Value Drug Co. v. Takeda Pharm. U.S.A., Inc.
Value Drug Co. v. Takeda Pharm. U.S.A., Inc.
2022 WL 1110356 (E.D. Pa. 2022)
April 11, 2022
Vanaskie, Thomas I., Special Master (Ret.)
Summary
The court denied Plaintiff's motion to compel discovery from Teva Ltd. due to the disproportionate effort required to process tens of millions of pages of ESI in the form of due diligence documents. Teva Ltd. offered five custodians it believes are “most likely to possess unique, relevant documents responsive to Plaintiff's requests” and Watson and Teva USA identified a dozen custodians involved in the transaction.
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
Signed April 11, 2022
Counsel
Andrew William Kelly, Stuart E. DesRoches, Dan Chiorean, Odom & Des Roches, LLC, 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, Dennie Benjiman Zastrow, 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.
Alexandra I. Russell, Kirkland & Ellis LLP, Washington, DC, Karl Gunderson, Kirkland & Ellis LLP, Chicago, IL, Vera Cherie Esses, 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.
Alexandra I. Russell, Kirkland & Ellis LLP, Washington, DC, Devora W. Allon, Vera Cherie Esses, 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.
Alexandra I. Russell, Kirkland & Ellis LLP, Washington, DC, Devora W. Allon, Vera Cherie Esses, 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. 2
*1 On March 25, 2022, Plaintiff Value Drug Company moved to compel discovery from Defendant Teva Pharmaceutical Industries, Ltd. (“Teva Ltd.”). (ECF Document No. 205.) Plaintiff seeks an order compelling Teva Ltd. to:
identify by name, title and role, the principal Teva individuals, including legal counsel, who managed and/or conducted the due diligence concerning the July 26, 2015 Master Purchase Agreement [“MPA”] transaction which ... effectuated the transfer of Watson Laboratories, Inc. and its assets, including its generic Colcrys ANDA; and considered and/or participated in Takeda Pharmaceuticals USA, Inc. v. Watson Laboratories, Inc. ... and/or its settlement, or any other Colcrys Patent Litigations and/or their settlements, or assessed any of the [Colcrys Patent Litigation] settlements at any point....
(ECF Document No. 205-10 at 1-2.) Plaintiff also asks that Teva Ltd. be required to “identify which due diligence materials continue to be maintained, where, and in what volume(s).” (Id. at 2.) Plaintiff further proposes that following these compelled disclosures the parties be directed to “meet and confer and endeavor to reach agreement regarding ... Teva Ltd.’s inclusion of additional document custodians; and ... [t]he searches Teva Ltd. should conduct of any maintained due diligence materials for documents responsive to Plaintiffs’ [sic] requests.” (Id.) Asserting that the settlements of the Colcrys Patent Litigation, including the settlement of the Takeda/Watson litigation, were key components of a conspiracy to restrain trade in the market for colchicine, Plaintiff contends that Teva Ltd.’s “due diligence materials [are] likely to evidence Teva Ltd.’s contemporaneous knowledge of and/or participation in the Takeda-Watson patent litigation and its settlement, and/or subsequent joinder in the alleged conspiracy.”
In its March 30, 2022 response to Plaintiff's motion (ECF No. 208), Teva Ltd. states that Watson's generic version of colchicine was a small part of a $40 billion MPA with Allergan plc that involved hundreds of other generic products, and both Watson (the entity that settled with Takeda) and Teva Ltd.’s American subsidiary, Teva USA, (the entity that sold Watson's colchicine product) have agreed to produce thousands of documents from a dozen custodians spanning a time frame of ten years. Presumably, that cache of documents would include anything relevant to the Takeda/Watson settlement. As for its due diligence documents, Teva Ltd. represents that it would have to process tens of millions of pages to be able to respond to Plaintiff's document requests, an effort disproportionate to the needs of this case. Teva Ltd. has pointed out that other, less burdensome discovery devices, such as interrogatories and depositions, are available to identify document custodians. Indeed, Plaintiff's proposed order is akin to an interrogatory, asking for an identification of those Teva Ltd. personnel who participated in its due diligence for the Allergan transaction and disclosure of the location of due diligence documents, if any.
*2 Oral argument on Plaintiff's motion was presented on April 8, 2022 via Zoom. For the reasons that follow, Plaintiff's motion will be denied.
Plaintiff's requested relief is not tied to any specific request(s) for production of documents. Plaintiff is hoping that in the millions of pages of due diligence documents it will find some reference to the Watson/Takeda settlement from which it could impute Teva Ltd.’s knowledge of and perhaps participation in an agreement to restrain trade in the colchicine market.
There are, however, more direct and certainly less burdensome means to explore Teva Ltd.’s alleged knowledge of and participation in the alleged conspiracy. Teva Ltd. has offered five custodians it believes are “most likely to possess unique, relevant documents responsive to Plaintiff's requests.” (ECF Document No. 208 at 5.) Furthermore, Watson and Teva USA, which are parties to this litigation, have identified a dozen custodians involved in the transaction by which Teva Ltd. acquired Watson's generic colchicine product. Teva Ltd. asserts that “Plaintiff does not dispute that the most relevant documents regarding the intersection of the MPA and colchicine or the Colcrys Patent Litigation are likely to be in the possession of Watson/Teva USA custodians, not Teva Ltd. custodians.” (Id. at 2.) This makes sense as Watson was directly involved in the Takeda settlement so that any documents evaluated by Teva Ltd. as part of the MPA undoubtedly came from Watson.
Plaintiff asserts that, based upon organization charts produced in this litigation, the Teva Ltd. staff identified as custodians are not likely to have responsive documents. In this regard, Plaintiff points to the failure of Teva Ltd. to identify any of its lawyers as document custodians, suggesting that Teva Ltd. should have identified Chief IP Counsel Staci Julie and “General Counsel NA Generic IP,” Lauren Rabinovic, due to their past involvement with settlements similar to the Takeda/Watson deal. (ECF Document No. 205 at 6.) However, Teva Ltd. points out that the involvement of these lawyers in other matters was on behalf of Teva USA, not Teva Ltd. Teva Ltd. also points out that two persons designated as custodians by Teva USA reported directly to Ms. Julie and Ms. Rabinovic, so that neither are likely to possess unique documents not already in the possession of the Teva USA custodians.
It may be that ongoing document production will identify additional Teva, Ltd. custodians likely to have unique relevant documents or suggest the existence of documents in the Teva Ltd. due diligence cache warranting a broad search of those documents, but the presentation made thus far by Plaintiff does not warrant the search sought by Plaintiff or the identification of additional document custodians by Teva Ltd. If additional discovery indicates that Teva Ltd. has not been forthcoming in its identification of document custodians or in its document production, Plaintiff can request additional discovery and sanctions. But for now, the order requested by Plaintiff has not been justified.
ACCORDINGLY, this 11th Day of April, 2022, IT IS HEREBY RECOMMENDED THAT Plaintiff's Motion to Compel Discovery from Teva, Ltd. be DENIED.