Innovative Health LLC v. Biosense Webster, Inc.
Innovative Health LLC v. Biosense Webster, Inc.
2024 WL 4405166 (C.D. Cal. 2024)
August 13, 2024
Selna, James V., United States District Judge
Summary
The court granted two motions filed by Plaintiff Innovative Health LLC, one for supplemental transaction data and the other to reopen discovery and issue subpoenas to third-parties. The court found that the plaintiff acted diligently and that there was no opposition from the defendant. The court also noted that the trial date had been vacated and that the defendant's opposition was based on inaccurate claims.
Additional Decisions
Innovative Health LLC
v.
Biosense Webster, Inc
v.
Biosense Webster, Inc
Case No. 8:19-cv-01984-JVS-KES
United States District Court, C.D. California
Filed August 13, 2024
Counsel
Jeffrey L. Berhold, Pro Hac Vice, Jeffrey L. Berhold PC, Atlanta, GA, Panteha Abdollahi, Theodora Oringher PC, Costa Mesa, CA, Andrew E. Goldsmith, Pro Hac Vice, Derek T. Ho, Joshua Hafenbrack, Pro Hac Vice, Kelley Schiffman, Matthew D. Reade, Pro Hac Vice, Rachel T. Anderson, Pro Hac Vice, Kellogg Hansen Todd Figel and Frederick PLLC, Washington, DC, Julie Pollock, Joshua Paul Davis, Kyla Gibboney, Matthew I. Summers, Berger Montague PC, San Francisco, CA, for Innovative Health LLC.Karla J. Kraft, Lisa M. Northrup, Sean Thomas Lobb, Stradling Yocca Carlson and Rauth LLP, Newport Beach, CA, Zachary William Jarrett, Pro Hac Vice, Colleen M. Kozikowski, Pro Hac Vice, German Alejandro Carvajal, Pro Hac Vice, Kathleen Elizabeth Young, Pro Hac Vice, Lauren A. Moskowitz, Pro Hac Vice, Lillian S. Grossbard, Pro Hac Vice, Michael T. Reynolds, Pro Hac Vice, Cravath Swaine and Moore LLP, New York, NY, Katherine B. Forrest, Pro Hac Vice, Matthew A. Robinson, Paul, Weiss, Rifkind, Wharton and Garrison LLP, New York, NY, Victoria Patricia McLaughlin, Orange, CA, for Biosense Webster, Inc.
Selna, James V., United States District Judge
Proceedings: [IN CHAMBERS] Order Regarding Motions for Supplemental Production and to Reopen Discovery [236, 237]
*1 Before the Court are two motions. First, Plaintiff Innovative Health LLC (“Innovative”) moves for an order directing Defendant Biosense Webster, Inc. (“Biosense”) to produce supplemental transaction data. (Mot. for Supplemental Data, Dkt. No. 236.) Biosense opposed the Motion, (Opp'n to Supplemental Data, Dkt. No. 240), and Innovative responded, (Reply for Supplemental Data, Dkt. No. 244).
Second, Innovative moves to reopen discovery to issue subpoenas to third-parties Stryker Substainability Solutions, Inc. (“Stryker”) and Abbott Laboratories (“Abbott”). (Mot. to Reopen, Dkt. No. 237.) Biosense also opposed that Motion, (Opp'n to Reopening, Dkt. No. 241), and Innovative responded, (Reply for Reopening, Dkt. No. 243).
For the following reasons, the Court GRANTS both of Innovative's Motions. The Court finds that oral argument would not be helpful in this matter and VACATES the August 19, 2024, hearing. Fed. R. Civ. P. 78; L.R. 7-15.
I. BACKGROUND
As the parties and the Court are all familiar with the facts of this case, the Court does not review them in full here. Innovative's Corrected Second Amended Complaint alleges twelve claims against Biosense: (1) monopolization in violation of the Sherman Act, 15 U.S.C. § 2 (high-density mapping catheters); (2) attempted monopolization in violation of the Sherman Act § 2 (high-density mapping catheters); (3) tying in violation of the Sherman Act § 1 (high-density mapping catheters); (4) exclusive dealing in violation of the Sherman Act § 1 (high-density mapping catheters); (5) tying in violation of the Cartwright Act, Cal. Bus. & Prof. Code § 16720 (high-density mapping catheters); (6) exclusive dealing in violation of the Cartwright Act (high-density mapping catheters); (7) monopolization in violation of the Sherman Act § 2 (ultrasound catheters); (8) attempted monopolization in violation of the Sherman Act § 2 (ultrasound catheters); (9) tying in violation of the Sherman Act § 1 (ultrasound catheters); (10) exclusive dealing in violation of the Sherman Act § 1 (ultrasound catheters); (11) tying in violation of the Cartwright Act (ultrasound catheters); and (12) exclusive dealing in violation of the Cartwright Act (ultrasound catheters). (Corrected Second Am. Compl, Dkt. No. 59.)
The Court entered summary judgment for Biosense April 29, 2022. (Dkt. No. 180.) Innovative appealed the order to the United States Court of Appeal for the Ninth Circuit. (Dkt. No. 183.) The Ninth Circuit reversed and remanded, finding that Innovative raised genuine issues of material fact that should have prevented this Court from entering summary judgment. (Dkt. No. 196.) The Court held an initial status conference following remand on April 29, 2024, and set a trial date of August 16, 2024. (Dkt. No. 208.) After another status conference on June 10, 2024, the Court vacated all the proceedings in the case and ordered the parties to meet and confer over discovery issues. (Dkt. No. 229.) Innovative then filed its Motions on July 22, 2024, to resolve the parties' discovery dispute. (Dkt. Nos. 236, 237.)
II. INNOVATIVE'S MOTION TO REOPEN DISCOVERY
*2 “A district court has wide latitude in controlling discovery.” Lane v. Dep't of Interior, 523 F.3d 1128, 1134 (9th Cir. 2008). Pursuant to Federal Rule of Civil Procedure 16(b), a district court must issue a scheduling order that limits the time to, among other things, complete discovery. Fed. R. Civ. P. 16(b)(1), (3). A party seeking to modify a scheduling order must satisfy the “good cause” standard for modifying the scheduling order under Rule 16(b) of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 16(b)(4); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607–08 (9th Cir. 1992). The good cause standard “primarily considers the diligence of the party seeking the amendment.” Johnson, 975 F.2d at 609. The court may grant relief from a scheduling deadline if the deadline could not “reasonably be met despite the diligence of the party seeking the extension.” Id. While a court may consider prejudice to the opposing party, “the focus of the inquiry is upon the moving party's reasons for seeking modification.” Id.
In evaluating whether good cause exists to grant leave to take discovery, the Court considers six factors: (1) whether trial is imminent; (2) whether the request is opposed; (3) whether the non-moving party would be prejudiced; (4) whether the moving party was diligent in obtaining discovery within the guidelines established by the court; (5) the foreseeability of the need for additional discovery in light of the time allowed for discovery by the district court; and (6) the likelihood that the discovery will lead to relevant evidence. City of Pomona v. SQM N. Am. Corp., 866 F.3d 1060, 1066 (9th Cir. 2017). However, “[i]f the party seeking the modification ‘was not diligent, the inquiry should end’ and the motion to modify should not be granted.” Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002) (citing Johnson, 975 F.2d at 609).
Innovative seeks to reopen discovery to issue subpoenas to third-parties Stryker and Abbott in order to obtain updated sales data. (Mot. to Reopen at 6.) It claims this data is material to its damages expert's analysis because it will allow him to update his damages calculation amid current market conditions. (Id. at 7, 9–10.) As part of its argument, Innovative asserts that five of the six good cause factors favor reopening discovery. (Id. at 7.) Biosense opposes the issuance of the subpoenas because it avers that Innovative intends to use the information to introduce new theories into the case, not simply update damages calculations as claimed. (Opp'n to Reopening at 8.) It specifically points to Innovative's claim that it needs the discovery material for its injunctive relief claim as inaccurate because Innovative has failed to offer a theory of injunctive relief that justifies disclosure of the updated sales data. (Id. at 7, 14.) It also contends that the Court already rejected Innovative's request to reopen discovery, (id. at 7), and that the good cause factors do not support reopening, (id. at 9). In reply, Innovative argues that it “merely seeks to update the data it already obtained” before the Court's summary judgment Order and such an update is not indicative of a new strategy, as Biosense claims. (Reply for Reopening at 4.) It further asserts that the discovery material is relevant to current market conditions, which the Court indicated it would like to see before granting injunctive relief, and that Biosense faces no prejudice from the subpoenas. (Id. at 5–6.)
As an initial matter, the Court notes that, while Biosense is correct that the Court did state it was “not going to reopen discovery” at the June 10, 2024 status conference, in context it is clear that Innovative's request is not foreclosed on those grounds. (Hr'g Tr., Dkt. No. 232, 4:6–8.) For example, the Court also stated that it believed it was “appropriate to update any information that goes to damages,” which “include[s] supplemental information.” (Id. 4:13–15.) Moreover, the Court told the parties that “if I'm asked to grant injunctive relief, I think the current [market] conditions ought to be before the Court”, (id. 16:9–11), and instructed Innovative to “[o]utline what discovery you think you would need for injunctive relief[,]” (id. 16:21–22). At most, the Court foreclosed additional discovery or supplementation of “any substantive facts going to the claims,” (id. 4:20–21), but it is readily apparent from the transcript that it did not close the door to discovery completely. Therefore, the Court will address the factors from City of Pomona to determine whether good cause exists to reopen discovery. See 866 F.3d at 1066.
1. Whether Innovative was Diligent
*3 Starting with the most important factor, diligence, see Zivkovic, 302 F.3d at 1087, the parties disagree over whether Innovative acted promptly in trying to obtain the third-party subpoenas requested in the Motion. The Ninth Circuit's mandate reversing this Court's summary judgment decision took effect on March 12, 2024. (Dkt. No. 197.) Innovative first indicated it was seeking to reopen discovery to issue subpoenas to Stryker and Abbott on May 28, 2024, in its opening brief for the June 10, 2024, status conference. (Dkt. No. 226, at 18.) In that brief, as it does in the present Motion, Innovative asserts it seeks the additional data to supplement its expert's report on market power and damages. Although the Court does not condone Innovative's method of initially requesting the reopening in its status conference briefing, it filed the current Motion only four months after the Ninth Circuit's mandate was issued. Prior to its filing, it was apparent that there were significant disputes among the parties over discovery issues that they failed to resolve in numerous meet and confer conferences or at status conferences before the Court. In this context, the Court finds Innovative acted diligently. This conclusion is amplified by the fact that Innovative requested and received similar data from Stryker and Abbott during the initial discovery window, (Declaration of Jeffrey Berhold, Dkt. No. 226-1 ¶¶ 24–25), and Innovative's assertion that it only seeks the supplemental sales data to update the damages analysis it presented through its expert Dr. Eric Forister three years ago, (Reply for Reopening at 4). In other words, Innovative does not seek discovery from a previously undisclosed entity, but an update from two parties who have already participated in this litigation. Accordingly, the Court finds this factor favors reopening discovery.
2. Whether Trial is Imminent
Although the Court set a trial date following remand for August 20, 2024, (Dkt. No. 218), that date has since been vacated in light of the ongoing discovery disputes between the parties, (Dkt. No. 229). At the time of this order, there is no scheduling order and all dates remain uncertain. Both parties blame the other for the delay and contend this factor favors them. The Court agrees with Innovative. Biosense is not wrong that supplemental discovery could cause further delay, (Opp'n to Reopening at 10), but, as the Court mentioned at the June 10, 2024, status conference, this case “will not go to trial this year[,]” (Hr'g Tr. 12:24–25). Therefore, a trial is not imminent, and this factor favors weighs in Innovative's favor.
3. Whether the Request is Opposed
With respect to the second factor, Biosense opposes Innovative's request; therefore, this factor weighs against reopening discovery. See, e.g., Cal. Inst. of Tech. v. Broadcom Ltd., No. CV 16-3714, 2022 WL 17345911, at *3 (C.D. Cal. Oct. 26, 2022) (“Plaintiff opposes Defendants' request, tipping this factor against allowing new discovery.”).
4. Whether Biosense Would be Prejudiced
Innovative contends that Biosense would not be prejudiced by the reopening of discovery because trial is not imminent and “it would not be prejudiced on the merits.” (Mot. to Reopen at 8.) It also blames Biosense for failing to sign a stipulation to issue the subpoenas for why the matter was not already resolved. (Id.; Reply for Reopening at 6.) In response, Biosense argues that Innovative is attempting to use the subpoenas to “redo” its prior strategic decisions, which would greatly prejudice Biosense at this point in the litigation. (Opp'n to Reopening at 8–9.) It also asserts that it would face prejudice in the form of additional costs, expenditure of resources, and delay in resolution of this matter if discovery were reopened. (Id. at 12.)
While the Court encourages parties to resolve issues through meet and confer sessions and stipulations, Biosense was under no obligation to consent to a stipulation merely because Innovative proposed one. Therefore, Innovative's attempt to heap blame on Biosense in that regard is unpersuasive.
There is little doubt that Biosense would suffer some prejudice if discovery is reopened in the form of expended time, costs, and resources. Nevertheless, that prejudice does not outweigh the relevance of the sales data Innovative seeks in its limited request to reopen discovery. See, e.g., Schagene v. Spencer, No.: 13cv333, 2018 WL 1210682, at *5 (S.D. Cal. Mar. 8, 2018) (finding prejudice non-moving party would endure not enough to supersede relevance of limited discovery requested). The Court previously indicated that it would “allow for a further extension of the period of damages to be commensurate with the trial date,” (Hr'g Tr. 4:16–17), which would include an update to “any information that goes to damages[,]” (id. 4:14–15). Consistent with that ruling, and in light of both the uncertainty of and time before any trial date, this factor weighs in favor of reopening discovery.
5. Whether the Need was Foreseeable
*4 Innovative asserts that it was unforeseeable during the initial discovery period in 2021 that it would need additional sales data from Stryker or Abbott because the issue only arose after the Ninth Circuit's mandate issued in March of this year. (Mot. to Reopen at 8.) Biosense's counter argument amounts to a reframing of its diligence argument in that it contends the need for additional discovery was foreseeable as soon as the Ninth Circuit's order was issued and it should have brought this Motion sooner. (Opp'n to Reopening at 14.) The Court agrees with Innovative that the requested information was not foreseeable during the time originally allotted for discovery and finds this factor favors reopening discovery.
6. The Likelihood of Relevant Evidence
Lastly, Innovative argues that the proposed limited discovery would produce relevant evidence because its damages expert, Dr. Forister, previously used Stryker and Abbott sales data as a yardstick to calculate damages and market share of the catheter markets. (Mot. to Reopen at 9–10.) It also points to the Court's indication at the June 10 status conference that current market conditions were relevant to both damages and injunctive relief as further support for its request. (Id. at 9.) Biosense contends that Innovative is taking the Court's statements out of context and they do not support third-party subpoenas. (Opp'n to Reopening at 14.) It further asserts that Dr. Forister did not use the data from Stryker in the way Innovative claims. (Id.) Finally, Biosense argues that even if the evidence Innovative seeks is relevant, because the other factors are in its favor, the relevance factor is insufficient to tip the scales in favor of Innovative. (Id. at 15.)
Innovative's arguments are more persuasive. Although the Court was referring to the request for Biosense to produce supplemental information when it said “I believe it's appropriate to update any information that goes to damages[,]” (Hr'g Tr. 4:13–15), it reaches the same conclusion regarding the sales data from Stryker and Abbott. The rationale for such a disclosure is the same. To accurately present a damages assessment to the factfinder, the logical approach is to extend the period of damages to be “commensurate with the trial date.” (Id. 4:17.) Moreover, it is likely that the data is relevant for assessing Biosense's market position and how a potential injunction should be crafted. Accordingly, this factor favors Innovative.
In sum, after weighing all the factors, the Court finds that good cause exists to reopen discovery for the limited purpose of issuing subpoenas to Stryker and Abbott to update the sales data already provided during discovery for the time period of October 1, 2020, to June 30, 2024. As Innovative states in its Reply, this data is to be used for updating its claims for damages and injunctive relief. (Reply for Reopening at 4–5.) Biosense's concern that the data may be used outside of this limited scope is properly the subject of a motion in limine, which the Court will hear closer to trial.
Accordingly, the Court GRANTS Innovative's Motion to Reopen Discovery.
III. INNOVATIVE'S MOTION FOR SUPPLEMENTAL DISCOVERY
Innovative seeks an order directing Biosense to supplement its production of nationwide transaction data for all customers because it is the “lifeblood” of antitrust cases and forms the basis of both parties' expert reports for analyzing market power and calculating damages. (Mot. for Supplemental Data at 7.) Innovative also contends that Biosense should be precluded from using the supplemental data at trial if they do not produce it by August 30, 2024. (Id. at 24.) Biosense opposes the Motion because it allegedly already provided sufficient updated data to satisfy Innovative's request and any additional data Innovative seeks is part of a wider effort to rectify its previously flawed theories of the case. (Opp'n to Reopening at 5–6.) It also asserts that an exclusion order is not justified and the Court should decline to impose one. (Id. at 18.) In reply, Innovative stresses that the supplemental data it seeks is simply to update data that was originally produced in discovery so current conditions and damages can be properly assessed before trial. (Reply for Supplemental Data at 4.)
*5 To begin, the Court does not condone the excessive finger-pointing and blaming by both parties in this discovery dispute. While the Court understands counsels need to zealously advocate for its client, this matter should have been resolved on its own considering the scope of discovery was discussed at both of the prior status conferences held after remand. The Court expects the parties to work cooperatively and in good faith going forward to find a solution to any other discovery issues before seeking a ruling from the Court.
Biosense is ORDERED to produce the supplemental data to update the transaction information it previously disclosed in discovery. As the Court stated at the June 10 status conference, “it's appropriate to update any information that goes to damages. That would include supplemental information.” (Hr'g Tr. 4:14–15.) The Court made clear that this production would be limited in scope and it would not “require further supplementation of any substantive facts going to the claims.” (Id. 4:19–21.) Thus, this production is part of the ordinary course of business for assessing damages and is in line with Biosense's previous disclosures during discovery. Moreover, the Court noted that current market conditions “ought to be before” it in order to properly address any injunctive relief Innovative seeks. (Id. 16:10.) Therefore, the Court deems the supplemental production appropriate for this case to move forward. Biosense's supplemental production should include data from the prior disclosure end date through June 30, 2024. However, the production is limited to the same categories of data already produced.
The Court, however, DENIES Innovative's request for preclusion without prejudice. (Mot. for Supplemental Data at 24.) While violations of Federal Rule of Procedure 26 “may warrant evidence preclusion[,]” such a sanction “can be ‘harsh.’ ” R & R Sails, Inc. v. Ins. Co. of Pa., 673 F.3d 1240, 1247 (9th Cir. 2012) (citation omitted). As discussed, the failure to rectify the discovery issues in this case rests with both parties. Therefore the Court finds such a sanction would be overly harsh and is unwarranted at this time.
Accordingly, the Court GRANTS Innovative's Motion for Supplemental Production, but DENIES its request for a preclusive sanction.
IV.CONCLUSION
For the foregoing reasons, the Court GRANTS Innovative's Motions. The parties are ORDERED to file a stipulation on or before August 23, 2024, proposing new case management dates, including deadlines for the issuance of the third-party subpoenas and Biosense to produce the supplemental data .
IT IS SO ORDERED.