MEDA PHARMACEUTICALS INC. v. APOTEX INC. et al

Filing 144

MEMORANDUM, OPINION filed. Signed by Magistrate Judge Tonianne J. Bongiovanni on 2/4/2014. (kas, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
PHYSICIANS HEALTHSOURCE, INC.,

Civil Action No. 12-2132 (FLW)

Plaintiff,
v.

MEMORANDUM OPINION

JANSSEN PHARMACEUTICALS, INC.,
et al.,
Defendants.
BONGIOVANNI, Magistrate Judge,
This matter comes before the Court upon Defendants Alert Marketing, Inc., Janssen
Pharmaceuticals, Inc. and Ortho-McNeil Pharmaceutical, LLC‟s (identified as Ortho-McNeil
Pharmaceutical, Inc.) (collectively “Defendants”) motion to bifurcate discovery. [Docket Entry
No. 52]. Plaintiff Physicians Healthsource, Inc. (“Plaintiff”) opposes Defendants‟ motion. The
Court has fully reviewed and considered all of the arguments made in support of and in
opposition to Defendants‟ motion. The Court considers same without oral argument pursuant to
L.Civ.R. 78.1(b). For the reasons set forth more fully below, Defendants‟ motion is GRANTED.
I.

Background and Procedural History
In light of the parties‟ familiarity with the facts of this matter, they shall not be reinstated

at length herein. Instead, the Court shall recount only those facts necessary for the resolution of
Defendants‟ motion to bifurcate. This case concerns whether two identical unsolicited faxes sent
by Defendants to Plaintiff on or about April 8, 2008 and May 6, 2008 violated the Telephone
Consumer Protection Act (“TCPA”). The faxes concern the reclassification of Levaquin for

insurance purposes.1 Plaintiff alleges that the faxes were sent as commercial advertisements in
violation of the TCPA. In contrast, Defendants argue that the faxes are informational and,
therefore, exempted from the TCPA.
In response to Plaintiff‟s Complaint, Defendants jointly moved to dismiss Plaintiff‟s
claims arguing that the faxes as a matter of law were informational and, as such, exempted from
the TCPA. The District Court held argument on Defendants‟ motion. For the reasons set forth
on the record on January 31, 2013 and for those set forth in the Supplemental Opinion dated
February 6, 2013, the District Court granted Defendants‟ motion to dismiss, finding that “the
faxes are indeed informational and that they include only an incidental amount of commercial
material.” (Supplemental Opinion of 2/6/2013 at 1; Docket Entry No. 28). Consequently, the
District Court determined that the “faxes are not actionable under the TCPA.” (Id.)
Plaintiff responded to this decision by filing a motion to reconsider the District Court‟s
January 31, 2013 Order pursuant to FED.R.CIV.P. 59(e) and L.Civ.R. 7.1(i). In the alternative,
Plaintiff sought leave to file an amended complaint. The District Court denied Plaintiff‟s motion
for reconsideration finding that Plaintiff had not asked the court to “correct errors of law or fact
upon which [its] rulings were based in order to prevent manifest injustice, [n]or was there an
intervening change in the prevailing law.” (Opinion of 6/6/2013 at 6; Docket Entry No. 43).
Instead, the District Court noted that Plaintiff‟s motion for reconsideration was based on two
new allegations that Plaintiff referred to as new evidence: (1) the receiver of the faxes in
question, a physician, never prescribed Levaquin; and (2) because Levaquin was reclassified in
2004, not in 2008 when the faxes were sent, the fax “created a „false impression that it was being

The specific content of the faxes is discussed in detail in the District Court‟s Supplemental
Opinion dated February 6, 2013 [Docket Entry No. 28]. As such, the Court does not go into
further detail here.
1

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sent for informational purposes.‟” (Id. (quoting Plaintiff‟s Opp. Brief at 6)). The District Court
found that these new allegations were not evidence for reconsideration purposes and since there
was no allegation that the information supporting these allegations was not available when the
District Court rendered its initial decision, there was no basis upon which the District Court
could reconsider its prior rulings.
The District Court also found that Plaintiff‟s proposed amended complaint was futile
because the only new allegations set forth in the pleading concerned the alleged fact that there
was no prior business relationship between the parties. The District Court found these
allegations to be insufficient because its “prior holding that the fax is an advertisement is not
relevant to a finding of a prior business relationship, and as a result, amending the Complaint to
include such allegations would not change the result.” (Id. at 7). In addition, the District Court
noted that Plaintiff‟s proposed amended complaint was devoid of any allegations that the faxes at
issue “could not be considered truly informational” because “Levaquin was actually reclassified
in 2004, and since the drug was already a Tier 2 drug in 2008, there was no „reclassification,‟
„up-to-date,‟ or „breaking news‟ reimbursement information” to be disseminated at the time they
were sent. (Id.) While Plaintiff raised these assertions in its brief, the District Court could not
consider same because they were un-pled.
Despite the failures in Plaintiff‟s proposed amended complaint, the District Court
permitted Plaintiff to amend its Complaint, although not in the form submitted with Plaintiff‟s
motion. Instead, the District Court permitted Plaintiff to “amend its Complaint with whatever
allegations it deems would be sufficient.” (Id. at 8). In so doing, the District Court specifically
noted that it was not making any findings as to whether Plaintiff‟s allegations concerning the
timing of Levaquin‟s reclassification could state a claim.

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Plaintiff filed its Amended Complaint on June 26, 2013. [Docket Entry No. 45].
Defendants filed answers in response to same on July 19, 2013. [Docket Entry Nos. 47 & 48].
Shortly thereafter, the Court set an Initial Conference with the parties to discuss the schedule to
be set in this matter. During the Initial Conference, Defendants indicated their desire to bifurcate
discovery. The Court directed Defendants to file a motion to that effect. Defendants did so by
filing the instant motion.
Defendants seek to bifurcate discovery into two phases. During the first phase, the
parties would focus on discovery related to whether the faxes at issue are informational or
whether the informational content is a sham designed to conceal the fact that they are
advertisements. During the second phase, the parties would conduct discovery on all matters,
including class action issues. Before the second phase of discovery commences, Defendants
would file a motion for summary judgment on the issue of whether the faxes are informational
and therefore exempted from the TCPA. Using this approach, the parties would only engage in
class action discovery if Plaintiff survived Defendant‟s anticipated motion for summary
judgment.
Defendants argue that bifurcating discovery in this matter is warranted in light of the
narrow, potentially dispositive issue that exists concerning whether the faxes at issue are
informational. Defendants argue that this issue is “totally distinct from class action discovery”
and “can be fully explored in a limited time, with limited costs, and with limited burdens on the
parties and the Court.” (Def. Br. at 4; Docket Entry No. 52). In contrast, Defendants argue that
unbounded class action discovery involves substantial costs and burdens both for the parties and
the court. Further, Defendants claim that the burden of class discovery is significantly greater
for defendants than plaintiffs. Indeed, Defendants contend that “[c]ertification and potential

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class liability are a sword of Damocles for Defendants[.]” (Id. at 5). Defendants argue that this
would be particularly true here where the District Court has previously determined that the faxes
at issue are informational. Consequently, Defendants argue that they should not be forced to
spend resources engaging in class discovery from the outset. Instead, they argue that the most
efficient manner for this case to proceed is for discovery to be bifurcated so that the issue of
whether the faxes are informational, and therefore exempted under the TCPA, can be decided
first.
Plaintiff opposes Defendants‟ motion to bifurcate. Plaintiff argues that, despite
Defendants‟ claims to the contrary, bifurcation will not promote efficiencies in the litigation of
this matter. In this regard, Plaintiff claims that “[n]o matter what evidence or testimony
Defendants could hope to submit to support any forthcoming motion for summary judgment,
there will at the very least still remain a genuine question of fact since the documents presented
by Plaintiff already show no Tier ranking change.” (Pl. Opp. Br. at 2; Docket Entry No. 53).
Further, Plaintiff argues that Defendants have not shown that it will be more timely and less
costly to litigate this matter by bifurcating discovery. Indeed, Plaintiff claims that “Defendants
provide no analysis whatsoever of the expected savings of time and costs, rendering their motion
wholly conclusory.” (Id. at 4).
In contrast, Plaintiff contends that bifurcation will just further delay this case, which has
already been “pending for almost eighteen months due in large part to Defendants‟ insistence
that the faxes were informing of a Levaquin Tier change.” (Id.) Specifically, Plaintiff contends
that if this matter is bifurcated, the first phase of discovery will take nearly a year to complete.
Plaintiff argues that such an expense of time cannot be justified. Plaintiff also argues that

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Defendants “fail to explain just how separation of the Tier change issue from the normal class
certification discovery can be accomplished.” (Id. at 5).
In addition, Plaintiff argues that bifurcation ignores the need to preserve evidence in this
TCPA matter. Plaintiff notes that in TCPA cases, electronic discovery involves databases of
transmissions records. Plaintiff further notes that both IT and non-IT personnel are responsible
for the integrity of these databases. Plaintiff argues that given the different personnel involved in
maintaining the databases, there is always a risk that the actual integrity of the databases has
been compromised. Plaintiff claims that this issue is compounded by the fact that “the steps
taken to actually send the faxes at issue may involve known and even unknown outside parties or
vendors” coupled with the common practice in data storage to delete data on quick intervals to
increase efficiencies and decrease costs. (Id. at 7). As such, Plaintiff argues that there is a risk
that vendors, both known and unknown, may be deleting or destroying databases relevant to this
case. Plaintiff argues that bifurcation will only multiply problems associated with evidence
preservation by delaying Plaintiff‟s ability to secure evidence for almost a year.
Indeed, Plaintiff argues that it will be inherently prejudiced if this matter is bifurcated. In
this regard, Plaintiff claims that “[s]ince no discovery has occurred in this case, Plaintiff will be
forever prejudiced if evidence relevant to proving this case, evidence in the form of electronic
data, is innocently destroyed or deleted as a matter of course by anyone who participated in the
sending of the faxes at issue here.” (Id. at 8). For these reasons, Plaintiff argues that
Defendants‟ motion to bifurcate discovery should be denied.

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II.

Analysis
Federal Rule of Civil Procedure 42(b) governs requests to bifurcate. According to Rule

42(b), “[f]or convenience, to avoid prejudice, or to expedite and economize, the court may order
a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party
claims.” Under Rule 42(b), “a district court has broad discretion in separating issues and claims
for trial as part of its wide discretion in trial management.” Medpointe Healthcare, Inc. v. HiTech Pharmacal Co., Inc., Civil Action No. 03-555 (MLC), Civil Action No. 04-1686 (MLC),
2007 U.S. Dist. LEXIS 4652, at *12-13 (D.N.J. Jan. 22, 2007) (internal quotation marks and
citation omitted). Further, the broad discretion afforded courts in handling discovery disputes
extends to decisions over bifurcating discovery. See Weiss v. First Unum Life Ins. Co., Civil
Action No. 02-4249 (GEB), 2008 WL 755958, *1 (March 19, 2008); see also Bandai America
Inc. v. Bally Midway Mfg. Co., 775 F.2d 70, 74 (3d Cir. 1985) (holding that bifurcation orders
and orders controlling order of discovery are reviewed for abuse of discretion).
Here, the Court finds that bifurcating discovery as proposed by Defendants is warranted
under Rule 42(b). In this regard, the Court agrees with Defendants that a narrow, potentially
dispositive issue exists concerning whether the faxes sent to Plaintiffs are informational and
therefore not actionable under the TCPA. Further, the Court is not persuaded by Plaintiff‟s
argument that the information contained in and attached to its Amended Complaint regarding the
lack of Levaquin Tier changes since at least 2004 precludes summary judgment being granted in
Defendants‟ favor. Defendants have already referenced evidence of Tier changes occurring as
late as 2007. Conflicting evidence does not always preclude summary judgment. Moreover, the
District Court never determined that Plaintiff‟s now asserted sham allegations do, in fact, state a
claim. As a result, even absent Tier changes, the District Court could find that the faxes are

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informational. As a result, depending on what evidence is ultimately presented, the District
Court may determine that summary judgment is warranted.
In addition, the Court finds that the issue concerning whether the faxes here are
informational is totally distinct from class issues. Unlike Plaintiff, the Court finds that there will
be no significant overlap between the two and therefore no real danger of a duplication of efforts
or corresponding increase in litigation costs. Moreover, the Court also finds that bifurcating the
two issues has the potential to save the parties and the Court from the substantial costs and
burdens associated with whole scale class action discovery. While Plaintiff faults Defendants for
not supporting their claims concerning the burdens and costs associated with class action
discovery, it is generally recognized that class actions involve the potential “for hefty litigation
expenses and an extensive use of judicial resources in the resolution of these claims[.]” Bais
Yaakov of Spring Valley v. Peterson’s Nelnet, LLC, Civ. No. 11-00011, 2013 WL 663301, at *5
(D.N.J. Feb. 21, 2013). It is also generally understood that the costs can be particularly
“enormous” for defendants. Id.
Similarly, the Court finds Plaintiff‟s projection regarding how long the first phase of
discovery will take to be unreasonable. The discovery at issue in phase one is narrow and relates
solely to whether the faxes sent to Plaintiff are informational or whether their apparent
informational content is a sham. Given this limited scope of discovery, there is simply no reason
why it should take close to a year to complete. Instead, the Court is confident that it can be
conducted in approximately 4 months.
Further the Court is not convinced that Plaintiff will be prejudiced by bifurcation. While
Plaintiff raises concerns over delay and the possibility that evidence will be lost or destroyed,
these concerns are not overly persuasive. First, the faxes at issue were sent in the Spring of

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2008, nearly four years before Plaintiff elected to file suit. If evidence preservation and the
elapse of time were a substantial concern, one would have expected this case to have been filed
more expediently. Second, the fact that no discovery has taken place to date can hardly be
blamed on Defendants. In response to Plaintiff‟s original Complaint, Defendants filed a motion
to dismiss. Defendants succeed on that motion: the District Court determined that Plaintiff had
failed to assert a viable claim under the TCPA. In response to the District Court‟s decision,
Plaintiff moved for reconsideration or in the alternative to file an amended Complaint. The
District Court denied Plaintiff‟s motion for reconsideration and found that Plaintiff‟s proposed
amended complaint failed to state a claim under the TCPA. Nevertheless, the District Court
permitted Plaintiff to file an amended pleading, albeit not in the form attached to the motion for
reconsideration. Plaintiff filed its Amended Complaint on June 26, 2013, over 14 months after
the initial Complaint was filed. Defendants certainly are not responsible for delaying discovery
during this period of time. Quite to the contrary, they moved to dismiss Plaintiff‟s Complaint
and they succeeded on that motion. Third, Defendants have notified third parties of this lawsuit
and have put them on notice to preserve evidence. Under these circumstances, the Court finds
that Plaintiff will not be prejudiced by an additional 4 month delay caused by bifurcating
discovery into two phases.
Everything considered, the Court finds that bifurcating discovery into two phases will
promote the efficient resolution of this matter. It will allow the Court to address a narrow,
potentially dispositive issue in a timely and cost effective manner with no significant prejudice to
Plaintiff. Consequently, the Court hereby bifurcates discovery as requested by Defendants. The
parties are directed to submit a proposed schedule for fact discovery concerning whether the
faxes sent were informational or whether their apparent informational content was a sham and

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the faxes were in reality advertisements. The schedule submitted shall have this phase of
discovery closing no later than June 13, 2014.2
III.

Conclusion
For the reasons set forth above, Defendants motion to bifurcate discovery is GRANTED.

An appropriate Order follows.

Dated: February 4, 2014

s/Tonianne J. Bongiovanni
HONORABLE TONIANNE J. BONGIOVANNI
UNITED STATES MAGISTRATE JUDGE

2

The Court notes that after Defendants‟ motion to bifurcate was filed, Defendants filed a motion
for summary judgment. In response, Plaintiff has filed an opposition arguing that certain
discovery is needed in order to respond to Defendants‟ motion for summary judgment. This
Opinion does not reach that issue, but only addresses Defendants‟ motion to bifurcate.
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