*1 Before the court is the End Payor Plaintiffs' (“EPPs”) Motion for a Protective Order. (ECF No. 1459). The EPPs move for an order prohibiting Defendants Merck[1] and Glenmark[2] from producing to the Insurer Plaintiffs[3] any documents or data subject to the October 2018 Discovery Confidentiality Order, (ECF No. 171), entered by this court, EPPs' Mem. Law Supp. Mot. Protective Order (“EPPs' Mem.”) (ECF No. 1460, at 6). The Insurer Plaintiffs opposed the motion, (“Ins.' Opp'n”) (ECF No. 1479), and the EPPs replied, (“EPPs' Reply”) (ECF No. 1485). Defendants take no position on the Motion. Defs.' Resp. EPPs' Mot. Protective Order (ECF No. 1478). On February 3, 2022, the court heard oral argument.

The matter was referred to the undersigned United States Magistrate Judge to determine the matter pursuant to 28 U.S.C. § 636 (b) (1) (A) and Rule 71(a) of the Federal Rules of Civil Procedure. Based on the record submitted, the EPPs have failed to demonstrate “good cause” necessary for a protective order at this stage of the proceedings. The court thus DENIES the EPPs' Motion. (ECF No. 1459).

The EPPs have been pursuing this complex multidistrict litigation (“MDL”) since 2018.[4] EPPs' Am. Compl. (ECF No. 130). For approximately four years, the EPPs have expended time and money developing the case, including taking and defending fact witness and expert depositions, preparing expert reports, and briefing complex issues. EPPs' Mem. (ECF No. 1460, at 4). Discovery has now closed, and summary judgment is fully briefed. (ECF Nos. 1037, 1067). This work has been subject to the court's Discovery Confidentiality Order, entered in accordance with Federal Rule of Civil Procedure 26(c). Order (ECF No. 171, at 1).

The Insurer Plaintiffs, who are not members of the EPP class but who assert end-payor claims,[5] joined this litigation after it was significantly advanced. Kaiser Found. Health Plan Inc. v. Merck & Co., Inc., No. 2:21-cv-01006; Humana Inc. v. Merck & Co., Inc., No. 2:21-cv-01007; Centene Corp. et al v. Merck & Co., Inc., No. 2:21-cv-01008. Prior to consolidation here, the Insurer Plaintiffs sought discovery from Defendants in other jurisdictions, and the EPPs moved for a protective order here. Ins.' Opp'n (ECF No. 1479, at 6). However, that motion was ultimately terminated as moot when the U.S. Judicial Panel on Multidistrict Litigation transferred the Kaiser action. Id. at 7; see also (ECF No. 1342) (transferring from the Northern District of California). The Centene and Humana actions were also transferred to this MDL. (ECF No. 1368) (transferring from the District of New Jersey). In November 2021, the Insurer Plaintiffs agreed to be subject to the Discovery Confidential Order pursuant to the court's order. (ECF Nos. 1348, 1397, 1398).

*2 In December 2021, the Insurer Plaintiffs noticed the EPPs that they were requesting production from Defendants of the EPPs' discovery documents, EPPs' Mem. (ECF No. 1460, at 4), including pleadings, deposition transcripts, expert reports, and the documents cited therein, Ins.' Opp'n (ECF No. 1479, at 5); see also Shrewsbury Decl. ¶¶ 3, 6 (ECF 1479-1, at 2-3) (outlining requested documents). The EPPs objected to the proposed discovery, primarily arguing that the Insurer Plaintiffs would unfairly benefit from the extensive work completed -- and paid for -- by EPPs and other plaintiff groups. EPPs' Mem. (ECF No. 1460, at 6). They moved for a protective order, arguing the court should not permit production until the parties agree with the Insurer Plaintiffs on a cost sharing mechanism or the court establishes procedures for a common benefit fund. Id.

The Federal Rules of Civil Procedure permit parties or anyone “from whom discovery is sought” to move for a protective order. Fed. R. Civ. P. 26(c)(1). The court may issue such an order “for good cause ... to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense,” and may include forbidding disclosure or allocating expenses for disclosure. Id. Good cause generally requires “demonstrating that ‘specific prejudice or harm will result if no protective order is granted.’ ” U.S. ex rel. Davis v. Prince, 753 F. Supp. 2d 561, 565 (E.D. Va. 2010) (quoting Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1210-11 (9th Cir. 2002)). Protective orders are “sparingly used and cautiously granted.” Big Ernie's, Inc. v. United States, No. 1:09-cv-122, 2009 WL 3166839, at *1 (E.D. Va. Aug. 13, 2009) (quoting Medlin v. Andrew, 113 F.R.D. 650, 652 (M.D.N.C. 1987)).

The EPPs have failed to demonstrate good cause for a protective order at this stage of the case. Briefing and oral argument have clarified that the key contention is whether EPP class counsel will be fairly compensated for the requested discovery without terms of payment negotiated prior to disclosure. See, e.g., EPPs' Reply (ECF No. 1485, at 4) (concerning “free riding”). The “common benefit” doctrine, which addresses the need to compensate lead counsel for benefits provided to later-filed actions, has thus been central to this dispute. See EPPs' Mem. (ECF No. 1460, at 8-10) (citing common benefit fund caselaw). However, because protective orders cannot operate to delay disclosure until a common benefit fund is established, and because the EPPs have not demonstrated any other cognizable prejudice or harm from disclosure, a protective order is inappropriate.

A. A Protective Order Cannot Be Entered to Delay Disclosure Until the Establishment of a Common Benefit Fund.

The parties' arguments are centered on the common benefit doctrine. The EPPs argue that the protective order should operate only until they “have reached agreement with the Insurer Plaintiffs concerning a common benefit fee for access to the documents or, if necessary, a common benefit motion has been ruled on by the court.”[6] EPPs' Mem. (ECF No. 1460, at 9). The Insurer Plaintiffs argue that “a set-aside or common-fund ... should be specifically requested in an appropriately styled motion.” Ins.' Opp'n (ECF No. 1479, at 14). A few comments about the common benefit doctrine -- while not before the court -- are thus appropriate to show why this financial dispute does not constitute “good cause” for a protective order.

i. Common Benefit Fund Doctrine.

In complex aggregate litigation, “attorneys designated with responsibilities for actions beyond those in which they are retained may be compensated for their work not only by their own clients, but also by those other parties on whose behalf the work is performed and on whom a benefit has been conferred.” In re Gen. Motors LLC Ignition Switch Litig., 477 F. Supp. 3d 170, 179 (S.D.N.Y. 2020) (quoting In re WorldCom, Inc. Sec. Litig., No. 02-CV-3288, 2004 WL 2549682, at *2 (S.D.N.Y. Nov. 10, 2004)). In an MDL, the authority to establish a common benefit fund to compensate class counsel derives from the courts managerial power over the consolidated litigation.[7] Id. at 190.

*3 Common benefits funds are frequently established before the case is resolved. “[O]ther courts have entered set aside orders prior to any recovery, as long as the litigation has been ‘significantly advanced.’ ” In re Lidoderm Antitrust Litig., No. 14-md-02521, 2017 WL 3478810, at *2 (N.D. Cal. Aug. 14, 2017). Potential factors showing that litigation is sufficiently advanced include class certification and evidence that identifiable non-class plaintiffs stand to benefit from class counsels' work. See generally In re Packaged Seafood Prods. Antitrust Litig., No. 3:15-md-2670, 2021 WL 5326517 (S.D. Cal. Nov. 16, 2021). The court does not necessarily determine “how much of the work performed by designated counsel benefitted” other plaintiffs, but it does establish “a framework to ensure that funds will be available to compensate them should the Court later determine such compensation is warranted.”[8] In re Linerboard Antitrust Litig., 292 F. Supp. 2d 644, 662 (E.D. Pa. Sept. 5, 2003). No cited cases involve protective orders preventing initial disclosure of class counsels' discovery pending the establishment of such a fund.[9]

ii. The Financial Risk Does Not Constitute Good Cause.

The EPPs have not yet moved for a common benefit fund, only a protective order, (ECF No. 1459), which requires some showing of good cause to protect from anticipated harm, see Davis, 753 F. Supp. 2d at 565. The potential harm that EPPs assert is the court's loss of jurisdiction -- and consequent inability to compel later contribution -- stemming from (1) early settlement between the Insurer Plaintiffs and Defendants; or (2) the Insurer Plaintiffs' return to their original districts for trial. See EPPs' Reply (ECF No. 1485, at 6-7); see also Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 28 (1998) (allowing remand after conclusion of pretrial proceedings).

The EPPs represented that a common benefit motion could be filed promptly, and thus the risk of an early settlement is de minimis. Defendants have filed multiple substantive Daubert motions and a comprehensive Motion for Summary Judgment, which all await resolution. (ECF Nos. 1037, 1040, 1042, 1048). The EPPs have not produced evidence that settlement negotiations are impending. While settlement can occur at any time during litigation, the EPPs have time to file an appropriately styled motion and have it heard on the merits, with little risk that settlement would place the proceeds beyond the court's reach.

B. The EPPs Have Not Shown Any Alternative Good Cause for Delaying Disclosure.

The EPPs do not assert any other cognizable reason they will be harmed by disclosure. The EPPs have argued that they “will be exposed to undue expense” by disclosure, EPPs' Reply (ECF No. 1485, at 8), but this argument refers to expenditures already made, and simply recasts the common-benefit contention. Because Defendants are producing the discovery, the EPPs do not even face transaction costs for production. As discussed above, preserving the EPPs' ability to recover for common benefit work is not the type of harm contemplated by Rule 26(c) (1) when the relevant parties are all before the court.

The EPPs also argue that EPPs' individual materials are not relevant or necessary to the insurer plaintiffs. EPPs' Mem. (ECF No. 1460, at 10). The Federal Rules allow parties to “obtain discovery regarding any nonprivileged matter that is relevant....” Fed. R. Civ. P. 26(b) (10; In re Wilson, 149 F.3d 249, 252 (4th Cir. 1998) (allowing even harmful disclosure if production “is sufficiently necessary and relevant ... to outweigh the harm”). These materials are relevant to the Insurer Plaintiffs'claims. Their complaints allege nearly identical theories of relief against the same defendants. Although the damages evidence will necessarily vary, Defendants' one-sided knowledge of the EPPs' information may prejudice the Insurer Plaintiffs' litigation position. See Ins.' Opp'n (ECF No. 1479, at 11-12).

*4 This is not to say the EPPs' complaints of free riding are without merit. But the court retains the ability to resolve these claims comprehensively later. Moreover, production of the disputed material and final resolution of the class certification and opt-out issues will clarify claims for common-benefit relief by all parties. Accordingly, production now promotes the conservation of resources. See id. Thus, the court does not find good cause to delay disclosure.

For the foregoing reasons, the court DENIES the EPPs' Motion for a Protective Order. (ECF No. 1459).

Norfolk, Virginia