Value Drug Co. v. Takeda Pharm. U.S.A., Inc.
Value Drug Co. v. Takeda Pharm. U.S.A., Inc.
2022 WL 1005310 (E.D. Pa. 2022)
March 31, 2022
Vanaskie, Thomas I., Special Master (Ret.)
Summary
The Court ordered Takeda to run searches for ESI from 2005 to 2021, and Par to produce documents requested in Request No. 16. The Court found that the ESI was relevant to assessing the lawfulness of the Takeda/Par agreement and to demonstrate the competitiveness of the market absent anticompetitive conduct.
Additional Decisions
VALUE DRUG COMPANY, on behalf of itself and all others similarly situated, Plaintiffs
v.
TAKEDA PHARMACEUTICALS U.S.A., INC., et al., Defendants
v.
TAKEDA PHARMACEUTICALS U.S.A., INC., et al., Defendants
Civil Action No. 2:21-cv-03500-MAK
United States District Court, E.D. Pennsylvania
Filed March 31, 2022
Counsel
Andrew William Kelly, Stuart E. DesRoches, Odom & Des Roches LLP, New Orleans, LA, Bradley J. Demuth, Faruqi & Faruqi, LLP, Bruce E. Gerstein, Dan Litvin, Deborah A. Elman, Garwin Gerstein and Fisher LLP, New York, NY, Caitlin G. Coslett, David F. Sorensen, Richard D. Schwartz, Zachary D. Caplan, Berger Montague PC, Philadelphia, PA, David C. Raphael, Jr., Susan C. Segura, Smith Segura Raphael & Leger LLP, Alexandria, LA, Joseph T. Lukens, Peter R. Kohn, Faruqi & Faruqi, LLP, Jenkintown, PA, Russell A. Chorush, William B. Collier, Jr., Heim, Payne & Chorush LLP, Houston, TX, for Plaintiffs.Steven A. Reed, Daniel Patrick Huyett, Melina R. Dimattio, R. Brendan Fee, Morgan Lewis & Bockius LLP, Philadelphia, PA, for Defendant Takeda Pharmaceuticals, U.S.A., Inc.
Forrest Lovett, George G. Gordon, John McClam, Julia Chapman, Steven E. Bizar, Dechert LLP, R. Brendan Fee, Steven A. Reed, Morgan Lewis & Bockius LLP, Philadelphia, PA, for Defendant Par Pharmaceutical, Inc.
Karl Gunderson, Kirkland & Ellis LLP, Chicago, IL, Andrew McCarty, Devora W. Allon, Gilad Bendheim, Sara Shaw Tatum, Jay P. Lefkowitz, Kirkland & Ellis LLP, New York, NY, R. Brendan Fee, Steven A. Reed, Morgan Lewis & Bockius LLP, Philadelphia, PA, for Defendants Watson Laboratories, Inc., Teva Pharmaceuticals USA, Inc.
Devora W. Allon, Andrew McCarty, Gilad Bendheim, Sara Shaw Tatum, Jay P. Lefkowitz, Kirkland & Ellis LLP, New York, NY, Karl Gunderson, Kirkland & Ellis LLP, Chicago, IL, Steven A. Reed, Morgan Lewis, Philadelphia, PA, for Defendant Teva Pharmaceutical Industries, Ltd.
Devora W. Allon, Andrew McCarty, Gilad Bendheim, Jay P. Lefkowitz, Kirkland & Ellis LLP, New York, NY, Karl Gunderson, Kirkland & Ellis LLP, Chicago, IL, R. Brendan Fee, Steven A. Reed, Morgan Lewis & Bockius LLP, Philadelphia, PA, for Defendant Amneal Pharmaceuticals, LLC.
Vanaskie, Thomas I., Special Master (Ret.)
SPECIAL MASTER RECOMMENDED ORDER NO. 1
*1 On March 2, 2022, Plaintiff Value Drug Company moved to compel discovery from Defendants Takeda, Par, Teva USA, Ltd., Watson, and Amneal. (ECF Doc. No. 182.) By Order dated March 15, 2022, the Court appointed the undersigned as Special Discovery Master under Fed. R. Civ. P. 53 “for purposes of promptly resolving all discovery disputes including the pending ... ECF Doc. No. 182.” (ECF Doc. No. 198 at 1.) During a March 18, 2022 conference call with the undersigned, the parties were directed to meet and confer to attempt to resolve the discovery disputes. By letter dated March 23, 2022 (ECF Doc. No. 201), the parties jointly reported that they had resolved many of the discovery issues and were continuing to discuss resolution. By letter dated March 25, 2022 (ECF Doc. No. 204), the parties jointly reported that there remained only two unresolved issues that were ripe for decision: (1) the starting and ending dates for document searches to be undertaken by Defendant Takeda, as well as the identification of custodians from Takeda's predecessors for the 2005 to 2010 time period; and (2) Defendant Par's objection to Plaintiff's document Request No. 16, which seeks “[d]ocuments sufficient to show instances when [Par] distributed a brand company's Authorized Generic drug product, and any royalty or profit share terms associated therewith.” (ECF Doc. No. 182-2 at 8.) Each of these issues will be addressed in turn.
A. START AND END DATES FOR TAKEDA'S SEARCHES
Plaintiff is requesting that Takeda run its document searches with a start date of January 1, 2005 and that Takeda identify document custodians of its predecessors, URL and Mutual, for the period 2005 through 2010. Takeda objects on grounds of relevance and burdensomeness, pointing out that the alleged conspiracy at the heart of this antitrust case is based upon settlements in 2015 and 2016 of ANDA Colcrys litigations and that it has agreed to start its searches as of January 1, 2011, because the first ANDA application was filed in that year. Plaintiff contends that pre-2011 documents would show a “competitive colchicine market untainted by Defendants’ anticompetitive conduct,” and “are also relevant to Takeda's state of mind about how a shift to a branded and limited generic market would impact prices.” (ECF Doc. No. 182 at 4.)
Plaintiff's arguments do not justify broad discovery before 2011. Plaintiff has not made any allegation that the alleged conspiracy was hatched before 2011. It has not shown how the requested searches for the period 2005 through 2010 are needed to demonstrate the competitiveness of the market absent anticompetitive conduct. And the search for “state of mind” evidence smacks of an unrestrained fishing expedition. Accordingly, Plaintiff's request that Takeda be compelled to run its search for the period 2005 through 2010 will be denied, as will its request that Takeda be directed to identify document custodians from its predecessors URL and Mutual.
Although Plaintiff has agreed to an end date of December 31, 2020 for most searches, it asserts that “Takeda should be required to run searches 17a and 17b through December 31, 2021 because these searches will capture communications between Takeda and Par (and other generics), which continued into 2021.”[1] In this regard, Plaintiff points out that the distribution agreement between Takeda and Par continued into 2021 and Par's ANDA for its own generic colchicine product was not approved until 2021. Takeda objects on the ground that Plaintiff has asserted that the conspiracy ended abruptly in November of 2019, citing ¶ 160 of the Amended Complaint, ECF Doc. No. 165.
*2 Post-conspiracy statements, however, certainly can be relevant. And the fact that Par did not receive regulatory approval for its generic until 202 and that the Takeda/Par distribution agreement continued into 2021 support Plaintiff's request that the searches laid out in 17a and 17b be run through 2021. Accordingly, Takeda will be required to run the 17a and 17b searches through 2021.
B. PLAINTIFF'S REQUEST NO. 16 AS TO DEFENDANT PAR
Request No. 16 in Plaintiff's First Set of Requests for Production of Documents to Generic Defendants asked for “Documents sufficient to show instances when [Par] distributed a brand company's Authorized Generic drug product, and any royalty or profit share terms associated therewith.” (ECF Doc. No. 182-2 at 8.) Par has objected on grounds that the request seeks documents not relevant to Plaintiff's claims and would impose an undue burden. As for the relevance objection, Plaintiff asserts that the terms of any other agreement by which Par marketed another brand's authorized generic would be relevant to Plaintiff's claims that the Takeda/Par joint venture was unlawful.
It does appear that other instances of Par marketing another brand's authorized generic could be relevant to assessing the lawfulness of the Takeda/Par agreement. Par claims that the search sought by Plaintiff generated more than 68,000 document hits, “61,000 of which do not mention colchicine products.” (ECF Doc. No. 186 at 6.) But the concept of relevance in the context of this antirust action is not limited to colchicine products. And Par has not carried its burden of showing that the requested discovery is not “proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1). Plaintiff should be able to assess the Takeda/Par agreement in the context of other undertakings by Par to market other brand's authorized generics. That there will be differences in agreements that need to be considered does not mean that the documents will have no relevance here. Accordingly, Par will be required to produce the documents called for in Request No. 16 addressed to the Generic Defendants.
NOW, THEREFORE, this 31st Day of March, 2022, IT IS HEREBY ORDERED THAT Plaintiff's Motion to Compel Discovery (ECF Doc. No. 182) is GRANTED IN PART. Within seven (7) days from the date of this Order, Defendant Takeda shall run the searches called for in paragraphs 17a and 17b of Plaintiff's search requests through the year 2021. IT IS FURTHER ORDERED THAT Defendant Par shall produce the documents requested in Request No. 16 of Plaintiff's First Set of Requests for Production of Documents to Generic Defendants within seven (7) days from the date of this Order. In all other respects, Plaintiff's Motion to Compel Discovery (ECF Doc. No. 182) is DENIED.
Footnotes
The terms in searches 17a and 17b are intended to produce communications between the alleged conspirators. See ECF Doc. No. 182-1 at 4. The searches are as follows: 17a: “parpharm.com OR amneal.com OR watson.com OR actavis.com OR teva.com OR tevapharm.com OR prasco.com.” 17b: “arentfox.com OR mbhb.com OR carlsoncaspers.com OR mto.com OR Prasco's outside counsel.”