORDER by Judge Edward M. Chen re Trial Structure & Motions in Limine. The Court is deferring ruling on #1615 EPPs' Motion to Dismiss and denying #1626 the Retailer Plaintiffs' Motion to Bifurcate. (emclc2, COURT STAFF) (Filed on 3/19/2023)
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 1 of 35
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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IN RE HIV ANTITRUST LITIGATION
Case No. 19-cv-02573-EMC
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ORDER RE TRIAL STRUCTURE &
MOTIONS IN LIMINE
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Docket Nos. 1615, 1626
United States District Court
Northern District of California
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The Court held a final pretrial conference in the case at bar on March 7, 2023. This order
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memorializes the rulings made by the Court at the conference. This order also provides rulings on
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some matters where the Court deems oral argument unnecessary. Finally, this order requires
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updates and/or supplemental briefing from the parties on certain issues. Updates and/or
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supplemental briefing shall be filed by March 28 or April 6, 2023, as described below.
I.
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TRIAL STRUCTURE
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For the reasons stated on the record, the Court bifurcates this case into two trials: the first
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trial shall deal with the reverse payment claims; the second trial shall deal with the collaboration
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claims. There shall be different juries for the two trials. All parties agreed that this bifurcation
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makes sense and is reasonable.
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On May 30, 2023, only the trial on the reverse payment claims shall proceed. The Court is
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not, at this time, setting a date for the trial of the collaboration claims. The parties agreed that it
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makes sense to take a “pause” in between the two trials, particularly because the bulk of the
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damages sought relate to the reverse payment claims and how the parties decide to proceed with
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the second trial may be informed by what takes place during the first trial.
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United States District Court
Northern District of California
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With respect to the first trial on the reverse payment claims, for the reasons stated on the
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record, the Court DENIES the Retailer Plaintiffs’ motion to bifurcate that trial into (1) an
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anticompetitive conduct phase and (2) an antitrust injury/damages phase, with the damages phase
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having two juries (one focused on the indirect purchasers’ injury/damages and the other focused
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on the direct purchasers’ injury/damages). 1 See Docket No. 1626 (motion). As the Court noted at
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the conference, bifurcation here would entail significant inefficiencies. This includes the jury for
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the direct purchasers’ injury/damages having to be reeducated in some fashion about the
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underlying antitrust violation. In addition, the two juries for the injury/damages phase would both
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by presented with evidence about, e.g., generic conversion rates. Contrary to what the Retailer
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Plaintiffs argued, they will not be unfairly prejudiced by a single trial because the Court can
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instruct the jury – even before the closing instructions – that there are different plaintiffs, that they
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have different claims (federal claims v. state law claims), and that the law on damages for those
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claims differs.
Because the Court’s focus is on the trial for the reverse payment claims, and not the trial
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on the collaboration claims, it DEFERS ruling on the EPPs’ motion for voluntary dismissal of the
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Complera Class Damages claim. See Docket No. 1615 (motion). To be clear, however, there
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shall be a jury trial on the collaboration claims, and not a bench trial, because the IHPPs continue
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to seek damages for the collaboration claims, and Defendants have not waived their right to a jury
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trial on the damages claims.
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II.
A.
DEFENDANTS’ MOTIONS IN LIMINE
MIL No. 1 (Docket No. 1630-3)
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Defendants have moved to exclude evidence and argument related to TAF conduct. The
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motion is GRANTED in part and DENIED in part. There is no longer any TAF-based antitrust
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or consumer protection claim. Therefore, Plaintiffs shall not offer evidence or argument that
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Gilead delayed in developing or commercializing TAF or that Gilead engaged in coercive or
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Under the Retailer Plaintiffs’ proposal, the first phase would include the common issue of
whether generic entry was delayed and, if so, what would the entry date have been in the absence
of the anticompetitive conduct.
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United States District Court
Northern District of California
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otherwise improper product switching.2 Plaintiffs also shall not offer evidence or argument that
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TAF was part of some anticompetitive scheme designed by Gilead. However, the Court shall not
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categorically bar any reference to TAF, in particular, neutral evidence of any market reality – e.g.,
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that TAF was the “new” tenofovir drug – since the existence of TAF seems to have affected
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Gilead’s forecasting and may have impacted the relevant market and the price of the HIV drugs at
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issue (Truvada and Atripla which are TDF-based drugs). The parties are ordered to meet and
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confer on the 6-10 documents that Plaintiffs referred to at the conference to see if they can reach
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agreement on redactions which would render any TAF-related dispute moot. A joint update shall
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be filed by March 28, 2023.
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To the extent Defendants argued at the conference that TAF-related evidence opens the
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door to evidence or argument that Plaintiffs were not injured because they would have bought a
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TAF-based drug instead of a drug containing generic TDF, the Court does not agree. Plaintiffs are
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no longer asserting that TAF should have been sold earlier than it actually was (i.e., that Gilead
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anticompetitively delayed introducing TAF into the market).
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B.
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MIL No. 3 (Docket No. 1630-5)3
The Court DEFERS ruling on the third motion in limine since it is relevant to the
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collaboration claims only, and not the reverse payment claims.
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C.
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MIL No. 4 (Docket No. 1630-6)
Defendants have moved to exclude most evidence or argument related to the TDF patent
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settlement agreement. For the reasons stated on the record, the motion is GRANTED in part and
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DENIED in part. The Court rejects Defendants’ suggestion that evidence related to the TDF
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patent settlement agreement is not relevant. There is evidence suggesting that negotiations related
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to the TDF patent settlement agreement informed what happened during negotiations related to the
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FTC patent settlement agreement.
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At the conference, Plaintiffs represented that they will not seek to introduce evidence or
argument on either of the above. They also represented that they will not seek to introduce
evidence or argument that Gilead withheld an HIV indication for TAF.
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The Court addresses Defendants’ MIL No. 2 below, in its discussion of Plaintiffs’ MIL No. 1.
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settlement agreement, which is no longer part of the reverse payment claims. In addition, the
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Court will not permit evidence or argument related to whether the Federal Trade Commission did
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or did not “approve” the TDF patent settlement agreement. The parties should meet and confer to
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determine whether they can reach agreement on a stipulation of fact related to the TDF patent
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settlement agreement – including the removal of the no-authorized generic provision from the
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settlement agreement. A joint update shall be filed by March 28, 2023.
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D.
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United States District Court
Northern District of California
To be clear, however, the Court does not intend there to be a mini-trial on the TDF patent
MIL No. 5 (Docket No. 1630-7)
The Court finds oral argument on MIL No. 5 unnecessary. Part of the motion may be
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DEFERRED because it relates solely to the collaboration claims (i.e., whether evidence or
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argument related to the NGRs in the Prezcobix, Odefsey, and Symtuza Agreements is permitted).
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The two remaining issues are addressed below.
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1.
Other Lawsuits or Investigations
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The first issue is whether evidence or argument related to other lawsuits or investigations
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involving Defendants should be excluded. The Court DEFERS ruling on this issue as well
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because context will matter. However, it gives the parties some general guidance here.
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Plaintiffs have articulated reasons why some other lawsuits or investigations involving
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Defendants are relevant. For example, there was foreign litigation related to FTC which seems to
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have informed Teva’s views on its likelihood of success in the FTC patent infringement suit in the
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United States. Also, the TDF patent settlement agreement, as discussed above, is relevant.
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Finally, whether Teva would be delayed with going forward with a NTE containing FTC because
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other component drugs were subject to suits or settlements is a fair consideration for the jury. The
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Court is inclined to permit such evidence so long as the evidence does not lead to mini-trials.
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That being said, the Court has Rule 403 concerns about some of the other lawsuits or
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investigations identified by Plaintiffs. For example, Plaintiffs argue that they are entitled to
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introduce evidence showing that “other third parties are responsible, in whole or in part, for
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Gilead’s patents,” and thus Gilead is not an innovator. Opp’n at 4. The probative value of this
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evidence is low, and it seems likely to be a waste of time and confusing to the jury. Plaintiffs
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United States District Court
Northern District of California
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remain free to argue that any patents Gilead owns are invalid because they do not protect any
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novel inventions. However, arguing who is the true inventor of a patent seems to be going off
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track. As another example, Plaintiffs seem to assert that they are entitled to introduce evidence
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related to other reverse payment claims made against Teva. If Plaintiffs want to introduce
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evidence that Teva (or Gilead) was generally aware of reverse payments potentially being
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anticompetitive, that may be reasonable. But dwelling on other reverse payment lawsuits or
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settlements raises the prospect of unfair prejudice and exclusion under Rule 403.
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2.
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The second issue is related to Ms. Julie, who is Teva’s Chief IFP Counsel. Defendants
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have expressed concern that Plaintiffs will ask Ms. Julie about another reverse payment case in
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which she provided testimony (Nexium) or that Plaintiffs will submit that testimony. In response,
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Plaintiffs state that they will not submit any evidence “includ[ing] discussions of the allegations in
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the Nexium case, its proceedings, or its result.” Opp’n at 6. Rather, Plaintiffs just want to use her
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testimony about broad topics – “including, inter alia, her role in overseeing and managing patent
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litigation at Teva, Teva’s process for evaluating patent strength, the value of exclusivity, and Teva
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expectations about brand lawsuits.” Opp’n at 6. This is permissible. But given that Ms. Julie will
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be testifying at trial live, it is not clear that Plaintiffs will need to use that testimony from Nexium
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in the first place. However, Plaintiffs should be able to use any Nexium testimony to impeach Ms.
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Julie in this case.
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Testimony of Ms. Julie
Accordingly, the Court DEFERS ruling on this issue related to Ms. Julie but, based on the
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above, the parties have guidance as to how the Court is inclined to proceed.
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E.
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MIL No. 6 (Docket No. 1630-8)
Defendants move to exclude evidence or argument related to damages that Defendants
claim Plaintiffs cannot recover as a matter of law. The motion is broken into three parts.
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Part 1: United and the IHPPs
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United and the IHPPs are both TPPs – i.e., indirect purchasers.4 Defendants argue that
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Technically, United also has direct purchaser claims which were assigned to it, but the issue here
concerns only indirect purchasers who have to rely on state law for damages because, as indirect
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United and the IHPPs have problematic damages claims because their damages claims are based
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on one state’s laws applying across the board. For United, that is Minnesota law. For the IHPPs,
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that is California law. Defendants argue that this Court rejected application of one state’s law
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across the board in its class certification order addressing the EPPs/indirect purchasers. The class
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certification order did not directly address United’s claims, or the IHPPs’, since both have brought
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individual suits. Nevertheless, Defendants argue that the reasoning of the Court in the class
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certification order should apply to United and the IHPPs as well (i.e., because they are indirect
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purchasers just like the EPPs). Thus, Defendants argue that United and the IHPPs should be
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precluded from introducing evidence of damages “that rest on a theory that a single state statute
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United States District Court
Northern District of California
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applies ‘across the board.’” Mot. at 1.
As to United, United fairly argues that the Court’s class certification order should not
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necessarily dictate how the Court should proceed because, in that order, the Court did a choice-of-
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law analysis under California law and, here, there should be a choice-of-law analysis under
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Minnesota law. See Sarver v. Chartier, 813 F.3d 891, 897 (9th Cir. 2016) (“Typically, ‘a federal
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court sitting in diversity applies the conflict-of-law rules of the state in which it sits.’ However,
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after a transfer under 28 U.S.C. § 1404 the choice-of-law rules of the transferor court apply.”).
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The Minnesota choice-of-law issue has not been sufficiently briefed. Accordingly, the Court
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DEFERS ruling here and orders Defendants and United to file supplemental briefs addressing the
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choice-of-law issue. This should include discussion of whether Minnesota law should apply to
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purchases made for beneficiaries who live outside the state of Minnesota (or reimbursements made
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to the same). The parties should also address whether – assuming the Court rules in Defendants’
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favor on choice of law – United should be permitted to serve an expert rebuttal report covering
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alternative state law calculations. Supplemental briefs shall be filed by March 28, 2023. Each
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brief shall be no longer than seven (7) pages.
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As for the IHPPs, the Court shall not reopen the choice-of-law issue because they, like the
EPPs, took the position that California law should apply across the board and the Court rejected
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purchasers, they cannot bring federal antitrust claims.
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There is, however, a new issue related to the IHPPs where the Court does seek
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supplemental briefing. See Docket No. 1659 (joint statement regarding disputed legal issues).
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Specifically, Defendants have argued that, if the laws of the various states do apply to the IHPPs’
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claims, then there are some state consumer protection laws that do not apply where there is only
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anticompetitive conduct at issue. See Docket No. 1388 (Order at 27). According to Defendants,
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the following states take this approach: Arkansas, Colorado, Idaho, Indiana, Louisiana,
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Pennsylvania, Virginia, and Wyoming. The Court has already addressed Arkansas and Idaho in its
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class certification order. The IHPPs’ consumer protection claims based on the laws of those two
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United States District Court
Northern District of California
that position. Thus, the motion in limine is GRANTED with respect to the IHPPs.
states are dismissed.
This leaves Colorado, Louisiana, Pennsylvania, Virginia, and Wyoming. The Court orders
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the IHPPs and Defendants to file supplemental briefs addressing whether these states’ consumer
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protection laws cover anticompetitive conduct. Supplemental briefs shall be filed by March 28,
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2023. Each brief shall be no longer than seven (7) pages.
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2.
Part 2: Medicare
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Defendants next ask the Court to preclude Plaintiffs from recovering damages for costs
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they did not incur – in particular, if Medicare paid for part of the drugs, then Plaintiffs cannot
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include that as part of their damages. The Court DENIES this part of the motion in limine.
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Although Defendants have raised a fair argument that they are entitled to set-offs based on the
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Medicare payments, exclusion is not the proper remedy because the parties essentially dispute
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whether it is possible to allocate the Medicare payments to serve as a set-off. See also In re
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Namenda Indirect Purchaser Antitrust Litig., No. 115CV6549CMRWL, 2022 WL 3362429, at
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*11-12 (S.D.N.Y. Aug. 15, 2022) (concluding that “the measure of damages is the actual damage
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– the out-of-pocket cost – that is suffered by a [TPP] as a result of being overcharged for
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memantine,” but “[w]hether Dr. Vogt has calculated that measure correctly in light of the various
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government reimbursement programs presents a question of fact for the trier of fact – not a ruling
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of law for the court to make”; likewise, “[w]hether aspects of what Plaintiffs characterize as
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‘premiums’ operate to reduce the out-of-pocket cost of memantine to a [TPP] is also a question of
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fact for the trier of fact – not a ruling of law for the court to make”).
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3.
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Finally, Defendants argue that Plaintiffs – United, in particular – should not introduce
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“evidence of damages that create duplicative purchaser/payor recovery.” Mot. at 5. Defendants
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focus on United in particular because it is “bringing claims on behalf of two ‘segments’ of its
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overall business: (i) the insurance business of United HealthCare Services [‘UHS . . . and (ii)
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OptumRx, a prescription drug business.” Mot. at 5. In other words, United has both (i) indirect
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purchaser claims and (ii) direct purchaser claims. See also United Compl. ¶ 23 (alleging that UHS
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is an affiliate of OptumRx, that Optum Rx makes direct purchases from Defendants, and that
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Optum Rx has made an assignment of its rights to UHS). According to Defendants,
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United States District Court
Northern District of California
Part 3: Duplication of Remedy
United’s damages expert calculated damages separately for UHS
and OptumRx, the result of which is that, if OptumRx dispensed
drugs to a UHS member, United’s expert calculated the damages for
that single purchase twice: once when that transaction showed up in
Optum Rx’s claims data, and again when it showed up in UHS’s
claims data. United’s expert does not disagree that this is what he
did, and in his rebuttal report provides “alternative damages
calculations that account for this issue without offering an opinion
as to whether it is necessary or appropriate.”
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Mot. at 5 (emphasis in original).
If UHS and OptumRx were two divisions within the same company, then Defendants’
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position could have some merit. However, it appears that, even though UHS and OptumRx are
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affiliated, they are separate companies. See also Opp’n at 7 (asserting that OptumRx and United
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simply share “an ultimate corporate parent”). That being the case, the Court DENIES the request
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to exclude. The issue of a pass-on defense and/or duplication of remedies where there are both
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direct and indirect purchasers is addressed in Plaintiffs’ MIL No. 6.
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F.
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MIL No. 7 (Docket No. 1630-9)
In their final motion in limine, Defendants move to exclude (1) certain characterizations of
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the pharmaceutical industry, (2) certain characterizations of Defendants’ acts, (3) certain
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characterizations of Plaintiffs’ damages, and (4) certain characterizations of Gilead’s innovation
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record.
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1.
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This part of the motion is essentially moot and thus it is DENIED. Defendants have
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expressed concern about, e.g., Plaintiffs referring to “Big Pharma” or encouraging jurors to “send
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a message.” But Plaintiffs state that they do not intend to go down that path – though they add
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(and fairly so) that it is “legitimate for them to refer to the price differences between branded and
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generic drugs. And it is certainly legitimate for them to refer to the high and rising prices
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Defendants charged for drugs . . . and the effects that generic entry has had on those prices.”
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Opp’n at 1.
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United States District Court
Northern District of California
Characterizations of the Pharmaceutical Industry
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Characterizations of Defendants’ Acts
Here, Defendants ask the Court to bar Plaintiffs from using allegedly pejorative or
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inflammatory terms – e.g., NGRs, secret or private agreement, payoff, pay for delay, kickback,
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immoral, unethical, and so forth. See Mot. at 2. In response, Plaintiffs argue that the Court should
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not be a censor or the word police. They add that, in Glumetza, Judge Alsup basically allowed
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free rein when it came to closing argument at least.
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The motion is GRANTED in part, DENIED in part, and DEFERRED in part. The Court
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should not be the word police but it can give some guidance. Certain terms should be off limits,
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including immoral, unethical, criminal, and so forth. On the other hand, there is no prejudice in
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the use of such terms as payoff, pay for delay, or secret or private agreement.
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As to the use of NGR (or No Generics Restraint). Plaintiffs fairly point out that expert
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reports and depositions have used this term. If the term comes up in that context, there is little that
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can be done. As to its use at trial, the Court will not preclude its use but will, upon request, give a
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limiting instruction – i.e., that it is being used as shorthand for the convenience of the jury but that
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the jury should not read that term as suggesting any conclusion about the operative effect or
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legality or illegality of Defendants’ acts.
Characterizations of Plaintiffs’ Damages
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3.
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Defendants emphasize that the only Plaintiffs seeking damages here are entities – TPPs or
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direct purchasers – and not any individual consumers. Thus, Defendants argue that the Court
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should not allow evidence of injury to individual consumers, whether in the form of overcharges
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or in the form of physical injury (e.g., because the cost of drugs was too high). In response,
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Plaintiffs argue that Defendants are myopically looking at damages, leaving out of the picture that
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consumer harm is relevant to liability. See also Opp’n at 4 (arguing that “[b]oth sides’ experts
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assess whether Defendants’ conduct benefited or harmed consumers[;] this is no surprise because
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consumer harm is relevant [since] antitrust law seeks to protect consumers”) (emphasis in
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original).
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can affect price and/or quality of goods). However, Plaintiffs should not argue outright that
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individual consumers have been overcharged. Also, under both Rule 402 and 403, evidence of
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United States District Court
Northern District of California
Plaintiffs are not barred from arguing that competition is beneficial to consumers (e.g., it
consumer physical injury shall be excluded.
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This part of the motion is therefore GRANTED in part and DENIED in part.
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4.
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Finally, Defendants ask that Plaintiffs be barred from making mischaracterizations about
Characterizations of Gilead’s Innovation Record
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Gilead’s innovation record. It is fair for Plaintiffs to argue that one of the harms to competition is
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Gilead’s lack of an incentive to innovate and that Gilead did not innovate. However, just because
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Gilead may buy patents does not mean that it does not innovate, and any such assertion takes
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things off track and will not be permitted. Extensive focus on this issue may implicate Rule 403.
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This part of the motion is GRANTED in part and DENIED in part.
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III.
A.
PLAINTIFFS’ MOTIONS IN LIMINE
MIL No. 1 (Docket No. 1632-3)
Plaintiffs argue that the Court should exclude or, in the alternative, limit the use of
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evidence of Teva’s subjective beliefs regarding its probability of prevailing on Gilead’s FTC
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patents (including the follow-on patents). The motion is GRANTED in part and DENIED in part.
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The Court shall not exclude evidence of Teva’s subjective beliefs. However, it is fair for Plaintiffs
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to be able to comment that there is not evidence of Gilead’s subjective beliefs because, unlike
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Teva, Gilead did not waive its attorney-client privilege. Plaintiffs, however, may not argue to the
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jury that there should be an adverse inference from Gilead’s failure to waive the attorney-client
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privilege. In essence, the Court follows the approach of Judge Alsup in In re Glumetza Antitrust
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Litig., No. C 19-05822 WHA (N.D. Cal.) (Docket No. 653) (Tr. at 48-51).
The Court’s resolution of this motion in limine also resolves Defendants’ MIL No. 2.
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B.
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United States District Court
Northern District of California
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MIL No. 2 (Docket No. 1632-4)
Plaintiffs characterize their second motion in limine as one seeking preclusion of defenses
“contrary to law.” There are three different defenses that Plaintiffs argue are contrary to law.
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1.
Defense No. 1
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First, Plaintiffs argue that Defendants should be precluded from offering evidence or
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argument that government entities (e.g., the Federal Trade Commission and the New York
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Attorney General’s Office) decided not to take action after being advised of the FTC patent
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settlement agreement (at issue in the reverse payment claims). The Court has already addressed
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this issue in the context of Plaintiffs’ Daubert motion challenging Wright. See Docket No. 1401-3
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(Daubert motion). This part of the motion in limine is GRANTED. However, if Plaintiffs argue
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that the settlement agreement was secret or otherwise concealed, then they will open the door to
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Defendants arguing that the agreement was not secret as they were required to submit it to the
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FTC.
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2.
Defense No. 2
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Next, Plaintiffs argue that the Court exclude evidence or argument regarding: “(1) the
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general ‘societal’ and ‘economic benefits’ of HIV therapies, and (2) the average costs and
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development time for new drugs.” Mot. at 3. This part of the motion is GRANTED in part and
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DENIED in part.
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As Plaintiffs note, there is overlap between this motion and their Daubert motion on Dr.
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Jena. See Docket No. 1400-3 (Daubert motion). The Court finds Plaintiffs’ position on (1)
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persuasive because such testimony does not directly address Defendants’ position that they have
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engaged in innovation in the HIV treatment space. And to the extent Defendants argue that there
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are benefits to their innovation, there is no real dispute that innovation provides benefits, and it
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would be a waste of time to go down that avenue. Such testimony could also mislead the jury into
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focusing on the benefits of innovation rather than whether there has been innovation.
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The Court’s ruling, however, does not bar Defendants from talking about what the drugs at
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issue do. See Opp’n at 4 (suggesting that Defendants should be able to provide evidence about the
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health benefits of Atripla, Truvada, Complera, and Evotaz, the four drugs at issue, because a jury
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must be able to “understand what these products do”). The ruling also d oes not bar Defendants
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from arguing that patents are issued where there is something innovative. See Opp’n at 4 (arguing
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that “jurors must . . . understand what patents do: reward inventors of beneficial new products with
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exclusive sales periods”). Nor would it bar evidence as to how these particular drugs innovate.
United States District Court
Northern District of California
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As for (2), the Court favors Defendants’ position. Plaintiffs’ complaint is that there should
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not be evidence about development costs generally (instead of evidence about development costs
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for the specific drugs at issue). But so long as the evidence about development costs generally is
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relatively concise, the Court does not see a Rule 402 or 403 problem (such as danger of confusion
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to the jury or undue prejudice to Plaintiffs).
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3.
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Finally, Plaintiffs argue that Defendants should be barred from offering evidence or
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Defense No. 3
arguing that
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Gilead’s reverse payment was not sufficiently ‘large’ compared to
any metric or benchmark other than Gilead’s avoided litigation costs
in the patent litigation. For example, the Court should exclude
arguments that the reverse payment was not ‘large’ compared to
Gilead’s revenues or profits on Truvada or Atripla, or the size of the
total HIV pharmaceutical market.
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Mot. at 5.
As noted by one district court, “Actavis did not identify any specific formula for
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determining whether a reverse payment is sufficiently large.” King Drug Co. of Florence v.
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Cephalon, Inc., 88 F. Supp. 3d 402, 416-17 (E.D. Pa. 2015).
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However, to the extent Plaintiffs argue that the only benchmark for whether a reverse
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payment is large is Gilead’s avoided litigation costs, they are incorrect. Actavis on its face
25
recognized that there may be other benchmarks. See FTC v. Actavis, Inc., 570 U.S. 136, 156
26
(2013) (stating that “[t]he reverse payment, for example, may amount to no more than a rough
27
approximation of the litigation expenses saved through the settlement” or “may reflect
28
compensation for other services that the generic has promised to perform . . . [;] [t]here may be
12
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 13 of 35
1
other justifications”) (emphasis added).5
Plaintiffs’ main concern, however, seems to be that it would not be proper (or fair) for
United States District Court
Northern District of California
2
3
Gilead to say that a payment might seem large on its face but, in fact, is not that large, or is a fair
4
payment, given the profits that Gilead was making from the FTC patents. Both sides have cited
5
authorities to support their respective positions. Compare, e.g., King Drug, 88 F. Supp. 3d at 416
6
(rejecting the defendants’ position that “the appropriate consideration [for whether a reverse
7
payment is sufficiently large] is whether the unexplained portion of the payment is large in
8
comparison to the brand manufacturer’s expected monopoly profits in the absence of generic
9
competition”), with Kelly Decl., Ex. L (order in In re Namenda Direct Purchaser Antitrust
10
Litigation, No. C-15-7488 CM-RWL (S.D.N.Y.) noting as follows: “I will not preclude
11
Defendants from introducing evidence in support of their position that the reverse payment to
12
Mylan [was] in fact not a large payment. I will not prohibit Defendants from arguing that the
13
value of their patented drug franchise is a legitimate benchmark for evaluating whether the $34.5
14
million reverse payment to Mylan was ‘large’”).
15
Unfortunately, the respective authorities cited by the parties do not provide much
16
reasoning as to why it is permissible or impermissible for a brand manufacturer to claim that a
17
reverse payment is not large when its profits (or the value of its patents) are taken into account.
18
Implicitly, Plaintiffs’ position is that it would be improper – or unfair – for Defendants to make
19
this assertion because the profits Gilead was making were monopoly profits. In other words,
20
Gilead was able to make a payment of the size it did because of its large monopoly profits. See
21
Actavis, 570 U.S. at 156 (“Where a reverse payment reflects traditional settlement considerations,
22
such as avoided litigation costs or fair value for services, there is not the same concern that a
23
patentee is using its monopoly profits to avoid the risk of patent invalidation or a finding of
24
noninfringement.”) (emphasis added). But that position seems to put the cart before the horse –
25
i.e., that essentially assumes that Gilead’s monopoly profits were not based on a lawful monopoly
26
arising from the patent but rather based on an unlawful monopoly because the patent is either
27
28
Admittedly, “large” and “unjustified” are distinct concepts. But the justification for a reverse
payment may also shed light on whether a payment should be considered large.
13
5
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 14 of 35
1
invalid or not infringed.
2
Furthermore, there is language in Actavis that suggests Gilead’s profits from the FTC
3
patents may be considered in determining whether the size of a reverse payment is large. See id. at
4
157-58 (noting that “[t]he owner of a particularly valuable patent might contend . . . that even a
5
small risk of invalidity justifies a large payment[;] [b]ut, be that as it may, the payment (if
6
otherwise unexplained) likely seeks to prevent the risk of competition”) (emphasis added).
United States District Court
Northern District of California
7
Accordingly, the Court finds in favor of Defendants on this issue and DENIES this part of
8
the motion in limine. The Court’s ruling here does not bar Plaintiffs from still asserting that the
9
reverse payment was not justified because it was a payoff to protect an invalid or noninfringed
10
patent.
11
C.
12
MIL No. 3 (Docket No. 1632-5)
For the reverse payment claims, Plaintiffs argue that the Court should preclude Defendants
13
from asserting – in conjunction with a rule-of-reason analysis – that certain “procompetitive
14
effects” justify their conduct.
15
16
17
The rule of reason has a “three-step, burden shifting framework.” Ohio v. Am. Express
Co., 138 S. Ct. 2274, 2284 (2018).
(1) The plaintiff has “‘the initial burden of showing that the restraint produces
18
significant anticompetitive effects within a relevant market.’” In re NCAA Ath.
19
Grant-In-Aid Cap Antitrust Litig., 958 F.3d 1239, 1256 (9th Cir. 2020).
20
21
(2) If the plaintiff meets that burden, the defendant must then “‘come forward with
evidence of the restraint’s procompetitive effects.’” Id.
22
(3) If the defendant makes that showing, then the burden shifts back to the plaintiff to
23
“‘show that any legitimate objectives [i.e., procompetitive effects] can be achieved
24
in a substantially less restrictive manner.’” Id.
25
Plaintiffs’ motion in limine focuses on the second step – i.e., a defendant coming forward with
26
evidence of the procompetitive effects of the restraint.
27
28
Before getting into the specifics of Plaintiffs’ motion, however, the Court finds it worth
going over how the rule of reason applies in a reverse payment case.
14
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 15 of 35
1
First, the Court rejects Defendants’ position that a large and unjustified payment is a
2
threshold showing that Plaintiffs must make before the rule of reason is applied. Although there is
3
some authority to support Defendants’ position, the Court finds other authority more persuasive:
4
whether a payment is large and unjustified is part of the rule-of-reason analysis – specifically, the
5
first step. For example, if a payment is large and unjustified, that may indicate anticompetitive
6
effects. See, e.g., King Drug, 88 F. Supp. 3d at 413-15; cf. Actavis, 570 U.S. at 158 (stating that “a
7
reverse payment, where large and unjustified, can bring with it the risk of significant
8
anticompetitive effects”).
United States District Court
Northern District of California
9
Second, the Court notes that there is a difference between whether a payment is “large and
10
unjustified” for purposes of step one and whether a defendant’s conduct has procompetitive
11
benefits for purposes of step two. There may be some confusion here because the term
12
“procompetitive justification” is sometimes used in discussing step two of the rule of reason. To
13
be sure, it may be possible for a justification for a large payment to be procompetitive. However,
14
the defendant does not necessarily have to justify a large payment as procompetitive. In Actavis,
15
the Supreme Court explained that a large payment could be justified if it reflected avoided
16
litigation costs. See Actavis, 570 U.S. at 156 (“Where a reverse payment reflects traditional
17
settlement considerations, such as avoided litigation costs or fair value for services, there is not the
18
same concern that a patentee is using its monopoly profits to avoid the risk of patent invalidation
19
or a finding of noninfringement.”). Such a justification would not be procompetitive in the sense
20
that the only ones who might benefit from the payment would be the contracting parties; in other
21
words, broadly speaking, competition is not benefitted. Cf. In re Lidoderm Antitrust Litig., No.
22
14-md-02521-WHO, 2018 U.S. Dist. LEXIS 227750, at *55 (N.D. Cal. Feb. 7, 2018)
23
(“Defendants may not argue that the Settlement in and of itself was procompetitive by removing
24
litigation uncertainty for defendants. Defendants' justifications (providing certainty and fewer
25
distractions) . . . may, at most, be relevant to whether the reverse payments were ‘large and
26
unexplained,’ but cannot be argued as procompetitive.”) (emphasis in original).
27
1.
Procompetitive Benefits of the FTC Patent Settlement Agreement
28
Plaintiffs’ first argument is that, at step two, Defendants can only talk about the
15
United States District Court
Northern District of California
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 16 of 35
1
procompetitive effects of the restraint at issue in this case – i.e., the reverse payment – and cannot
2
talk about the procompetitive effects of the broader settlement agreement of which the reverse
3
payment is a part. This is too restrictive. One such alleged benefit is that the settlement
4
agreement here purportedly gives Teva a broad license to make new FTC products. (The parties
5
have a dispute about how the license provision should be interpreted. The Court addressed this
6
issue in the Daubert motion related to Dr. Saravia. See Docket No. 1404-3 (motion).)
7
The Court rejects Plaintiffs’ position and thus DENIES this part of the motion in limine.
8
Even if the Court were to follow the approach of the Federal Trade Commission in In re Impax
9
Labs., Inc., No. 9373, 2019 FTC LEXIS 25 (Fed. Trade Comm'n March 28, 2019), that decision
10
does not favor Plaintiffs given the circumstances of this case. If Teva did agree, under the FTC
11
patent settlement agreement, to delay its entry into the market, then the finder of fact must
12
consider what benefits Teva received in exchange. This would be not only the reverse payment
13
(as alleged by Plaintiffs) but also the broad license to use FTC (as alleged by Defendants). This
14
was the basic analysis of Judge Alsup in In re Glumetza Antitrust Litig., No. C 19-05822 WHA,
15
2021 U.S. Dist. LEXIS 161066 (N.D. Cal. Aug. 25, 2021):
16
This order agrees with defendants that the Supreme Court's language
[in Actavis], in context, contemplated a broader review of the
agreement than solely the no-AG term in isolation. Regarding the
nexus argument in plaintiffs' reply, plaintiffs' expert Professor
McGuire also acknowledges a connection between the reverse
payment and the marketing provisions when he states that "the
commitment to a minimum level of promotion expenditures is also a
form of pay from the Brand Defendants" (McGuire Rep. ¶ 101 n.
168, Dkt. No. 440-19). If both the no-AG provision and the
marketing provisions in the agreement constitute forms of payment
to Lupin, then a nexus between the no-AG provision and reverse
payment would include (or at least be affected by) the marketing
provisions with their alleged procompetitive effects.
17
18
19
20
21
22
23
24
Id. at *35-36 (emphasis added).
25
2.
Procompetitive Benefits of Patent Litigation Settlements Generally
26
According to Plaintiffs, even if Defendants are permitted to talk about the procompetitive
27
benefits of the FTC patent settlement agreement specifically (see above), Defendants still should
28
be barred from discussing the procompetitive benefits of patent litigation settlements generally –
16
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 17 of 35
1
e.g., that “settlements reduce uncertainty, free up the time of management personnel, and save
2
litigation costs.” Mot. at 2.
United States District Court
Northern District of California
3
The Court finds this part of the motion effectively moot – and thus DENIES relief to
4
Plaintiffs – because Plaintiffs seem to be confusing here the issue of procompetitive benefits (at
5
step two of the rule of reason) with justification for a large payment (at step one of the rule of
6
reason). To the extent there is any substance that needs to be addressed, the Court does so below
7
as this part of the motion in limine overlaps with Part III.C.5 infra.
8
3.
Procompetitive Benefit of Generic Entry Prior to Expiration of the Patent
9
Plaintiffs argue next that Defendants should not be able to claim as a procompetitive
10
benefit of the FTC patent settlement agreement the fact that Teva was allowed to enter the market
11
before the expiration date of the FTC patents. See Opp’n at 4 (noting that the FTC patent
12
settlement agreement “gave Teva licenses to enter no later than September 2020, a year before the
13
expiration of the FTC patents and more than three years before the expiry of the [follow-on]
14
combination patents”).
15
The Court does not find Plaintiffs’ position persuasive and thus DENIES them relief.
16
Plaintiffs’ position is predicated on the Supreme Court rejecting the “scope of the patent” test in
17
Actavis. “The scope of the patent test insulates from antitrust scrutiny virtually any agreement that
18
restrains trade no more than the patent itself would have, if valid.” In re Cipro Cases I & II, 61
19
Cal. 4th 116, 145 (2015). In Actavis, the Supreme Court rejected the Eleventh Circuit’s
20
conclusion that “a reverse payment settlement agreement generally is ‘immune from antitrust
21
attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of
22
the patent.’” Actavis, 570 U.S. at 141; see also id. at 145 (noting that, in the reverse payment case
23
under consideration, the generic manufacturer agreed that “it would not bring its generic to market
24
until . . . 65 months before [the brand’s] patent expired (unless someone else marketed a generic
25
sooner)”). The reason why is that an entry date before patent expiration could be anticompetitive
26
if the generic could have obtained an even earlier entry date if there were no reverse payment. See
27
King Drug Co. of Florence, Inc. v. SmithKline Beecham Corp., 791 F.3d 388, 408 (3d Cir. 2015)
28
(“Notwithstanding such ‘early entry,’ the antitrust problem was that, as the [Actavis] Court
17
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 18 of 35
1
inferred, entry might have been earlier, and/or the risk of competition not eliminated, had the
2
reverse payment not been tendered.”).
3
To the extent Plaintiffs assert that an entry date prior to patent expiration is not dispositive,
4
the Court agrees. But that does not mean that a defendant therefore cannot claim as a
5
procompetitive benefit entry before the patent expiration date. It is up to Plaintiffs to show that
6
the entry date agreed to by Defendants is later than it should have been. That is a matter for the
7
jury to decide.
8
4.
United States District Court
Northern District of California
9
Procompetitive Benefit of Broad License Given to Teva Under the Settlement
Agreement)
10
Plaintiffs also argue that Defendants will try to claim, as a procompetitive benefit of the
11
settlement agreement, that Teva was given a broad license to use the FTC patents – e.g., so that
12
Teva could make new FTC products. As an initial matter, Plaintiffs dispute that Teva was in fact
13
given such a broad license. That was the subject of the Daubert motion challenging Defendants’
14
expert Dr. Saravia. See Docket No. 1404-3 (motion); see also Mot. at 5 n.1. The Court found that
15
there was ambiguity as to the scope of Teva’s license such that extrinsic evidence on the matter
16
would need to be considered.
17
But putting that aside, Plaintiffs contend that Defendants cannot invoke the procompetitive
18
effects of the alleged broad license because “Gilead’s reverse payment to Teva cannot be
19
explained by its further grant of license benefits.” Mot. at 5 (emphasis added). But this seems to
20
misread Defendants’ position. Defendants are not relying on the broad license to justify the
21
reverse payment (rather, they are contending that the broad license was another benefit given to
22
Teva).
23
Plaintiffs protest still that “any procompetitive benefits of the broad license are not
24
cognizable because they do not flow from the restraint.” Mot. at 5. But the alleged restraint here
25
is Teva’s agreement to delay entry into the market. In exchange for delay, Teva was given
26
multiple benefits – i.e., not just the reverse payment but also the broad license. So there is an
27
asserted tie between the restraint and the license that Teva was given to make FTC products.
28
Again, this raises a factual issue for the jury.
18
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 19 of 35
1
This part of the motion in limine is DENIED.
2
5.
3
Plaintiffs contend that both Gilead and Teva should be precluded from arguing that the
Procompetitive Benefit of Averting Risk
4
reverse payment was justified “because Gilead or Teva [was] risk averse or the payment allowed
5
[a] defendant[] to avoid the risk of litigation.” Mot. at 5. Plaintiffs maintain that Actavis bars such
6
an argument.
7
8
9
10
United States District Court
Northern District of California
11
The Supreme Court [in Actavis] expressly rejected the idea that risk
aversion might justify a reverse payment: “The owner of a
particularly valuable patent might contend, of course, that even a
small risk of invalidity justifies a large payment. But, be that as it
may, the payment (if otherwise unexplained) likely seeks to prevent
the risk of competition. And, as we have said, that consequence
constitutes the relevant anticompetitive harm.” Actavis, 570 U.S. at
157.
12
Mot. at 4-5 (emphasis in original); see also Kelley Decl., Ex. F (Order at 5) (in In re Loestrin 24
13
Fe Antitrust Litigation, No. 13-md-2472 WES (D.R.I.), stating that “Defendants are permitted to
14
introduce evidence of business reasons for settlement, including the broad spectrum of costs and
15
expenses associated with litigation,” but “the jury will be instructed, as directed by Actavis, that
16
settlement to avoid the specific risk of a finding of patent invalidity may be anticompetitive”).
17
While Gilead cannot assert litigation risk as a means of justifying a large payment –
18
specifically, the risk that, through litigation, its patents could be found invalid – Teva may claim
19
litigation risk as a reason to settle. See King Drug Co. of Florence, Inc. v. SmithKline Beecham
20
Corp., 791 F.3d 388, 404 (3d Cir. 2015) (“[T]he [Actavis] Court reasoned that ‘even a small risk
21
of invalidity’ may not justify a ‘large payment’ (presumably enabled by ‘patent-generated
22
monopoly profits’) that ‘likely seeks to prevent the risk of competition.’ And, the Court reiterated,
23
it is the prevention of that risk of competition – eliminating ‘the risk of patent invalidation or a
24
finding of noninfringement’ by ‘paying a challenger to stay out’ of the market (for longer than the
25
patent’s strength would otherwise allow) – that ‘constitutes the relevant anticompetitive harm,’
26
which must then be analyzed under the rule of reason.”); id. at 411 (“[T]he District Court thought
27
the no-AG agreement was ‘justified’ because, although the settlement amount was likely greater
28
than litigation costs, ‘the consideration which the parties exchanged in the settlement [wa]s
19
United States District Court
Northern District of California
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 20 of 35
1
reasonably related to the removal of the uncertainty created by the dispute.’ That conclusion is in
2
tension with Actavis in that, without proper justification, the brand cannot pay the generic simply
3
to eliminate the risk of competition.”); In re Namenda Direct Purchaser Antitrust Litig., 2019 U.S.
4
Dist. LEXIS 204827, at *28 (S.D.N.Y. Aug. 2, 2019) (“With respect to ‘litigation risk’ or ‘risk
5
aversion,’ Forest may offer evidence of its ostensible business reasons, including ‘business
6
uncertainty’ or ‘litigation risk,’ for settling the patent litigation. Actavis itself provides that a
7
reverse payment can be justified by ‘traditional settlement considerations, such as avoided
8
litigation costs,’ or ‘may amount to no more than a rough approximation of the litigation expenses
9
saved through the settlement.’”); id. at *29 (“[But] ‘litigation risk’ is very different from
10
‘competition risk,’ which the U.S. Supreme Court (accurately) has labeled the ‘relevant
11
anticompetitive harm’ in reverse payment cases such as these. By definition, ‘competition risk’
12
can never justify, ‘offset[],’ or ‘redeem[]’ the anticompetitive consequences of a reverse payment.
13
It is the very evil the antitrust laws seek to prevent.”); King Drug Co. of Florence v. Cephalon,
14
Inc., No. 2:06-cv-1797, 2015 U.S. Dist. LEXIS 135264, at *47 (E.D. Pa. Oct. 5, 2015) (“The
15
Actavis opinion supports the determination that a patent holder's litigation uncertainty cannot
16
justify a reverse payment.”); id. at *47-48 (“Although I conclude that evidence of Cephalon's
17
litigation uncertainty cannot be offered to explain or justify the terms of the settlement agreements
18
and the associated payments, this does not mean that other procompetitive justifications for the
19
reverse payment, such as ‘avoided litigation costs or fair value for services’ are inadmissible.
20
Actavis approves of these potential justifications because, unlike a patent-holder's avoidance of
21
litigation risk, they do not raise the same ‘concern that a patentee is using its monopoly profits to
22
avoid the risk of patent invalidation or a finding of noninfringement.’ [¶] My conclusion
23
regarding Cephalon's litigation uncertainty does not, however, extend to the Generic Defendants.
24
Unlike Cephalon, the litigation uncertainty that the Generic Defendants faced in the underlying
25
infringement litigation was the potential of the RE '516 patent being upheld as valid and infringed.
26
Thus, the ‘risk’ to be avoided for the Generic Defendants was being kept off of the market for the
27
duration of the RE '516 patent or owing money damages for an at-risk launch. As these
28
considerations do not implicate anticompetitive motivations, they may be introduced by the
20
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 21 of 35
1
Generic Defendants.”).
2
6.
3
Belief re Generic Entry
Finally, Plaintiffs argue that “defendants should be precluded from arguing to the jury that
4
5
the reverse payment was justified or procompetitive because Teva’s entry date was purportedly
6
earlier than its ‘expected date [based on its subjective beliefs].’” Mot. at 6.
Plaintiffs’ argument here is not entirely clear. To the extent Plaintiffs suggest evidence is
7
8
lacking that “the same settlement could not be reached without the reverse payment,” that is a
9
step-three inquiry under the rule of reason, not a step-two inquiry.
To the extent Plaintiffs argue that it is the brand manufacturer’s belief that is important
10
United States District Court
Northern District of California
Procompetitive Benefit of Actual Generic Entry Before Teva’s Alleged Subjective
11
here, and not the generic’s, because the brand is the one making the reverse payment, that is
12
somewhat beside the point since the generic should be able to argue that there was a
13
procompetitive effect since actual generic entry was earlier than what it believed it should be.
14
15
16
17
This part of the motion in limine is DENIED.
D.
MIL No. 4 (Docket No. 1632-6)
Plaintiffs’ fourth motion in limine relates to Defendants expert, Kathleen O’Malley, who is
a retired federal judge.
18
First, Plaintiffs ask that Ms. O’Malley not be referred to as “Judge” or “Your Honor”
19
because the jury would likely give her testimony undue weight as a result (and use of such an
20
honorific would also violate ethical rules applicable to judges). This is a reasonable request.
21
Defendants do not disagree. See Opp’n at 1 n.1. (indicating that Defendants would stipulate to
22
such). However, Defendants should still be able to ask Ms. O’Malley about her qualifications –
23
i.e., the fact that she was a federal judge. This is consistent with the district court’s ruling in In re
24
Namenda Indirect Purchaser Antitrust Litigation, No. 1:15-cv-6549 (CM) (RWL), 2022 U.S. Dist.
25
LEXIS 149561, at *7 (S.D.N.Y. Aug. 15, 2022):
26
27
28
Plaintiffs move in limine for an order prohibiting Defendants'
expert, Sue Robinson, from being referred to as Judge Robinson.
(See Docket No. 748). The rule in my courtroom is that there is
only one judge, and it is I. Therefore, the motion is granted; the
21
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 22 of 35
witness will be addressed as Ms. Robinson during her testimony.
However, the fact that she was at one time a judge is a basis for her
proffered expertise, and that fact will not be kept secret from the
jury; it will be revealed when her credentials are discussed at the
outset of her testimony, and it may come up in her answers to
specific questions. Nothing in this ruling is meant to suggest that
Ms. Robinson's prior career is irrelevant to her testimony; nothing
could be further from the truth.
1
2
3
4
5
6
Id. at *7.
To the extent Plaintiffs suggest that even going over Ms. O’Malley’s qualifications would
7
be prejudicial, any potential prejudice could be alleviated by the Court giving an instruction that
8
Ms. O’Malley’s testimony should be assessed the same as any other witness. Defendants note that
9
there is a Ninth Circuit model instruction that already addresses expert testimony:
10
United States District Court
Northern District of California
11
12
13
14
15
You [have heard] [are about to hear] testimony from [name] who
[testified] [will testify] to opinions and the reasons for [his] [her]
opinions. This opinion testimony is allowed, because of the
education or experience of this witness.
Such opinion testimony should be judged like any other testimony.
You may accept it or reject it, and give it as much weight as you
think it deserves, considering the witness’s education and
experience, the reasons given for the opinion, and all the other
evidence in the case.
16
9th Cir. Model Civil Jury Instruction No. 2.13. But Defendants fail to explain why it would be
17
prejudicial for them to have this instruction read at the time Ms. O’Malley testifies. The general
18
practice of the Court is to do so when requested.
19
Next, Plaintiffs request that Ms. O’Malley be barred from offering testimony about what
20
Judge Sullivan (the judge who presided over the FTC patent infringement trial) thought. Plaintiffs
21
argue this is improper state-of-mind testimony. This subject is already covered in one of
22
Plaintiffs’ motions in limine. See Docket No. 1402-3 (addressing state-of-mind testimony by
23
multiple defense experts, including Ms. O’Malley); cf. Docket No. 1398-3 (addressing state-of-
24
mind testimony by another defense expert, Mr. Berneman). The Court reiterates its guidance on
25
the issue: (1) an expert cannot speculate about what someone else thought; (2) he or she can testify
26
about what the factual record indicates; and (3) he or she can testify about what a rational person
27
or entity would do.
28
Finally, Plaintiffs ask that the Court preclude Ms. O’Malley from “opining on the
22
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 23 of 35
1
credibility of witnesses” – whether those who testified in the FTC patent infringement trial or
2
those who testified or will testify in this case (such as Plaintiffs’ expert Mr. Lentz). Mot. at 2. It
3
is undisputed that an expert cannot testify specifically to a witness’s credibility (i.e., that is a role
4
for the jury). Ms. O’Malley may testify about what the factual record indicates, and she may
5
challenge or otherwise criticize the opinions of Plaintiffs’ expert Mr. Lentz.
6
7
in part.
8
E.
9
10
United States District Court
Northern District of California
Accordingly, for the reasons stated above, the motion is GRANTED in part and DENIED
MIL No. 5 (Docket No. 1632-7)
Plaintiffs ask the Court to exclude language “disparaging” Plaintiffs or their burden under
the law. Plaintiffs have four specific requests which are addressed below.
11
1.
Request No. 1: But-for World
12
First, Plaintiffs ask that the Court bar Defendants from describing the but-for world “as
13
‘imaginary,’ ‘made up,’ ‘merely hypothetical’ or using any other disparaging or derogatory
14
characterization. Such characterizations improperly criticize the plaintiffs for undertaking the
15
analysis required by the law, mischaracterize the plaintiff’s burden of proof, and are highly
16
prejudicial.” Mot. at 1; see also Mot. at 2 (“It is precisely because of the defendants’ illegal
17
conduct that the litigants and the factfinder are left to hypothesize about what would have
18
happened absent that conduct.”).
19
This part of the motion is DENIED as it is essentially moot. As an initial matter,
20
Defendants expressly state in their opposition that they “do not intend to criticize Plaintiffs’
21
causation theory merely because it requires proof of a but-for world.” Opp’n at 1. Furthermore,
22
Defendants do not seem to assert that they want to use “disparaging” terms such as “imaginary.”
23
But see Mot. at 1 n.1 (noting that, in a different case “involving some of the same counsel
24
representing the defendants here, counsel argued to the jury that it should reject the alternative no-
25
payment benchmark that the plaintiffs used to demonstrate causation because it was ‘imaginary’”).
26
However, Defendants do assert that they should not be constrained from arguing that the
27
but-for world proposed by Plaintiffs is not supported or unreasonable: “Plaintiffs’ but-for world is
28
not immune from criticism simply because it is based on hypotheticals. The law is clear: courts
23
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 24 of 35
1
construct the but-for world not out of whole cloth, but as a matter of reasoned deviation from the
2
actual world.’” Opp’n at 1 (emphasis in original).
United States District Court
Northern District of California
3
Here, the Court agree with Defendants. That is, Defendants should be able to argue that
4
Plaintiffs’ but-for models are essentially “flawed.” Opp’n at 1; see also Opp’n at 2 (noting as an
5
example that Defendants will argue that Dr. McGuire’s models “are based on sheer speculation
6
and loaded with unreasonable assumptions about a large number of key variables”).
7
2.
Request No. 2: Generic Drugs v. Brand Drugs
8
Second, Plaintiffs ask that Defendants be barred from “(i) denigrating generic drugs and
9
generic drug makers, including the use of pejoratives such as ‘me too’ drugs, ‘piggy-backing’ or
10
‘free riders’ or . . . (ii) touting the quality or benefits of brand versions of drugs, including with
11
self-serving descriptors such as ‘innovator.’” Mot. at 4. Plaintiffs emphasize that generic drugs
12
are therapeutically equivalent to their counterpart brand drugs.
13
For this motion, the Court takes a practical approach. Calling generic drugs “me too”
14
drugs or “copycats” is pejorative. On the other hand, that does not mean that Defendants should
15
be barred from saying that generic drugs are “copies” of brand drugs and that, under the regulatory
16
scheme, generic drugs are allowed to “piggy back” or “free ride” on brand drugs. Notably, the
17
Supreme Court has even used the term “piggy back.” See FTC v. Actavis, Inc., 570 U.S. 136, 142
18
(2013) (noting that “[t]he Hatch-Waxman Act permits a generic manufacturer to file an
19
Abbreviated New Drug Application specifying that the generic has the ‘same active ingredients
20
as,’ and is ‘biologically equivalent’ to, the already-approved brand-name drug”; that, “[i]n this
21
way the generic manufacturer can obtain approval while avoiding the ‘costly and time-consuming
22
studies’ needed to obtain approval ‘for a pioneer drug’”; and that the act thereby “allow[s] the
23
generic to piggyback on the pioneer’s approval efforts,” which “‘speed[s] the introduction of low -
24
cost generic drugs to market’”). Similarly, Defendants should be able to claim “innovation” with
25
respect to brand drugs because innovation is why brand drugs are given patent protection and why
26
the R&D costs for brand drugs are significant. Using terms such as “piggy back” or “innovate”
27
does not suggest that generic drugs are not therapeutically equivalent to brand drugs, or that
28
generic drugs are otherwise inferior. See In re Loestrin 24 FE Antitrust Litig., No. MDL No.
24
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 25 of 35
1
2472, 2019 U.S. Dist. LEXIS 210600, at *30 (D.R.I. Dec. 6, 2019) (“Use of pejorative terms will
2
not be permitted; however, occasional use of terms like ‘innovation’ and ‘copycat’ are not
3
problematic in the proper context.”); see also Namenda, 2022 U.S. Dist. LEXIS 149561, at *7
4
(“Plaintiffs move in limine to bar Defendants from introducing evidence or argument denigrating
5
generic drugs or touting the qualify or benefits of brand drugs. The motion is denied for the
6
reasons articulated in Forest's brief in opposition thereto.”).
7
8
doctors and patients prefer brand drugs over generic drugs to help the jury understand why some
9
customers continue to purchase brand HIV drugs after generic entry and why brand companies do
10
United States District Court
Northern District of California
Finally, it is fair for Defendants to note they “must be free to explain to the jury why some
not always find it necessary to match generic pricing.” Opp’n at 4 (referring to brand loyalists).
11
This part of the motion is therefore GRANTED in part and DENIED in part.
12
3.
13
Plaintiffs ask that the Court bar Defendants from offering at trial argument or evidence
Request No. 3: Financial Condition of Plaintiffs
14
about “the relative wealth, financial condition, or size of the plaintiffs and/or absent class
15
members, individually or in the aggregate.” Mot. at 5. Plaintiffs argue that the information is not
16
relevant to any issues in this case and, even if it were, it would be unfairly prejudicial. (Some of
17
the indirect purchasers are large entities (e.g., TPPs including health plans) as are some of the
18
direct purchasers (e.g., Walgreens and CVS).)
19
Defendants have the better position. With respect to relevance, Defendants have
20
articulated a basis for such – i.e., “plaintiff’s size and financial condition can be relevant to that
21
party’s ability to influence prices [i.e., bargaining power] and thus to mitigate damages.” Opp’n at
22
6. The mitigation that Defendants are referring to here appears to be, e.g., rebates and discounts.
23
Defendants emphasize that Plaintiffs will characterize “Defendants as large pharmaceutical
24
companies with market power to set prices however they want,” but “Plaintiffs include some of
25
the biggest and most profitable companies in the country, which negotiated prices from a position
26
of strength, not weakness.” Opp’n at 7.
27
28
Notably, even one of the authorities cited by Plaintiffs actually favors Defendants. See In
re Namenda Direct Purchaser Antitrust Litig., No. 15 Civ. 7488 (CM), 2019 U.S. Dist. LEXIS
25
United States District Court
Northern District of California
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 26 of 35
1
204827, at *32 (S.D.N.Y. Aug. 2, 2019) (“Forest represents that it plans to use evidence of the
2
DPPs' size and financial condition . . . to argue that some larger class members successfully
3
mitigated damages by negotiating discounts and rebates. Forest concedes – as it must – that
4
information about the size or relative financial condition of the DPPs has no relevance to liability.
5
Accordingly, I GRANT the DPPs' motion with respect to the first phase of the trial (‘pay to delay’
6
liability). [¶] The issue of bargaining power, however, is relevant to damages. During the second
7
phase of the trial, which includes both ‘hard switch’ liability and overall damages, the jury can and
8
will be instructed about the limited relevance of the size and financial condition of the DPPs, and
9
will be reminded that their size does not mean they cannot be injured in an antitrust sense.”).
10
To the extent Plaintiffs raise the issue of unfair prejudice, the Court can ameliorate any
11
prejudice by giving an instruction (consistent with Namenda above) that evidence of financial
12
condition or size does not mean that a plaintiff cannot be injured per se but is relevant to the issue
13
of a plaintiff’s damages – i.e., the plaintiff’s bargaining power which would inform its ability to
14
negotiate discounts or rebates. The Court will give such an instruction if requested.
15
This part of the motion is DENIED.
16
4.
17
Plaintiffs ask the Court to preclude Defendants from referring to (1) unrelated lawsuits in
Request No. 4: Other Lawsuits or Investigations
18
which “[a] number of the named plaintiffs in this litigation have been parties to . .. , including
19
other antitrust lawsuits involving the delay of unrelated generic drugs,” and (2) unrelated
20
investigations or suits involving the named plaintiffs (e.g., “investigations into or lawsuits against
21
Humana related to formulary tiering of HIV drugs” and “investigations and lawsuits related to
22
Centene’s pharmacy benefit management practices”). Mot. at 7 & n.4. Plaintiffs argue that the
23
unrelated lawsuits are irrelevant and, even if they were relevant, Rule 403 still mandates exclusion
24
of the evidence.
25
This part of the motion is essentially moot and thus it is DENIED. In their opposition
26
brief, Defendants state that they “do not anticipate presenting evidence about other reverse
27
payment lawsuits involving named Plaintiffs or the other investigations or lawsuits listed in their
28
brief, unless Plaintiffs inject those issues into the case.” Opp’n at 7.
26
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 27 of 35
1
2
3
MIL No. 6 (Docket No. 1632-8)
In their final motion in limine, Plaintiffs move to exclude certain evidence related to their
injury and/or damages. There are four specific requests, each of which is addressed below.
4
1.
5
Plaintiffs ask first that Defendants be barred from offering evidence or argument that any
6
7
United States District Court
Northern District of California
F.
Request No. 1: Pass-On of Overcharge
Plaintiff “passed on” overcharges incurred as a result of Defendants’ conduct.
Plaintiffs are correct that, for direct purchasers, passing on is irrelevant for purposes of
8
federal antitrust law. See Ill. Brick Co. v. Ill., 431 U.S. 720, 724-25 (1977) (stating that “a direct
9
purchaser suing for treble damages under § 4 of the Clayton Act is injured within the meaning of §
10
4 by the full amount of the overcharge paid by it”; “the antitrust defendant is not permitted to
11
introduce evidence that indirect purchasers were in fact injured by the illegal overcharge,” i.e., the
12
overcharge was passed on to them). But this case also involves indirect purchasers who have sued
13
under state law. Defendants have pointed out that at least some states’ laws do allow for a
14
defendant to assert a pass-on defense against an indirect purchaser. See, e.g., D.C. Code § 28-
15
4509(b) (“In actions where both direct and indirect purchasers are involved, a defendant shall be
16
entitled to prove as a partial or complete defense to a claim for damages that the illegal overcharge
17
has been passed on to others who are themselves entitled to recover so as to avoid duplication of
18
recovery of damages.”); Neb. Rev. Stat. § 59-821.01(1) (“A defendant may prove, as a partial or
19
complete defense to a claim for damages under sections 59-801 to 59-831 and this section, that the
20
illegal overcharge or undercharge has been passed on to others who are themselves entitled to
21
recover so as to avoid duplication of recovery of such damages.”).
22
Plaintiffs suggest that, as to indirect purchasers, there should be no evidence of passing on
23
an overcharge. Plaintiffs emphasize that the indirect purchasers seeking damages are all TPPs
24
(e.g., health plans) who are at the very end of the distribution chain and do not resell drugs to
25
anyone else. The Court DEFERS ruling on this part of the motion because it is not clear whether
26
Defendants will argue that TPPs do pass on overcharges. See In re Lidoderm Antitrust Litig., No.
27
14-md-02521-WHO, 2018 U.S. Dist. LEXIS 227750, at *43 (N.D. Cal. Feb. 7, 2018) (indicating
28
that defendants argued TPPs were able to pass or recoup some of their damages “through raising
27
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 28 of 35
1
premium prices to members” of the health plans; “the Court has repeatedly denied EPPs’ motions
2
to exclude testimony from actuary John Fritz regarding how EPPs actually set premiums,” and
3
“Fritz’s opinions can be attacked at trial”). But see In re Lipitor Antitrust Litig., MDL No. 2332,
4
2020 U.S. Dist. LEXIS 173522 (D.N.J. Sep. 22, 2020) (stating that “our sister courts have
5
routinely found that insurance premiums are not relevant to a pass-on defense ‘because insurance
6
premiums are set by anticipating future projected costs, not to recover money that insurers paid in
7
the past’”). The Court will take oral argument on this part of the motion at the final pretrial
8
conference on April 10, 2023.
United States District Court
Northern District of California
9
The Court also defers ruling here because the issue of duplicative recovery would benefit
10
from oral argument. On the one hand, there is case law noting that “‘[s]tates . . . which have
11
repealed Illinois Brick and allowed indirect purchasers to sue for antitrust violations[] have
12
necessarily made the policy decision that duplicative recovery may occur. Duplicative recovery
13
is, in many if not all cases alleging a nationwide conspiracy with both direct and indirect purchaser
14
classes, a necessary consequence that flows from indirect purchaser recovery.’” In re Flash
15
Memory Antitrust Litig., 643 F. Supp. 2d 1133, 1156 (N.D. Cal. 2009); see also In re TFT-LCD
16
(Flat Panel) Antitrust Litig., No. C 11-5765, 2013 WL 257148, at *1 (N.D. Cal. Jan. 23, 2013).
17
On the other hand, Defendants have pointed to at least one state’s statute that indicates a payment
18
to a direct purchaser should be used as a set-off against a payment to an indirect purchaser so as to
19
avoid duplication of recovery. See Utah Code § 76-10-3109(6) (“In an action by indirect
20
purchasers, any damages or settlement amounts paid to direct purchasers for the same alleged
21
antitrust violations shall constitute a defense in the amount paid on a claim by indirect purchasers
22
under this chapter so as to avoid duplication of recovery of damages.”). Defendants have also
23
taken note of some state statutes that discuss the ability of a court to, e.g., apportion damages to
24
avoid duplication of recovery. See, e.g., D.C. Code § § 28-4509(c) (“In any case in which claims
25
are asserted by both direct purchasers and indirect purchasers, the court may transfer and
26
consolidate cases, apportion damages and delay disbursement of damages to avoid multiplicity of
27
suits and duplication of recovery of damages, and to obtain substantial fairness.”); Haw. Rev. Stat.
28
§ § 480-13(c)(5) (“In any lawsuit or lawsuits in which claims are asserted by both direct
28
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 29 of 35
1
purchasers and indirect purchasers, the court is authorized to exercise its discretion in the
2
apportionment of damages, and in the transfer and consolidation of cases to avoid the duplication
3
of the recovery of damages and the multiplicity of suits, and in other respects to obtain substantial
4
fairness.”); Neb. Rev. Stat. § 59-821.01 (“The court may transfer and consolidate such claims,
5
apportion damages, and delay disbursement of damages to avoid multiplicity of suits and
6
duplication of recovery of damages and to obtain substantial fairness.”).
United States District Court
Northern District of California
7
The parties may file supplemental briefs on these issues by March 28, 2023. Each brief
8
shall be no longer than ten (10) pages. If necessary, the parties should address the issues on a
9
state-by-state basis (if possible, whether states can be grouped).
10
2.
Request No. 2: Mitigation of Damages
11
Plaintiffs next ask the Court to exclude evidence related to any failure to mitigate damages
12
on their part. In particular, Plaintiffs want to bar Defendants from arguing that Plaintiffs could
13
have mitigated their damages by buying other drugs that were cheaper. See Mot. at 5. According
14
to Plaintiffs, “[D]efendants did not develop this issue in their expert report or otherwise, and so it
15
is waived. In any event, the failure to mitigate damages is not a defense to any of the plaintiffs’
16
claims” – i.e., “there is no ‘mitigation’ defense against damages arising from a horizontal
17
agreement restricting price or output, principally because victims of such a conspiracy have no
18
option of ‘finding another supplier’ for the product at issue.” Mot. at 4-5.
19
In their response, Defendants do not argue that a mitigation defense is viable or that they
20
did not waive a mitigation defense. Rather, they argue that Plaintiffs are trying to “use this motion
21
as a backdoor attempt to improperly exclude evidence that is directly relevant to” the question of
22
what is the relevant product market – i.e., what are economic substitutes for the drugs at issue.
23
Opp’n at 5; see also Opp’n at 6 (arguing that, “regardless of any questions about damage
24
mitigation, the clear relevance of the same evidence for defining the relevant market defeats any
25
attempt to exclude it”). See, e.g., Kelley Decl., Ex. M (in In re Solodyn, No. 14-md-02503-DJC
26
(D. Mass.) (denying plaintiffs’ motion to preclude failure-to-mitigate defense; “[i]t appears that
27
Plaintiffs are seeking to preclude evidence about Plaintiffs’ ability to purchase substitutes for
28
Solodyn or generic Solodyn” but “[i]t is not clear that this is mitigation evidence as opposed to an
29
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 30 of 35
1
2
Defendants’ point is well taken. Furthermore, there is some overlap here with Plaintiffs’
3
fifth motion in limine – i.e., where Defendants have argued that a plaintiff’s size and financial
4
condition can be relevant to their ability to influence prices, i.e., bargaining power (which is
5
relevant to damages since a plaintiff’s bargaining power would inform its ability to negotiate
6
discounts and rebates). As noted above, the Court will give an instruction if requested, informing
7
the jury that evidence of financial condition or size does not mean that a plaintiff cannot be injured
8
per se but is relevant to the issue of a plaintiff’s damages.
9
United States District Court
Northern District of California
issue about interchangeability as it bears about the relevant market here”).
This part of the motion is DENIED.
10
3.
Request No. 3: Large Damages Award
11
In their third request, Plaintiffs ask that the Court exclude evidence or argument that “a
12
large judgment will negatively impact their current businesses and the businesses of their
13
distributors or resellers, for example, by requiring the defendants to adjust their prices to
14
distributors or resellers of HIV medications.” Mot. at 5. Plaintiffs assert that such evidence is
15
both irrelevant and unfairly prejudicial.
16
In response, Defendants state that they “do not intend to introduce evidence or argument
17
about the effect of an adverse verdict in this case on them.” Opp’n at 6. However, they add that
18
their position would change if Plaintiffs were to open the door – e.g., “by suggesting that
19
Defendants are large companies that could easily absorb a large damage award, or by suggesting
20
that Defendants were so desperate for profits that they were incentivized to violate the antitrust
21
laws.” Opp’n at 6. The Court finds the motion moot in light of the above and therefore DENIES
22
Plaintiffs relief. The Court does not preclude Defendants from contending, during trial, that
23
Plaintiffs have opened the door to such evidence, although it is skeptical that an assertion by
24
Plaintiffs that “Defendants were so desperate for profits” that they violated the antitrust laws
25
would be enough to open the door.
Request No. 4: Treble Damages and Attorneys’ Fees and Costs
26
4.
27
Finally, Plaintiffs ask the Court to exclude evidence or argument that Plaintiffs are able to
28
recover treble damages and attorneys’ fees and costs under federal law. Plaintiffs maintain that
30
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 31 of 35
1
2
In response, Defendants state that they do not intend to refer to the recoverability of these
3
damages for the direct purchasers who have federal claims – “unless Plaintiffs somehow open the
4
door.” Opp’n at 7. However, Defendants argue that the situation is different for indirect
5
purchasers who have state law claims. According to Defendants, “[u]nder the laws of several
6
states, the jury determines whether to apply a damage multiplier, and potentially how large of a
7
multiplier it is. As a result, the issue must be presented to the jury – unless Plaintiffs waive their
8
rights to recover those categories of damages.” Opp’n at 7. Defendants point to the antitrust laws
9
of four states. (It is not clear if there are any others.)
10
United States District Court
Northern District of California
such evidence is irrelevant and unfairly prejudicial.
•
Arizona (Ariz. Rev. Stat. § 44-1401 et seq.). Section 44-1408(B) provides as
11
follows: “A person threatened with injury or injured in his business or property by
12
a violation of this article [the Uniform State Antitrust Act] may bring an action for
13
appropriate injunctive or other equitable relief, damages sustained and, as
14
determined by the court, taxable costs and reasonable attorney’s fees. If the trier of
15
fact finds that the violation is flagrant, it shall increase recovery to an amount not
16
in excess of three times the damages sustained.” Ariz. Rev. Stat. § 44-1408(B)
17
(emphasis added).
18
•
Michigan (Mich. Comp. Laws Ann. § 445.771 et seq.). Section 445.778(2) is
19
similar to the Arizona statute above. It provides: “Any other person threatened
20
with injury or injured directly or indirectly in his or her business or property by a
21
violation of this act may bring an action for appropriate injunctive or other
22
equitable relief against immediate irreparable harm, actual damages sustained by
23
reason of a violation of this act, and, as determined by the court, interest on the
24
damages from the date of the complaint, taxable costs, and reasonable attorney’s
25
fees. If the trier of fact finds that the violation is flagrant, it may increase recovery
26
to an amount not in excess of 3 times the actual damages sustained by reason of a
27
violation of this act.” Mich. Comp. Laws Ann. § 445.778(2) (emphasis added).
28
•
North Dakota (N.D. Cent. Code § 51-08.1-01 et seq.). Section 51-08.1-08(3) is
31
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 32 of 35
1
similar to the Arizona and Michigan statutes above. It provides: “A person
2
threatened with injury or injured in that person’s business or property by a violation
3
of this chapter may bring an action for appropriate injunctive or other equitable
4
relief, damages sustained and, as determined by the court, taxable costs and
5
reasonable attorney’s fees. If the trier of fact finds that the violation is flagrant, it
6
may increase recovery to an amount not in excess of three times the damages
7
sustained.” N.D. Cent. Code § 51-08.1-08(3) (emphasis added).
•
United States District Court
Northern District of California
8
New Mexico (N.M. Stat. Ann. § 57-1-1 et seq.). The New Mexico statute is
9
somewhat different, providing as follows: “[A]ny person threatened with injury or
10
injured in his business or property, directly or indirectly, by a violation of Section
11
57-1-1 or 57-1-2 NMSA 1978 may bring an action for appropriate injunctive relief,
12
up to threefold the damages sustained and costs and reasonable attorneys’ fees. If
13
the trier of fact finds that the facts so justify, damages may be awarded in an
14
amount less than that requested, but not less than the damages actually sustained.”
15
N.M. Stat. Ann. § 57-1-3(A).
16
In light of the above, Defendants’ position has merit. See also Namenda, 2022 U.S. Dist.
17
LEXIS 149561, at *19-20 (S.D.N.Y. Aug. 15, 2022) (“If there are claims brought under state laws
18
pursuant to which the jury enhances damages, then the jury must be allowed to know that it has
19
the right to enhance damages and be given an opportunity to enhance damages.”). The Court
20
therefore DENIES this part of the motion.
21
22
IV.
WITNESS LISTS & DEPOSITION DESIGNATIONS
Given the rulings that the Court has made on the motions in limine (including, e.g., its
23
ruling on Defendants’ MIL No. 1 which concerns TAF-related evidence and argument), the Court
24
expects that the parties will be able to significantly narrow their witness lists as well as their
25
deposition designations. (The parties need only focus on the reverse payment claims at this
26
juncture.)
27
By March 28, 2023, the parties shall file their revised witness lists. The lists shall:
28
32
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 33 of 35
1
•
state whether a witness will testify live or by deposition 6 ;
2
•
differentiate whom the parties expect to call (i.e., likely will call) and whom the
3
parties may call;
4
•
include summaries of the testimony that each witness is expected to provide; and
5
•
provide time estimates – i.e., how much time a witness is expected to testify on
United States District Court
Northern District of California
6
direct and cross.
7
The parties should meet and confer to see if they can reach agreement such that custodians of
8
record need not testify.
9
With respect to deposition designations, the Court expects revised designations and
10
objections to be filed by April 6, 2023. The Court’s expectation is that objections will be made in
11
good faith and only where there is a true objection to admissibility. Foundation-type objections
12
are not helpful unless there is a real concern – e.g., that a witness does not have even some limited
13
personal knowledge to provide testimony. The parties should also bear in mind that relevance is
14
not a high bar; comparatively, Rule 403 is (i.e., requiring that probative value be “substantially
15
outweighed”). The parties shall meet and confer to see if they can reach agreement on a special
16
master who will rule on objections. Plaintiffs and Defendants shall each pay for 50% of the cost
17
of the special master. The special master will track his or her time spent on objections and
18
determine how much of that time will be charged against each side’s trial time (with the
19
understanding that the party that “loses” on an objection will be charged).
20
V.
21
EXHIBIT LISTS, BELLWETHERS & WRITTEN DISCOVERY DESIGNATIONS
Given the rulings that the Court has made on the motions in limine (including, e.g., its
22
ruling on Defendants’ MIL No. 1 which concerns TAF-related evidence and argument), the Court
23
expects that the parties will be also be able to significantly narrow their exhibit lists and written
24
discovery designations. (The parties need only focus on the reverse payment claims at this
25
26
27
28
6
The parties should meet and confer so that they are on the same page. Although a party may
affirmatively use deposition testimony of a party-opponent witness even where the witness
testifies live, see Fed. R. Civ. P. 32(a)(1) (providing that, at a trial, a “deposition may be used
against a party” on certain conditions), the Court strongly encourages the parties to limit such use
of deposition testimony; instead, deposition testimony for live witnesses is better used for
impeachment purposes.
33
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 34 of 35
1
2
The Court expects revised exhibit lists and objections, as well as revised written discovery
3
designations and objections, to be filed by April 6, 2023. As above, Court’s expectation is that
4
objections will be made in good faith and only where there is a true objection to admissibility. For
5
exhibits, the parties should be able to stipulate to authenticity in most, if not all, instances. The
6
Court reserves the right to deduct trial time if it is forced to spend inordinate time on objections
7
(as above, the losing party will be charged).
8
9
10
11
United States District Court
Northern District of California
juncture.)
12
Because the exhibit lists will be revised, the Court shall allow the parties to identify new
bellwethers (15 per side) by April 6, 2023. The parties are permitted to reassert their original
bellwether designations.
VI.
VERDICT FORM
Defendants have raised an issue related to the verdict form (as well as jury instructions):
13
14
15
16
17
18
19
[T]he EPPs and IHPPs bring claims under the antitrust and
consumer protection laws of over 30 different states, and those
states’ laws have various procedural differences – including
different statutes of limitations (2-4 years), and different available
damages (i.e., single, double or treble damages, based on different
factual showings) – that may materially impact the calculation of
recoverable overcharges in any particular state. Plaintiffs’ jury
instructions and verdict form propose that the jury make only
aggregate damages findings, with no additional findings (such as
time or location) that would allow the parties to determine whether
and how the underlying state laws impact those aggregate findings.
20
Docket No. 1659 (St. at 3); see also Docket No. 1632-8 (Opp’n at 7 n.10) (Defendants stating that
21
they have asked Plaintiffs to “provide a proposed plan for managing the differing damages and
22
standards across the various states for which they have brought claims”; “if Plaintiffs continue to
23
pursue multiple damages state-by-state, a verdict form breaking out the individualized issues will
24
be necessary”). The Court asks the parties to be prepared to discuss this issue at the next final
25
pretrial conference on April 10, 2023. The Court also orders the parties to file supplemental briefs
26
on what the differences are among the states on statutes of limitation and enhanced damages. If
27
necessary, the parties should address these issues on a state-by-state basis (if possible, whether
28
states may be grouped). Supplemental briefs shall be filed by March 28, 2023. Each brief shall be
34
Case 3:19-cv-02573-EMC Document 1716 Filed 03/19/23 Page 35 of 35
1
no longer than ten (10) pages.
2
3
VII.
JURY INSTRUCTIONS
The Court has reviewed the parties’ proposed jury instructions and intends to give the
4
parties its own proposed version. The parties will have an opportunity to comment on the Court’s
5
proposed version. When commenting on the Court’s version, the parties should bear in mind that
6
the Court, for the most part, finds the parties’ proposals problematic because they are, quite
7
simply, too long and detailed. They provide too much information – often overly one-sided and
8
repetitive – and it will be too much for the jury to process.
9
10
IT IS SO ORDERED.
United States District Court
Northern District of California
11
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Dated: March 19, 2023
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______________________________________
EDWARD M. CHEN
United States District Judge
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