*1 “You know the more things change/ the more they stay the same/The same sunrise, it's just another day”

- Bon Jovi[1]

For almost five years,[2] Procaps S.A. (“Procaps” or “Plaintiff”) and Patheon Inc. (“Patheon” or “Defendant”) have been embroiled in a pedal-to-the-metal, no-pulled-punches, full-speed-ahead litigation war that generated 1185 docket entries, sanctions motions, myriad hearings, the submission of thousands of pages of legal memoranda and exhibits, and a whole lot of unpleasantness. It would therefore be naive to think that the fighting would end merely because the Eleventh Circuit Court of Appeals affirmed a summary judgment in Patheon's favor.

Following the appellate affirmation, this Court entered an order granting Patheon's motions for attorney's fees and costs and entered a judgment in Patheon's favor for approximately $18.5 million. [ECF Nos. 1166-67].

Procaps has filed a notice of appeal. [ECF No. 1178]. It has not, however, sought a stay or posted a bond. It has also not paid the judgment, and Patheon is pursuing post-judgment discovery.

So, to no one's surprise, the parties have now ratcheted up their never-ending legal battle by fighting over discovery, which Patheon says it needs to help locate assets for collection purposes.

Because the parties could not reach agreements on their disputes, the Court held a discovery hearing on September 29, 2017. [ECF No. 1185].

Patheon's counsel advised the Court that Procaps’ counsel, who is new to the case, advised him that: (1) Procaps was not paying the judgment; (2) Procaps has no assets in the United States; (3) Patheon's $18.5 million judgment is merely a Pyrrhic victory; and (4) “good luck trying to collect.”

Procaps’ counsel did not deny saying those things, but he argued that any in-court discussion of those remarks was inappropriate. He contended that his comments were privileged, settlement discussions because they were made after Patheon's counsel suggested mediation, an offer that was rejected. But regardless of whether the comments from Procaps’ counsel were made in connection with settlement discussions, Federal Rule of Evidence 408 does not prevent them from being mentioned for certain purposes in a hearing. That rule provides that evidence about “conduct or a statement made during compromise negotiations about the claim” is generally not admissible “either to prove or disprove the validity or amount of a disputed claim[.]” F.R.E. 408(a). In addition, subsection b of the Rule also provides that “the court may admit this evidence for another purpose, such as proving a witness's bias or prejudice, [or] negating a contention of undue delay[.]” F.R.E. 408(b).

The Undersigned does not (for several reasons) deem the comments made by Procaps’ counsel to be excludable or inadmissible at a discovery hearing designed to address arguments about the propriety of post-collection discovery, which includes Patheon's suggestion that Procaps has been involved in improper efforts to hide its assets.

*2 In any event, Procaps’ counsel argued that the discovery propounded on third parties should not be permitted because those entities are independent third parties and are not the judgment debtor. He also argued that the subpoenas served on Procaps’ two lead litigation attorneys, Mr. Rosenthal and Mr. Coutroulis, and a Rule 30(b)(6) subpoena for documents and testimony served on Carlton Fields Jorden Burt, P.A. (“Carlton Fields”), where the lead litigators practice, should, at a minimum, be postponed until Patheon first pursues discovery from other, less-provocative sources.

Patheon, in turn, argued that these third parties are part of the “Minski Group,” which purportedly owns Procaps. In addition, Patheon's counsel argued that Procaps “dramatically” changed its business practices after Patheon filed its attorney's fees motion in 2015. Without getting into specific details, Patheon contends that Procaps took steps to avoid paying a judgment by making sure that payments for product sales did not flow into the United States. At bottom, Patheon suggests that Procaps is (or was) involved in a scheme to defraud creditors. Therefore, Patheon urged, it needs discovery from these third parties to obtain meaningful discovery from Procaps, its principals and others (such as Procaps’ litigation counsel) about Procaps’ assets and what it has done with revenue it has received from its sales of pharmaceutical products in the United States.

Plaintiff filed a Notice of Hearing concerning the discovery disputes. [ECF No. 1181]. The Undersigned held a hearing on those disputes on September 29, 2017. The Undersigned then ordered as follows:

1. The Court extends Procaps’ deadline to respond to Defendant's requests for interrogatories and production by 30 days.

2. If Patheon wishes to obtain discovery from the third parties, then it may redraft the subpoenas to Nature's Products, Inc.; Orignates, Inc.; Wellnext LLC; Sofgen Pharmaceuticals LLC (referred to collectively as the “affiliates”); and Carlton Fields.

3. For the affiliates discovery, Patheon must (1) delete topic Q of Addendum A; (2) rephrase topic P of Addendum A to current litigation/arbitration where Procaps is a plaintiff or a party pursuing a counterclaim, crossclaim or third party claim; and (3) redraft the addenda to limit the requested discovery to topics concerning the affiliates’ relationship with Procaps. Permissible topics include: common ownership, common membership on boards and committees, common ownership of assets, sales and purchases between Procaps and the affiliates, and the business relationship between Procaps and the affiliates.

4. If it wishes to obtain discovery from the Carlton Fields law firm, then Patheon shall also redraft the Carlton Fields subpoena in the same way as the affiliates’ subpoenas. In addition, for the Carlton Fields subpoena, Addendum B is limited to non-privileged, responsive documents. For privileged responsive documents, Carlton Fields does not need to include on a privilege log its client communications created after this lawsuit was filed.[3] But the mere fact that Procaps may have sent a business document, such as a bank account record or a financial statement, to its counsel with a confidential cover letter encompassed by the attorney-client privilege does not then immunize the underlying business document from discovery.

*3 5. The Court permits Patheon to serve the affiliate discovery in stages. The timing of this discovery is at Defendant's discretion.

6. However, the affiliates and Carlton Fields must produce documents responsive to the subpoenas before the Rule 30(b)(6) designees’ depositions take place.

7. Defendant shall not take Carlton Fields’ Rule 30(b)(6) designee's deposition until after the depositions of Mr. Minski, Mr. Franco, and the affiliates’ Rule 30(b)(6) designees’ depositions take place.

8. Defendant shall postpone taking the depositions of attorneys Rosenthal and Coutroulis until (1) the Carlton Fields and the affiliates’ subpoenas are redrafted; (2) the affiliates’ production and Rule 30(b)(6) designees’ depositions are completed; (3) Carlton Fields’ production and Rule 30(b)(6)’s designee's deposition are completed; and (4) Plaintiff responds to the requests for production and interrogatories.

DONE and ORDERED, in Chambers, in Miami, Florida, on October 2, 2017.