I. Procedural History and Statement of Facts
Given the parties’ familiarity with the procedural and underlying facts which form the basis of this motion, the Special Master will provide only a brief summary of those facts and events pertinent to this application.
Plaintiffs are MSP Recovery Claims Series, LLC; MAO-MSO Recovery II, LLC; Series PMPI; and MSPA Claims I, LLC (collectively referred to as “Plaintiffs” or singularly as “MSP”). From the inception of this litigation, Plaintiffs have asserted claims on behalf of certain assignors who are effectively private health plans that provide prescription drug coverage through Medicare Part D. Defendants manufacture analog insulin to treat patients with diabetes. Plaintiffs, on behalf of their assignors, contend that the manufacturers have employed an insulin pricing scheme that has unlawfully resulted in an inflated purchase price for that medicine. Plaintiffs are seeking to recover, as assignees, damages caused by this allegedly unlawful pricing scheme.
Fallon is one of the assignors whose claims have been transferred to MSP. Hence, Fallon's putative claims arising out of Defendants’ alleged scheme to improperly maintain insulin prices has been subsumed within this action. As is the case with the other assignors whose claims have been transferred to MSP, Fallon (through MSP) has produced written discovery, and has made available witnesses – employees and former employees – for depositions conducted by Defendants’ counsel. This motion concerns a proposed deposition.
Simply stated, on November 9, 2022, Defendants served a Rule 30(b)(6) deposition subpoena on Fallon. The subpoena sought to depose a corporate representative of that company, a Massachusetts based health insurer, and contained 31 topics as to the insulin pricing at issue in this lawsuit. Previously, Defendants had conducted three depositions of current Fallon employees, and a deposition of one former employee. Fallon had identified its vice president of pharmacy operations, Benjamin Barner, as its prospective corporate representative. Barner had been one of the three previously deposed Fallon employees and testified in his individual capacity.
Fallon now moves to quash the subpoena of its corporate representative, Barner, or alternatively, for a protective order limiting the extent and duration of the deposition.
*2 Essentially, Fallon argues that the deposition of its corporate representative is unnecessary, duplicative, burdensome and costly, especially in light of the fact that Fallon is a third party and not a named litigant in this action. In support, Fallon emphasizes the following:
- Defendants have deposed three current Fallon employees – Barner, vice president of pharmacy services; Lisa Lashbrook, senior director of Medicare programs and Medicare compliance officer; and David Sartini, manager of pharmacy operations and clinical programs. A fourth deposition of a former Fallon employee, Kevin Grozio, has also been taken.
- The depositions of the Fallon employees deposed to date amounted to more than 22 hours of testimony.
- Fallon incurred more than $21,000 in attorneys’ fees in preparing for and defending these depositions.
- In response to prior requests, MSP produced a “voluminous set” of Fallon documents for which it took Fallon employees approximately 15 hours to retrieve and compile. Additionally, Fallon's counsel reviewed these documents for privileged and proprietary information consuming another three hours.
- The Rule 30(b)(6) deposition subpoena demands that Fallon produce all documents used to prepare for the deposition which, Fallon says, is “completely duplicative of the Fallon documents previously produced to Defendants by MSP.” [See affidavit of Mark A. Mosby, Fallon's chief legal counsel, at page 3, ¶ 14.]
- Fallon maintains that “almost all” of the subpoena topics have been discussed during the course of the prior depositions.
- Fallon has agreed to be bound by its deponents’ deposition testimony.
- As to the proposed 31 subpoena topics, only six of them have not already been covered in Barner's deposition. (Topic numbers 8, 9, 14, 16, 20, 27) Of those six topics, only numbers 8 and 9 were never raised in the depositions of the other witnesses. Fallon also argues that even though there exist subpoenaed topics not covered in the Barner deposition, those topics are overbroad and seek irrelevant information, that is, they are not limited to insulin or Fallon's Medicare Advantage health plan.
- Fallon is concerned that based upon the depositions already concluded, Defendants will conduct a Rule 30(b)(6) deposition that will last in the area of six to seven hours.
Fallon maintains that it is a nonparty and, as such, is afforded the heightened protections to a nonparty under Federal Rule of Civil Procedure 45. Under the Rule, a party issuing and serving a subpoena “must take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” Fed. R. Civ. P. 45(d)(1). Citing case law, Fallon says this heightened discovery standard as to nonparties constitutes a “critical protection” since our courts have recognized that nonparties “have no dog in the fight” and “are strangers to the [ ] litigation,” and should not be subject to invasive burdens associated with typical discovery. Cusumano v. Microsoft Corp., 162 F. 3d 708, 717 (1st Cir. 1998). Hence there is “special weight” afforded to nonparties seeking to quash the subpoena. Courts need to consider issues such as relevance, the requesting party's need, the breadth of the request, and the burden imposed on a nonparty.
Additionally, both parties and nonparties are protected by Federal Rule of Civil Procedure 26 which gives the court the power to limit the extent of discovery if the requested discovery is unreasonably cumulative or duplicative, can be obtained from another more convenient source or when the party seeking discovery has had ample opportunity to obtain the information previously. Fed. R. Civ. P. 26(b)(2)(C). Rule 26, like Rule 45, also contains a balancing test and the burden or expense of the proposed discovery must not outweigh its likely benefit. Fed. R. Civ. P. 26(b)(1).
*3 Put succinctly, Fallon says that Defendants are seeking to “redepose” Barner, an action which imposes an undue burden and expense on the company. Prior depositions have already exceeded 22 hours. Barner's deposition will be the fifth and the time incurred as a consequence of his deposition must also include the time needed to comply with the subpoena's request for documents. Further, the financial requirements are excessive, especially in light of the fact that the prior depositions forced Fallon to expend more than $21,000 in fees. As done in the past, Fallon's chief legal counsel will review the most recent document production. Finally, Defendants have not shown a particular need for redeposing Barner when he had been deposed for six and a half hours in September 2022 “on largely the same topics the Subpoena notice identifies.”
Adding to all of this, says Fallon, is the fact that Defendants have refused to narrow or refine any one of the 31 topics identified in the notice, insisting that Fallon – and not Defendants – bear the burden of reviewing the prior Fallon deposition testimony to exclude topics previously covered – a requirement that even an opposing party does not need to undertake.
Even if Fallon is considered a party (which movant insists it is not), the subpoena should be quashed because it fails to satisfy the discovery restrictions of Rule 26. It is unreasonably cumulative and Defendants had ample opportunity to obtain the information during the course of the four prior depositions.
Fallon specifically points to Barner's September 20, 2022 deposition transcript, a copy of which was supplied. The topics covered included, among other things, Fallon's insulin manufacturer rebates, purported “kickbacks,” Fallon's affiliation with health providers, Fallon's relationship with pharmacy benefit manufacturers, contractual relationships with pharmacies, internal policies, document retention, calculation of insulin payments, regulation compliance, and the company's relationship with MSP. [See, memorandum in support of Fallon's motion to quash and for protective order, page 9-10, items a-m.] Barner's testimony, in combination with the other Fallon witnesses, leave only two topics never covered – numbers 8 and 9 – “a fact which renders the Subpoena duplicative and cumulative.”
[1] Fallon concedes that a subpoena is not duplicative solely because a Rule 30(b)(6) representative was previously deposed, but in this case, there is an overwhelming subject-matter overlap between the previous Fallon depositions (especially Barner's) and the subpoena's document demands. Citing District of Massachusetts case law, Fallon emphasizes that this overlap renders a subpoena impermissibly cumulative and duplicative.
Fallon has also agreed to be bound by the deposition testimony of its employees – Barner, Lashbrook, Sartini and its former employee, Grozio. Citing Anaheim Gardens v. United States, 124 Fed. Cl. 36, 41 (2015), movant says that courts will greatly limit the scope of a Rule 30(b)(6) deposition when a corporation offers to be bound by individual deposition testimony and when the deposition of a representative would comprise asking the same individual the same questions as in prior depositions.
Citing Rule 36, Fallon maintains that Defendants have been seeking discovery that they had ample opportunity to obtain previously. Having taken more than 22 hours of testimony and having been provided voluminous documents by Fallon, Defendants have had the opportunity to be fully versed in Fallon's pharmacy operations. Instead, it appears, the objective in deposing Barner is to retrieve different answers to the same questions.
*4 Finally, if the court determines that the subpoena should not be quashed, Fallon seeks a protective order “from the most egregiously burdensome and duplicative aspects of the Subpoena.” Fallon requests to reduce the topics to those not already covered in Barner's deposition and identifies topic numbers 8, 9, 14, 16, 20 and 27. Movant also seeks an order that the deposition is restricted to one hour.
III. Defendants’ Opposition
In opposing Fallon's motion to quash, Defendants emphasize certain procedural and factual events. Defendants stress that in 2017, Fallon entered into a recovery agreement with MSP which obligated the company to cooperate by providing information relating to the assigned claims and, in exchange, Fallon was to receive 50% of the net proceeds recovered by MSP. In 2021, while this litigation was pending, Fallon sold its interest to MSP for an undisclosed amount. Then, in 2018, MSP brought the underlying litigation in which Plaintiffs seek to recover damages on behalf of the remaining assignors including Fallon based upon a claim that the drug manufacturers have artificially inflated the list price of analog insulin as part of the scheme. Furthermore, MSP has no direct knowledge supporting its allegations and all the relevant information is in the possession of the assignors with these damages arising out of insulin purchases between 2009 and 2019.
Defendants go on to stress that during the course of discovery the court has issued several orders related to efforts to obtain discovery from the assignors, including Fallon. Defendants reiterate that in January 2021, the Special Master ordered Plaintiff to produce “the same documents and information from each assignor that Defendants would have been entitled to if the assignors had brought the lawsuit themselves.” As to depositions, on September 15, 2022, the Special Master ordered multiple assignor-related depositions including those of Fallon witnesses and a Fallon corporate representative. [ECF No. 255 at 2-3.]
As a consequence of those orders, Defendants deposed three current and one former Fallon employee at which time attorneys for Fallon and MSP jointly defended the witnesses and asserted that they were being deposed in their individual capacities, not as representatives of Fallon. None of the depositions lasted the seven hours allowed under Rule 30(d)(1) because, according to Defendants, “none of the witnesses meaningfully prepared for the deposition” and each failed to review appropriate corporate documentation. Barner, the subject of this motion, testified to merely reviewing recent Google articles and repeatedly testified to an absence of knowledge about matters which transpired before he joined Fallon in mid-2019. Defendants say the same is true for Fallon's other three witnesses – Lashbrook, Sartini and Grozio.
After being served with a Rule 30(b)(6) deposition notice in November 2022, Fallon objected to each topic asserting that the topics were overbroad, burdensome and oppressive. In December 2022, the parties conducted a meet and confer at which time Fallon identified Barner as Fallon's corporate witness and, asserted that since he had already been deposed, the deposition would be duplicative and cumulative. Defendants maintain that Fallon, having taken this position, refused (in an effort to compromise) to identify those portions of the earlier depositions that were duplicative or by stipulating to certain topics. Thereafter, this motion followed.
*5 Defendants argue that this motion is not governed by either Rule 45 or 26 but is effectively a motion to reconsider the Special Master's September 2022 order which compelled “dozens of Assignor-related depositions, including the depositions of [four Fallon witnesses and a corporate representative].” Fallon has failed to meet the standard necessary to succeed on a motion for reconsideration, i.e., this motion presents no newly discovered evidence, no intervening change in the law and was not based on a manifest error of law or was clearly unjust, citing United States v. Allen, 573 F. 3d. 42, 53 (1st Cir. 2009) and other cases.
However, Defendants go on to say that should the court analyze this motion under either Rule 26 or 45, Fallon's motion should be defeated.
As to Rule 45, which governs the scope of subpoenas as to nonparty witnesses and which is more stringent than Rule 26, Defendants say Fallon is wrong. Defendants argue that Fallon should be treated as a party for discovery purposes and held to the less stringent standard of Rule 26, citing
In re Infant Formula Antitrust Litig., MDL No. 878, 1992 U.S. Dist. LEXIS 21981 (N.D. Fla. Jan. 13, 1992). That is, for discovery purposes, assignors should be treated as parties.
Nevertheless, even under the more stringent standard of Rule 45, Defendants cite a variety of reasons that they are entitled to fully depose a Fallon corporate representative and their right to take that deposition outweighs any burden to Fallon.
Defendants argue that they have never deposed a corporate representative, they have only garnered testimony from Fallon employees in their individual capacities. A corporate representative under Rule 30(b)(6) must testify on behalf of an organization based upon information reasonably available to that organization, i.e., in this case as to Fallon's corporate knowledge. Four individual depositions do not substitute for a Rule 30(b)(6) deposition as those witnesses did not bind the entity nor were they responsible for providing all relevant information knowable to the entity. Further along these lines, a Rule 30(b)(6) deposition witness has a greater responsibility to prepare for the deposition which includes, among other things, reviewing all relevant corporate documentation bearing on the deposition topic, citing Calzaturficico S.C.A.R.P.A. s.p.a. v. Fabiano Shoe Co., 201 F.R.D. 33, 36 (D.Mass. 2001).
The deposition of an individual and the deposition of the same person as a corporate representative are two distinct matters. Courts have rejected the argument that prior deposition from an individual fact witness relieves the corporation from designating a corporate spokesman, citing Smith v. Gen. Mills, Inc., No. C2 04-705, 2006 U.S. Dist. LEXIS 19093, 2006 WL 7276959, at *5 (S.D.Ohio Apr. 13, 2006) and other cases. Here, none of the Fallon witnesses attempted to educate themselves about the subject matter of the deposition and took minimal efforts to prepare. Accordingly, Fallon cannot argue that this unprepared testimony, in which the witnesses disclaimed knowledge of many of the topics, obviates Defendants’ need for a proper Rule 30(b)(6) deposition of Fallon.
Contrary to Fallon's argument, Defendants say a deposition would not be unreasonably duplicative of the prior witness’ testimony. They reiterate that courts reject the argument that previous individual depositions make a subsequent Rule 30(b)(6) deposition duplicative, citing Cabi v. Boston Children's Hospital, No. 15-cv-12306, 2017 U.S. Dist. LEXIS 230174, 2017 WL 8232179, at *2 (D. Mass. June 21, 2017). Barner repeatedly testified that he could not comment on matters occurring prior to 2019 when he joined Fallon, but the claims here date back to 2009. Additionally, his existing testimony is inadequate. In response to the statement in Fallon's motion that Barner was questioned about and testified to specific deposition topics, Defendants say Barner, in fact, was wholly unprepared to offer testimony about Fallon on those topics. Defendants list the topics allegedly covered at Barner's deposition in comparison with his deposition testimony on pages 15-17 of their memorandum in opposition. Those topics include Fallon's compliance with regulations, relationship with MSP, rebate programs, contracts with pharmacies, internal policies, document retention, cost savings on insulin, calculation of insulin payment, affiliation with health providers, health plan products, relationships with PBMs, geographic distribution and manufacturer rebates. In each case, say Defendants, Barner was unprepared to and failed to provide a direct response.
*6 Defendants say that this deficiency is true of the other witnesses including Lashbrook who, despite having held the title of Medicare compliance officer and director of Medicare programs, testified “more than 140 times that she could not answer various questions, including if Fallon even receives rebates from the PBMs.”
Defendants say that Fallon has failed to satisfy its obligation to show that the subpoena imposes an undue burden. As to time requirements, had Fallon directly pursued these claims, the company would have presumptively been obligated to produce up to ten witnesses (not four or five). As to financial requirements imposed by the subpoena, including attorneys’ fees, the fees of some $21,000 represent approximately 0.05% of the $40 million of Fallon insulin purchases. Moreover, these attorneys’ fees were self-imposed since three attorneys were present at each deposition (an attorney for MSP, one on behalf of Fallon, and in-house counsel for Fallon).
Finally, as to Fallon's request for a protective order limiting the number of topics and the time to one hour, Defendants say that they are entitled to a complete deposition of a representative on all topics – a right they would have been entitled to had Fallon brought the claim directly.
The Special Master is called upon to decide whether an assignor's Rule 30(b)(6) witness may, under these circumstances, be shielded from appearing for deposition or, alternatively, to limit the extent of that deposition. In essence, the moving party, Fallon, argues that its corporate representative has already been (effectively) deposed in his capacity as an individual fact witness and because three other Fallon employees have also been subject to questioning. Defendants counter by asserting that under the Federal rules, they are entitled to an unlimited Rule 30(b)(6) deposition and, to this date, no such deposition has been conducted.
Put another way, the Special Master needs to decide whether (a) Defendants are entitled to conduct a Rule 30(b)(6) deposition and, if so, (b) whether such deposition should be limited given what has transpired previously as to Fallon's discovery.
Before addressing this question further, the Special Master will first address an argument, indeed the first argument advanced by Defendants in support of their position. It is an argument which the Special Master finds to be without substantial merit. That is, Defendants contend that this issue has already been decided by virtue of the court's September 6, 2022 order (ECF No. 255), which compelled certain assignor-related depositions, including the depositions of the assignor's corporate representatives. Contrary to Defendants’ argument, that order clearly does not resolve the issue to be decided by way of this motion. It is evident from reviewing the order that it arose out of a status conference at which time the issue of an orderly deposition
schedule as to all potential witnesses was addressed. Consequently, the timing of some 48 assignor depositions was addressed (and “so ordered”) in an effort to expedite discovery. That order included within its ambit four Fallon fact witnesses and a Fallon 30(b)(6) witness, but the order certainly did not address the
substance of the depositions, the topics to be addressed or the potential that a witness might be subject to repetitive or duplicative questioning on the same issues. The order was entered simply for the purpose of keeping discovery on track. The order did not take into consideration any aspect of this motion and Fallon, as the movant correctly points out, had no direct part in opposing that scheduling order and in raising the issues as to undue burden that it raises here.
*8 Given this, Defendants’ initial argument that the instant motion is one for “reconsideration” fails. Therefore, the Special Master has not taken into account the standards for granting – or rejecting – a motion for reconsideration, i.e., an intervening change of law, newly discovered evidence or manifest in justice. Instead, the decision rests upon the analysis and the legal standards set forth below.
The starting point for this analysis, of course, centers on Rule 30(b)(6). The Rule is entitled “Notice or Subpoena Directed to an Organization” and states, in pertinent part:
