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In re Namenda Direct Purchaser Antitrust Litigation

United States District Court, S.D. New York

August 30, 2017

IN RE NAMENDA DIRECT PURCHASER ANTITRUST LITIGATION Nos. 17 MC 0274 (CM)(JCF), 17 MC 0314 (CM)(JCF)

          MEMORANDUM AND ORDER

          JAMES C. FRANCIS IV, UNITED STATES MAGISTRATE JUDGE.

         In this putative class action asserting violations of antitrust law by defendants Actavis pic (now known as Allergan pic) 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 (the "plaintiffs") have filed a motion to compel non-party Lupin Pharmaceuticals, Inc. ("Lupin Pharmaceuticals") to produce documents responsive to a subpoena. In addition, Lupin Pharmaceuticals has filed a motion to quash a deposition subpoena served upon it by Forest.[1] The motion to compel is granted; the motion to quash is granted in part and denied in part.

         Background

         A. Substantive Claims

          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 3314233, at *1 (S.D.N.Y. Aug. 2, 2017); In re Namenda Direct Purchaser Antitrust Litigation, 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). The asserted collusive settlement scheme is particularly relevant to this dispute.

         Specifically, the plaintiffs allege that in late 2007 Lupin Pharmaceuticals submitted an Abbreviated New Drug Application (“ANDA”) to the FDA seeking approval to market a generic version of Namenda IR prior to the expiration of the relevant patent, known as the ‘703 Patent.[2] (Memorandum of Law In Support of Direct Purchaser Class Plaintiffs' Motion to Compel Third Party Lupin Pharmaceuticals, Inc. to Produce Documents Responsive to Plaintiffs' Rule 45 Subpoena (“Pl. MTC Memo.”) at 6). In response, Forest filed a patent infringement action against Lupin Pharmaceuticals in January 2008. (Pl. MTC Memo. at 6). Forest and Lupin Pharmaceuticals settled that action in December 2009. (Pl. MTC Memo. at 6). As part of that settlement, Lupin Pharmaceuticals agreed not to launch its generic version of Namenda IR until July 11, 2015, absent certain contingencies. (Pl MTC Memo. at 6). Lupin Pharmaceuticals received final approval of its generic drug on April 10, 2015. (Pl. MTC Memo. at 7). However, by the time it was able to begin marketing its medication pursuant to the settlement agreement, Forest had engineered a “product hop” using a “hard switch” strategy that “succeeded in converting a substantial portion of the market to its new product, Namenda XR, ” a drug that is pharmacologically identical to Namenda IR but not therapeutically equivalent to the older drug under FDA regulations. (Pl. MTC Memo. at 7); In re Namenda, 2017 WL 2693713, at *1.

         B. Subpoenas

         The plaintiffs served a subpoena on Lupin Pharmaceuticals on January 9, 2017. (Subpoena to Produce Documents, Information, or Objects or to Permit Inspection of Premises in a Civil Action dated Jan. 5, 2017 (“Document Subpoena”), attached as Exh. A to Declaration of Daniel C. Simons dated July 19, 2017 (“Simons Decl.”), at 2). The Document Subpoena defined its target to include Lupin Pharmaceuticals' parent corporation. (Schedule A to Document Subpoena at 1). It sought documents in Lupin Pharmaceutical's “possession, custody and/or control” -- defined as including material in the possession of “any affiliated company from which [Lupin Pharmaceuticals] ha[s] the practical ability to obtain documents without service of legal process” (Schedule A to Document Subpoena, at 2) -- and included a request for “[a]ll documents regarding the scale-up, validation, manufacturing, and/or marketing of Generic Namenda. By way of example only, this would include, but not be limited to, agendas and minutes of meetings of any teams, committees, or departments involved in the aforementioned activities; and communications with third-party ingredient suppliers” (Schedule A to Document Subpoena at 5 (“Request No. 4”)). Pursuant to Rule 45 of the Federal Rules of Civil Procedure, which requires the target of the subpoena to object “before the earlier of the time specified for compliance or 14 days after the subpoena is served, ” objections were due on January 23, 2017. Fed.R.Civ.P. 45(d)(2)(B).

         On February 22, 2017, counsel for Lupin Pharmaceuticals contacted plaintiffs' counsel to schedule a time to meet and confer on the scope of the Document Subpoena. (Declaration of Zarema A. Jaramillo dated Aug. 2, 2017 (“Jaramillo 8/2/17 Decl.”), ¶ 2). The first conference call regarding the Document Subpoena took place on March 1, 2017. (Jaramillo 8/2/17 Decl., ¶ 3). On March 9, 2017, Lupin Pharmaceuticals served its responses to the Document Subpoena, which included objections stating that, “to the extent that [the Document Subpoena] improperly purport[s] to seek information from distinct corporate entities . . . not controlled by Lupin Pharmaceuticals, Inc.[, ] Lupin will respond on behalf of Lupin Pharmaceuticals, Inc. only.” (Lupin Pharmaceuticals, Inc.'s Response and Objections to Direct Purchaser Plaintiffs' Subpoena to Produce Documents, Information, or Objects or to Permit Inspection of Premises in a Civil Action dated March 9, 2017, attached as Exh. G to Simons Decl., at 2-3). In a letter April 28, 2017, plaintiffs' counsel informed Lupin Pharmaceuticals that its objections were untimely. (Letter of Daniel C. Simons dated April 28, 2017, attached as Exh. B to Simons Decl., at 2 n.1).

         The plaintiffs and Lupin Pharmaceuticals continued to confer about the scope of the Document Subpoena, including Request No. 4. (Pl. MTC Memo. at 8; Jaramillo 8/2/17 Decl., ¶¶ 5-9). During that process, the plaintiffs suggested that, in response to Request No. 4, Lupin Pharmaceuticals produce “‘high-level' documents related to [its] plans to launch generic Namenda IR.” (Jaramillo 8/2/17 Decl., ¶ 5). After a conference with Lupin Pharmaceuticals employees, counsel for the company informed the plaintiffs that “the employees most likely to have such documents would be members of [Lupin Pharmaceutical's] Generics Department (internally referred to as ‘Commercial').” (Jaramillo 8/2/17 Decl., ¶ 6). Lupin Pharmaceuticals ultimately agreed to produce “high level documents sufficient to show Lupin's plans to scale-up, manufacture, and/or market Namenda IR that are prepared by Lupin's Commercial Department.” (Letter of Zarema Jaramillo, dated May 5, 2017, attached as Exh. C to Simons Decl., at 2; Jaramillo 8/2/17 Decl., ¶¶ 6, 8-9).

         At the beginning of July 2017, immediately after Lupin Pharmaceuticals completed production pursuant to the agreement, the plaintiffs objected that responsive documents were missing, specifically, documents sufficient to show the following:

(1) when Lupin Pharmaceuticals began preparations for real world launch of its generic Namenda product;
(2) when or where validation batches were made;
(3) when the first commercial batches were manufactured;
(4) when the commercial batches needed for launch were fully manufactured;
(5) the quantity Lupin Pharmaceuticals estimated it would have to produce for launch; and
(6) communications from project managers concerning preparation for launch, launch meetings, or spreadsheets tracking what batches were manufactured.

(Pl. MTC Memo. at 9; Jaramillo 8/2/17 Decl., ¶¶ 11-13).[3] On July 25, 2017, while attempting to resolve this dispute, the plaintiffs asked Lupin Pharmaceuticals if its response to Request No. 4 “related to documents from Lupin in both the United States and India.” (Email of Daniel Simons dated July 25, 2017, attached as part of Exh. C to Jaramillo 8/2/17 Decl.). Lupin Pharmaceuticals answered that only the U.S. entity was “relevant, ” making explicit, apparently for the first time, that Lupin Pharmaceuticals had not requested responsive documents from its Indian parent company, Lupin Limited. (Emails of Zarema Jaramillo and Daniel Simons dated July 26, 2017, attached as part of Exh. C to Jaramillo 8/2/17 Decl.).

         Meanwhile, on February 3, 2017, Forest had served a subpoena for documents on Lupin Pharmaceuticals. (Declaration of Zarema A. Jaramillo dated July 10, 2017 (“Jaramillo 7/10/17 Decl.”), ¶ 4). Forest and Lupin Pharmaceuticals came to the same agreement regarding document production as had Lupin Pharmaceuticals and the plaintiffs. (Jaramillo 7/10/17 Decl., ¶ 5). Forest then served a deposition subpoena on Lupin Pharmaceuticals seeking testimony on eighteen topics. (Subpoena to Testify at a Deposition in a Civil Action dated April 25, 2017 (“Deposition Subpoena”), attached as part of Exh. A to Jaramillo 7/10/17 Decl.). The parties then negotiated as to the scope of the subpoena. (Jaramillo 7/10/17 Declaration, ¶¶ 7-18; Declaration of Kristen O'Shaughnessy dated July 24, 2017 (“O'Shaughnessy Decl.”), ¶¶ 7-17). Forest whittled down the topics covered by the Deposition Subpoena to nine:

(1) Sales projections and actual sales for Generic Namenda IR;
(2) Forecasts regarding anticipated regulatory approval dates, launch dates, and price of any Generic IR, including assumptions used;
(3) The company's understanding and evaluation of whether Namenda IR or the ‘703 Patent was subject to a pediatric exclusivity period;
(4) The expected timeline for patent litigation arising from the ANDA for Generic Namenda IR, and fees and costs incurred or expected to be incurred in connection with such litigation;
(5) The actual, proposed, or contemplated plans for “at-risk” launch of any Generic Namenda IR and past instances of “at-risk” ...

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