MSP Recovery Claims Series, LLC v. Sanofi-Aventis U.S., LLC
MSP Recovery Claims Series, LLC v. Sanofi-Aventis U.S., LLC
2024 WL 4913567 (D.N.J. 2024)
January 29, 2024
Cavanaugh, Dennis, Special Master (Ret.)
Summary
The plaintiffs have filed a motion for reconsideration of the Special Master's order granting the defendants' request for additional documents, including marketing materials and agreements with litigation funders. The plaintiffs argue that these documents are not relevant and are disproportional to the needs of the case, while the defendants argue that the plaintiffs are still responsible for producing responsive documents and should bear the cost of the search. The defendants also argue that the plaintiffs' certification does not moot the request for agreements and funding documents with litigation funders.
Additional Decisions
MSP RECOVERY CLAIMS, SERIES, LLC, MAO-MSO RECOVERY II, LLC, SERIES PMPI, and MSPA CLAIMS I, LLC, Plaintiffs,
v.
SANOFI-AVENTIS U.S. LLC, NOVO NORDISK INC. and ELI LILLY AND COMPANY, Defendants
v.
SANOFI-AVENTIS U.S. LLC, NOVO NORDISK INC. and ELI LILLY AND COMPANY, Defendants
Case No. 2:18-cv-2211(BRM)(RLS)
United States District Court, D. New Jersey
Filed January 29, 2024
Cavanaugh, Dennis, Special Master (Ret.)
ORDER AND OPINION OF THE SPECIAL MASTER AS TO PLAINTIFFS’ MOTION FOR RECONSIDERATION OF THE SPECIAL MASTER'S MAY 10, 2023 ORDER
*1 Plaintiffs have filed a motion seeking reconsideration (ECF No. 366) (the “Motion”) of the Special Master's May 10, 2023, Order (ECF No. 361) (the “May 10 Order”). On May 5, 2023, the Special Master held a status conference and heard from the parties on a variety of issues (the “May 5 Conference”). Thereafter, the Special Master entered the May 10 Order, which reflects certain decisions made on the record during the May 5 Conference. The Motion seeks reconsideration of that portion of the May 10 Order that pertains to Defendants’ request for additional documents, which was set forth in correspondence dated April 20, 2023. The additional documents include corporate formation documents, marketing materials, agreements and funding documents with litigation funders, and non-responsive slipsheets. The May 10 Order granted Defendants’ request for the additional documents. Defendants filed an Opposition to the Motion. (ECF No. 375.) After considering the submissions and based upon the following analysis, it is the opinion of the Special Master that Plaintiffs’ motion for reconsideration is DENIED.
I. Procedural History and Statement of Facts
As the Special Master writes primarily for the benefit of the parties, the court will limit the discussion to the procedural history and underlying facts which bear directly on the Motion.
Plaintiffs are MSP Recovery Claims, Series, LLC; MAO-MSO Recovery II, LLC, Series PMPI; and MSPA Claims I, LLC (collectively “Plaintiffs” or singularly “MSP”). Plaintiffs assert claims on behalf of certain assignors, that is, on behalf of a series of private health plans which provide prescription drug coverage, including insulin products, to their respective members.
Defendants are Sanofi-Aventis U.S. LLC; Novo Nordisk Inc.; and Eli Lilly and Company (“Defendants”). Defendants manufacture insulin products designed to treat patients diagnosed with diabetes.
Plaintiffs, as assignees, seek to recover monetary damages, which they allege were caused by the individual and collective actions of Defendants. Plaintiffs claim the manufacturers have employed an insulin pricing scheme that has unlawfully raised the purchase price of that medicine. Plaintiffs further contend that the health plans, from which they have received their assignments, suffered financial harm because of the scheme.
On April 20, 2023, Defendants served a letter to Plaintiffs concerning certain deficiencies in Plaintiffs’ custodial document productions. Specifically, Defendants identified four categories of documents that were allegedly missing from Plaintiffs’ document production: (1) corporate formation documents; (2) marketing materials; (3) agreements and funding documents with litigation funders; and (4) non-responsive slipsheets (the “April 20 Correspondence”). Plaintiffs did not respond to the April 20 Correspondence, and the issue was raised during the May 5 Conference when Defendants renewed their request for the above-referenced documents. Plaintiffs claimed that the parties had agreed to a Technology Assisted Review (“TAR”) protocol and the subject documents were not pulled in the protocol. Plaintiffs also argued that Defendants waited too long to follow up on the request. The Special Master ordered production of the documents identified in Defendants’ April 20 Correspondence.
*2 On May 10, 2023, the Special Master entered an order reflecting his rulings from the May 5 Conference. The May 10 Order states, in relevant part:
WHEREAS, Defendants also contend that they have requested additional relevant documents by way of letter dated April 20, 2023, including corporate formation documents, marketing materials, agreements and funding documents with litigation funders, and non-responsive slipsheets (“Issue 4”);...IT IS FURTHER ORDERED that with respect to Issue 4, Plaintiffs are required to produce the documents requested in Defendants’ April 20, 2023, correspondence, as set forth above, by May 31, 2023;[(ECF No. 361).]
Thereafter, on May 24, 2023, Plaintiffs filed a Motion for Reconsideration of the May 10 Order. (ECF No. 366.) On June 16, 2023, Defendants opposed the Motion for Reconsideration. (ECF No. 375.)
II. Plaintiffs’ Argument
Initially, Plaintiffs have agreed to produce the corporate formation documents and the non-responsive slipsheets that Defendants requested in the April 20 Correspondence. Thus, Plaintiffs seek reconsideration of that portion of the May 10 Order that directs Plaintiffs to produce marketing materials and agreements and funding documents with litigation funders.
As it pertains to the marketing materials, the April 20 Correspondence made the following request:
Like all businesses, MSP markets its services to customers. All marketing materials to assignors and potential assignors are responsive to, inter alia, RFP Nos. 1, 4, and 5, as those communications relate to the assignment of claims. Yet MSP has produced very few documents in this category. For example, it has produced what appears to be a template assignor solicitation email—one email was sent to HealthFirst (MSP-0000086394) and another to AvMed (MSP-0000090820)—but MSP's current productions do not include this marketing email to any other assignor. Nor do the productions appear to contain any other indications of how MSP markets itself to assignors. Additionally, MSP has improperly withheld the attachments to this solicitation email as non-responsive. (MSP-0000090821; MSP-0000090825; MSP-0000090822; MSP-0000090826; MSP-0000090823; MSP-0000090827). As these attachments describe MSP's offerings to assignors, they are responsive and must be produced. Please produce all marketing materials (including presentations, brochures, and emails that MSP uses to solicit assignment of claims) to assignors whose claims you have pursued in this litigation, as well as the specific aforementioned attachments.
Plaintiffs argue that the marketing materials are not responsive to any existing RFPs. Plaintiffs further argue that Defendants speculate that documents are missing from Plaintiffs’ production without any basis. Plaintiffs contend that Defendants’ request is an “attack on the agreed upon ESI/TAR Protocol” and that the May 10 Order compelling production of such documents improperly expands the scope of production, which undermines the agreed upon protocol and imposes an undue burden on Plaintiffs that is disproportional to the needs of the case. Plaintiffs further contend that there is confusion as to how they should comply with the May 10 Order, including whether Plaintiffs must re-run everything through the ESI/TAR Protocol, whether the May 10 Order now requires a 100% recall rate instead of the agreed-upon 90% recall rate, or whether Plaintiffs should disregard the ESI/TAR Protocol and run a manual search. Plaintiffs argue that because the marketing materials are irrelevant and disproportional to the needs of the case, Defendants should be responsible for the cost of a new search.
*3 With respect to the agreements and funding documents with litigation funders, Plaintiffs contend that the request for this category of documents is rendered moot by virtue of its certification from Jorge Lopez that Plaintiffs have not received litigation funding in this matter. (ECF No. 362.) The April 20 Correspondence claimed that MSP has solicited and received funding from several litigation funding companies, including Virage Capital Management, RD Legal Finance, and Brickell Key Investments. Defendants requested documents concerning MSP's relationship with these entities, including: (1) all contracts and amendments and modifications thereto between MSP and the funders; (2) all funding documents, including any projections, budget, and/or financial analyses to support the funding relationship and due diligence documents; (3) all “valuation reports” for assignors, as described at MSP-0000012491; (4) all other reports related to the assignors whose claims you are pursuing in this litigation provided to these funders; (5) any documents and communications with investors related to the purpose of the assignments, the validity of the assignments, and concerns about champerty and maintenance; and (6) any marketing materials to these funders.
During the May 5 Conference, Defendants argued that Plaintiffs failed to file a Local Civil Rule 7.1.1 statement regarding litigation funding. Plaintiffs argued that they are not required to file such a statement because they are not receiving litigation funding. On May 17, 2023, Plaintiffs filed a certification from Jorge Lopez, Plaintiffs’ designated corporate representative, which states that Virage Capital Management, RD Legal Finance, and Brickell Key Investments are not third-party litigation funders in this matter. Thus, Plaintiffs argue that the certification from Jorge Lopez renders moot Defendants’ request for the agreements and funding documents with litigation funders.
Plaintiffs maintain that the motion for reconsideration is appropriate because they are seeking “reconsideration, and/or, in the alternative, clarification, due to the ‘availability of new evidence that was not available when the court [made its initial decision and/or]... to correct a clear error of law or fact to prevent manifest injustice.’ ” Max's Seafood Café v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). Plaintiffs argue that the April 20 Correspondence was not a motion to compel, and did not identify relevancy, the need for such documents, proportionality, etc. Plaintiffs dispute that the RFPs referenced in the April 20 Correspondence request marketing materials or documents related to third-party litigation funders. Plaintiffs claim that because the May 10 Order required production of the documents requested in the April 20 Correspondence, without requiring a motion to compel, they were unable to fully levy their objections.
III. Defendants’ Argument
Defendants argue that Plaintiffs’ motion for reconsideration is improper because there is no clear error or manifest injustice and there has been no change in law or the evidentiary record that would dictate a different conclusion. Rather, Plaintiffs are raising arguments that they could have raised before, but did not. Defendants also disagree that there is anything for the Court to clarify. Defendants contend that the Special Master already rejected Plaintiffs’ request for clarification of the documents during the May 5 Conference.
Defendants argue that their document requests sufficiently cover the category of marketing materials. Specifically, RFP No. 1 requests “[a]ll Documents concerning any assignment of claims to MSP from any Assignor, including but not limited to... (iii) Documents discussing the scope, limitations, terms (including the terms relating to any payment by MSP in exchange for the assignment), or purpose of any such assignment...[and] (vi) Documents concerning any efforts by MSP to acquire the Assignments, or demonstrating MSP's purpose for assigning or acquiring the Assignments[.]” Additionally, RFP No. 5 requests “[a]ll Documents containing or reflecting communications between MSP and any Person from which MSP unsuccessfully sought to obtain an assignment of claims that could cover the allegations of the Complaint.”
*4 Defendants further argue that the TAR protocol does not absolve Plaintiffs of the responsibility to produce responsive documents, nor does requiring production of the marketing materials renege on the TAR protocol or require a 100% recall rate. With respect to how Plaintiffs should go about producing the marketing materials, Defendants argue that Plaintiffs should conduct a manual, targeted collection, which they have previously done. Defendants also argue that Plaintiffs should bear the cost of the search, and that Plaintiffs failed to demonstrate any basis for cost-shifting.
As it pertains to the request for agreements and funding documents with litigation funders, Defendants contend that the Jorge Lopez certification does not moot this issue. Defendants further contend that Plaintiffs failed to demonstrate any error or manifest injustice with respect to the May 10 Order on the issue. Defendants argue that MSP's document productions, SEC disclosures, and belated corporate disclosures make clear that at least three entities – Virage Capital Management, RD Legal Finance, and Brickell Key Investments – have financial interests in this litigation and have been involved in MSP's negotiations with assignors. Defendants maintain that Plaintiffs’ certification from Jorge Lopez does not moot the request for documents concerning the agreements and funding documents with these entities because they are responsive to existing RFPs and fall within the permissible scope of discovery.
Defendants argue that Plaintiffs’ Rule 7.1.1 certification does not moot their request for agreements and funding documents between Plaintiffs and Virage Capital Management, RD Legal Finance, and Brickell Key Investments. Rather, Defendants contend that a non-party's status as an owner of a litigated claim does not take that entity outside the scope of Rule 7.1.1. Indeed, the Rule requires disclosure of “ ‘any person or entity that is not a party and is providing funding for some or all of the attorneys’ fees and expenses for the litigation’ in exchange for ‘a contingent financial interest’ or ‘a non-monetary result.’ ” Defendants argue that they are entitled to test the validity of Plaintiffs’ certification that it receives no third-party litigation funding as these three entities’ own websites make clear that litigation funding is their core business offering.
Defendants contend that the fact that these three entities have ownership and management interests in the named plaintiffs only underscores that they possess responsive, relevant documents. MSP's existing document production demonstrates that Virage Capital Management not only financially supports, but actively participates in, MSP's decision-making relating to this litigation. For example, MSP Recovery Claims Series, LLC's operating agreement indicates that Virage Capital Management has “power and authority to unilaterally manage, control, administer and operate the business and affairs of” named plaintiff MSP Recovery Claims Series, LLC. Additionally, there are emails indicating Virage Capital Management is involved in reviewing and revising agreements with assignors and paying assignors for their claims. Likewise, MSP produced emails that RD Legal Finance reviewed Plaintiffs’ contracts with assignors and contributed funding to Plaintiffs.
Defendants further contend that the request for litigation funding-related documents is responsive to RFP No. 1, which requests, in relevant part:
All documents concerning any assignment of claims to MSP from any Assignor, including but not limited to: ...(ii) agreements or contracts governing the distribution of any financial recoveries received, or that maybe received, by MSP in connection with asserting claims or making recoveries on behalf of any Assignor; (iii) Documents discussing the scope, limitations, terms (including the terms relating to any payment by MSP in exchange for the assignment), or purpose of any such assignment; (iv) Documents regarding the rights of assignee to an assignment of claims, the merits of any assigned claims, and any obligations assignee owes the alleged Assignor for the assignment of claims; ... (vii) Document relating to any projection or estimate by MSP of the recovery, by litigation, settlement or otherwise, of the recovery on the assigned claims or of its or any Assignees’ share of the recovery.
*5 Thus, the Court did not err or commit manifest injustice in concluding that the litigation funding materials are responsive to Defendants’ RFPs.
Defendants also argue that litigation funding materials are relevant and proportional. Discovery into litigation funding is appropriate where “there is a sufficient showing that a non-party is making ultimate litigation or settlement decisions.” In re Valsartan N-Nitrosodimethylamine (NDMA) Contamination Products Liability Litigation, 405 F. Supp. 3d 612, 615 (D.N.J. 2019). Defendants contend that MSP's relationship with Virage Capital Management, RD Legal Finance, and Brickell Key Investments suggests that those entities are intimately involved in MSP's litigation decision-making and such discovery will shed light on the extent of that involvement. Defendants also contend that these documents are relevant to establish the real party in interest here and to support Defendants’ champerty and maintenance defenses.
IV. Legal Standard
While not expressly authorized by the Federal Rules of Civil Procedure, motions for reconsideration are proper pursuant to this District's Local Civil Rule 7.1(i). That Rule states:
Motions for Reconsideration.Unless otherwise provided by statute or rule (such as Fed. R. Civ. P. 50, 52, and 59), a motion for reconsideration shall be served and filed within 14 days after the entry of the order or judgment on the original motion by the Judge. A brief setting forth concisely the matter or controlling decisions which the party believes the Judge has overlooked shall be filed with the Notice of Motion.
The comments to the Rule make clear that “reconsideration is an extraordinary remedy that is granted ‘very sparingly.’ ” Rich v. State, 294 F. Supp. 3d 266, 272 (D.N.J. 2018) (citations omitted). It has also been described as “an extremely limited procedural vehicle.” Fellenz v. Lombard Investment Corp., 400 F. Supp. 2d 681, 683 (D.N.J. 2005); Rich, 294 F. Supp. 3d at 272. A motion for reconsideration may not be used to re-litigate old matters nor to raise arguments or present evidence that could have been raised prior to the entry of judgment. P. Schoenfeld Asset Mgmt., LLC v. Cendant Corp., 161 F. Supp. 2d 349, 352 (D.N.J. 2001).
To prevail on a motion for reconsideration, the moving party must show at least one of the following grounds: “(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court [made its initial decision]; or (3) the need to correct a clear error of law or fact to prevent manifest injustice.” Max's Seafood Café v. Quinteros, 176 F. 3d 669, 677 (3d. Cir. 1999). A court commits clear error of law “only if the record cannot support the findings that led to the ruling.” ABS Brokerage Servs., LLC v. Penson Fin. Servs., Inc., 09-cv-4590, 2010 WL 3257992, at *1 (D.N.J. Aug. 16, 2010). Moreover, when the assertion is that the court overlooked something, the court must have overlooked some dispositive factual or legal matter that was presented to it. Rich, 294 F. Supp. 3d 272-273. In short, mere disagreement with a court's decision does not suffice. Id. at 273.
V. Analysis
*6 Plaintiffs, the moving parties here, have failed to demonstrate any of the grounds upon which a motion for reconsideration may be granted. Initially, Plaintiffs do not allege that there has been an intervening change in the controlling law. Rather, Plaintiffs seek reconsideration due to the availability of new evidence that was unavailable when the court made its initial decision and/or to correct a clear error of law or fact to prevent manifest injustice.
Plaintiffs have failed to present any “new” evidence that was not available when the Special Master made his initial decision with respect to the requested documents. Plaintiffs’ argument that Defendants’ April 20 Correspondence was not a motion to compel was presented to the Special Master during the May 5 Conference. Similarly, Plaintiffs argued at the May 5 Conference that the requested documents are not responsive to Defendants’ RFPs. The Special Master rejected these arguments and reiterates that the requested documents at issue in this motion for reconsideration – i.e., marketing materials and litigation funding materials – are sufficiently encompassed in Defendants’ RFPs. Furthermore, Plaintiffs argued at the May 5 Conference that they utilized a TAR protocol for document production and that ordering production of the requested documents would be disregarding the TAR protocol and essentially requiring a 100% recall rate. The Special Master also rejected any notion that the TAR protocol is a safe harbor to document production and that Plaintiffs have no obligation to produce responsive documents that were not identified by the TAR protocol. Finally, to the extent Plaintiffs contend that their Rule 7.1.1 certification that Virage Capital Management, RD Legal Finance, and Brickell Key Investments are not “third-party litigation funder[s]” that must be disclosed pursuant to Rule 7.1.1 is “new” evidence, the Special Master rejects that argument. Such information was known to and available prior to the Special Master's May 10 Order and does not constitute “new” evidence for purposes of a motion for reconsideration.
The Special Master also rejects Plaintiffs’ contention that reconsideration is necessary to correct a clear error of law or fact to prevent manifest injustice. As set forth above, when the assertion is that the court overlooked something, the court must have overlooked some dispositive factual or legal matter that was presented to it. Rich, 294 F. Supp. 3d 272-273. In short, mere disagreement with a court's decision does not suffice. Id. at 273. Plaintiffs do not set forth any relevant law that the Special Master allegedly overlooked in ordering production of the marketing materials or the agreements and funding documents with litigation funders.
The Special Master finds that Lawson v. Spirit AeroSystems, Inc., No. 18-1100, 2020 WL 1813395 (D. Kan. Apr. 9, 2020) does not compel a different result. Initially, Lawson was not presented to the Special Master during the May 5 Conference. However, even if it had been, it would not have changed the Special Master's ruling. In Lawson, the plaintiff, a former chief executive officer for Spirit Airlines sued his former employer to recoup money that he claimed he was owed under his retirement agreement that Spirit Airlines refused to pay after concluding that the plaintiff had breached his non-compete by providing consulting services to a competitor. Id. at *3. The parties had a tortured history of attempting to agree upon an electronically stored information (ESI) protocol, which ultimately led to the use of a TAR. Id. at *3-12. The plaintiff was unwilling to narrowly-tailor his list of custodians or search terms, and demanded production of the residual TAR documents, which fell outside of the 80% recall rate. Id. at *22-28. Furthermore, the documents that had been produced had an extraordinarily low responsiveness rate. Id. The Court refused to order Spirit Airlines to expend an additional $40,000 to review the residual TAR documents after it had already spent over $600,000 attempting to appease the plaintiff and producing thousands of documents with a low responsiveness rate. Id. The plaintiff made no effort to tailor his request for the residual TAR documents or make any showing as to why those documents would be more responsive and not duplicative of previously produced documents. Id. Thus, the Court rejected the plaintiff's request for the residual TAR documents.
*7 Here, Defendants’ request for marketing materials is narrowly tailored and responsive to pre-existing RFPs. The Special Master does not find the request to be unduly burdensome, disproportional to the needs of this case, or tantamount to a rejection of the TAR protocol by requiring a 100% recall rate. The Special Master also finds no basis to order cost-shifting to Defendants. The common practice is for the responding party to bear the costs associated with its document production. In this matter, both sides of the litigation have and will continue to bear significant costs in retrieving and producing documents which are pertinent to the issues. Plaintiffs have provided the Special Master with no compelling reason to alter that balance.
Finally, with respect to the request for agreements and funding documents with litigation funders, Plaintiffs have failed to demonstrate any law or fact that the Special Master overlooked in the May 10 Order. Plaintiffs cite to Valsartan to argue that Defendants must demonstrate good cause as to why they are entitled to discovery as to litigation funding. At the time of the May 10 Order, Plaintiffs had not yet disclosed the Jorge Lopez certification, which outlines the relationship between Plaintiffs and the three litigation funding companies. However, that information was available to Plaintiffs and could have been provided to the Special Master at the May 5 Conference. Nevertheless, even if it had been presented to the Special Master at the May 5 Conference, Defendants have identified documents suggesting that these entities have intimate involvement in Plaintiffs’ litigation decision-making and argue that these documents are relevant to determine the real party in interest and Defendants’ defenses of champerty and maintenance. In Valsartan, the Court clarified that it was not holding that “litigation funding discovery is off-limits in all instances.” Id. at 615. Indeed, the Court will order the discovery where “good cause exists to show the discovery is relevant to claims and defenses in the case[,]” or where “there is a sufficient showing that a non-party is making ultimate litigation or settlement decisions[.]” Id.
Thus, for the foregoing reasons, the Special Master denies Plaintiffs’ Motion for Reconsideration of the May 10 Order. Plaintiffs have failed to demonstrate an intervening change in the controlling law, the availability of new evidence that was not available when the Special Master made his initial decision, or the need to correct a clear error of law or fact to prevent manifest injustice.
VI. Conclusion
For the foregoing reasons, Plaintiffs’ motion for reconsideration of the May 10 Order is DENIED. Plaintiffs shall produce the requested documents within 45 days of the date of this Order.