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In re Namenda Direct Purchaser Antitrust Litigation

United States District Court, S.D. New York

August 2, 2017


          Bruce E. Gerstein, Esq. Dan Litvin, Esq. Joseph Opper, Esq. Noah H. Silverman, Esq. Kimberly M. Hennings, Esq. Garwin Gerstein & Fisher, L.L.P.

          Heather McDevitt, Esq. Jack Pace, Esq. Peter J. Carney, Esq. Martin M. Toto, Esq. Kristen 0'Shaughnessy, Esq. Ryan P. Johnson, Esq. Michael E. Hamburger, Esq. Charles C. Moore, Esq. White & Case LLP

          John M. Gidley, Esq. White & Case LLP (DC)

          Kevin C. Adam, Esq. White & Case LLP

          Heather M. Burke, Esq. White & Case LLP



         The plaintiffs in this putative class action allege, in relevant part, that the defendants - Actavis pic (now known as Allergan pic), Forest Laboratories, LLC, Forest Laboratories, Inc., and Forest Laboratories Holdings Ltd. (together, "Forest") - schemed to delay entry of generic versions of the brand-name Alzheimer's disease treatment Namenda IR by entering into collusive settlements with various generic drug companies. Before me now is a motion to compel concerning a residual dispute following my decision of May 19, 2017, which found that Forest had not (yet) waived protection of attorney work product or attorney-client communications by putting them at issue. In re Namenda Direct Purchaser Antitrust Litigation, No. 15 Civ. 7488, 2017 WL 2226591 (S.D.N.Y. May 19, 2017). At this time, the plaintiffs' motion to compel is denied.


         As noted in my earlier opinion, the plaintiffs contended that 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 that “its conduct with respect to the Namenda patent litigations was anything but routine behavior” under the patent regime governing entry of generic drugs into the market, 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 non-privileged 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 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] agreements with [generic producers] Mylan and Orchid.” (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 [that] are contained in attorney-client communications or attorney-created documents.” (Supplemental Memorandum in Support of Direct Purchaser Class Plaintiffs' Motion to Compel Production of Documents (“Pl. Supp. Memo.”) at 2).

         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. at 2-3). The second comprises up to 295 charts and spreadsheets containing financial analyses relevant to “the cost, value[], and purpose of the amendments to a prior Lexapro distribution and supply agreement, which [the] [p]laintiffs contend was a vehicle that Forest used to make a ‘reverse payment' to Mylan as part of the Namenda patent settlement.” (Pl. Supp. Memo. at 1, 3-4). 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. (Pl. Supp. Memo. at 4). The plaintiffs suppose that the redactions in this email hide unprivileged factual information concerning ...

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