Momenta Pharmaceuticals, Inc. et al v. Amphastar Pharmaceuticals, Inc. et al
Filing
582
Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER: "In accordance with the foregoing, defendants' objections to the Memorandum and Order entered at Docket No. 517 are OVERRULED. So ordered."(Moore, Kellyann)
United States District Court
District of Massachusetts
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Plaintiffs,
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v.
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AMPHASTAR PHARMACEUTICALS, INC., )
INTERNATIONAL MEDICATION
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SYSTEMS, LTD., ACTAVIS, INC. AND )
WATSON PHARMA, INC.,
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Defendants.
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MOMENTA PHARMACEUTICALS, INC.
AND SANDOZ INC.,
Civil Action No.
11-11681-NMG
MEMORANDUM AND ORDER
GORTON, J.
The subject discovery dispute is one of several matters
pending in this patent infringement case, the facts of which are
described in previous Memoranda and Orders issued by this Court
(Docket Nos. 92, 497).
In brief, plaintiffs Momenta
Pharmaceuticals, Inc. and Sandoz Inc. (collectively, and for
simplicity, “Momenta”) filed suit in 2011 against Amphastar
Pharmaceuticals, Inc., International Medication Systems, Ltd.,
Actavis, Inc. and Watson Pharma, Inc. (collectively, and for
simplicity “Amphastar”).
Plaintiffs alleged that defendants
infringed two of their patents.
The Court entered summary judgment in favor of defendants
in July, 2013 (Docket No. 497) but has reserved entering final
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judgment because a motion for sanctions for noncompliance with
discovery orders (Docket No. 392) was pending before Magistrate
Judge Collings.
The magistrate judge allowed the motion, in
part, and denied it, in part, in a December 5, 2013 Memorandum
and Order (Docket No. 517).
Defendants’ objections to that
Memorandum and Order are now pending before this Court.
I.
Procedural history
The subject discovery dispute arose after plaintiffs moved
to compel defendants to produce certain documents in March and
April, 2012.
The motions, which overlap to some extent,
generally involve requests relating to the Abbreviated New Drug
Application (ANDA) that defendants submitted to the Food and
Drug Administration (FDA) and records of testing purportedly
conducted by defendants.
One motion (Docket No. 161) sought to
compel defendants to produce unredacted versions of, inter alia,
1) the ANDA, 2) amendments to the ANDA and 3) all internal
documents relating to defendants’ “manufacturing release test
procedures” and certain other analyses.
Another motion (Docket
No. 225) sought to compel the production of defendants’ actual
testing records for the generic enoxaparin it sold and
manufactured for sale.
This Court referred both motions to Magistrate Judge
Collings.
At a June 4, 2012 hearing before the magistrate
judge, plaintiffs contended that defendants had not provided a
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single document with respect to the testing of 30 to 40 lots of
enoxaparin that they sold between September, 2011, and the
hearing date.
Defense counsel told the magistrate judge that
plaintiffs’ counsel was engaging in “rank speculation” as to
whether the documents existed.
On June 12, 2012, the magistrate judge ordered defendants
to produce all documents sought by plaintiffs’ requests numbered
5, 7, 11, 12 and 13 within one week.
Request 5 concerned the
ANDA and amendments to the ANDA and Request 7 involved
defendants’ other communications with the FDA.
Requests 11, 12
and 13 all related to testing records.
On June 18, 2012, plaintiffs filed an emergency motion to
enforce the June 12 order of the magistrate judge (Docket No.
275).
They claimed that defendants had not produced the
requested documents but instead informed plaintiffs that the
documents would only be made available for inspection in
California.
Following a telephonic hearing on June 27, 2012,
during which defendants admitted that they had not produced, in
unredacted form, the full ANDA, ANDA amendments and related
correspondence with the FDA, the magistrate judge ordered the
production of those documents by July 5, 2012.
On July 9, 2012, plaintiffs filed an emergency motion for a
finding of contempt and sanctions against defendants for failing
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to comply with the magistrate judge’s June 12 and June 27 orders
(Docket No. 295).
This Court stayed the case in August, 2012, before the
magistrate judge ruled on the pending motions.
The stay was
entered in response to the vacation by the Federal Circuit of
the preliminary injunction entered against defendants.
Subsequently, this Court denied the pending discovery motions
without prejudice in December, 2012.
In January, 2013, the plaintiffs moved for discovery in
advance of the filing of dispositive motions (Docket No. 366).
This Court allowed plaintiffs to re-file the two discoveryrelated motions that were pending before the magistrate judge at
the time the case was stayed (Docket No. 388).
Per that Order,
plaintiffs renewed their motion to compel (originally filed as
Docket No. 225 and re-filed as Docket No. 390) and a motion for
a finding of willful contempt and sanctions against defendants
for willful violation of court orders related to the ANDA motion
(originally filed as Docket No. 295 and re-filed as Docket No.
392).
The Court again referred the motions to Magistrate Judge
Collings, who held a hearing on both motions in April, 2013.
With respect to the motion to compel production of testing
documents (Docket No. 390), the magistrate judge allowed the
motion and ordered the defendants to produce unredacted portions
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of all notebooks, logbooks and binders that concern testing of
certain lots of enoxaparin (Docket No. 423).
With respect to the motion for sanctions (Docket No. 392),
the magistrate judge allowed, in part, denied, in part, and
otherwise reserved ruling on the motion.
He reasoned that his
Order of June 27, 2012 was “ineffective due to the parties’
differing views on what constitutes an ‘amendment’ to the ANDA”
and the fact that he was unaware of those differences of opinion
at the time.
As a result, he ordered defendants to make the
subject documents available for inspection by plaintiffs so that
plaintiffs could determine what, if anything, they would seek to
have produced (Docket No. 420).
This Court entered summary judgment in favor of defendants
on July 19, 2013 (Docket No. 497).
In August, 2013, the
magistrate judge ordered the parties to inform him if they
disagreed with his retention of jurisdiction to rule on the
motion for sanctions despite the fact that plaintiffs had filed
a Notice of Appeal prior to this Court’s entry of final judgment
(Docket No. 502).
The parties notified the magistrate judge
that they agreed that he should retain such jurisdiction (Docket
Nos. 503, 504).
On December 5, 2013, the magistrate judge entered a
Memorandum and Order allowing, in part, and denying, in part,
plaintiffs’ motion for contempt and sanctions (Docket No. 517).
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He declined to enter a report and recommendation to enter
judgment of infringement against defendants, allowed the motion
with respect to costs and fees and ordered plaintiffs to file an
account of the costs and fees incurred.
Plaintiffs submitted
their costs and fees in the amount of $813,935 to the magistrate
judge on December 23, 2013 (Docket No. 545) and defendants filed
objections to the magistrate judge’s order with this Court
(Docket No. 537).
II.
Defendants’ objections to the award of sanctions
A.
Standard for awarding sanctions premised on alleged
discovery violations
Magistrate Judge Collings imposed sanctions under Fed. R.
Civ. P. 37(b), which governs sanctions for failing to obey a
discovery-related order of the court.
Rule 37(b) provides that,
for failure to comply with a court order, the court may impose
sanctions, including, inter alia, 1) directing that certain
facts be taken as established for the purposes of the action, 2)
prohibiting the nonmoving party from supporting or opposing
certain claims or defenses and 3) treating the failure to obey a
court order as contempt of court. Fed. R. Civ. P. 37(b)(2)(i-ii,
vii).
Moreover, a court that imposes sanctions for discovery
violations is required to
order the disobedient party, the attorney advising
that party, or both to pay the reasonable expenses,
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including attorney’s fees, caused by the failure,
unless the failure was substantially justified or
other circumstances make the award unjust.
Fed. R. Civ. P. 37(b)(2)(C).
The Supreme Court has interpreted the term “substantially
justified” in this context to mean that the matter is the
subject of a “genuine dispute” or that “reasonable people could
differ as to the appropriateness of the requested action.”
Pierce v. Underwood, 487 U.S. 552, 565 (1988) (internal
citations omitted).
B.
Standard of review for orders by magistrate judges
premised on discovery violations
The First Circuit Court of Appeals has held that motions
for sanctions that are premised on alleged discovery violations
are generally classified as “non-dispositive”. Phinney v.
Wentworth Douglas Hosp., 199 F.3d 1, 6 (1st Cir. 1999).
As a
result, a district court in most cases may only modify or set
aside the resulting order if the ruling of the magistrate judge
is clearly erroneous or contrary to law. Id.
The First Circuit has recognized that the general rule does
not apply when a magistrate judge imposes discovery sanctions
that “fully dispose[] of a claim or defense.” Id.
In such a
case, the order is reviewed de novo. Id. (citing Ocelot Oil
Corp. v. Sparrow Indus., 847 F.2d 1458, 1462 (10th Cir. 1988)
(reviewing de novo an order striking pleadings as a discovery
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sanction); N. Am. Watch Corp. v. Princess Ermine Jewels, 786
F.2d 1447, 1450 (9th Cir. 1986) (reviewing de novo the dismissal
of counterclaim as discovery sanction)).
In this case, Magistrate Judge Collings ruled that he would
award attorneys’ fees as a sanction for disobeying his orders
during discovery but declined to recommend entering judgment of
infringement against defendants.
As a result, his order will be
reviewed under the standard for non-dispositive matters and will
stand unless this Court finds that it is clearly erroneous or
contrary to law.
C.
Analysis
After a careful review of the subject Memorandum and Order
and defendants’ objections thereto, the Court finds that the
rulings of the magistrate judge were not clearly erroneous or
contrary to law.
With respect to the testing records, the Court finds that
the magistrate did not clearly err in finding sanctions
warranted.
At the June 4, 2012 hearing, counsel for plaintiffs
advised the magistrate judge that they had not received records
of “release testing” between September, 2011, and January, 2012.
In response, counsel for the defendants told the magistrate
judge that plaintiffs’ counsel was “engaging in rank
speculation” and was “wrong” that such testing documents
existed.
In his June 12 order, the magistrate judge required
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the defendants to produce all documents sought by Request 11,
which concerned release testing.
Defendants did not produce
such documents within the time prescribed, in violation of the
court order, even though such testing records did, in fact,
exist.
Sanctions are warranted under these circumstances
because defendants were aware that plaintiffs sought testing
records for a certain period and failed to disclose them despite
a court order to do so.
The order to produce unredacted documents presents a closer
question but the Court nevertheless finds that the magistrate
judge did not clearly err.
The magistrate judge concluded that
defendants’ failure to produce previously produced documents in
an unredacted form warranted sanctions in light of his June 12,
2012 order to produce such documents.
Defendants seek to
obfuscate the issues by contending that the magistrate judge’s
order did not specify the manner of production and therefore
their offer to allow counsel for the plaintiffs to inspect the
complete ANDA records in California sufficed.
The magistrate
judge, however, specifically ordered defendants to produce in
unredacted form documents that had previously been produced in
redacted form.
Thus, to the extent that defendants had
previously provided redacted copies of documents to the
plaintiffs, it was no excuse to say that unredacted versions of
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those documents were available as part of the larger ANDA file
kept in hard copy at Amphastar’s offices in California.
Finally, the magistrate judge did not clearly err in
finding that defendants disobeyed his June 27, 2012 order to
deliver a complete copy of all amendments to the ANDA to
plaintiffs’ counsel in Boston.
Even though the magistrate judge
was not aware at the time of the dispute concerning the meaning
of “amendment”, his order was clear that defendants were to
physically transport to plaintiffs’ counsel’s office
in Boston a complete copy of all amendments to the
ANDA together with a copy of the same which contains
the redactions which counsel for the defendants
proposes in order to protect highly confidential and
proprietary information.
The order clarified that defendants were to produce two copies
of the amendments, one redacted and one unredacted.
Defendants
were not justified in producing only unredacted transmittal
letters in light of that order.
ORDER
In accordance with the foregoing, defendants’ objections to
the Memorandum and Order entered at Docket No. 517 are
OVERRULED.
So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated January 22, 2014
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