Hope Med. Enters., Inc. v. Fagron Compounding Servs., LLC
Hope Med. Enters., Inc. v. Fagron Compounding Servs., LLC
2021 WL 6618726 (C.D. Cal. 2021)
April 20, 2021
Snyder, Christina A., United States District Judge
Summary
The court granted Hope's motion to amend the scheduling order to extend the cut-off for discovery relating to the issues raised. This allowed Hope to conduct a further two hours of deposition of defendants' corporate designee, depose Fresenius employees Peterson, Pham, and Grant, and depose defendants' employee Gwinup. The ESI in this case includes emails, orders, and attestation documents, which revealed that Defendants accepted and filled 503B sodium thiosulfate orders from DaVita without receiving any attestation documents whatsoever.
Additional Decisions
HOPE MEDICAL ENTERPRISES, INC.
v.
FAGRON COMPOUNDING SERVICES, LLC ET AL
v.
FAGRON COMPOUNDING SERVICES, LLC ET AL
Case No. 2:19-CV-07748-CAS-PLAx
United States District Court, C.D. California
Filed April 20, 2021
Counsel
Aaron S. Craig, Joseph N. Akrotirianakis, King and Spalding LLP, Los Angeles, CA, for Hope Medical Enterprises, Inc.Ellen S. Robbins, Akerman LLP, Los Angeles, CA, Lawrence D. Silverman, Akerman LLP, Miami, FL, Sherylle A. O. Francis, Sherylle Francis PA, Southwest Ranches, FL, for Fagron Compounding Services, LLC, et al.
Snyder, Christina A., United States District Judge
Proceedings: (IN CHAMBERS) [REDACTED] - DEFENDANTS' MOTION TO CERTIFY ORDER FOR INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. § 1292(b) (Dkt. 227, filed on February 12, 2021) PLAINTIFF'S SEALED MOTION (1) TO MODIFY SCHEDULING ORDER TO PERMIT TAKING OF, AND (2) TO COMPEL DEPOSITIONS OF KEIOLA PETERSON, PHU PHAM, TAMEKKA GRANT, VERONICA GWINUP, AND THE FURTHER DEPOSITION OF FAGRON COMPOUNDING SERVICES, LLC (Dkt. 230, filed on February 19, 2021)
*1 The Court finds this motion appropriate for decision without oral argument. See Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. Accordingly, the matter is hereby taken under submission.
I. INTRODUCTION
Before the Court is defendants' motion, filed on February 12, 2021, to certify for interlocutory appeal the Court's January 25, 2021 order pursuant to 28 U.S.C. § 1292(b) (“Section 1292(b)”). Dkt. 227 (“Mot. for Cert.”). Plaintiff opposed on February 22, 2021. Dkt. 237 (“Opp. to Mot. for Cert.”). Defendants replied on February 26, 2021. Dkt. 243.
Also before the Court is plaintiff's motion to modify the scheduling order and requesting such relief as is necessary for plaintiff to conduct several additional depositions, filed on February 19, 2021. Dkt. 230 (“Mot. to Mod. Sched.”). The parties included a joint stipulation with the motion. Dkt. 230-1 (“Joint Stip.”). On March 1, 2021, defendants filed a supplemental memorandum in opposition to the joint stipulation. Dkt. 244. And on March 8, 2021, Hope filed a supplemental memorandum in support of its motion. Dkt. 249.[1] The Court held a hearing on March 15, 2021.
Having carefully considered the parties' arguments and submissions, the Court finds and concludes as follows.
II. BACKGROUND
The Court previously set out the factual and procedural background of this case in its prior orders. For that reason, the Court only sets forth those facts necessary to resolve the parties' present motions.
On September 6, 2019, plaintiff Hope Medical Enterprises, Inc., d/b/a Hope Pharmaceuticals (“Hope”) filed suit in this Court against defendants Fagron Compounding Services, LLC, JCB Laboratories, LLC, AnazaoHealth Corporation, and Coast Quality Pharmacy, LLC (collectively, “defendants”). Dkt. 1. Hope's allegations involve defendants' compounded sodium thiosulfate drug, which is identical to Hope's Sodium Thiosulfate Injection, except that it does not contain potassium. Defendants compound their drug in one compounding pharmacy operated pursuant to Section 503A of the Food, Drug and Cosmetics Act (“FDCA”), 21 U.S.C. § 353a (“Section 503A”); and two outsourcing facilities operated pursuant to Section 503B of the FDCA, 21 U.S.C. § 353b (“Section 503B”). Defendants sell their compounded sodium thiosulfate drug nation-wide, including into the five states at issue here: California, Connecticut, Florida, South Carolina and Tennessee.
Hope filed the operative first amended complaint on November 12, 2019. Dkt. 47 (“FAC”). The FAC asserts claims for: (1) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. (“UCL”); (2) violation of Florida's Deceptive and Unfair Trade Practices Act, Fla. Stat. Ann. § 501.201, et seq. (“FDUTPA”); (3) violation of Tennessee's Consumer Protection Act, Tenn. Code Ann. § 47-18-104(b)(44)(C) (“TCPA”); (4) violation of South Carolina's Unfair Trade Practices Act, S.C. Code Ann. § 39-5-20 (“SCUTPA”); and (5) violation of Connecticut's Unfair Trade Practices Act, Conn. Gen. St. § 42-110b (“CUTPA”). See generally FAC.
*2 Hope's unfair competition claims are based on its allegation that defendants' practices violate both Section 503A and 503B of the FDCA. Importantly, Hope argues that these violations also violate state-law parallels to the FDCA, namely, (1) California's Sherman Food, Drug, and Cosmetic Law, Cal. Health & Safety Code § 111550 (“Sherman Law”); (2) Florida's Drug and Cosmetic Act, Fla. Stat. Ann. § 499.001, et seq.; (3) Tennessee's Food, Drug and Cosmetic Act, Tenn. Code Ann. § 53-1-101, et seq.; and (4) South Carolina's Drug Act, S.C. Code Ann. § 39-23-70.[2]
III. DEFENDANTS' MOTION FOR INTERLOCUTORY APPEAL
Defendants move for an order certifying this Court's January 25, 2021 order for interlocutory appeal pursuant to Section 1292(b).
A. Background
Hope filed a motion for a preliminary injunction on June 1, 2020, dkt. 105 (“PI Mot.”), which the Court granted in part on July 7, 2020, dkt. 141 (“PI Ord.”). In granting Hope's motion for a preliminary injunction, the Court found, in part, that Hope's state-law claims were not preempted by the FDCA. PI Ord. at 23. Specifically, the Court found that “it appears that the FDCA does not preempt state-law, consumer protection claims based on alleged violations of the FDCA where there is a parallel state law that renders the same noncompliant conduct independently unlawful.” Id. (citing Farm Raised Salmon Cases, 42 Cal. 4th 1077, 1091 n.13, 1094 (2008)). The Court relied on Allergan, Inc. v. Athena Cosmetics, Inc., 738 F.3d 1350 (Fed. Cir. 2013), where the Federal Circuit concluded “that the FDCA [did] not impliedly pre-empt [Allergan's] UCL claim,” which was premised on the Sherman Law,[3] because the Sherman Law “incorporates various provisions of the FDCA, which does not itself allow a private right of action.” Id. at 1354; see also Allergan USA, Inc. v. Imprimis Pharm., Inc., No. 8:17-CV-01551-DOC-JDE, 2019 WL 4545960 (C.D. Cal. Mar. 27, 2019). The Court reasoned that this conclusion was in keeping with the leading cases on the issue of FDCA preemption: Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341 (2001), and Perez v. Nidek Co., 711 F.3d 1109 (9th Cir. 2013). These cases stand for the proposition that a plaintiff's claims must thread a “narrow gap ... to escape preemption by the FDCA: The plaintiff must be suing for conduct that violates the FDCA (or else his claim is expressly preempted by § 360k(a)), but the plaintiff must not be suing because the conduct violates the FDCA (such a claim would be impliedly preempted under Buckman).” Perez, 711 F.3d at 1120 (emphasis in original) (quotation omitted).
In October 2020 and January 2021, after the preliminary injunction was issued in this case, a different court in the Central District of California reached a different conclusion in four related cases. See Nexus Pharm., Inc. v. U.S. Compounding, Inc., No. CV 20-07331-CJC (JDEx), dkt. 33 (C.D. Cal. Jan. 7, 2021); Nexus Pharm., Inc. v. Cent. Admixture Pharmacy Servs., Inc., No. SACV 20-01505-CJC (JDEx), 2020 WL 6555052 (C.D. Cal. Oct. 29, 2020); Nexus Pharm., Inc. v. Quva Pharma, Inc., et al., No. CV 20-07518-CJC (JDEx), 2020 WL 6498970 (C.D. Cal. Oct. 29, 2020); Nexus Pharm., Inc. v. Leiters, Inc., et al., No. CV 20-07328-CJC (JDEx), dkt. 70 (C.D. Cal. Oct. 29, 2020) (together, the “Nexus cases”). In Nexus Pharm. v. Cent. Admixture Pharmacy Servs., for instance, the plaintiff alleged claims under several states' unfair competition laws, including the UCL, FDUTPA and CUPTA, on the grounds that the defendants' conduct violated, among other things, the “essentially a copy” requirement of Section 503B. 2020 WL 6555052, at *1. The Nexus court found that the plaintiff's claims were impliedly preempted because “Defendants' actions [were] unfair only because they purportedly violate the FDCA.” Id. at *3. However, importantly, the plaintiff in the Nexus cases did not allege violations of state-law parallels to the FDCA. The question of preemption that this Court faced was therefore not squarely before the Nexus court.
*3 On November 2, 2020, Hope filed a motion for summary judgment, and a motion for contempt. Dkts. 151 (“MSJ”), 153 (“Mot. for Contempt”). On November 23, 2020, defendants opposed the motion and filed a cross-motion for summary judgment. Dkt. 178. On November 24, 2020, defendants filed a combined opposition and a motion for reconsideration of the preliminary injunction. Dkt. 183. Both the cross-motion for summary judgment and the motion for reconsideration were based in part on the grounds that the FDCA preempted Hope's state law claims. On January 25, 2021, the Court issued an order, inter alia, denying defendants' motion for reconsideration, and denying defendants' cross-motion for summary judgment. Dkt. 225 (“Jan. 25, 2021 Ord.”). In ruling, the Court reiterated its previous conclusion that Hope's parallel state law claims were not preempted. Jan. 25 Ord. The Court acknowledged that other district courts have reached a contrary conclusion, such as in the Nexus cases and Somers v. Beiersdorf, Inc., 467 F. Supp. 3d 934 (S.D. Cal. 2020) (“Somers”), but maintained that Allergan v. Athena, 738 F.3d 1350, remained persuasive.
On February 12, 2021, defendants filed the instant motion to certify the Court's January 25, 2021 Order for interlocutory appeal pursuant Section 1292(b). Specifically, defendants seek to appeal this Court's conclusion that Hope's state law claims are not preempted by the FDCA.
On February 23, 2021, defendants filed a notice of appeal to the Ninth Circuit Court of Appeals, appealing this Court's January 25, 2021 Order, specifically, this Court's decision in that order not to dissolve the preliminary injunction it had previously issued. Dkt. 238.
On March 3, 2021, the Ninth Circuit heard oral argument in Somers. In that case, the plaintiff brought suit against the defendant, Beiersdorf, alleging that Beiersdorf had sold a drug—a face lotion—without Food and Drug Administration approval. Id. at 935. The plaintiff claimed that this violation of the FDCA constituted a violation of the Sherman Law, which in turn constituted a violation of the UCL. Id. at 938. Beiersdorf moved for summary judgment in part on the ground that the FDCA impliedly preempted the claims at issue because, in effect, the plaintiff there was attempting to privately enforce the FDCA. Id. at 935–36. The district court agreed with Beiersdorf, finding that the plaintiff's claims failed to thread the narrow gap established by Buckman and Perez, and granted summary judgment on this issue. Id. at 937. Plaintiff there appealed, and the Ninth Circuit, in oral argument, addressed the question of whether the plaintiff's claims, based on the Sherman Law, were impliedly preempted by the FDCA. See Somers v. Beiersdorf, Inc., 9th Cir. Case No. 20-55541.
On March 15, 2021, this Court stayed the proceedings in this case on the grounds that the Ninth Circuit's ruling in Somers may have provided guidance on the question of preemption in this case. Dkt. 255. The Ninth Circuit issued its ruling in Somers on March 25, 2021. Dkt. 256-1, Exh. A (Ninth Circuit memorandum). The ruling did not address the question of preemption. See id. Accordingly, this Court now takes up defendants' Motion for Appeal.
B. Legal Standard
Section 1292(b) provides a means for litigants to bring an immediate appeal of a non-dispositive order with the consent of both the district court and the court of appeals. 28 U.S.C. § 1292(b); In re Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982). The district court may certify an order for interlocutory appellate review under Section 1292(b) if the following three requirements are met: “(1) there is a controlling question of law, (2) there are substantial grounds for difference of opinion, and (3) an immediate appeal may materially advance the ultimate termination of the litigation.” In re Cement Antitrust Litig., 673 F.2d at 1026. “[T]he legislative history of 1292(b) indicates that this section was to be used only in exceptional situations in which allowing an interlocutory appeal would avoid protracted and expensive litigation.” Id. (citing U.S. Rubber Co. v. Wright, 359 F.2d 784, 785 (9th Cir. 1966)); Fukuda v. County of Los Angeles, 630 F.Supp. 228, 229 (C.D. Cal. 1986) (“The party seeking certification has the burden of showing that exceptional circumstances justify a departure from the ‘basic policy of postponing appellate review until after the entry of a final judgment.’ ” (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978))).
C. Discussion
*4 Defendants request an order certifying for interlocutory appeal this Court's January 25, 2021 Order denying defendants' cross-motion for summary judgment and motion for reconsideration of the preliminary injunction. Mot. for Cert. at 1. Defendants request certification of the following question:
Are the Plaintiff's claims that Defendants violated California's Unfair Competition Law (“UCL”), Florida's Deceptive and Unfair Trade Practices Act (“FDUTPA”), Tennessee's Consumer Protection Act (“TCPA”), South Carolina's Unfair Trade Practices Act (“SCUTPA”), and Connecticut's Unfair Trade Practices Act (“CUTPA”) impliedly preempted by the Federal Food, Drug & Cosmetic Act (“FDCA”) where the Plaintiff's claims are based on violations of the FDCA?
Id. Defendants argue, first, that this question is a controlling question of law because “[i]f the Ninth Circuit agrees with Defendants' arguments that Plaintiff's claims are preempted by the FDCA, then this action will end.” Id. Second, defendants argue that there are substantial grounds for difference of opinion on whether Hope's claims are preempted by the FDCA, as evidenced by the differing opinions of courts in this District. Id. at 2. And third, defendants argue that interlocutory appeal would materially advance this litigation because “[r]esolving the threshold preemption issue in this case would avoid unnecessary litigation.” Id.
Hope first responds that defendants ought to have appealed this Court's preliminary injunction order, not the order denying reconsideration of that order. Hope thus contends that “the order Fagron asks the Court to certify ... does not present [the] preemption question” raised by defendants, but rather “the question presented by the Order was whether Fagron satisfied the requirements necessary for this Court to reconsider its earlier decision ... that the FDCA does not preempt Hope's claims.” Opp. to Mot. for Cert. at 3. Relatedly, Hope argues that the seven-month delay between the Court's preliminary injunction order and this appeal is grounds to deny certification. Id. But Hope also argues that, even if the Court's order did squarely present the preemption question, that question does not satisfy the requirements for certification under Section 1292(b). Id. at 5. First, Hope argues that there is no controlling question of law because “the ‘framework’ for FDCA preemption is ‘well settled,” ’ and that “[t]he parties' dispute, then, is not over the test for FDCA preemption, [but rather] over how that test applies to Hope's particular claims.” Id. at 6-7 (emphasis in original). Second, Hope argues that a “small minority of federal courts taking a contrary position does not establish a substantial ground for difference of opinion.” Id. at 8 (quotations omitted). Finally, Hope argues that an appeal will not materially advance the litigation because the Nexus cases are already on appeal, and they raise the preemption question raised here. Id. at 10.
As a preliminary matter, the Ninth Circuit, on April 14, 2021, denied without prejudice Hope's motion to dismiss defendants' appeal on the grounds that the appeal is untimely. Dkt. 259 (Ninth Circuit order). Accordingly, the Ninth Circuit may address the merits of defendants' appeal. With this in mind, the Court turns to the requirements for certification pursuant to Section 1292(b).
1. Controlling Question of Law
*5 “A question of law is ‘controlling’ within the meaning of the first prong of § 1292(b) where the matter at issue is not ‘collateral to the basic issues of [the] case,’ and the ‘resolution of the issue on appeal could materially affect the outcome of litigation in the district court.’ ” Delarosa v. Boiron, Inc., No. 10-1569-JST (CWX), 2011 WL 13130856, at *4 (C.D. Cal. Dec. 29, 2011) (quoting In re Cement Antitrust Litig., 673 F.2d at 1026, 1027).
Here, whether the FDCA preempts Hope's state law claims is a purely legal question. Furthermore, resolution of the question would determine whether a case-dispositive defense is available to defendants. Accordingly, the preemption question is a controlling question of law. See id. at *4 (finding “the question of whether the FDCA expressly or impliedly preempts each of Plaintiff's state law claims” was controlling question of law).
2. Substantial Grounds for Disagreement
As to the second prong, “[c]ourts traditionally will find that a substantial ground for difference of opinion exists where ‘the circuits are in dispute on the question and the court of appeals of the circuit has not spoken on the point, if complicated questions arise under foreign law, or if novel and difficult questions of first impression are presented.’ ” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010) (quoting 3 Federal Procedure, Lawyers Ed. § 3:212 (2010)).
In arguing that substantial grounds for disagreement exist, defendants rely heavily on the disagreement between this Court and the Nexus court. But the Nexus cases are distinguishable because the plaintiff there did not allege violations of state-law parallels to the FDCA, which is precisely what this Court found permitted Hope to thread the narrow gap established by Buckman and Perez, Furthermore, the fact that one other district court has reached a contrary conclusion—Somers—is insufficient grounds for finding a substantial difference of opinion. See Couch, 611 F.3d at 633 (“[J]ust because counsel contends that one precedent rather than another is controlling does not mean there is such a substantial difference of opinion as will support an interlocutory appeal.” (quotation omitted)): Spears v. Washington Mut. Bank FA, No. C-08-00868 RMW, 2010 WL 54755, at *3 (N.D. Cal. Jan. 8, 2010) (“[T]he mere fact that one district court came to a different conclusion on the same issue is insufficient to establish a substantial ground for difference of opinion.” (citing In re Cement Antitrust Litig., 673 F.2d at 1026)); Tsyn v. Wells Fargo Advisors, LLC, No. 14-CV-02552-LB, 2016 WL 1718139, at *4 (N.D. Cal. Apr. 29, 2016) (“[I]t would not warrant a § 1292(b) appeal simply because another district court reached a different decision in a broadly similar case.” (citations omitted)). Finally, defendants do not show that there is a circuit split among the courts of appeals. Thus, while the Court acknowledges that reasonable jurists could disagree on the question of whether the FDCA preempts Hope's state-law claims, this disagreement does not rise to the level required by Section 1292(b).
3. Materially Advance the Litigation
“Resolution of a question materially advances the termination of litigation if it ‘facilitate[s] disposition of the action by getting a final decision on a controlling legal issue sooner, rather than later in order to save the courts and the litigants unnecessary trouble and expense.’ ” In re Countrywide Fin. Mortgage-Backed Sec. Litig., 966 F. Supp. 2d 1031, 1045–46 (C.D. Cal. 2013) (quoting U.S. v. Adam Bros. Farming, Inc., 369 F. Supp. 2d 1180, 1182 (C.D. Cal. 2004)).
*6 Here, the case is scheduled for trial on August 31, 2021. Dkt. 224. It is therefore likely the trial will be completed before the Ninth Circuit rules on the question of certification. In any event, the pending appeal of this Court's January 25, 2021 Order could resolve the preemption issue. Finally, certification at this juncture would save little effort, as most of the work preceding trial has been completed, including significant discovery. See Saeidian v. Coca Cola Co., No. CV 09-06309 SJO (FMOx), 2015 WL 13700527, at *4 (C.D. Cal. Sept. 15, 2015) (fact that “considerable discovery” had taken place weighed against third prong of Section 1292(b)).
Accordingly, because defendants have not shown that there are substantial grounds for disagreement nor that interlocutory appeal would materially advance the litigation, the Court DENIES defendants' motion to certify.
IV. HOPE'S MOTION TO AMEND THE SCHEDULE AND COMPEL DEPOSITIONS
Hope seeks additional time to complete discovery. Specifically, Hope seeks additional time in which to compel and conduct certain depositions related to defendants' practices in fulfilling orders for their compounded sodium thiosulfate drug.
A. Background
On March 4, 2020, the Honorable Paul L. Abrams, Magistrate Judge (“Magistrate Judge”), granted Hope's motion to compel responses to certain requests for production, including, as relevant here, requests for documents substantiating defendants' claims that they were complying with Section 503B, such as documents relating to clinical difference determinations provided by defendants' customers, including Fresenius Kidney Care (“Fresenius”) and DaVita Kidney Care (“DaVita”). Joint Stip. at 7.
On July 7, 2020, this Court issued an order granting Hope's motion for a preliminary injunction. Dkt. 141 (“PI Ord.”). This order enjoined defendants from “dispensing or distributing any compounded sodium thiosulfate product” from a 503A pharmacy or a 503B outsourcing facility into California, Connecticut, Florida, South Carolina, or Tennessee unless:
(i) defendants are provided a valid prescription or order form for the product; (ii) the prescription or order form includes an attestation specifically indicating that defendants' compounded product, which does not contain potassium, will produce a significant difference for the intended patient; (iii) the attestation specifies that defendants' compounded product, rather than the comparable commercially available drug product, is “medically necessary” for the intended patient; and (iv) the attestation indicates that the attestation is made or approved by the intended patient's prescribing practitioner.
PI Ord. at 38-39.
On August 14, 2020, Hope noticed a deposition on defendants pursuant to Federal Rule of Civil Procedure 30(b)(6) (“Rule 30(b)(6)”). Joint Stip. at 8. The notice included topic 8: “Communications You have had with any Customer relating to any prescription order for Your Sodium Thiosulfate Product,” and topic 9: “Your prescription forms, attestation forms, or order forms pursuant to which You have shipped any of Your Sodium Thiosulfate Product, including any changes made to Your prescription forms, attestation forms, or order forms from 2014 to present.” Id. Hope contends it intended to inquire into orders and attestations provided to defendants' 503B facilities, including those provided after the preliminary injunction. Id. The deposition was scheduled for September 16, 2020. Id.
Hope contends that, between the date of the preliminary injunction and defendants' Rule 30(b)(6) deposition, defendants produced “no orders or completed attestations or emails between Defendants and their customers.” Id. at 8-9. Hope adds that the only documents relevant to topics 8 and 9 that defendants produced were “two blank attestation forms[.]” Id. at 9. The Rule 30(b)(6) deposition was held as scheduled.
*7 Hope contends that, on October 27, 2020—over a month after defendants' Rule 30(b)(6) deposition—defendants produced “210 pages of completed attestation documents they received from individual Fresenius clinics after the preliminary injunction”; and on October 30, 2020—the discovery cut-off date—defendants produced an additional 466 such documents. Id. Furthermore, on November 23, 2020, defendants produced [redacted] and on January 28, 2021, defendants “produced an additional 2,227 pages, totaling 2,817 pages[.]” Id. at 10. These documents include [redacted] Id. at 10–11. These documents apparently also show that [redacted] Id. at 11.
On November 2, 2020—after the discovery cut-off but several months before defendants completed production of relevant documents—Hope filed a motion for summary judgment, and a motion for contempt, as noted above. Relevant here, Hope argued that defendants' 503B outsourcing facilities were compounding sodium thiosulfate and distributing it to clinics without clinical difference statements accompanying each order, as Hope argues is required under Section 503B. Specifically, Hope argued that (1) the clinical difference statements were insufficient in their own right; (2) that they did not accompany each order, but rather were provided ex ante; and (3) that they were not signed by authorized providers. MSJ at 14. Hope further argued that a finding of contempt was appropriate because it was apparent that the 503B outsourcing facilities had not adopted the attestation language required by the preliminary injunction. Specifically, Hope argued that (1) of the roughly 80 orders produced in discovery, only about half were accompanied by a clinical difference statement; (2) defendants continued to use order forms without attestation language; and (3) defendants failed to indicate that the orders were made or approved by a prescribing practitioner. Contempt Mot. at 9.
In its January 25, 2021 Order, the Court denied Hope's motion for summary judgment and reserved judgment until the time of trial on Hope's motion for contempt. On February 19, 2021, Hope filed the instant motion to modify the scheduling order, in part in response to defendants' January 28, 2021 production of documents.
B. Legal Standard
Rule 16(b)(4) provides that a scheduling order shall be modified “only for good cause.” “Unlike Rule 15(a)'s liberal amendment policy which focuses on the bad faith of the party seeking to interpose an amendment and the prejudice to the opposing party, Rule 16(b)'s ‘good cause’ standard primarily considers the diligence of the party seeking the amendment.” Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992). Accordingly, while the court may consider the “existence or degree of prejudice” to the opposing party, the focus of the court's inquiry is upon the moving party's explanation for failure to timely move for leave to amend. Id. “The pretrial schedule may be modified ‘if it cannot reasonably be met despite the diligence of the party seeking the extension.’ ” Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002) (quoting Johnson, 975 F.2d at 609). “The district court is given broad discretion in supervising the pretrial phase of litigation, and its decisions regarding the preclusive effect of a pretrial order ... will not be disturbed unless they evidence a clear abuse of discretion.” Miller v. Safeco Title Ins. Co., 758 F.2d 364, 369 (9th Cir. 1985).
C. Discussion
Hope “requests an order compelling a further two hours of deposition testimony from Defendants' corporate designee, and such relief as is necessary to permit Plaintiff to depose three administrative employees of third party Fresenius ... and Defendants' ‘onboarding specialist[.]’ ” Joint Stip. at 1.
*8 Hope argues good cause exists to grant this relief because, “[f]or months prior to the deposition of Defendants and the discovery cutoff, Defendants were in possession of thousands of pages of sodium thiosulfate orders, attestation documents, and related email correspondence Defendants failed to produce until weeks and months later.” Id. at 2-3. Hope further argues that “[t]he belatedly-produced orders, e-mails and attestation documents establish [redacted] Id. at 3. With regard to DaVita, the documents “indicate that after the preliminary injunction, Defendants accepted and filled 503B sodium thiosulfate orders from DaVita without receiving any attestation documents whatsoever.” Id. at 10. With respect to Fresenius, Hope argues the documents reveal that [redacted] Id. at 13
Defendants respond that “[n]o good cause exists to further modify the scheduling order and re-open discovery for Plaintiff to depose witnesses it has known about for over a year and to obtain testimony and evidence Plaintiff already relied upon in moving unsuccessfully for summary judgment and contempt.” Id. at 15. Defendants argue that “Plaintiff relied on documents signed by these very Fresenius representatives when it moved for preliminary injunction on June 1, 2020[.]” Id. at 16. Further, defendants' note that Hope has already argued that [redacted] Id. at 16–17. Defendants point out that Hope had access to and relied upon defendants' post-injunction sales records, and never stated those records were insufficient. Id. at 18–19. And defendants note that Hope inquired into defendants' post-preliminary injunction practices when it deposed their Rule 30(b)(6) deponent. Id. at 19–20.
Hope appears to have sought production of documents relating to clinical difference attestations and the process by which defendants' customers placed orders for their compounded sodium thiosulfate drug well in advance of defendants' Rule 30(b)(6) deposition, but defendants produced these documents after the deposition was complete. Further, defendants produced thousands of these documents after the discovery cut-off date, thereby preventing Hope from noticing certain depositions it reasonably considers relevant to those documents. Although Hope may have been aware, before the cut-off, of the witnesses it now hopes to depose, it is reasonable to believe that Hope would not have understood the full significance of their testimony without having seen the documents defendants eventually produced. There is no indication that Hope lacked diligence. Hope has therefore demonstrated good cause to modify the scheduling order for the limited purposes of (1) conducting a further two hours of deposition of defendants' corporate designee;[4] (2) deposing Fresenius employees Peterson, Pham, and Grant; and (3) deposing defendants' employee Gwinup.
Accordingly, the Court GRANTS Hope's motion to amend the schedule.
The Court modifies the scheduling order to extend the cut-off for discovery relating to the issues raised herein. For present purposes, the discovery cut-off shall be continued to June 4, 2021 to permit Hope to file the motions necessary to seek the aforementioned depositions. The parties shall address any issues relating to the discovery requests or arising from the depositions to the Magistrate Judge.
V. CONCLUSION
In accordance with the foregoing, the Court DENIES defendants' motion to certify this Court's January 25, 2021 order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). The Court GRANTS plaintiff's motion to amend the scheduling order for the limited purposes outlined above.
*9 IT IS SO ORDERED.
Footnotes
Hope filed a request for judicial notice, dkt. 252, which defendants opposed, dkt. 253. The Court does not decide the issue as it is unnecessary to the Court's conclusion herein.
Hope's FAC does not identify a Connecticut state-law parallel to the FDCA, but rather relies solely on the state's unfair competition law.
California's Sherman Law provides that “ ‘no person shall sell, deliver, or give away any new drug’ that has not been approved by the California Department of Human Services or the [Food and Drug Administration].” Allergan USA Inc. v. Imprimis Pharm., Inc., No. 8:17-CV-01551-DOC-JDE, 2019 WL 3029114, at *6 (C.D. Cal. July 11, 2019) (quoting Cal. Health & Safety Code § 111550(a)–(b)). And, “[i]t follows that failure to comply with the FDCA ... affronts” the Sherman Law. Id. at *6.
“Unless otherwise stipulated or ordered by the court, a deposition is limited to one day of 7 hours.” Fed. R. Civ. P. 30(d)(1). “The court must allow additional time ... if needed to fairly examine the deponent or if the deponent, another person, or any other circumstance impedes or delays the examination.” Id. The Court concludes that additional time is warranted under the circumstances.