Federal Trade Commission v. Reckitt Benckiser Pharmaceuticals, Inc.
Filing
29
MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 9/24/2014. Copies to counsel.(cmcc, )
II
IN THE UNITED
E
w
SEP2 4 20M
STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
L
JJ
Richmond Division
CLERK, U.S. DISTRICT COURT
RICHMOND. VA
FEDERAL TRADE COMMISSION,
Petitioner,
Misc.
v.
RECKITT
No.
3:14mc005
BENCKISER
PHARMACEUTICALS,
INC.,
Respondent.
MEMORANDUM OPINION
This matter is before the Court on RESPONDENT RECKITT BENCKISER
PHARMACEUTICALS,
INC.'S MOTION TO TRANSFER (Docket No.
pursuant to 28 U.S.C. § 1404 (a) .
13),
filed
For the reasons stated on the record
on September 23, 2014 and as set forth below,
the motion will be
denied.
BACKGROUND
Petitioner Federal Trade Commission ("FTC") is investigating
Respondent Reckitt Benckiser Pharmaceuticals, Inc. ("Reckitt") for
potentially anticompetitive conduct involving its branded drug
Suboxone.
As part of this investigation, the FTC is looking into
whether Reckitt abused certain FDA regulatory processes, including
the FDA "citizen petition" process, to hinder competition by generic
products.
The FTC issued a Civil Investigative Demand ("CID") to
Reckitt on June 13, 2013.
Reckitt produced almost 600,000 documents
in response, but it has withheld approximately 28,000 documents on
grounds of attorney-client privilege.
THE
FEDERAL
TRADE
COMMISSION
FOR
INVESTIGATIVE DEMAND (Docket No.
August 8, 2014.
2)
The FTC filed a PETITION OF
AN
ORDER
("Petition")
ENFORCING
CIVIL
in this Court on
An ORDER TO SHOW CAUSE (Docket No.
6) was issued
on August 26, 2014, and, by ORDER issued on September 6, 2014 (Docket
No. 20) , the ORDER TO SHOW CAUSE was amended to set a briefing schedule
and oral argument on RESPONDENT RECKITT BENCKISER PHARMACEUTICALS,
INC.'S MOTION TO TRANSFER.
On September 23, 2014, the Court heard
argument on the motion to transfer.
Reckitt filed the motion to transfer this proceeding to the
Eastern
District
of
Pennsylvania,
where
twelve
antitrust
class
actions have been centralized by the Judicial Panel on Multidistrict
Litigation, with! Judge Mitchell S. Goldberg presiding.
An order was
entered in that proceeding at Reckitt's urging requiring Reckitt to
produce, in the MDL proceeding, any documents that it produces to
the FTC.
See Order, Oct. 1, 2013, Case No. 2:13-md-2445 (Exh. A to
Docket No. 14) .
it
seeks
in
precedent in
The FTC takes the position that the 28,000 documents
this
the
proceeding
are
non-privileged
United States Court of Appeals
under
for the
binding
Fourth
Circuit.
Relying on FTC v. Cephalon, Inc., No. 2:08cv2141 (E.D. Pa. Sept.
11, 2013), Reckitt contends that the FTC is aware that Judge Goldberg
has previously held that documents of the type the FTC seeks are
privileged and tihat the FTC's filing the Petition in the Eastern
District of Virginia is forum-shopping.
Reckitt also contends that
a transfer is the only way to avoid multiple proceedings on the same
privilege issue and potentially conflicting rulings.
DISCUSSION
Under 28 U.S.C.
and witnesses,
§ 1404(a), "[f]or the convenience of parties
in the interest of justice,
a district court may
transfer any civil action to any other district or division where
it might have been brought or to any district or division to which
all parties have consented."
"prevent the waste
litigants,
of
witnesses
'time,
and
inconvenience and expense.' "
The basic purpose of § 1404(a) is to
energy and money'
the
public
and
against
'to protect
unnecessary
Original Creatine Patent Co. v. Met-Rx
USA, Inc., 387 F. Supp. 2d 564, 566 (E.D. Va. 2005) (quoting Van Dusen
v. Barrack,
376 U.S.
612,
616 (1964)).
The analysis to be made in determining a motion for transfer
made under § 1404(a) requires that the Court first determine whether
the action could have been brought in the proposed transferee forum
and then consider the
choice of venue,
following factors:
502
(E.D.
the
plaintiff's
(2) the convenience of the parties and witnesses,
and (3) the interest of justice."
2d 499,
"(1)
Va.
Jaffe v. LSI Corp., 874 F, Supp.
2012).
It is undisputed - and the parties agree - that this action could
have been brought by the FTC in Pennsylvania.
The FTC may file in
"any judicial district in which such person resides, is found,
or
transacts business ... a petition for an order of such court for
the
enforcement
of
[a
CID]."
15
U.S.C.
§
57b-le.
Thus,
the
resolution of the motion turns on the three factors traditionally
considered in deciding motions under § 1404(a).
1.
The FTC's
Choice
of Forum
A plaintiff's choice of forum is generally given substantial
weight; however, "the plaintiff's choice of forum is not entitled
to substantial weight if the chosen forum is not the plaintiff s 'home
forum,'
and the cause of action bears little or no relation to the
chosen forum."
Lycos, Inc. v. TiVo, Inc., 4 99 F. Supp. 2d 685,
(E.D. Va. 2007).
Further,
692
as the Court previously has explained:
"if there is little connection between the claims and this judicial
district, that would militate against a plaintiffs chosen forum and
weigh in favor of transfer to a venue with more substantial contacts."
Kohv. Microtek Int'1, Inc., 250 F. Supp. 2d 627, 635 (E.D. Va. 2003) .
Reckitt argues that the FTC's choice of forum should be given
little, if any, weight because: (1) the FTC is not a private litigant;
(2) the Eastern District of Virginia is not the FTC's home forum;
and
(3)
this dispute has no
connection to this forum.
Reckitt
contends that this is nothing more than forum shopping.
The FTC disagrees and contends that its choice is entitled to
substantial weight and that this proceeding, in fact, has strong ties
to
this
Richmond.
forum.
Most
Reckitt's
of
the
headquarters
employees
that
and
operations
Reckitt
are
in
identified
as
custodians of the documents sought by the FTC work in Richmond, and
many of the documents sought are located in Richmond as well.
The
FTC contends that much of the significant conduct and many of the
relevant decisions took place at Reckitt's Richmond headquarters and
that the consultant, Venebio, that prepared the study on which the
citizen's petition at issue was based is also a Richmond company.
The
lawyers involved in the assertedly privileged documents are
located in Richmond,
The
FTC's
Washington,
choice
of
this
D.C.,
forum
and New York.
is
entitled
to
reasonable
deference, especially given that it is Reckitt's home forum, where
Reckitt is headquartered, and where much of the conduct at issue took
place.
The FTC's choice was reasonable,
and this factor weighs
against transfer.
2.
The Convenience Factor
This factor requires an assessment of the "ease of access to
sources of proof, the cost of obtaining the attendance of witnesses,
and the availability of compulsory process." Lycos, 4 99 F. Supp. 2d
at 693 (quoting Samsung Elecs. Co. v. Rambus, Inc., 386 F. Supp. 2d
708, 717 n. 13 (E.D. Va. 2005)).
As the FTC notes, the ORDER TO SHOW
CAUSE, as amended by the Order of September 5, 2014, requires that,
if
Reckitt
testimony,
"believes
it
it must file,
necessary
for
by October 1,
the
Court
2014,
to
hear
live
a summary of such
testimony and explain why [it] believes live testimony is required."1
To the extent that testimony is required, it will come for the most
part from witnesses who work in Richmond.
And, notwithstanding the
FTC's urging to the contrary, it is likely that it will be necessary
to hear testimony of Reckitt witnesses and their lawyers to decide
the claims of
privilege.
To the extent that witnesses are not
located in Richmond, it appears that they will be willing to travel
here without compulsory process.
This district is adjacent to the
District of Columbia, so it is also more convenient than the Eastern
District of Pennsylvania to the FTC and to Reckitt's counsel. . Based
on the record, the convenience factor weighs against a transfer.
3.
The
Interest of
Justice
The interest of justice factor focuses on "systemic integrity
and fairness, . . . the most prominent elements of which are 'judicial
economy and the avoidance of inconsistent judgments.'"
F. Supp.
2d at 505 (quoting Byerson v. Equifax Info.
467 F. Supp. 2d 627,
by
considering
controversies
635 (E.D. Va. 2006)).
docket
decided
congestion,
at
home,
Servs., LLC,
"Fairness is assessed
interest
knowledge
Jaffe, 874
of
in
having . local
applicable
law,
unfairness in burdening forum citizens with jury duty, and interest
in avoiding unnecessary conflicts of law."
Id.
In general, these
1 The ORDER TO SHOW CAUSE, as amended, also provides that Reckitt
may file affidavits, exhibits, and other papers in opposition to the
pending Petition.
factors are neutral in the analysis in this case, except with regard
to "avoiding unnecessary conflicts of law" and "judicial economy."
Reckitt's arguments to the contrary notwithstanding, there is
very little overlap between the privilege issue presented in this
matter and the issues in the MDL cases pending in the Eastern District
of Pennsylvania.
As the FTC notes, the only issue in this proceeding
is whether Reckitt must produce some or all of the 28,000 documents
that it has withheld on the grounds of attorney-client privilege.
Moreover,
in September 2013,
Reckitt filed two motions to dismiss
the action in Pennsylvania, and no ruling on those motions has been
issued as of this date, although oral argument was held on September
18, 2014 .2
If the motions to dismiss are granted, Judge Goldberg will
never be required to address any privilege claims that might be raised
in
that
litigation,
and
a transfer
to
the
Eastern
District
of
Pennsylvania would likely delay resolution of the privilege issue.
Given these facts,
the Court concludes that a transfer would not
promote judicial economy.
The Court also finds that the risk of inconsistent rulings is
illusory.
If the Court rules that the documents are not privileged,
then Reckitt can appeal that decision to the Court of Appeals for
the Fourth Circuit and can seek a stay of the implementation of that
decision while the appeal is pending.
Reckitt can also ask Judge
These facts indicate some possible docket congestion, as argued by
the
FTC.
Goldberg for an exemption to his order that it must produce, in the
MDL proceeding, any documents that it produces to the FTC.
The risk
of inconsistent rulings is slight and is not sufficient to overcome
the
other factors.
The interest of justice factor weighs against a transfer to the
Eastern District of Pennsylvania.
CONCLUSION
For
the
foregoing
PHARMACEUTICALS,
reasons,
RESPONDENT
RECKITT
BENCKISER
INC.'S MOTION TO TRANSFER (Docket No. 13) will be
denied.
It
is
so ORDERED.
/s/
t&fi
Robert E. Payne
Senior United States District Judge
Richmond, Virginia
Date: September £db
201'
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