Dietrick v. Bayer Healthcare Pharmaceuticals, Inc. et al
Filing
10
ORDER denying 7 Motion Petition the FDA. Signed by Chief Judge David R. Herndon on 11/11/2011. (dsw)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF ILLINOIS
IN RE: YASMIN AND YAZ
(DROSPIRENONE) MARKETING, SALES
PRACTICES AND PRODUCTS LIABILITY
LITIGATION
This Document Relates to:
3:09-md-02100-DRHPMF
MDL No. 2100
Judge David R. Herndon
ALL CASES
CASE MANAGEMENT ORDER 45
Herndon, Chief Judge
Pending before the Court is plaintiff Kaitlyn Dietrick’s motion for authority
to petition the FDA and its advisory committee by presenting key “protected”
documents concerning public health issues regarding drospirenone-containing
oral contraceptives (Doc. 2051).
Plaintiff, through the Plaintiffs’ Steering
Committee (PSC), requests the Court, pursuant to the First Amendment, to dedesignate documents previously held confidential pursuant to the Protective
Order (CMO 7) (Doc. 291).
Defendant Bayer responds contesting not plaintiff’s right to petition the
government, but the use of confidential documents in her petition (Doc. 2079).
Plaintiff seeks de-designation of 58 documents (Doc. 2069) (filed under seal).
Defendant agrees to de-designate ten of the subject documents (Doc. 2069, Bayer
Addendum Items 8, 10, 12, 14, 31, 44, 48, 52, 54, and 55) (filed under seal).
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Thus, 48 documents are at issue. For the following reasons, the Court DENIES
plaintiff’s motion. To consider the subject documents in Doc. 2069, the Court
grants the Motion to Supplement found at Doc. 2068.
ARGUMENT AND APPLICATION
1. Plaintiff has no 1st Amendment Right to Disseminate Confidential
Information Obtained Through Discovery and not Otherwise Filed With
the Court
a. Protective Orders Entered Pursuant to 26(c) are not Subject to
Strict Scrutiny
Plaintiff argues the important right bestowed upon every United States
citizen to “petition the Government for a redress of grievances,” allows her the
right to present confidential documents, obtained solely through discovery in
these proceedings, to the FDA Advisory Committee (Doc. 2051, pp. 4-8) (citing
U.S. Const. amend. I). Defendant contends plaintiff is free to exercise her right to
petition the government through presenting documents to the FDA Advisory
Committee. However, she may not do so with the subject confidential documents
without compromising the integrity of the instant discovery process as well as the
controlling German privacy laws. More importantly, defendant argues, the fact
the pertinent confidential documents are designated confidential to avoid a
German law conflict, does not violate plaintiff’s First Amendment rights (Doc.
2079, p. 5). The Court finds defendant’s reasoning controlling.
Litigants do not have an unfettered First Amendment right to disseminate
documents obtained through the discovery process. See Seattle Times Co. v.
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Rhinehart, 467 U.S. 20 (1984). In Seattle Times, the Supreme Court held in
addressing whether the subject protective order, limiting dissemination of
information obtained solely through the discovery process, offended the First
Amendment required consideration of, “whether the ‘practice in question
[furthers] an important or substantial government interest unrelated to the
suppression of expression’ and whether the ‘limitation of First Amendment
freedom [is] no greater than is necessary or essential to the protection of the
particular governmental interest involved.’”
Id. at 20-21. The Supreme Court
further explained, “[a] litigant has no First Amendment right of access to
information made available only for purposes of trying his suit. Furthermore,
restraints placed on discovered information are not a restriction on a traditionally
public source of information.” Id. at 21. Thus, “Rule 26(c) furthers a substantial
governmental interest unrelated to the suppression of expression,” as “[l]iberal
pretrial discovery” rules have a “significant potential for abuse.”Id. Thus, the use
of protective orders does not violate the First Amendment. Id.
Significant
to
the
instant
dispute,
the
Supreme
Court
based
its
determination on the privacy and reputational rights of the subject individuals of
the underlying documents. Therefore, as the trial court entered the subject
protective order upon a showing of “good cause” pursuant to Rule 26(c), the order
was limited solely to the context of pretrial civil discovery, and the order did not
restrict dissemination of information obtained through other sources, the
Supreme Court held it did not violate the First Amendment. Id. Thus, Seattle
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Times demonstrates protective orders are not subject to the same“ exacting First
Amendment scrutiny” as a “classic prior restraint.” Id. at 34. As such, they are
not subject to strict scrutiny; provided “good cause” pursuant to 26(c) supports
the protective order, it is valid under the First Amendment.
Notably, as the
Seventh Circuit has reiterated, the public’s presumptive right of access to
discovery materials does not apply when the parties have not filed the subject
documents with the court.
Bond v. Utreras, 585 F.3d 1061, 1073 (7th Cir.
2009).
Plaintiff gained access to the disputed documents solely through the
discovery process. The documents are not filed with the Court. Further, plaintiff
is not restricted from disseminating the subject information if obtained through
other means. Therefore, based on the holdings of Seattle Times and Bond, the
Court finds preservation of CMO 7 will not violate plaintiff’s First Amendment
right to petition the government provided defendant makes the requisite showing
of “good cause” pursuant to 26(c).
b. Relevance of German Law Does not Change Applicable First
Amendment Level of Scrutiny
Plaintiff further argues application of the German privacy laws at issue
violates her First Amendment rights as preservation of the documents’
confidential status acts as a prior restraint on speech (See Doc. 2068).
As
previously explained, Rule 26(c) protective orders are not prior restraints on First
Amendment rights. See Seattle Times, 467 U.S. at 34. Further, the principle of
comity requires the Court to recognize the relevant German privacy laws at issue.
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See Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for the So. Dist.
of Iowa, 482 U.S. 522, 546 (1987). Moreover, despite application of German
privacy law to the instant dispute, provided defendant demonstrates “good cause”
for confidentiality of the subject documents under Rule 26(c), whether based on
privacy rights, trade secrets, or intellectual property, the protective order is valid
and does not violate the First Amendment. See Seattle Times, 467 U.S. at 21.
2. Defendant has Made Required Showing of “Good Cause” Under Rule
26(c) Requiring Preservation of Documents’ Confidential Status
FEDERAL RULE OF CIVIL PROCEDURE 26(c) provides, “[t]he court may, for good
cause, issue an order to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense.” Rule 26(c) specifically
holds a court may issue an order “requiring that a trade secret or other
confidential research, development, or commercial information not be revealed or
be revealed only in a specified way.”
FED.R.CIV.P. 26(c)(1)(G).
Moreover,
“although Rule 26(c) contains no specific reference to privacy or other rights or
interests that may be implicated, such matters are implicit in the broad purpose
and language of the Rule.” Seattle Times, 467 U.S. at 38 n. 21. The Court finds
defendant has met its burden of proving “good cause” exists to preserve the
confidential status of the documents at issue.
a. Documents Require Confidential Status Pursuant to German
Privacy Laws
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The Court finds application of the German Federal Data Protection Act
(BDSG) demonstrates “good cause” under Rule 26(c) as to twenty-eight of the
subject documents. The BDSG applies as the processing of the personal data at
issue took place in Germany. Thus, the participants expected, rightfully so, that
German law would dictate the use of their personal data. CMO 7 § II.B dictates
German entities may designate as confidential documents containing “personal
data” pursuant to the BDSG (Doc. 291, p. 3). The Court finds defendant has
made a particularized showing that twenty-eight of the confidential documents at
issue contain “personal data” pursuant to the BDSG.
As defendant explains, the BDSB presumptively prohibits the “collection,
processing and use of personal data . . . to achieve a maximum degree of
protection” (Doc. 2079, p. 14) (citing Doc. 2079, Ex. 2, ¶ 11). Further, the BDSG
broadly defines “personal data” as “any information concerning the personal or
material circumstances of an identified or identifiable individual.”
Id. at ¶ 13.
Moreover, defendant states, “[t]he BDSG applies to personal data processed in
Germany regardless of the nationality, citizenship, or domicile of the individual to
whom the information pertains” (Doc. 2079, p. 14) (citing Doc. 2079, Ex. 2, ¶ 8).
After consulting with Dr. Henning Moelle, German attorney-at-law,
defendant contends twenty-eight of the confidential documents contain “personal
data” as defined under the BDSG as they “include names, job titles, phone
numbers, email addresses, or other personal data for literally hundreds of
individuals, and thus concern the ‘personal or material circumstances of an
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identified or identifiable individual’” (Doc. 2079, p. 16) (citing Doc. 2079, Ex. 2, ¶
19).
Generally, the BDSG prohibits transfer of personal data to any jurisdiction
that does not provide data protection rules functionally equivalent to the E.U.
According to German and E.U. lawmakers, this includes the U.S. (Doc. 2079, p.
17) (citing Doc. 2079, Ex. 2, ¶ 21). Defendant concedes an exception exists as the
BDSG allows transfer of “personal data” outside the E.U. for purposes of litigation
(Doc. 2079, p. 17) (citing Doc. 2079, Ex. 2, ¶ 22 (citing BDSG § 4c(1)(4))).
Plaintiff cites this exception as allowing unfettered transfer of the confidential
documents (Doc. 2068, p. 10). However, defendant explains in detail that this
limited exception does not abrogate the need for either 1) consent of the data
subject, or 2) some other provision of the BDSG permitting such transfer,
processing, or use(Doc. 2079, p. 17) (citing Doc. 2079, Ex. 2, ¶ 24).
Defendant contends the confidentiality allowed under CMO 7 facilitated
defendant’s production of over twenty-two million pages of documents containing
personal data from many thousands of subjects (Doc. 291). Obviously, obtaining
the consent of all the participants is out of the question. Further, defendant
contends obtaining consent of the subjects connected to the twenty-eight
documents currently at issue would require contact with hundreds of employees,
former employees, and individuals generally unknown to defendant (Doc. 2079, p.
18) (citing Doc. 2079, Ex. 2, ¶ 27). Moreover, defendant admits other provisions
of the BDSG do permit transfer.
However, these provisions require the
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documents maintain their confidential status (Doc. 2079, pp. 18-19) (citing Doc.
2079, Ex. 2, ¶¶ 28-33).
The Court finds the BDSG dictates the relevant expectations of privacy of
the confidential documents’ underlying subjects. Defendant has demonstrated the
BDSG does not allow for dissemination of the subjects’ “personal data” without
consent or pursuant to some other provision of the BDSG. Defendant has further
demonstrated it is not practicable, or perhaps possible, to obtain the subjects’
consent. Moreover, defendant has adequately shown that no other provision of
the BDSG allows for relief from the CMO 7. As stated previously, privacy interests
are implicitly encompassed within the “good cause” showing under Rule 26(c).See
Seattle Times, 467 U.S. at 38 n. 21. Defendant has adequately shown CMO 7 is
the only means available to uphold the privacy interests of the confidential
documents’ subjects. Thus, the Court finds defendant has demonstrated “good
cause” for upholding CMO 7 based on the relevant privacy interests of the
documents’ subjects.
b. The Remaining Documents Constitute Trade Secrets
Intellectual Property Requiring Confidential Status
and
i. Trade Secrets
Under Rule 26(c), a showing that particular information amounts to a trade
secret such that a disclosure may place the holder at a completive advantage
constitutes “good cause.” Jamsport Entm’t, LLC v. Paradama Prods., Inc., No.
02-2298, 2005 WL 14917, at *2 (N.D. Ill. Jan. 3, 2005). The Illinois Trade Secret
Act provides relevant guidance to the Court. It defines a trade secret as:
Page 8 of 12
[I]nformation, including but not limited to, technical or non-technical
data, a formula, pattern, compilation, program, device, method,
technique, drawing, process, financial data, or list of actual or
potential customers or suppliers, that:
(1) is sufficiently secret to derive economic value, actual
or potential, from not being generally known to other
persons who can obtain economic value from its
disclosure or use; and
(2) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy or confidentiality.
765 ILCS 1065/2(d); see also Hal Wagner Studios, Inc. v. Elliott, No. 09-0031,
2009 WL 854676, at *3-5 (S.D. Ill. Mar. 30, 2009).
a. Nonpublic Corporate Product Research
Defendant contends documents for which plaintiff seeks de-designation
constitute “non-public research reports related to Yaz or other Bayer products”
(Doc. 2079, p. 22-23). Specifically, defendant contends these documents contain
“confidential trade secrets as they include technical and non-technical data and/or
compilation data” (Doc. 2079, p. 23). Defendant explains at length the need to
maintain the confidential status of these documents as they “contain highly
sensitive information” of great value to defendant’s research and development
(Doc. 2079, p. 23-24).
Defendant states this information could prove highly
valuable to its competitors if made public. These reports are not published nor
disseminated outside of defendant’s business. Defendant asserts to the extent it
has provided these documents to outside entities, such as the FDA, these
regulators have agreed to their continuing confidentiality (Doc. 2079, pp. 24-25).
The information contained in these documents has cost defendant “hundreds of
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thousands, if not millions, of dollars” to produce(Doc. 2079, p. 35). Thus, the
Court finds defendant has made the requisite showing of “good cause” to
demonstrate
dissemination
these
documents
would
prove
constitute
trade
economically
secrets
advantageous
such
to
that
their
defendant’s
competitors. Thus, the Court preserves the confidentiality CMO 7 provides these
documents.
b. Marketing Related Materials
Plaintiff seeks de-designation of documents defendant claims generally
constitute marketing materials.
The documents at issue contain “observations
and guidance from external healthcare providers,” “minutes of the Global Brand
Team discussing marketing strategy and planning,” “discussions of factors
relating to marketing development and growth,” and “a report on trends in the
development and marketing of oral contraceptives” (Doc. 2079, p. 26) (citing Doc.
2079, Ex. C ¶ 12; Ex. D ¶ 11).
The Seventh Circuit has held customer lists and customer information
constitute trade secrets. Am. Family Mut. Ins. Co. v. Roth, 485 F.3d 930, 933
(7th Cir. 2007).
Moreover, non-public marketing plans are confidential
information, properly subjected to protective orders. See Kimberly-Clark Corp. v.
Tyco Healthcare Retail Group, Inc. No. 05-0985, 2006 WL 6652868, at *1-2
(E.D. Wis. Apr. 6, 2006).
The Court finds the documents at issue represent
substantial investments of defendant.
publicly available.
Investments defendant does not make
Further, these documents represent “list[s] of actual or
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potential customer or suppliers,” “compilation[s],” and “process[es]” subject to a
proper protective order. See 765 ILCS 1065/2(d).
As these documents would
prove highly valuable to defendant’s competitors, represent a large monetary
investment of defendant, and are otherwise non-public, the Court finds defendant
has demonstrated “good cause” for preservation of CMO 7 as to these documents.
c. Documents Revealing Intellectual Property are Subject to
Confidentiality Protection
Plaintiff seeks de-designation of documents defendant contends are
“unpublished intellectual property of third parties, and therefore must be
maintained as confidential” (Doc. 2079, p. 28).
On many of the relevant
documents, defendant contends the authors have designated their confidential
status through a stamp or other marker (Doc. 2079, p. 28).
Intellectual property is a proper basis for a protective order. See Sanimax
AGS v. Gulf Hydrocarbon, Inc., No. 09-37, 2010 WL 2560032, at *1-2 (S.D. Ind.
June 23, 2010); McManaway v. KBR, Inc., No. 08-186, 2009 WL 807641, at *1
(S.D. Ind. Mar. 25, 2009).
Defendant has sufficiently demonstrated the
documents constitute intellectual property. Thus, the Court finds defendant has
demonstrated “good cause” for preservation of CMO 7 as to the subject
documents.
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Conclusion
For the foregoing reasons, the Court DENIES plaintiff’s motion (Doc.
2051). The plaintiff’s motion at Doc. 2068 was granted in order to consider the
subject documents in 2069, which was inappropriately tagged as a motion.
Therefore, to the extent defendant has not otherwise stipulated, the subject
documents’ status as confidential under CMO 7 is preserved.
IT IS HEREBY ORDERED that plaintiff is not granted relief from
CMO 7 except to the extent defendant stipulates.
IT IS SO ORDERED.
Signed this 10th day of November, 2011.
David R.
Herndon
2011.11.10
17:57:40 -06'00'
Chief Judge
United States District Court
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