In Re Namenda Direct Purchaser Antitrust Litigation

Filing 348

MEMORANDUM AND ORDER denying #265 Motion to Compel; denying #267 Motion to Compel. The plaintiffs' motion to compel (Docket nos. 265 and 267) is denied at this time. The dispute regarding these documents may be raised in an orderly fashion in the plaintiffs' anticipated omnibus motion. Prior to filing that motion, the parties shall meet and confer in light of the guidance provided in this Order. Indeed, the parties are cautioned that any motion that is filed prior to a meaningful meet-and-confer process may be denied on that basis alone, and the parties shall strictly adhere to the requirements of Rule 37(a)(1) of the Federal Rules of Civil Procedure. Recalcitrance in the meet-and- confer process on the part of the non-movant -- whether for the purpose of delay, cf. In re Namenda Direst Purchaser Antitrust Litigation, No. 15 Civ. 7488, 2017 WL 3085342, at *6 n.6 (S.D.N.Y. July 20, 2017), or for any other reason may result in sanctions. A tight discovery schedule does not absolve the parties of the responsibility to adhere to the Court's procedural rules. Further motions seeking rulings on waiver may be asserted only "with respect to specifically identified documents or communications so that I may rule on discrete waiver assertions." Lidoderm, 2016 WL 4191612, at *1. SO ORDERED. (Signed by Magistrate Judge James C. Francis on 8/2/2017) Copies Transmitted this Date By Chambers. (anc)

a number of Forest’s central defenses in this action relied on
Forest’s assessment of the legal merits of the underlying patent
litigation between Forest and the generic drug companies, which
would implicate counsel’s advice.

Id. at *2.

Forest countered

that it “ha[d] not yet necessarily injected [into this litigation]
its subjective views of the strength of the [relevant] patent or
of

its

litigation

positions

in

the

[underlying]

infringement

action,” noting that it could support its defenses with “objective
evidence,”

such

as

the

presumption

of

patent

validity,

the

prosecution history of the patent, and factual material from the
patent litigation.

Id. at *4.

I found that, given the “stage of discovery and Forest’s
representations, I [could not] determine that Forest ha[d] broadly
waived attorney-client privilege and work product protection.”
Id. at *5.

Adopting a strategy used in In re Lidoderm Antitrust

Litigation, No. 14-md-2521, 2016 WL 4191612 (N.D. Cal. Aug. 9,
2016), I required Forest to “disclose any subjective beliefs it
will rely on in its defense of this action.”

Namenda, 2017 WL

2226591, at *5.
Forest did so, asserting that it would rely on “evidence from
its current or former business executives or employees” to rebut
(1)

argument

that

its

business

deals

were

“motivated

by

illegitimate or anti-competitive justifications,” (2) allegations
2

that “its conduct with respect to the Namenda patent litigations
was

anything

governing

but

entry

routine
of

behavior”

generic

drugs

under

into

the

the

patent

market,

regime

and

(3)

allegations that “the Namenda IR patent litigation settlement
agreements provided generic competitors any consideration beyond
the express terms of each of the final agreements.”

(Forest’s

Disclosure Pursuant to the May 19, 2017 Memorandum and Order (“Def.
Disclosure”), attached as Exh. A to Memorandum in Support of Direct
Purchaser Plaintiffs’ Motion to Compel Production of Documents
(“Pl. Initial Memo.”), at 4-5).
The plaintiffs promptly filed a motion to compel seeking an
“Order finding that [Forest] may not withhold factual information
regarding its subjective intent evidence” even if that factual
information “is embedded in attorney-client communications and/or
attorney documents.”

(Pl. Initial Memo. at 3, 9).

In response,

Forest asserted that it had repeatedly committed to producing nonprivileged

documents

responsive

to

the

plaintiffs’

requests,

including redacted versions of documents containing privileged
information, and that it had never argued that “non-privileged
facts

become

privileged

when

communicated

to

a

lawyer.”

(Defendants’ Opposition to Direct Purchaser Plaintiffs’ June 15,
2017 Motion to Compel Production of Documents (“Def. Initial
Memo.”), at 4, 6-7).

Forest also made the (accurate) point that
3

it had neither completed production nor produced a privilege log
and so the plaintiffs’ “dispute” was not “ripe for the Court’s
review.”

(Def. Initial Memo. at 7).

In light of Forest’s

representation that it would produce a privilege log on or before
June 30, 2017, and would make significant production of documents
in the surrounding weeks (Def. Initial Memo. at 7), I deferred
resolution of the plaintiffs’ motion.

In mid-July, I requested

that the parties update the briefing of the motion in light of the
new production.
The plaintiffs’ new submission focuses on Forest’s argument
that its business deals were not motivated by illegitimate or anticompetitive justifications, for which it “anticipates presenting
evidence

from

its

current

or

former

executives

or

employees

concerning the business considerations, rationales, and reasons
for

entering

into

the

[settlement]

producers] Mylan and Orchid.”

agreements

with

[generic

(Def. Disclosure at 4).

The

plaintiffs contend that because this defense “place[s] at issue
what Forest’s management actually believed about the value and
purpose of the deals,” Forest must produce “factual information
about

such

beliefs

communications

or

[that]

are

contained

attorney-created

in

attorney-client

documents.”

(Supplemental

Memorandum in Support of Direct Purchaser Class Plaintiffs’ Motion
to Compel Production of Documents (“Pl. Supp. Memo.”) at 2).
4

Unlike in their initial submissions, where they “failed to
cite a single document . . . that they believe is problematic”
(Def. Initial Memo. at 7), the plaintiffs have now identified three
documents or types of documents to support their hypothesis that
Forest is improperly withholding information.

The first is a

draft slide presentation for a Mylan settlement meeting, which
Forest inadvertently produced and then clawed back.

(Pl. Supp.

Memo.

charts

at

2-3).

The

second

comprises

up

to

295

and

spreadsheets containing financial analyses relevant to “the cost,
value[],

and

distribution

purpose
and

of

supply

the

amendments

agreement,

to

which

a

prior

[the]

Lexapro

[p]laintiffs

contend was a vehicle that Forest used to make a ‘reverse payment’
to Mylan as part of the Namenda patent settlement.”
Memo. at 1, 3-4).

(Pl. Supp.

This group includes a set of spreadsheets

regarding the Lexapro amendment that was produced twice -- once in
full and again with redactions.

(Pl. Supp. Memo. at 3; Declaration

of Dan Litvin dated July 24, 2017, Exhs. A & B).

The third is an

email from a former Forest in-house lawyer to Forest business
executives

“describing

negotiations

with

Orchid

regarding

the

Namenda patent-suit settlement” and a side deal concerning the
drug Ceftaroline.
that

the

(Pl. Supp. Memo. at 4).

redactions

in

this

email

hide

The plaintiffs suppose
unprivileged

factual

information concerning Forest’s justifications for the settlement
5

with Orchid.

(Pl. Supp. Memo. at 4). Forest has since clawed back

the document including this email and produced a version that
redacts large swaths of the email chain, including the portion
that the plaintiffs cite in their motion.

(Letter of Heather K.

McDevitt dated Aug. 1, 2017 (“McDevitt Letter”), at 1).
Although it is not completely clear, it appears that the
plaintiffs seek a ruling that Forest has waived privilege over
these documents because testing the “subjective belief” identified
above can only be assessed by examining the documents.
Memo. at 2 n.3, 4-5; Pl. Initial Memo. at 7).

(Pl. Supp.

Forest, for its

part, has provided, for my in camera review, copies of the draft
slide presentation and of the unredacted email chain.
Letter & Exhs. A, C, D).

(McDevitt

As to the set of spreadsheets that was

produced both unredacted and redacted, Forest has reviewed it and
“agrees that [the] attachments are not privileged.”

(Defendants’

Opposition to DPPs’ Supplemental Memorandum in Support of June 15,
2017 Motion to Compel Production of Documents (“Def. Supp. Memo.”)
at

5).

It

disagrees,

however,

spreadsheets are not privileged.

that

all

such

charts

and

(Def. Supp. Memo. at 5).

Analysis
Forest’s argument regarding the waiver issue is sparse.

It

asserts that it “agreed to forego presenting ‘factual assertions’
which

require

recourse

to

privileged
6

communications,

but

identified [] three narrow areas of subjective belief, all of which
turn exclusively on business judgment and experience.”
Supp.

Memo.

at

2

(citation

omitted)).

According

to

(Def.
Forest,

Lidoderm -- which Forest acknowledges provides the “framework” for
my analysis of the waiver issue (Def. Supp. Memo. at 2 (citing
Namenda, 2017 WL 2226591, at *5)) -- stands for the proposition
that

“reliance

on

subjective

beliefs

to

the

extent

they

are

‘derived exclusively from business judgment and experience’ does
not effectuate an at issue waiver” (Def. Supp. Memo. at 3 (emphasis
omitted) (quoting Lidoderm, 2016 WL 4191612, at *1)).
The

court

in

Lidoderm

took

pains

to

explain

that

the

defendants
cannot avoid waiver by offering to rely at summary
judgment or trial solely on non-legal justifications for
certain subjective beliefs. There is no doubt -- given
the question at issue is whether anticompetitive goals
motivated defendants’ settlement -- that business advice
and non-legal facts were considered by settlement
decision-makers.
But if defendants inject their
subjective beliefs on specific topics as part of their
defense of the [relevant] settlement . . . where evidence
establishes that the subjective belief was also informed
by attorney advice, it would be unfair to not allow
plaintiffs
access
to
defendants’
contemporaneous
attorney-client information to test the veracity of the
defendants’ justifications in this litigation even
though that belief is based in part on business judgment
and executive experience.
Lidoderm, 2016 WL 4191612, at *5 (emphasis omitted).

Similarly,

even subjective beliefs that “plausibly implicate only business

7

decisions

and

could

attorney-client

have

input”

been
may

theoretically
require

access

reached

without

to

attorney

communications or attorney-created information, because in order
to

test

the

veracity

of

the

defendants’

asserted

subjective

beliefs, “other justifications that [the] plaintiffs have shown
relied on attorney-client advice are also directly implicated.”
Id. at *6.

So, for example, Lidoderm found that a defendant could

not “rely on identified subjective beliefs [assertedly based on
business judgment] where they are backed up by ‘public statements’”
without waiving privilege where there is evidence that “other
motivations” influenced by attorney information “could have been
at play.”

Id. at *8.

And, perhaps more to the point, the opinion

found that “the reasons, explanations, and intentions for the
‘payment’

. . . to [the generic drug-maker] would appear to

necessarily implicate attorney-client advice because that payment
was a key, if not the central, term of the [] settlement agreement
negotiated by [the] defendants’ counsel.”
omitted).

Id. at *10 (emphasis

That is, Forest’s promise to rely only on information

from business people showing that the Lexapro agreement with Mylan
and the Ceftaroline agreement with Orchid -- which are the alleged
vehicles of the purportedly anticompetitive reverse payments -were motivated by pro-competitive business concerns, does not
necessarily

shelter

otherwise

privileged
8

information.

I

am

therefore baffled by Forest’s insistence that its position here is
“consistent” with Lidoderm.

(Def. Supp. Memo. at 3).

Moreover, in my prior opinion, I endeavored to be explicit in
the

penultimate

paragraph

as

to

Forest’s

responsibilities

in

challenging waiver:
Let me be clear: it is Forest’s burden to establish that
it has not waived privilege. It is not acceptable for
Forest
to
take
the
position
“Trust
us.
The
justifications we are putting forward here are why we
settled.”
Thus, Forest will have to back up with
argument and evidence any contention as to why the
“subjective beliefs” on which it plans to rely do not,
in fact, implicate privileged communications based on
the guidelines applied in Lidoderm and similar cases.
If there are disputes as to this issue, I will resolve
them after receiving submissions on a truncated briefing
schedule.
Namenda, 2017 WL 2226591, at *5 (citations omitted) (emphasis
omitted) (quoting Lidoderm, 2016 WL 4191612, at *6).
is based directly on that opinion.

This dispute

(Pl. Initial Memo. at 1; Pl.

Supp. Memo. at 1; Def. Supp. Memo. at 1-2).

And yet Forest has

failed to explain, with evidence or argument (other than one based
on a seeming misunderstanding of Lidoderm), why protection over
the specific documents identified by the plaintiffs has not been
waived.
The plaintiffs, for their part, introduce some different
problems.
Forest’s

Their initial motion was filed prematurely, prior to
completion

of

document

9

production

or

service

of

a

privilege log.
facts

(Def. Initial Memo. at 7).

included

in

otherwise

privileged

It argued (1) that
documents

are

not

themselves privileged (Pl. Initial Memo. at 5-6), (2) that even if
certain

factual

statements

are

privileged,

Forest

waived

the

privilege over such statements (Pl. Initial Memo. at 7-9), while
(3) disclaiming, for the purpose of the motion, an intent to seek
“legal analysis or legal advice” in connection with the underlying
patent cases (Pl. Initial Memo. at 3).

To the extent that the

plaintiffs intended to argue that facts can never be protected by
work product immunity, they are incorrect, see, e.g., US Bank
National Association v. PHL Variable Insurance Co., Nos. 12 Civ.
6811, 13 Civ. 1580, 2013 WL 5495542, at *8–9 (S.D.N.Y. Oct. 3,
2013) (citing In re Grand Jury Subpoena dated October 22, 2001,
282 F.3d 156, 161 (2d Cir. 2002), but I will leave that aside, as
in their supplemental memorandum, the plaintiffs appear to abandon
that argument to press the waiver issue (Pl. Supp. Memo. at 4-5),
while nevertheless pointing me to the section of their initial
memorandum discussing that abandoned argument (Pl. Initial Memo.
at 5-6; Pl. Supp. Memo. at 2 n.3).

In any case, the plaintiffs

have apparently ditched that issue (for now) in anticipation of
filing a later “omnibus motion” (Pl. Supp. Memo. at 4), which will
presumably address waiver of privilege over legal advice and
analysis,

as

well

as

matters

included
10

in

a

letter

from

the

plaintiffs dated June 20, 2017, and filed under seal (Letter of
Dan Litvin dated June 20, 2017; Letter of Heather M. Burke dated
July 24, 2017, at 1).
Of course, Forest points out that the supplemental memorandum
was also filed prior to any discussion between the parties as to
the documents at issue, including hundreds of charts (which the
plaintiffs fail to specifically identify).
1; Pl. Supp. Memo. at 4).

(Def. Supp. Memo. at

This chaotic presentation of disputes

and arguments is part of a pattern (which also includes the filing
and subsequent withdrawal of a prior discovery motion (Order dated
June 13, 2017)) that indicates a failure to engage in a meaningful
process

of

meeting

and

conferring

prior

to

requesting

court

intervention (Def. Initial Memo. at 4; Def. Supp. Memo. at 1).

I

will not accept a continuation of this paradigm, which confuses
the issues and wastes judicial resources.
Conclusion
The plaintiffs’ motion to compel (Docket nos. 265 and 267) is
denied at this time.

The dispute regarding these documents may

be raised in an orderly fashion in the plaintiffs’ anticipated
omnibus motion.

Prior to filing that motion, the parties shall

meet and confer in light of the guidance provided in this Order.
Indeed, the parties are cautioned that any motion that is filed
prior to a meaningful meet-and-confer process may be denied on
11