*1 Rule 37(c)(1)(C) of the Federal Rules of Civil Procedure provides, in relevant part, that “[i]f a party fails to provide information ... as required by Rule 26(a) or (e), ..., the court, on motion and after giving an opportunity to be heard ... may impose ... appropriate sanctions.” Claiming that Defendant Takeda Pharmaceutical U.S.A., Inc. violated court-imposed deadlines for production of documents and improperly withheld documents based on the attorney-client privilege, Plaintiff has moved pursuant to Fed. R. Civ. P. 37(c)(1)(C) for an order compelling Takeda to produce all documents in the custodial files of two former in-house lawyers for Takeda who were intimately involved in negotiating the settlement of patent litigation that is now the focus of this antitrust case. (ECF Document No. 585.) Plaintiff's motion is accompanied by a number of exhibits, including specific documents that Plaintiff claims are examples of documents that were improperly redacted based on the attorney-client privilege.

Takeda, of course, opposes the motion, noting that the Special Master has previously observed that Takeda has operated in good faith in the discovery process. (ECF Document No. 596 at 1.) Takeda also asserts that the particular sanction sought by Plaintiff – waiver of the attorney-client privilege over a large set of documents – is reserved for cases of egregious misconduct not present here.

Plaintiff filed a Reply Brief in support of its sanctions motion, disputing Takeda's justifications for its production delays, asserting that the timing of document production was not tied to depositions, and contending that Takeda's privilege assertions were “frivolous.” (ECF Document No. 619 at 2.) Takeda filed a sur-reply, arguing that “the discovery minutiae upon which Plaintiff bases its sanctions motion [were] substantially justified or harmless, or both.” (ECF Document No. 622 at 1.)

Discovery in this complex litigation, spanning a period of ten years, has, of course, been extensive. Takeda has produced more than 230,000 documents, totaling more than two million pages. Much of that production occurred on a rolling basis after the court-imposed deadline for document discovery.

As the focus of this case is the settlement of related patent litigation, many of the document custodians are lawyers and many of the documents implicate the attorney-client privilege. Plaintiff has mounted discrete challenges to Takeda's assertion of privilege, resulting in Takeda withdrawing its privilege objection for hundreds of documents. In camera review of other documents has resulted in their compelled production. Plaintiff contends that Takeda has continued to wrongly assert privilege protection over documents, presenting with its sanctions motion eleven redacted documents it claims are not protected from discovery by the attorney-client privilege.

Takeda has offered justifications for its spasmodic document production, pointing out, for example, that “vendor error” accounted for the delayed production of nearly 50,000 documents. Plaintiff counters that it first discovered the vendor error that resulted in the delayed production. Takeda also argues that that its delayed production is not like a case cited by Plaintiff, Wilczynski v. Redling, CIV.A. 12-4335 MAS, 2014 WL 5361916, at *1 (D.N.J. Oct. 21, 2014), where key documents were not produced until after a summary judgment motion was filed. As to the eleven documents presented by Plaintiff as examples of improper assertions of the attorney-client privilege, Takeda notes that Plaintiff has not offered to meet and confer with respect to those documents in violation of Local Rule of Court 26.1(f). Finally, Takeda argues that Plaintiff has not articulated any specific prejudice due to delayed production of documents.

*2 The Third Circuit has recognized that “preventing a party from asserting the attorney-client privilege is a legitimate sanction for abusing the discovery process.” In re Teleglobe Commun. Corp., 493 F.3d 345, 386 (3d Cir. 2007). But it is a sanction that may be imposed only if there is a finding of “bad faith, willfulness, or fault.” Id. As stated in United States v. Philip Morris Inc., “waiver of a privilege is a serious sanction most suitable for cases of unjustified delay, inexcusable conduct, and bad faith.” 347 F.3d 951, 954 (D.C. Cir. 2003) (emphasis added); (citations omitted).

To be sure, discovery in this case has been contentious, with Plaintiff filing multiple discovery motions, many of which were decided in its favor. The record presented on Plaintiff's motion, however, is not sufficient to support a conclusion that Takeda's delays in production were unjustified, that its conduct was inexcusable, or that it acted in bad faith.

ACCORDINGLY, IT IS HEREBY RECOMMENDED THAT Plaintiff's Motion for Sanctions (ECF Document No. 585) be DENIED.