Mylan Inc. et al v. Analysis Group, Inc.
Filing
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MEMORANDUM AND ORDER granting in part and denying in part 2 Mylan Inc. and Mylan Specialty L.P.'s Motion to Compel Compliance with Subpoena Directed to Analysis Group, Inc. The motion is granted insofar as Analysis Group, Inc. shall produce d ocuments responsive to Request No. 1, but is denied in all other respects. Analysis Group, Inc. shall produce documents responsive to the subpoena within 21 days of the date of this order, and if it intends to pursue its request for costs, shall submit an appropriate affidavit with supporting documents no later than 10 business days after it has fully complied with this order. Signed by Magistrate Judge Teresa J. James on 8/27/2018. (ts)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
MYLAN INC., et al.,
Plaintiffs,
v.
ANALYSIS GROUP, INC.,
Defendant.
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Case No. 18-mc-209-DDC-TJJ
MEMORANDUM AND ORDER
This matter is before the Court on Mylan Inc. and Mylan Specialty L.P.’s Motion to
Compel Compliance with Subpoena Directed to Analysis Group, Inc. (ECF No. 2). Mylan Inc.
and Mylan Specialty L.P. (“Mylan”) seek an order requiring non-party Analysis Group, Inc.
(“AG”) to produce additional documents responsive to Mylan’s subpoena served pursuant to
Fed. R. Civ. P. 45.1 AG opposes the motion. As set forth below, the Court will grant Mylan’s
motion in part and deny it in part.
I.
Relevant Background
On February 1, 2018, Mylan served a subpoena on AG pursuant to Fed. R. Civ. P. 45.2
On February 16, 2018, AG’s in-house counsel requested and Mylan agreed to a 30-day extension
of time to respond to the subpoena. AG timely served its objections and responses and produced
1
Mylan filed the motion in the District of Massachusetts, where its filing also included a motion
to transfer the matter to this district. Mylan Inc. v. Analysis Group, Inc., Case No. 1:18-mc91153. Mylan’s motion to transfer was granted and the case was docketed in this court on April
24, 2018 (ECF No. 7).
2
ECF No. 3-3.
responsive documents. Counsel thereafter exchanged emails and on March 29, 2018, they spoke
by telephone to confer about matters Mylan had indicated it wanted to discuss. Counsel
continued to communicate electronically but resolved nothing other than that AG agreed to
provide metadata underlying materials it had produced for use by Mylan’s experts.3 AG did not
agree to Mylan filing a motion to compel in this district, so Mylan filed the motion in the District
of Massachusetts. Ultimately, the motion was transferred to this district.
Mylan’s and AG’s counsel have communicated at length regarding their clients’
respective positions on the subpoena. The Court finds they have complied with the requirements
of D. Kan. R. 37.2.
II.
Summary of the Parties’ Arguments
Mylan argues that AG (1) is improperly withholding documents responsive to Request
No. 1, (2) has not sufficiently explained efforts it undertook to search for documents responsive
to Request Nos. 2-16, and (3) improperly declines to produce documents other than those AG
received from or sent to Sanofi. Mylan also contends AG has posed boilerplate objections that
the Court should overrule.
AG contends it has complied with its obligations under Rule 45. According to AG,
Mylan has not established that the additional documents it seeks are relevant, and Mylan ignores
the protections afforded under the rule to AG’s expert and confidential information. AG contends
disclosure would cause injury which could be avoided if Mylan were to seek the documents from
Sanofi.
III.
3
Legal Standard
ECF No. 3-1.
2
In issuing a subpoena, a party must “take reasonable steps to avoid imposing undue
burden or expense on a person subject to the subpoena.”4 Non-parties responding to Rule 45
subpoenas generally receive heightened protection from discovery abuses.5
Federal Rule of Civil Procedure 45 governs both motions to compel compliance with and
motions to quash a subpoena served on a non-party. Under Rule 45(d)(2)(B), if the entity
commanded to produce documents serves written objections to the subpoena, the serving party
may seek compliance by filing a motion to compel production of the documents. If the nonparty wishes to challenge the subpoena, it does so by filing a motion to quash. Rule 45(d)(3) sets
forth circumstances under which a court must quash or modify a subpoena, including when the
subpoena “requires disclosure of privileged or other protected matter, if no exception or waiver
applies,” and when the subpoena “subjects a person to undue burden.”6 The rule also allows a
court discretion to quash or modify a subpoena that requires the disclosure of a “trade secret or
other confidential research, development, or commercial information,”7 or “an unretained
expert’s opinion or information that does not describe specific occurrences in dispute and results
from the expert’s study that was not requested by a party.”8
Resolution of a dispute regarding a Rule 45 subpoena involves the following shifting
4
Fed. R. Civ. P. 45(d)(1).
5
XPO Logistics Freight, Inc. v. YRC, Inc., No. 16-mc-224-CM-TJJ, 2016 WL 6996275, at *3
(D. Kan. Nov. 30, 2016) (citing Speed Trac Techs., Inc. v. Estes Exp. Lines, Inc., No. 08-212KHV, 2008 WL 2309011, at *2 (D. Kan. June 3, 2008)).
6
Fed. R. Civ. P. 45(d)(3)(A).
7
Fed. R. Civ. P. 45(d)(3)(B)(i).
8
Fed. R. Civ. P. 45(d)(3)(B)(ii).
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burdens:
The subpoenaing party must first show that its requests are relevant to its claims or
defenses, within the meaning of Federal Rule of Civil Procedure 26(b)(1). Next,
the burden shifts to the subpoenaed nonparty who must show that disclosure of the
information is protected under Rule 45(d)(3)(A) or (B). If the subpoenaed nonparty
claims the protections under Rule 45(d)(3)(B) or asserts that disclosure would
subject it to undue burden under Rule 45(d)(3)(A), it must show that disclosure will
cause it a 'clearly defined and serious injury.' City of St. Petersburg v. Total
Containment, Inc., Case No. 06-cv-20953, 2008 WL 1995298, at *2 (E.D. Pa. May
5, 2008) (undue burden under Rule 45(d)(3)(A)); In re Mushroom Direct Purchaser
Antitrust Litig., Case No. 06-cv-0620, 2012 WL 298480, at *5 (E.D. Pa. Jan. 31,
2012) (disclosure of trade secrets under Rule 45(d)(3)(b)(i)). 'This burden is
particularly heavy to support a motion to quash as contrasted to some more limited
protection such as a protective order.' Frank Brunckhorst Co. v. Ihm, Case No. 12cv-0217, 2012 WL 5250399, at * 4 (E.D. Pa. Oct. 23, 2012).9
Trade secrets and similar confidential information are not afforded absolute privilege.10
However, under Federal Rule of Civil Procedure 26, for good cause shown a court may “issue an
order to protect a party or person from annoyance, embarrassment, oppression, or undue burden
or expense,” including that “a trade secret or other confidential research, development, or
commercial information not be revealed or be revealed only in a specified way.”11 A person
seeking to resist disclosure must (1) establish that the information sought is a trade secret or
other confidential research, development, or commercial information, and (2) demonstrate that
its disclosure might be harmful.12 If these requirements are met, the burden shifts to the party
seeking discovery to establish that the disclosure of trade secrets is relevant and necessary to the
9
In re Domestic Drywall Antitrust Litig., 300 F.R.D. 234, 239 (E.D. Pa. 2014).
10
MGP Ingredients, Inc. v. Mars, Inc., 245 F.R.D. 497, 500 (D. Kan. 2007).
11
Fed. R. Civ. P. 26(c)(1).
12
MGP, 245 F.R.D. at 500.
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action.13 Finally, the court must balance the need for the trade secrets against the claim of injury
resulting from disclosure.14 If the requesting party demonstrates both relevancy and need, the
trade secrets should be disclosed unless they are privileged or the subpoenas are unreasonable,
oppressive, annoying, or embarrassing.15
IV.
Analysis
Mylan does not dispute that AG has produced documents responsive to Request No. 2, a
far-reaching request that calls on AG to produce “[a]ll documents that [AG] created, produced,
or prepared for Sanofi concerning the market that contains EAI Drug Devices.”16 Similarly, AG
does not dispute that it has not produced any documents in response to Request No. 1, which
seeks “[a]ll documents constituting or relating to any actual or potential contract, agreement,
proposal, negotiation, or commission of services between [AG] and Sanofi.”17 As for the
remaining fourteen requests, Mylan and AG agree that the responsive documents AG has
produced include only items that AG can determine it sent to or received from Sanofi. Mylan
thus calls upon the Court to rule that AG (1) must produce documents responsive to Request No.
1; (2) may not withhold documents concerning its work for Sanofi that it did not receive from or
send to Sanofi; and (3) must produce documents from a 2011 EAI pricing project for Sanofi or
13
Id.
14
Centurion Indust., Inc. v. Warren Steurer & Assocs.¸ 665 F.2d 323, 325 (10th Cir. 1981).
15
Id. at 326.
16
ECF No. 3-3 at 12.
17
Id.
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explain why it has not been able to locate the documents. Analysis of these issues begins with
examining the relevancy of Mylan’s requests.
A.
Relevancy
Mylan explains that it seeks discovery from AG to support its defense against Plaintiffs’
claims that Mylan unlawfully excluded Auvi-Q from the market. Mylan’s defense is that AuviQ failed because Sanofi was unable to compete on the merits, including price, and not because
Mylan offered rebates on the EpiPen conditioned on favorable formulary placement. Because
Sanofi had engaged AG, an economics consulting firm, to advise it on the competitive landscape
before entering the market, Mylan seeks information from AG that it believes will help prove
Sanofi’s alleged failure to compete on the merits. The Court finds that by producing documents
responsive to all but one of Mylan’s requests, AG acknowledges relevancy to the extent the
requests seek documents AG shared with Sanofi.
AG argues that the documents it produced – information, analyses, and recommendations
it shared with Sanofi in the course of AG’s work – will enable Mylan to achieve its stated goal of
challenging decisions Sanofi made in reliance on or contrary to AG’s consulting work. AG
contends that Sanofi could not have relied upon or ignored information and analyses it did not
receive, and that Mylan has not articulated any reason why information AG did not send to or
receive from Sanofi is relevant.
Mylan asserts its ability to evaluate the quality of AGI’s work for Sanofi depends in part
on reviewing the materials on which AGI relied in reaching its conclusions. In addition, Mylan
intends to use the information to learn what Sanofi’s own consultant understood in 2011 about
competition in the market, including the extent to which manufacturers used rebates to compete,
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because that bears on Plaintiffs’ claims that Mylan’s rebates were anticompetitive. The Court
finds that Mylan’s Request Nos. 3 to 16 seek relevant information.
AG’s argument regarding the relevancy of Request No. 1 is a bit different. AG has
resisted producing documents “constituting or relating to any actual or potential contract,
agreement, proposal, negotiation, or commission of services” between it and Sanofi, and faults
Mylan for failing to demonstrate that Mylan cannot obtain from Sanofi all documents relevant to
that request. The Court rejects AG’s characterization of Mylan’s burden. AG is not in a position
to know what Sanofi has produced or will produce, nor whether a particular document may differ
in version or have additions or omissions when coming from two different sources. Rule 45 does
not require a party to conduct party discovery before seeking information from third parties, and
relevancy analysis under Rule 26 does not distinguish between the two. Mylan’s Request No. 1
also seeks relevant information.
B.
Whether the documents are protected under Rule 45(d)(3)(B)
Having found the requested documents relevant, the burden now shifts to AG to show
that disclosure of the information is protected under Rule 45(d)(3)(B). AG argues that Mylan is
seeking documents protected by both subdivisions of the rule. The Court considers each in turn.
1.
Unretained expert information
First, AG contends that Mylan’s own description of the items it seeks acknowledges that
the subpoena calls for AG to disclose an unretained expert’s opinion or information that does not
describe specific occurrences in dispute and results from the expert’s study that was not
requested by a party.18 Information Mylan wants AG to produce includes internal deliberations,
18
See Fed. R. Civ. P. 45(d)(3)(B)(ii).
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communications, predictions, assessments, recommendations, research and analysis, projections,
estimations, draft advice, and analyses AG performed.19 The issue is whether these items
constitute facts relevant to Mylan’s defense, in which case they are not shielded from production,
or if instead they contain information resulting from AG’s study as an expert, disclosure of
which would cause injury to AG because it would be giving away its intellectual property for
free.20 Clearly any analysis AG performed for Sanofi would qualify as expert opinion that,
because Mylan has not paid for it, is unretained and protected by Rule 45.
Rule 45 allows but does not require the Court to quash the subpoena insofar as it seeks
unretained expert information. The rule provides two alternatives: modifying the subpoena21 or
ordering production under specified conditions if Mylan shows substantial need for the material
that cannot otherwise be met without undue hardship and ensures AG will be reasonably
compensated.22 As the Court considers these alternatives, two pertinent considerations emerge.
First, it is important to note that AG has produced documents responsive to Request Nos. 3 to 16,
described as follows by in-house counsel:
AG identified the relevant projects it had performed for Sanofi-Aventis (“Sanofi”),
interviewed the employees who had worked on those projects and still work at AG,
ascertained (with those employees’ assistance) the location of those materials
related to the analyses AG conducted for Sanofi that AG was able to confirm had
been prepared for and sent to or received from Sanofi and that remained in AG’s
possession, custody or control, and produced those materials to [Mylan].23
19
ECF No. 3 at 11, 12, 15, 16.
20
See United States ex rel. Willis v. SouthernCare, Case No. CV410-124, 2015 WL 5604367, at
*6-7 (S.D. Ga. Sept. 23, 2015).
21
Fed. R. Civ. P. 45(d)(3)(B).
22
Fed. R. Civ. P. 45(d)(3)(C).
23
ECF No. 3-8 at 2.
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Second, not every document request in the subpoena seeks information properly
classified as analysis. Request No. 1 asks AG to produce contracts, agreements, proposals,
negotiation, or commission of services between AG and Sanofi. Insofar as these documents
contain factual statements, they are not protected as expert information.
The Court finds Mylan has not demonstrated substantial need for AG’s expert
information beyond what AG has provided, i.e., materials AG produced to or obtained from
Sanofi related to the analyses AG conducted for Sanofi. Mylan argues that the fact-finder in this
case will need to assess the credibility and reliability of AG’s advice, which requires analysis of
AG’s underlying research, data, and methodology. The Court accepted the argument in
determining the threshold issue of relevancy. But if Mylan is correct in stating the fact-finder’s
task, the determination will begin by assessing Sanofi’s conduct and then comparing it to AG’s
advice. The credibility and reliability of that advice stems from what AG told Sanofi, and not
from any other analysis AG might have performed along the way but ultimately determined in its
expert judgment not to share with Sanofi. Sanofi’s business judgment cannot have been based
on information in AG’s files that AG did not share with Sanofi.
In sum, the Court finds that because Mylan has not shown substantial need for documents
responsive to Request Nos. 3 to 16 beyond those AG has produced and which are protected by
Rule 45, the Court will deny the motion to compel AG to produce additional documents in
response to those requests.
The factual statements called for by Request No. 1 are not protected as expert opinion
information. Accordingly, the Court must determine whether AG may withhold documents
responsive to this request as confidential.
2.
Confidential research, development, or commercial information
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AG also asserts that Mylan is asking for confidential research and commercial
information protected from disclosure under Rule 45(d)(3)(B)(i). Specifically, AG points to
Mylan’s request for the information AG considered in formulating its opinions and advice,
including all underlying data, research and materials that AG considered, as well as all the
materials that informed AG’s advice to Sanofi. AG states these materials were all generated
through its own research efforts and include data AG obtained from confidential sources and
from confidential surveys AG designed and performed. Disclosure would divulge AG’s
analytical methods and proprietary analysis, giving AG’s competitors a significant advantage in
bidding for, winning, and performing future work. To safeguard the confidentiality of such
information, AG requires its employees and affiliates to execute confidentiality agreements and
does not reveal the identity of confidential data sources to its own clients. 24
The Court has determined that AG will not be required to produce additional documents
in response to Request Nos. 3 to 16. But because the documents sought in Request No. 1 do not
share the same characteristics, the Court must also consider whether they deserve protection
under Rule 45(d)(3)(B)(i) as confidential information.
Documents that comprise trade secrets or other confidential research, development, or
commercial information include “information, which if disclosed would cause substantial
economic harm to the competitive position of the entity from whom the information was
obtained.”25 Based on AG’s representations, the Court accepts that the subpoena seeks
24
ECF No. 15-1 at 3.
25
Nostrum Pharmaceuticals, LLC v. Dixit, No. 15-mc-218-JWL-GLR, 2015 WL 6828182, at *2
(D. Kan. Nov. 6, 2015) (quoting In re S3 LTD, 242 B.R. 872, 876 (Bank. E.D. Va. 1999)).
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confidential information and that disclosure might be harmful to AG.26 The Court already has
determined the relevancy of the requested information.27 But because trade secrets and other
similar confidential information do not enjoy absolute privilege, the Court must balance the need
for the trade secrets against the claim of injury resulting from disclosure.28 And while the Court
is sensitive to the fact that the burden falls on a non-party, the Court concludes that Mylan’s need
outweighs the burden of disclosure. Moreover, the safeguard contemplated by Rule 26 to protect
AG is in place in the form of the Third Amended Stipulated Protective Order, which specifically
includes documents and information obtained from third parties.29 Under the protective order,
AG’s competitors will not have access to AG’s documents, and AG may designate a level of
confidentiality that provides additional protection. Accordingly, the Court rejects AG’s argument
that the requested documents are shielded from discovery by virtue of Rule 45(d)(3)(B)(i).30
V.
Documents from 2011 EAI Pricing Project
Mylan argues the Court should compel AG to produce materials from a 2011 EAI pricing
project or explain why it has been unable to locate those documents. Regarding production, no
unique characteristics apply which require separate analysis; the Court’s rulings herein apply.
26
See MGP Ingredients, Inc. v. Mars, Inc., 245 F.R.D. 497, 500 (D. Kan. 2007).
27
See id.
28
Centurion Indust., Inc. v. Warren Steurer & Assocs.¸ 665 F.2d 323, 325 (10th Cir. 1981).
29
ECF No. 556 ¶15.
30
Mylan argues that the Court should overrule AG’s other objections as boilerplate, meaning
they preserve nothing and waste the time and resources of the court and the parties. AG does not
defend the objections. The additional objections lack substance and the Court rejects them.
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Mylan argues the Court should compel AG to provide the details of the search it
conducted so that Mylan can determine whether AG conducted a reasonable search for
documents. In her affidavit, AG’s in-house counsel details her efforts to locate the documents,31
which the Court accepts. Other than to muse about AG’s document preservation policy, Mylan
does not suggest any reason to suspect AG and its counsel have failed in their obligations.32
Absent a compelling reason, the Court declines to act on Mylan’s suggestion. The Court’s order
with respect to Request Nos. 3 to 16 applies equally to documents related to the 2011 EAI
Pricing Project.
VI.
Costs
AG asks the Court to order Mylan to pay the costs of compliance if the Court grants the
motion to compel. AG has submitted the affidavit of in-house counsel showing the number of
hours it has expended to date in responding to Mylan’s subpoena, and stating more will be
required if the Court grants Mylan’s motion. The Court is cognizant that compliance with the
subpoena requires AG to search for a variety of information. The Court’s policy is to deny costshifting in the absence of evidence sufficient to demonstrate that compliance will impose undue
expense on the producing party. “[T]he court will not deny a party access to relevant discovery
because compliance inconveniences a nonparty or subjects it to some expense.”33 In this
instance, because AG has provided detailed information describing the precise burdens and costs
31
ECF No. 15-1 at 2.
32
AG is not a party to this litigation, and therefore has been under no obligation to preserve
documents for production to a party.
33
Booth v. Davis, No. 10-4010, 2011 WL 2008284, at *7 (D. Kan. May 23, 2011) (citing EEOC
v. Citicorp Diners Club, Inc., 985 F.2d 1036, 1040 (10th Cir. 1993)).
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it will incur to which Mylan offers no rejoinder except to opine that minimal additional work
would be required to produce more documents, the Court finds it appropriate for Mylan to share
in the cost of production. However, the Court will hold in abeyance its ruling on costs until AG
has complied with this order and has submitted an affidavit setting forth the time and expense it
has incurred in responding to the subpoena.
IT IS HEREBY ORDERED that Mylan Inc. and Mylan Specialty L.P.’s Motion to
Compel Compliance with Subpoena Directed to Analysis Group, Inc. (ECF No. 2) is granted in
part and denied in part as described herein. The motion is granted insofar as AG shall produce
documents responsive to Request No. 1. The motion is denied in all other respects. AG shall
produce documents responsive to the subpoena within 21 days of the date of this order.
IT IS FURTHER ORDERED that if AG intends to pursue its request for costs in
connection with responding to the subpoena, it shall submit an appropriate affidavit with
supporting documents no later than 10 business days after it has fully complied with this order.
IT IS SO ORDERED.
Dated this 27th day of August, 2018 in Kansas City, Kansas.
Teresa J. James
U. S. Magistrate Judge
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