In Re Namenda Direct Purchaser Antitrust Litigation

Filing 416

MEMORANDUM AND ORDER granting #378 Motion to Compel; denying #398 Motion for Leave to File Document. The plaintiffs' motion to compel (Docket no. 378) is granted. Macleods shall produce the requested information within fourteen calendar days. The plaintiffs shall pay the reasonable expenses incurred by Macleods in complying with the requests. See Fed. R. Civ. P. Rule 45 (d) (1). Macleods' application to file a sur-rely (Docket no. 398) is denied. (As further set forth in this Order.) (Signed by Magistrate Judge James C. Francis on 10/19/2017) Copies Sent By Chambers. (cf)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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IN RE NAMENDA DIRECT PURCHASER
:
ANTITRUST LITIGATION
:
:
:
:
:
:
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JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
In

this

putative

class

15 Civ. 7488 (CM) (JCF)
MEMORANDUM
AND ORDER

action

asserting

violations

of

antitrust law by defendants Actavis plc (now known as Allergan
plc)

and

Forest

Laboratories,

LLC

(together,

“Forest”),

in

connection with its patented Alzheimer’s drugs Namenda IR and
Namenda XR (brand names for memantine hydrochloride), the Direct
Purchaser Class Plaintiffs have filed a motion to compel nonparties Macleods Pharmaceuticals Ltd. and Macleods Pharma USA,
Inc. (collectively, “Macleods”), to produce documents responsive
to a subpoena.

For the reasons set forth below, the motion is

granted.
Background
I have outlined the allegations in this litigation in numerous
prior opinions.

See In re Namenda Direct Purchaser Antitrust

Litigation, No. 15 Civ. 7488, 2017 WL 3822883, at *1 (S.D.N.Y.
Aug.

30,

2017);

In

re

Namenda

Direct

Purchaser

Antitrust

Litigation, No. 15 Civ. 7488, 2017 WL 3314233, at *1 (S.D.N.Y.
Aug. 2, 2017); In re Namenda Direct Purchaser Antitrust Litigation,
1

No. 15 Civ. 7488, 2017 WL 3085342, at *1-2 (S.D.N.Y. July 20,
2017); In re Namenda Direct Purchaser Antitrust Litigation, No. 15
Civ. 7488, 2017 WL 2693713, at *1-2 (S.D.N.Y. June 21, 2017); In
re Namenda Direct Purchaser Antitrust Litigation, No. 15 Civ. 7488,
2017 WL 2226591, at *1-2 (S.D.N.Y. May 19, 2017).

In brief, the

plaintiffs allege that in late 2007, at least twelve generic
manufacturers, not including Macleods, filed Abbreviated New Drug
Applications (“ANDAs”) with the FDA for generic versions of Namenda
IR in which they contended that the patent, known as the “‘703
patent,” “was invalid, not infringed by their proposed products,
or both.”

(First Amended Class Action Complaint (“Am. Compl.”),

¶ 103); see Namenda, 2017 WL 2226591, at *2.

In early 2008, Forest

filed patent infringement suits against the generic manufacturers,
which led the FDA to stay the action on the ANDAs.
¶¶ 104-105); Namenda, 2017 WL 2226591, at *2.

(Am. Compl.,

In these lawsuits,

the generic manufacturers again argued, among other things, that
the patents were invalid.
settled the lawsuits.

(Am. Compl., ¶ 109).

Forest ultimately

Namenda, 2017 WL 2226591, at *2.

The

settlements included cash payments from Forest to the alleged
infringers

and

licensing

agreements

that

allowed

the

generic

defendants to launch generic versions of Namenda IR months before
Namenda IR’s patent expired, but well after the generics could
have begun selling generic Namenda IR if Forest’s patent was found
to be invalid.

(Am. Compl., ¶ 114); Namenda, 2017 WL 2226591, at
2

*2.

The plaintiffs in this action, direct purchasers of Namenda

products from Forest, allege that these settlements were collusive
and anticompetitive, and they allege that because of the conduct,
they

had

to

pay

“supracompetitive

prices”

for

the

products.

Namenda, 2017 WL 2226591, at *1.
The parties are now past the discovery cut-off in this case.
However, before the deadline, the plaintiffs served a subpoena on
Macleods -- a producer of generic memantine hydrochloride -- on
August 14, 2017.

(Subpoena to Produce Documents, Information, or

Objects or to Permit Inspection of Premises in a Civil Action dated
Aug.

14,

2017

(“Document

Subpoena”),

attached

as

Exh.

A

to

Declaration of Dan Litvin dated Sept. 15, 2017 (“Litvin Decl.”),
at 1).

The subpoena seeks Macleods’ “sales data for generic

versions of Namenda in electronic format, at the transactional
level,” including the date of the transaction, the transaction
type, the customer’s name, bill-to customer information, ship-to
customer information, dosage strength, package size, NDC code, and
the number of units and dollar amount involved in the transaction,
among other information.
III(1)(a)-(l)).

(Schedule A to Document Subpoena §

Macleods objected to the subpoena on a number of

grounds, but offered to produce the “product name, package sizes,
dosage strengths, quantity sold of each dosage strength, and the
net sales price.”

(Letter of Samuel J. Ruggio dated Aug. 21, 2017,

3

attached as Exh. B to Litvin Decl., at 4).1 In emails that followed
this response, Macleods’ counsel clarified that it was willing to
provide “total amounts” of “net quantities” and “net sales price”
but would not produce the transactional level sales data sought by
the plaintiffs.

(Emails of Samuel J. Ruggio dated Aug. 22 & 23,

2017, attached as part of Exh. C to Litvin Decl.).

On September

5, 2017, Macleods produced a one-page document providing monthly
data of the number of units sold, net sales, and net sales price,
but did not provide the names of its customers, bill-to-customer
data, or a breakdown of individual transactions.

(Memorandum of

Law in Support of Direct Purchaser Class Plaintiffs’ Motion to
Compel Third Parties Macleods Pharmaceuticals Ltd. and Macleods
Pharma USA, Inc. to Produce Documents Responsive to Subpoena
Request Nos. 1-2 (“Pl. Memo.”) at 3; Macleods’ Memorandum in
Opposition to Plaintiffs’ Motion to Compel Documents (“Macleods
Memo.”) at 2).
The plaintiffs now move to compel Macleods to respond to the
subpoena in full by providing (1) transactional sales data of
Macleods’ sales of generic memantine hydrochloride and (2) a legend
or data dictionary to interpret the data.

The dispute turns on

whether the more detailed information sought by the plaintiffs is
relevant and proportional to the needs of the case.

Because the letter is not paginated, I use the pages
generated by the Court’s Electronic Case Filing system.
1

4

Discussion
The Federal Rules of Civil Procedure permit parties “to obtain
discovery regarding any nonprivileged matter that is relevant to
any party’s claim or defense and proportional to the needs of the
case.”

Fed. R. Civ. P. 26(b)(1).

In determining whether the

discovery sought is proportional to the needs of the case, the
Rules instruct courts to consider, among other factors, “whether
the burden or expense of the proposed discovery outweighs its
likely

benefit.”

Fed.

R.

Civ.

P.

26(b)(1).

“Although

not

unlimited, relevance, for the purpose of discovery, is an extremely
broad concept.”

American Federation of Musicians of the United

States and Canada v. Sony Music Entertainment, Inc., No. 15 Civ.
5249, 2016 WL 2609307, at *3 (S.D.N.Y. April 29, 2016) (quoting
Condit v. Dunne, 225 F.R.D. 100, 105 (S.D.N.Y. 2004)).
To determine whether a subpoena imposes an undue burden, a
court should examine “such factors as relevance, the need of the
party for the documents, the breadth of the document request, the
time period covered by it, the particularity with which the
documents are described[,] and the burden imposed.”

MacNamara v.

City of New York, No. 04 Civ. 9612, 2006 WL 3298911, at *15
(S.D.N.Y. Nov. 13, 2006) (quoting Travelers Indemnity Co. v.
Metropolitan Life Insurance Co., 228 F.R.D. 111, 113 (D. Conn.
2005)).

Litigants and courts are instructed to be especially

unsolicitous of non-party targets of subpoenas.
5

See, e.g., Fed.

R. Civ. P. 45(d)(1); MacNamara, 2006 WL 3298911, at *15.

However,

it is still the responsibility of the target of the subpoena to
establish, with evidence and argument, that the discovery sought
is unduly burdensome.

See, e.g., Wells Fargo Bank, N.A. v.

Konover, No. 05 CV 1924, 2009 WL 585430, at *6 (D. Conn. March 4,
2009); Jones v. Hirschfeld, 219 F.R.D. 71, 74-75 (S.D.N.Y. 2003).
Here, the plaintiffs seek Macleods’ sales data to support
their

damages

claim

by

showing

that

the

entry

of

generic

manufacturers into the market, which was allegedly delayed by
Forest’s collusive settlement scheme, reduced the cost of Namenda.
(Pl. Memo. at 2).

Macleods counters that it has already produced

the “most relevant information” to the plaintiffs and that the
additional

discovery

sought

is

unduly

proportional to the needs of the case.
There

is

little

question

that

burdensome

and

not

(Macleods Memo. at 3-6).
the

transactional

information sought by the plaintiffs is relevant.

sales

While monthly

sales summaries provide a general overview of how the entry of
Macleods into the market for Namenda impacted its price, data for
each transaction would enable the plaintiffs to analyze the impact
of generic manufacturers into the market more precisely.

Cf. In

re Neurontin Antitrust Litigation, MDL No. 1479, Civ. A. Nos. 021830, 02-2731, 2011 WL 286118, at *7 (D.N.J. Jan. 25, 2011)
(holding that “transactional data reflecting that the generics’

6

actual market entry did in fact reduce the cost of gabapentin
dramatically” contributed to showing of anticompetitive behavior).
As to undue burden and proportionality, Macleods asserts that
providing sales data at the transactional level would require 150
hours of employee time, cost between $10,0000 and $15,000, and
take approximately twenty-seven days to compile.
at 4, 6).

(Macleods Memo.

It also claims that additional attorney expenses would

be incurred for privilege and objection review but do not state
how much those costs would be.

(Macleods Memo. at 4).

It further

asserts that because it is smaller than other generic Namenda
producers,

its

data

would

(Macleods Memo. at 6-7).

not

be

particularly

compelling.

Finally, Macleods also points out that

it has produced the most relevant material

by providing

the

plaintiffs with a one-page summary of the information requested.
(Macleods Memo. at 6).
Macleods’ arguments are unpersuasive.

While the money and

time that will be spent on the production is not trifling, it is
small in comparison with the potential damages in this case.
Macleods, while not the largest producer of generic Namenda,
appears to make “over 10% of generic Namenda IR sales in the United
States, making it the fourth largest seller of the product.”
(Direct Purchaser Class Plaintiffs’ Reply Brief in Further Support
of Their Motion to Compel Third Parties Macleods Pharmaceuticals
Ltd. and Macleods Pharma USA, Inc. to Produce Documents Responsive
7

to Subpoena Request Nos. 1-2 at 2).
request

is

not

a

broad

one,

and

Furthermore, the plaintiffs’
they

seek

only

transactional dataset” and explanatory documents.
4).

“a

single

(Pl. Memo. at

While Macleods has produced a summary, a one-page outline of

customer sales data is insufficient in a case such as this, where
more specific material would be expected to support the plaintiffs’
case.

Additionally, the summary does not detail sales specific to

customers, and those sales could inform an analysis of class member
damages and injuries.

Finally, Macleods appears to be the only

source for the requested information.

The request is therefore

proportional to the needs of the case.
Macleods also suggests that the request should be rejected
because, as a third party, it retains a greater expectation of
privacy.

(Macleods

Memo.

at

5).

However,

Macleods’

unsubstantiated and cursory assertions of confidentiality are
insufficient.

See In re Mushroom Direct Purchaser Antitrust

Litigation, Master File No. 06-0620, 2012 WL 298480, at *5 (E.D.
Pa. Jan. 31, 2012).

Additionally, discovery in this case is

subject to a protective order.

Macleods’ confidentially argument

is therefore unpersuasive.2

Macleods also seeks leave to file a sur-reply (Docket no.
398) to respond to the plaintiffs’ request that relief be ordered
within a certain timeframe and to respond to the plaintiffs’
argument that Macleods did not substantiate its claims of burden
and cost.
(Motion to File Sur-Reply at 1).
This request is
entirely frivolous. First, Macleods, in its first brief, already
2

8