Opinion
20cv00706 (DLC)
11-18-2021
FEDERAL TRADE COMMISSION, STATE OF NEW YORK, STATE OF CALIFORNIA, STATE OF OHIO, COMMONWEALTH OF PENNSYLVANIA, STATE OF ILLINOIS, STATE OF NORTH CAROLINA, and COMMONWEALTH OF VIRGINIA, Plaintiffs, v. VYERA PHARMACEUTICALS, LLC, AND PHOENIXUS AG, MARTIN SHKRELI, individually, as an owner and former director of Phoenixus AG and a former executive of Vyera Pharmaceuticals, LLC, and KEVIN MULLEADY, individually, as an owner and former director of Phoenixus AG and a former executive of Vyera Pharmaceuticals, LLC, Defendants.
For plaintiff Federal Trade Commission: James H. Weingarten Markus H. Meier Bradley S. Albert Amanda Triplett Armine Black Daniel W. Butrymowicz J. Maren Schmidt Lauren Peay Leah Hubinger Matthew B. Weprin Neal J. Perlman For plaintiff State of New York: Amy E. McFarlane, Jeremy R. Kasha, Elinor R. Hoffman, Saami Zain Office of the New York Attorney General Bryan Lewis Bloom Freshfields Bruckhaus Deringer U.S. LLP For plaintiff State of California: Michael D. Battaglia Office of the Attorney General of California For plaintiff State of Ohio: Beth Ann Finnerty, Derek M. Whiddon Office of the Ohio Attorney General For plaintiff Commonwealth of Pennsylvania: Joseph Betsko Pennsylvania Office of Attorney General For plaintiff State of Illinois: Richard S. Schultz Office of the Attorney General of Illinois For plaintiff State of North Carolina: K.D. Sturgis, Jessica V. Sutton North Carolina Dept. of Justice Consumer Protection Division For plaintiff Commonwealth of Virginia: Sarah Oxenham Allen, Tyler T. Henry Office of the Attorney General of Virginia For defendants Vyera Pharmaceuticals, LLC and Phoenixus AG: Stacey Anne Mahoney, Sarah E. Hsu Wilbur Morgan, Lewis & Bockius LLP Scott A. Stempel, William Cravens, Melina R. Dimattio, Morgan, Lewis & Bockius LLP Steven A. Reed Morgan, Lewis & Bockius LLP Noah J. Kaufman Morgan, Lewis & Bockius LLP Michael M. Elliott, Rachel J. Rodriguez Phillips Nizer LLP Michael L. Weiner Dechert LLP (NYC) For defendant Martin Shkreli: Christopher H. Casey, Andrew J. Rudowitz, Jeffrey S. Pollack, Sarah O'Laughlin Kulik James Manly Parks Duane Morris LLP Sarah Fehm Stewart Duane Morris, LLP (NJ) For defendant Kevin Mulleady: Kenneth R. David, Marc E. Kasowitz, Albert Shemtov Mishaan, Nicholas Anthony Rendino Kasowitz, Benson, Torres LLP (NYC)
For plaintiff Federal Trade Commission:
James H. Weingarten
Markus H. Meier
Bradley S. Albert
Amanda Triplett
Armine Black
Daniel W. Butrymowicz
J. Maren Schmidt
Lauren Peay
Leah Hubinger
Matthew B. Weprin
Neal J. Perlman
For plaintiff State of New York: Amy E. McFarlane, Jeremy R. Kasha, Elinor R. Hoffman, Saami Zain Office of the New York Attorney General
Bryan Lewis Bloom Freshfields Bruckhaus Deringer U.S. LLP
For plaintiff State of California: Michael D. Battaglia Office of the Attorney General of California
For plaintiff State of Ohio: Beth Ann Finnerty, Derek M. Whiddon Office of the Ohio Attorney General
For plaintiff Commonwealth of Pennsylvania: Joseph Betsko Pennsylvania Office of Attorney General
For plaintiff State of Illinois: Richard S. Schultz Office of the Attorney General of Illinois
For plaintiff State of North Carolina: K.D. Sturgis, Jessica V. Sutton North Carolina Dept. of Justice Consumer Protection Division
For plaintiff Commonwealth of Virginia: Sarah Oxenham Allen, Tyler T. Henry Office of the Attorney General of Virginia
For defendants Vyera Pharmaceuticals, LLC and Phoenixus AG: Stacey Anne Mahoney, Sarah E. Hsu Wilbur Morgan, Lewis & Bockius LLP
Scott A. Stempel, William Cravens, Melina R. Dimattio, Morgan, Lewis & Bockius LLP
Steven A. Reed Morgan, Lewis & Bockius LLP
Noah J. Kaufman Morgan, Lewis & Bockius LLP
Michael M. Elliott, Rachel J. Rodriguez Phillips Nizer LLP
Michael L. Weiner Dechert LLP (NYC)
For defendant Martin Shkreli: Christopher H. Casey, Andrew J. Rudowitz, Jeffrey S. Pollack, Sarah O'Laughlin Kulik
James Manly Parks Duane Morris LLP
Sarah Fehm Stewart Duane Morris, LLP (NJ)
For defendant Kevin Mulleady: Kenneth R. David, Marc E. Kasowitz, Albert Shemtov Mishaan, Nicholas Anthony Rendino Kasowitz, Benson, Torres LLP (NYC)
MEMORANDUM OPINION AND ORDER
DENISE COTE, United States District Judge
The United States Federal Trade Commission and seven States (collectively, “Plaintiffs”) have moved to strike portions of the expert testimony of John S. Russell offered on behalf of defendants Vyera Pharmaceuticals, LLC, its parent company Phoenixus AG (together, “Vyera”), Martin Shkreli, and Kevin Mulleady (collectively, “Defendants”). For the following reasons, the motion is granted.
Trial in this antitrust action is scheduled to commence on December 14, 2021. The direct testimony of witnesses under the parties' control, including their experts, is being received by affidavit. The parties exchanged those affidavits on October 20 and filed their Daubert motions on the same date. This Opinion is the final in a series of Opinions addressing those motions. Familiarity with the most recent such Opinion is presumed and its recitation of the legal standard is incorporated herein. Fed. Trade Comm'n v. Vyera Pharms., LLC, No. 20CV00706 (DLC), 2021 WL 5336949 (S.D.N.Y. Nov. 16, 2021).
In this motion, the Plaintiffs seek to strike the following paragraphs from the affidavit of defense expert John S. Russell: 11.iii, 11.vi, 66-92, and 125-144. Their motion is granted.
Background
Russell is the Managing Partner for ASDO Consulting Group. His firm provides consulting and advisory services to early stage and midsize life science companies, institutional investors, and healthcare data providers.
Russell holds an M.A. in microbiology. He worked from 1973 to 1985 with Eli Lilly in sales, marketing and pricing; from 1985 to 1995, in marketing and sales at its subsidiary IVAC Corporation; and from 1996 to 2002, in marketing and sales at Otsuka America Pharmaceutical Inc.
Russell is offered as a rebuttal witness to Plaintiffs' experts Edward V. Conroy and James Bruno, who have testified respectively about defendant Vyera's Daraprim distribution system and supply agreements with API suppliers. Russell identifies seven opinions he is prepared to offer at trial. The Plaintiffs challenge two of those seven opinions and those portions of his report associated with those two opinions.
The two opinions at issue are:
These two opinions are stated, respectively, in paragraphs 11.iii and 11.vi of Russell's affidavit.
1. There are numerous examples of procurement companies that were able to provide quotes, and when commissioned to do so, purchase Daraprim. Based on my review of this evidence, I conclude that Daraprim samples were available to generic manufacturers.
2. Generic manufacturers successfully found alternative sources for pyrimethamine. It is clear that pyrimethamine API was available, as Cerovene, Inva-Tech, Fera, Mylan, and Teva were able to acquire API.
The Plaintiffs seek to strike the paragraphs in the body of the affidavit that contain the support for these two opinions. Russell explains in those paragraphs that these opinions are based on his review of the evidence. The paragraphs provide no independent expert analysis, but instead recite a chronology of the events at issue in this litigation which he believes are relevant.
These corresponding passages are, for example, paragraphs 70, 92, and 144.
Discussion
The Plaintiffs contend that the Defendants have not shown that Russell is qualified to provide an expert opinion on the topic of RLD procurement or API sourcing. Additionally, they have moved to strike this material on the ground that it is simply a factual narrative untethered to any admissible expert opinion and improperly invades the province of the factfinder.
The Plaintiffs are correct. Each ground is an independent basis for striking the identified material.
In his deposition, Russell frankly admitted that he had no direct experience in either area at issue in these sections of his affidavit. During his work with pharmaceutical companies and in his current job as a consultant, he has never been involved in the acquisition of RLD. While he has had more experience with researching API manufacturers, that experience has been too limited and sporadic to qualify him as an expert in the evaluation of API supplier capabilities and the assessment of alternative API suppliers.
The body of his affidavit devoted to these topics is simply a summary of facts that the Defendants wish to argue are relevant to the decisions the fact finder must make at trial. This is not proper expert testimony.
In opposing this motion, the Defendants admit that Russell's report contains summaries of facts. They argue that those summaries should be accepted because they are relevant, they are helpful as a rebuttal of opinions offered by the Plaintiffs' experts, and they are summaries of “objective facts.” None of these arguments succeeds. Unless facts provide context to or support for admissible expert opinions, they must be stricken from an expert's testimony. A naked recitation of facts usurps the role of the finder of fact, whether those facts are properly characterized as objective or not.
Conclusion
The October 20, 2021 motion by the Plaintiffs to strike portions of the trial testimony of John S. Russell is granted. Dated: New York, New York