SANDOZ INC. et al v. UNITED THERAPEUTICS CORPORATION et al

Filing 248

OPINION AND ORDER of the Special Discovery Master Denying in Part and Granting in Part Defendant's request seeking copies of Plaintiff's exclusivity agreements pertaining to medical devices. Signed by Special Master Jose L. Linares on 11/16/2020. (abr) Modified on 11/16/2020 (eaj, ).

Case 3:19-cv-10170-BRM-LHG Document 248 Filed 11/16/20 Page 1 of 5 PageID: 12059

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

SANDOZ, INC., et ano.,

Civil Action No.: 19-10170

Plaintiffs,
v.
UNITED THERAPEUTICS CORP., et ano.,
Defendants.
______________________________________
This document relates to:
ECF No. 209

OPINION AND ORDER OF THE
SPECIAL DISCOVERY MASTER
REGARDING DEFENDANT’S REQUEST
SEEKING COPIES OF PLAINTIFF’S
EXCLUSIVITY AGREEMENTS
PERTAINING TO MEDICAL DEVICES

LINARES, J.
This matter comes before the Special Master by way of Joint Letter (ECF No. 209 (“Joint
Letter”)), which was submitted to Hon. Lois H. Goodman, U.S.M.J. on July 17, 2020. The
Special Master has reviewed the submission and the relevant controlling law. For the reasons set
forth below, the Special Master hereby GRANTS IN PART and DENIES IN PART the
discovery request set forth by Defendant United Therapeutics in the Joint Letter.
I. INTRODUCTION & PARTY ARGUMENTS
The Special Master presumes that the parties are familiar with the facts surrounding the
underlying action and claims. Accordingly, the Special Master will only recite the relevant
procedural and factual background necessary to dispose of the dispute at hand.

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Defendant United Therapeutics Corporation (“Defendant”) seeks copies of contracts
and/or agreements Plaintiff Sandoz, Inc. (“Plaintiff”) has entered into relating to medical devices.
(Joint Letter at 1). Specifically, Defendant seeks copies of agreements that create exclusive
relationships between Plaintiff and medical device companies. (Id.). According to Defendant,
these contracts are relevant to the underlying dispute because said information will assist
Defendant in rebutting Plaintiff’s assertion that Defendant’s own contracts with Defendant
Smiths Medical ASD, Inc. 1 were unreasonable and anti-competitive. (Id.). In making this
argument, Defendant points to Third Circuit law which indicates that exclusivity agreements
which shed light on industry standards may be discoverable in certain circumstances. (Id. at 2
(quoting and citing Race Tires Am., Inc. v. Hoosier Racing Tire Corp, 614 F.3d 57, 76 (3d Cir.
2010)).
On the other hand, Plaintiff asserts that Defendant’s request violates Rule 26 of the
Federal Rules of Civil Procedure because the request is disproportionate to the needs of this case
and not relevant to the claims and defenses of the matter sub judice. (Id. at 6). According to
Plaintiff, “Defendant[] ask[s] that [Plaintiff] be ordered to produce documents about unrelated
medical devices for the use with unrelated drug products in different competitive contexts.” (Id.).
Despite the fact that Plaintiff has resisted Defendant’s demand, Plaintiff has agreed to
produce some responsive items. (Id. at 10). Specifically, Plaintiff has agreed to produce any
“non-privileged, responsive communications and documents relating to obtaining exclusivity or
potential exclusivity for pumps, cartridges, or delivery systems for use in administering generic
injected treprostinil.” (Id. (quoting Plaintiff’s Response and Objections to Defendant’s First
1

The Special Master notes that he received a communication from Defendant Smiths on November 10, 2020 which
indicates that Defendant Smiths has executed a binding Term Sheet settling Plaintiff’s claims against it. As such,
Defendant Smiths is only referred to here for purposes of clarity and not as an active participant in the action.
Additionally, the dispute outlined herein does not relate to Defendant Smith, as it is strictly between Plaintiff and
Defendant United.

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Request for Production) (emphasis added)). In other words, Plaintiff believes it should not be
required to produce the demanded contracts because those demanded contracts are not directly
related to the specific drug and delivery method at the heart of the underlying dispute, and only
should be required to produce documents relating to exclusivity contracts concerning the specific
drug that is the subject of this action.
II. DISCUSSION
The Special Master finds that both parties have advanced compelling arguments. Indeed,
as Defendant has outlined, Third Circuit law does permit discovery that will shed light on
industry standards and practices, as well as a party’s understanding of those standards and
practices. See Race Tires A, 614 F.3d at 76. Furthermore, a party’s own contracts can provide
insight regarding industry standards, and whether an adverse party’s contract and/or conduct falls
within the parameters of the industry standard. See ZF Meritor, LLC v. Eaton Corp., 696 F.3d
254, 272 (3d Cir. 2012).
However, as Plaintiff has highlighted, the right to this discovery is not unfettered. As
noted, Rule 26 provides a responding party with various protections from overly broad or
abusive discovery demands. See Fed. R. Civ. P. 26. Under the Rule, a demand may not be
cumulative, irrelevant to the resolution of the dispute, or disproportionate to the needs of the case.
Id. As such, the Special Master must balance the needs of the demanding party with the burden
the discovery demand places on the responding party.
Here, the Special Master has determined that Defendant is entitled to receive some
discovery pertaining to Plaintiff’s own exclusive medical device contracts. As a matter of fact,
Plaintiff has offered to provide some information regarding these exclusive contracts but would
like to limit its response to contracts that only relate to treprostinil; the drug that is at the center

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of the underlying dispute. The Special Master finds this proposal to be too narrow. On the other
hand, Defendant’s demand for all exclusive contracts between Plaintiff and medical device
companies is too broad and may be violative of Rule 26. As such, the Special Master finds that
the ideal balance would be a combination of both parties’ positions.
Accordingly, the Special Master orders that Plaintiff shall provide limited responses to
Defendant’s demand for exclusivity contracts. Plaintiff’s response shall be limited to any and all
“non-privileged, responsive communications and documents relating to obtaining exclusivity or
potential exclusivity for pump, cartridges, or delivery systems for administering” any drug
subcutaneously. The Special Master believes that this approach reflects a fair middle ground
between the two extremes proposed by the parties. This will assure that Defendant receives the
necessary discovery while also assuring that Plaintiff is not unduly burdened by having to
respond to an expansive discovery demand.
III. CONCLUSION & ORDER
For the foregoing reasons, it is on this 16th day of November 2020,
ORDERED that Defendant United Therapeutics Corporation’s discovery request
contained in the parties joint July 17, 2020 letter (ECF No. 209) is hereby GRANTED IN
PART and DENIED IN PART; it is further
ORDERED that Plaintiff shall produce any and all “non-privileged, responsive
communications and documents relating to obtaining exclusivity or potential exclusivity for
pump, cartridges, or delivery systems for administering” any drug subcutaneously; and it is
further
ORDERED that Plaintiff shall make said production within twenty (20) days of this
Order.

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SO ORDERED.
_/s/ Jose L. Linares________________________
Hon. Jose L. Linares, U.S.D.J. (Ret.)

Date: November 16, 2020

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