Opinion
CIVIL ACTION NO. 16-12652-LTS
12-29-2021
IN RE LANTUS DIRECT PURCHASER ANTITRUST LITIGATION
ORDER ON PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS TO PRODUCE DOCUMENTS RELEVANT TO THEIR AFFIRMATIVE DEFENSE
DEIN, U.S.M.J.
I. INTRODUCTION
This matter is before the court on the "Motion to Compel Defendants to Produce Documents Relevant to Their Affirmative Defense" (Docket No. 285) by which the plaintiffs, FWK Holdings, LLC, Meijer, Inc. and Meijer Distribution, Inc., are seeking an order compelling defendants Sanofi-Aventis US, LLC and Sanofi-Aventis Puerto Rico Inc. (collectively, "Sanofi") to produce documents relevant to Sanofi's regulatory compliance defense. The motion raises questions regarding the scope of the privilege waiver resulting from Sanofi's decision to rely on the advice of its counsel to support its assertion that at the time it listed its patents for Lantus in the Food and Drug Administration's book of Approved Drug Products with Therapeutic Equivalence Evaluations (the "Orange Book"), it had a reasonable basis to conclude, and in good faith did conclude, that its listings were required by the Hatch-Waxman Act and its implementing regulations. While it is undisputed that Sanofi has waived attorney-client privilege and work product protection over the subject matter of the opinions on which it relies, and that Sanofi has produced documents from its opinion counsel that would have been protected in the absence of a waiver, the plaintiffs contend that Sanofi is withholding the following categories of documents that fall within the scope of the waiver and should in fairness be produced: (1) internal documents that were generated by Sanofi's opinion counsel and relate to the advice provided by that counsel but were not communicated to Sanofi, and (2) documents reflecting advice that Sanofi received from its outside litigation counsel in other litigation regarding its Orange Book listings. By their motion, the plaintiffs are seeking an order compelling Sanofi to produce these documents in discovery.
Although requested in their motion, during the hearing before this court on the plaintiffs’ motion to compel, the plaintiffs informed the court that they were no longer seeking documents from Jones Day, Sanofi's litigation counsel in this action. Accordingly, that matter will not be addressed further.
After consideration of the parties’ written submissions and their oral arguments, the plaintiffs’ motion to compel is ALLOWED IN PART and DENIED IN PART. For the reasons detailed below, Sanofi shall conduct a search and produce any communications, as well as any documents reflecting communications, between Sanofi and its outside litigation counsel in the the infringement litigation against Eli Lilly & Company, to the extent that such communications address the propriety of listing or maintaining Sanofi's Lantus patents in the Orange Book. To the extent no such documents can be identified, Sanofi shall notify the plaintiffs that it has completed a search and that no such documents exist. The plaintiffs’ motion to compel is otherwise denied.
II. DISCUSSION
The issues before the court concern the extent to which Sanofi waived its attorney-client privilege and work product immunity when it chose to rely on the advice of its opinion counsel to defend its decisions to list its Lantus patents in the FDA's Orange Book. Rule 502(a) of the Federal Rules of Evidence governs intentional waivers of the attorney-client privilege and work product protection in federal proceedings such as the instant case. It provides in substantive part:
When the disclosure is made in a federal proceeding or to a federal office or agency and waives the attorney-client privilege or work product protection, the waiver extends to an undisclosed communication or information in a federal or state proceeding only if: (1) the waiver is intentional; (2) the disclosed and undisclosed communications or information concern the same subject matter; and (3) they ought in fairness to be considered together.
Fed. R. Evid. 502(a). Thus, Rule 502(a) establishes that "a subject matter waiver (of either privilege or work product) is reserved for those unusual situations in which fairness requires a further disclosure of related, protected information, in order to prevent a selective and misleading presentation of evidence to the disadvantage of the adversary." Fed. R. Evid. 502(a), Advisory Committee Notes.
The Rule's emphasis on fairness is consistent with the relevant case law. As described by another session of this court:
[i]t is settled law that by placing privileged communications ... ‘at issue’ in civil litigation, a party waives any applicable claim of privilege where nondisclosure would cause manifest unfairness to the opposing party. A waiver, as the First Circuit [has] made clear ... is not automatic, but like most things judicial, is subject to a balancing test. The test requires an arbitrating court to consider whether a [party moving to compel] has demonstrated the relevancy of the materials sought, whether there is any reasonable alternative source for the information the materials contain, and whether the [privilege holder's] presumptively valid interest in preserving the confidentiality of its privileged communications outweighs any need for disclosure.
Urban v. Fed. Home Loan Mortg. Corp., 79 F. Supp. 3d 307, 313-14 (D. Mass. 2015) (quoting F.D.I.C. v. R.W. Beck, Inc., No. CIV. A. 01-CV-11982-RGS, 2004 WL 1474579, at *1 (D. Mass. July 1, 2004) ). Consequently, "[t]here is no bright line test for determining what constitutes the subject matter of a waiver, rather courts weigh the circumstances of the disclosure, the nature of the legal advice sought and the prejudice to the parties of permitting or prohibiting further disclosures." In re Seagate Tech., LLC, 497 F.3d 1360, 1372 (Fed. Cir. 2007) (quoting Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349-50 (Fed. Cir. 2005) ), abrogated on other grounds by Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93, 136 S. Ct. 1923, 195 L. Ed. 2d 278 (2016). With these principles in mind, this court turns to the issues raised by the motion to compel.
A. Plaintiffs’ Request for Counsel's Internal Documents
As indicated above, Sanofi does not dispute that by relying on the advice of its counsel regarding the listing of its Lantus patents in the Orange Book, it has waived any claim of privilege over the subject matter of the communications over which it relies. (Def. Opp. Mem. (Docket No. 292-6) at 1). It is also undisputed that Sanofi has produced the following documents from its opinion counsel at Covington & Burling LLP, McDonnell Boehnen Hulbert & Berghoff LLP and Fish & Richardson: "1) the Orange Book listing opinions it received; 2) all documents sent to or from counsel in connection with the opinions or on the subject of Orange Book listing; and 3) documents from the files of counsel referencing communications with [Sanofi] in connection with rendering those opinions." (Id. (footnote omitted)). However, Sanofi has not produced "documents that were not communicated to Sanofi, or documents that did not reference communications with Sanofi[.]" (Id. at 2). The plaintiffs have moved to compel the production of these documents.
The plaintiffs argue that the internal documents of the defendant's opinion counsel should be produced because they could possibly shed light on whether Sanofi disclosed all material facts to its attorneys and whether it tried to dictate its counsel's advice. (Pl. Mem. (Docket No. 287) at 14-15). Additionally, the plaintiffs assert that the only way they will be able to counter Sanofi's advice of counsel defense is by having access to all of the facts and circumstances surrounding opinion counsel's advice. (Id. at 15). This court finds the plaintiffs’ arguments unpersuasive and concludes that counsel's internal documents fall outside the scope of Sanofi's waiver.
"[I]t is important to keep in mind that what is relevant is [Sanofi's] state of mind" regarding the appropriateness of listing its Lantus patents in the Orange Book. Micron Separations, Inc. v. Pall Corp., 159 F.R.D. 361, 363 (D. Mass. 1995). "Counsel's mental impressions, conclusions, opinions or legal theories are not probative of ... [a client's] state of mind unless they have been communicated to that client." Id. (quoting Thorn EMI N. Am., Inc. v. Micron Tech., Inc., 837 F. Supp. 616, 622 (D. Del. 1993) ) (alteration in original). In this case, Sanofi has already produced all of the documents that are relevant to Sanofi's state of mind, including documents that Sanofi's opinion counsel communicated to the defendant, as well as documents that reference communications with Sanofi regarding its Orange Book listings. Notwithstanding the plaintiffs’ assertions to the contrary, internal documents that were not communicated to Sanofi and do not reflect communications with Sanofi are not probative of Sanofi's—as opposed to its counsel's—state of mind. Therefore, they have little if any relevance to Sanofi's affirmative defense and need not be produced.
Even if the documents could arguably prove helpful to the plaintiffs, this court remains mindful that "[t]he overarching goal of waiver" when a party relies on an advice of counsel defense "is to prevent [that] party from using the advice he received as both a sword, by waiving privilege to favorable advice, and a shield, by asserting privilege to unfavorable advice." In re EchoStar Commc'ns Corp., 448 F.3d 1294, 1303 (Fed. Cir. 2006). If, as is the case here, an attorney's internal documents were never communicated to the client or even reflect communications with the client, there is little danger that the client will attempt or even have the ability to use those documents as a means of distorting the factfinding process. For this reason as well, fairness concerns weigh in favor of maintaining the confidentiality of the documents and denying the motion to compel their disclosure.
B. Plaintiffs’ Request for Documents from Litigation Counsel
The second category of documents that the plaintiffs are seeking consist of documents from outside counsel who represented Sanofi in connection with infringement litigation that the defendant brought against Eli Lilly & Company ("Lilly") (the "Lilly litigation"), Merck Sharp & Dohme Corp. ("Merck") and Mylan N.V. and its affiliates (collectively, "Mylan") under the Hatch-Waxman Act. Sanofi argues that its waiver should not extend to communications with its litigation counsel because those communications pertain to litigation advice and strategy rather than the appropriateness of listing its Lantus patents in the Orange Book. (See Def. Opp. Mem. at 6, 12-13). It also argues that it "would chill the adversarial process" and result in fundamental unfairness to require disclosure of litigation related communications. (Id. ). However, the plaintiffs contend that Sanofi "is concealing legal advice from litigation counsel about its Orange Book listings, despite having received such advice both before it listed patents at issue and while it had a continuing obligation to delist any improperly listed patents." (Pl. Mem. at 9 (footnote omitted)). They further contend that this advice is directly relevant to Sanofi's defense and falls within the scope of Sanofi's subject matter waiver. (Id. ). Under the unique circumstances of this case, most notably because (1) the propriety of the listings in the Orange Book were directly at issue in the Lilly litigation, (2) Sanofi continued to list additional, similar Lantus patents during and after the Lilly litigation was concluded, and (3) it appears that litigation counsel in the Lilly litigation consulted with opinion counsel during the course of the litigation, this court will order the limited production from Lilly litigation counsel as described herein.
In a case involving similar circumstances to those presented here, the Federal Circuit Court of Appeals held persuasively that "as a general proposition," "asserting the advice of counsel defense and disclosing opinions of opinion counsel do not constitute waiver of the attorney-client privilege for communications with trial counsel." In re Seagate Tech., LLC, 497 F.3d at 1374. In reaching its decision, the Federal Circuit emphasized that "the significantly different functions of trial counsel and opinion counsel advise against extending the waiver to trial counsel." Id. at 1373. As the court explained in relevant part:
[w]hereas opinion counsel serves to provide an objective assessment for making informed business decisions, trial counsel focuses on litigation strategy and evaluates the most successful manner of presenting a case to a judicial decision maker. And trial counsel is engaged in an adversarial process .... Because of the fundamental difference between these types of legal advice, this situation does not present the classic "sword and shield" concerns typically mandating broad subject matter waiver.
Id.
Significantly, the Seagate court also determined that there were other compelling interests that also weighed against an extension of the waiver to trial counsel. Id. In particular, the court focused on the purpose of the attorney-client privilege "to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice." Id. at 1372 (quoting Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981) ). It explained that these interests depend on the ability of counsel to " ‘work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel’ " and that "allowing discovery of an attorney's thoughts would result in ‘[i]nefficiency, unfairness and sharp practices,’ " which would harm both litigants and the administration of justice. Id. at 1373 (quoting Hickman v. Taylor, 329 U.S. 495, 510-11, 67 S. Ct. 385, 91 L. Ed. 451 (1947) ). The Federal Circuit found that these concerns are directly applicable to patent litigation, and that "[i]n most cases, the demands of our adversarial system of justice will far outweigh any benefits of extending waiver to trial counsel." Id.
The Seagate court further noted that in the context of the case before it, "communications of trial counsel [would] have little, if any, relevance warranting their disclosure[.]" Id. at 1374. In that case, the advice of counsel defense was raised in response to a claim of willful infringement. See id. The question of "[w]illfulness is determined by examining what the accused [infringer] knew or should have known at the time the complaint was filed." Alloc, Inc. v. Pergo, L.L.C., No. 00-C-099, 2010 WL 3808977, at *5 (E.D. Wis. Sept. 23, 2010). Accordingly, the Federal Circuit concluded "[b]ecause willful infringement in the main must find its basis in prelitigation conduct, communications of trial counsel have little, if any, relevance warranting their disclosure, and this further supports generally shielding trial counsel from the waiver stemming from an advice of counsel defense to willfulness." In re Seagate, 497 F.3d at 1374.
Although the Federal Circuit held that communications with trial counsel generally do not fall within the scope of the waiver arising from the disclosure of opinion counsel's communications, it emphasized that it was not setting out an absolute rule. Id. Instead, the court explained that "trial courts remain free to exercise their discretion in unique circumstances to extend waiver to trial counsel, such as if a party or counsel engages in chicanery. We believe this view comports with Supreme Court precedent, which has made clear that rules concerning privileges are subject to review and revision, when necessary." Id. at 1374-75. Thus, the Federal Circuit recognized that courts must have discretion to determine the scope of a privilege waiver given the interests involved and the circumstances presented in a particular case. See Alloc, Inc., 2010 WL 3808977, at *5 (noting that "[t]he discretionary element of In re Seagate [left] undisturbed prior decisions extending the waiver to trial counsel whose connection with opinion counsel raised equitable concerns" and that "[s]ubsequent decisions have extended the scope of the waiver, with limitations, to trial counsel who had a pre-litigation role in advising the accused infringer.").
This court finds that the interests articulated by the Federal Circuit in maintaining the attorney-client privilege and avoiding intrusion into the communications of litigation counsel are equally compelling here. As in the case of Seagate, Sanofi claims in this action that it relied on the advice of its opinion counsel in connection with its decisions to list its Lantus patents in the Orange Book, and that its "Hatch-Waxman Litigation Counsel did not advise the Company in connection with its Orange Book listing decisions for [Lantus ]." (Def. Opp. Mem. at 13). Instead, according to the defendant, its litigation counsel in the infringement actions "advised Sanofi about litigation. " (Id. (emphasis in original)). This court agrees with the reasoning of the court in Seagate and concludes that fairness and concerns for the administration of justice should ordinarily counsel against the disclosure of litigation counsel's communications in these circumstances. See In re Seagate, 497 F.3d at 1373.
With respect to Sanofi's infringement litigation against Merck and Mylan, the record presents no basis for making an exception. In particular, there is insufficient evidence to suggest that Sanofi's representations about the role of its counsel in those cases is inaccurate or that communications between Sanofi and such counsel would shed light on the defendant's state of mind with regard to the propriety of listing its patents in the Orange Book. Although it is undisputed that Sanofi continued to list its Lantus patents in the Orange Book after filing its infringement actions, there is no indication that it requested or received any advice from counsel in the Merck and Mylan actions that may be relevant to its affirmative defense. Therefore, the plaintiffs’ motion to compel the production of documents from those sources is denied.
The Lilly litigation presents a different scenario. In that case, Lilly asserted a counterclaim in which it challenged the propriety of Sanofi's decision to list and maintain its Lantus patents in the Orange Book, thereby putting Sanofi's listings directly at issue in the litigation. (See, e.g., Pl. Mem., Ex. 1 at Entry Nos. 14731-33 (reflecting communications involving Lilly litigation counsel that pertain to Orange Book listings). Additionally, the plaintiffs have presented evidence showing that Sanofi's litigation counsel from the law firm of Gibson, Dunn & Crutcher, LLP ("Gibson, Dunn") participated in communications with Sanofi's FDA regulatory counsel, David Fox at the law firm of Hogan Lovells. (Id. at Entries 14731-32). It is undisputed that Sanofi sought advice from Attorney Fox regarding its Orange Book listings as well as other regulatory matters. (Def. Opp. Mem. at 2 n.4 & 3 n.8). Furthermore, the plaintiffs have presented evidence indicating that at times just preceding or during the Lilly litigation, Sanofi requested legal advice from its litigation counsel at Gibson, Dunn "regarding [the] listing of patents in [the] Orange Book for products other than Lantus." (Def. Privilege Log at Entries 540 & 787). It is also undisputed that Sanofi continued to list Lantus patents in the Orange Book during and after the Lilly litigation and did not remove the patents at issue from the Orange Book. Thus, there is evidence that Sanofi may have been counseled by Lilly litigation counsel about the propriety of listing its Lantus patents in the Orange Book, and that such counsel's communications may be relevant to determining whether Sanofi had a reasonable basis to conclude, and in good faith did conclude, that the listings at issue in this case were required by the Hatch-Waxman Act. Under the scenario presented here, disclosure of Lilly litigation counsel's advice may be necessary to avoid the classic "sword and shield" concerns.
The plaintiffs included excerpts from Sanofi's privilege log in a slide deck that they submitted to the court ahead of the hearing on their motion to compel.
In sum, this court finds that under the specific circumstances of this case, concerns regarding fairness outweigh the interests of protecting the attorney-client privilege and work product protection with respect to any communications, as well as any documents reflecting communications, between Sanofi and its outside litigation counsel in the Lilly litigation, to the extent any such documents address the propriety of listing or maintaining Sanofi's Lantus patents in the Orange Book. Accordingly, Sanofi shall conduct a search for any such documents and produce them to the plaintiffs. To the extent no such documents can be identified, Sanofi shall notify the plaintiffs that it has conducted a search and that no such documents exist. The plaintiffs’ motion for documents from Sanofi's litigation counsel is otherwise denied.
Sanofi is not required to produce any documents that pertain solely to advice it received regarding the litigation or litigation strategy. Its production obligation is limited to advice regarding the propriety of Sanofi's Orange Book listings for Lantus patents.
III. ORDER
For all the reasons described above, the plaintiffs’ "Motion to Compel Defendants to Produce Documents Relevant to Their Affirmative Defense" (Docket No. 285) is ALLOWED IN PART and DENIED IN PART. Sanofi shall conduct a search and produce any communications, as well as any documents reflecting communications, between Sanofi and its outside litigation counsel in the Lilly litigation, to the extent that such communications address the propriety of listing or maintaining Sanofi's Lantus patents in the Orange Book. To the extent no such documents can be identified, Sanofi shall notify the plaintiffs that it has completed a search and that no such documents exist. The plaintiffs’ motion to compel is otherwise denied.