Opinion
MDL NO. 2:18md2836
2021-10-12
IN RE: ZETIA (EZETIMIBE) ANTITRUST LITIGATION
MEMORANDUM ORDER
Rebecca Beach Smith, Senior United States District Judge
This matter comes before the court on the Merck and Glenmark Defendants’ ("Defendants") Rule 72(a) Objections to Magistrate Judge Miller's Order Granting Plaintiffs’ Motion to Exclude Portions of the Proposed Testimony of Mark Robins. ECF Nos. 1318, 1319 ("Objections"). For the reasons explained below, Defendants’ Objections are OVERRULED , and the Magistrate Judge's well-reasoned Order is AFFIRMED .
The Merck Defendants ("Merck") consist of Merck & Co., Inc.; Merck Sharp & Dohme Corp.; Schering-Plough Corp.; Schering Corp.; and MSP Singapore Co. LLC. The Glenmark Defendants ("Glenmark") consist of Glenmark Pharmaceuticals, Ltd. and Glenmark Pharmaceuticals Inc., USA, the latter incorrectly identified as Glenmark Generics Inc., USA.
I. BACKGROUND
Defendants and Plaintiffs have been engaged in extensive litigation concerning Defendants’ alleged violation of antitrust law through a settlement agreement that resolved Merck and Glenmark's earlier patent dispute ("Settlement Agreement"). That earlier dispute concerned Glenmark's introduction into the market of a generic version of Merck's cholesterol drug, Zetia. The terms of the Settlement Agreement allowed Glenmark to introduce its generic four months before Merck's patent expired. Plaintiffs also claim that Merck agreed not to introduce its own generic version of Zetia (an "Authorized Generic" or "AG"), which would have competed with Glenmark's drug, during the one hundred eighty (180) days following Glenmark's introduction of its generic. Plaintiffs argue that this aspect of the Settlement Agreement (the "No-AG Agreement") violated antitrust law, contending that, without the No-AG Agreement, Glenmark would have received more than the four months early entry established in the Settlement Agreement.
"Plaintiffs" refers to all plaintiffs in this multi-district litigation.
Title 21 U.S.C. § 355(j)(5)(B)(IV) provides for a 180-day exclusivity period for the first to file certain "abbreviated application[s] for the approval of a new drug." However, this statutory bar would not have applied to Merck, as it had an AG. See, e.g., Teva Pharm. Indus. Ltd. v. Crawford, 410 F.3d 51, 55 (D.C. Cir. 2005) (holding that § 355(j)(5)(B)(IV) does not bar a brand manufacturer from introducing "its own ‘brand-generic’ version of its drug."). Therefore, during this 180-day statutory period, Merck would have been the only other manufacturer permitted to bring a generic version of Zetia to market.
See supra note 3 and accompanying text.
Central to the current litigation is whether the No-AG Agreement caused Glenmark's purportedly delayed introduction of its generic version of Zetia. Defendants retained Dr. Mark Robbins ("Robbins") (1) "to provide opinions concerning the development and approval process of pharmaceutical products, and the ability (or lack thereof) of Glenmark and other generic manufacturers to commercially launch a generic version of Zetia," and (2) to respond to portions of Plaintiffs’ experts’ opinions. ECF No. 1091-14 at 8 ("Report"). Defendants filed the Report outlining Robbins's opinion on August 10, 2020. Id.
On August 10, 2020, Plaintiffs filed both a Motion to Exclude Portions of the Proposed Testimony of Dr. Mark Robbins, and a Memorandum in Support of the Motion. ECF Nos. 1055 ("Motion"), 1056 ("Memorandum in Support"). Plaintiffs argued, among other things, that the court should exclude two of Robbins's opinions outlined in the Report: (1) his opinion interpreting the Settlement Agreement; and (2) his "opinion that [Merck and Glenmark] would not have agreed to an earlier entry date" than the one provided for in the Settlement Agreement ("Causation Opinion"). See ECF No. 1056 at 2-3. On September 11, 2020, Defendants filed an Opposition to the Motion, ECF No. 1136, and Plaintiffs filed a Reply on October 12, 2020, ECF No. 1187.
On October 14, 2020, the Motion was referred to United States Magistrate Judge Douglas E. Miller, pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and Federal Rule of Civil Procedure 72(a), to conduct necessary hearings and to issue an order addressing the disposition of the Motion. See ECF No. 20 at 2 (Pretrial Order No. 1 (June 3, 2018)). The Magistrate Judge held hearings on the Motion on June 28, 2021. ECF No. 1285. On August 17, 2021, the Magistrate Judge granted Plaintiffs’ Motion, and issued a Memorandum Order. ECF No. 1315. In the Order, the Magistrate Judge held that Robbins "lack[ed] an adequate basis to testify" on the two points at issue, thereby excluding the Causation Opinion under Federal Rule of Evidence 702 as both unhelpful to the trier of fact and not reliably based on Robbins's expertise or experience. Id. at 1, 13.
On August 31, 2021, Merck filed Objections to the portion of the Order excluding Dr. Robbins's Causation Opinion. ECF No. 1318 at 1. Glenmark joined in Merck's Objections to the extent that they challenged any holding by the Magistrate Judge that "Plaintiffs can satisfy their burden of proving causation solely by reference to what ‘reasonable companies’ in Merck's and Glenmark's position would have done, without regard to evidence of what Merck and Glenmark actually would have done ...." ECF No. 1319 at 1-2. Plaintiffs filed a Response on September 14, 2021. ECF No. 1341. Merck filed a Reply to Plaintiff's Response on September 20, 2021. ECF No. 1346.
II. LEGAL STANDARD
The court will not disturb a magistrate judge's ruling on non-dispositive pre-trial matters, unless the ruling is "clearly erroneous or is contrary to law." 28 U.S.C. § 636(b)(1)(A). "A finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948) (emphasis added). When assessing whether a ruling is "contrary to law," a district court must review the magistrate judge's legal conclusions de novo. See 12 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 3069 (3d ed. 2002) ("Regarding legal issues, the language ‘contrary to law’ appears to invite plenary review."); PowerShare, Inc. v. Syntel, Inc., 597 F.3d 10, 15 (1st Cir. 2010) (accord); Bruce v. Hartford, 21 F. Supp. 3d 590, 593 (E.D. Va. 2014) (Cacheris, J.) (accord).
Federal Rule of Evidence 702 governs the admissibility of an expert witness's testimony. See Sardis v. Overhead Door Corp., 10 F.4th 268, 281 (4th Cir. 2021). Under the Rule:
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
Fed. R. Evid. 702. Section (a) contains two requirements, providing that expert testimony is only admissible "if it concerns (1) scientific, technical, or other specialized knowledge that (2) will aid the jury or other trier of fact to understand or resolve a fact at issue." Westberry v. Gislaved Gummi AB, 178 F.3d 257, 260 (4th Cir. 1999) (citing Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) ).
Unlike testimony based on a witness's scientific knowledge, testimony based on an expert's "specialized knowledge" derived from industry experience is not characterized by "falsifiability, or refutability, or testability." United States v. Wilson, 484 F.3d 267, 274 (4th Cir. 2007) (quoting Daubert, 509 U.S. at 593, 113 S.Ct. 2786 ). To test the reliability of such testimony, courts "must nonetheless require an experiential witness to ‘explain how [his] experience leads to the conclusion reached, why [his] experience is a sufficient basis for the opinion, and how [his] experience is reliably applied to the facts.’ " Id. (quoting Fed. R. Evid. 702 advisory committee's note to 2000 amendment).
Any expert opinion must be assessed in context. Here, the Causation Opinion addresses whether the challenged conduct caused Glenmark to enter the market with its generic later than it otherwise would have. Relevant here, "an antitrust plaintiff's damages should reflect the difference between its performance in a hypothetical market free of all antitrust violations and its actual performance in the market infected by the anticompetitive conduct." Nat'l Farmers’ Org., Inc. v. Associated Milk Producers, 850 F.2d 1286, 1306 (8th Cir. 1988) (emphasis added) (citing Bigelow v. RKO Radio Pictures, 327 U.S. 251, 264, 66 S.Ct. 574, 90 L.Ed. 652 (1946) ). Thus, an expert addressing the issue of causation in an antitrust case must base his opinion on a benchmark free of the challenged anticompetitive conduct. See id.; ECF No. 1315 at 13-14 (collecting cases).
III. DISCUSSION
Merck argues that the Magistrate Judge committed "clear[ ] error" during his assessment of the Causation Opinion in two connected ways. It first contends that the court erred by construing Robbins's testimony as "improperly rely[ing] on a benchmark that is not ‘free of anticompetitive conduct’ as the basis for his opinion about the ‘but-for’ world." ECF No. 1318 at 2 (quoting ECF No. 1315 at 13). Second, Merck argues that this misconstruction led the Magistrate Judge to erroneously conclude that the Causation Opinion did not "provide an economic analysis free of the challenged conduct," rendering it inadmissible under Federal Rule of Evidence 702. Id. (quoting ECF No. 1315 at 21).
A. CONSTRUCTION OF THE CAUSATION OPINION
The Causation Opinion, described in a footnote within his seventy-five (75) page Report, plainly states Robbins's conclusion: "[A] reasonable brand company would not agree to an entry date earlier than the first demand, and instead would expect the agreement to reflect a compromise with significantly less early entry than was first demanded." ECF No. 1091-14 at 29 n.52. Robbins opined that "once such a demand is made, it serves as a ‘bookend’ for future negotiations, and both parties understand that any ultimate settlement would be [for] less early entry." Id. However, the November 2009 "first demand" made by Glenmark and referenced by Robbins included more than a demand for six months early entry; it also included, among other things, a demand for the alleged No AG Agreement. ECF No. 1086-39. This is the same No AG Agreement which Plaintiffs challenge as anticompetitive.
The footnote, in full, reads:
To be clear, I do not concede or agree that Glenmark would have won the Glenmark Litigation or that the parties would have agreed to an earlier entry date than they did in the actual world. I understand that Merck expert Robert Armitage will offer an opinion that Merck had a very high level of probability of winning the Glenmark Litigation. With respect to Plaintiffs’ allegation that the parties would have agreed to an earlier entry date in a but-for world without the challenged conduct, I disagree. The testimony and documents reflect that Glenmark's opening demand was six months of early entry, and that Glenmark understood that the six month figure would be negotiated down. See 10/16/19 Deposition of Vijay Soni ("Soni Depo.") at 107:13-108:5, 228:21-229:8, 241:15-242:22; GLENMARK-ZETIA-0034970; GLENMARK-ZETIA-00281992. Based on my experience as a General Counsel in the pharmaceutical industry, once such a demand is made, it serves as a "bookend" for future negotiations and both parties understand that any ultimate settlement would be less early entry. Moreover, while Vijay Soni of Glenmark testified that Merck expressly informed him that it would not agree to a no-AG provision, he did not respond to that position by demanding an earlier entry date. See Soni Depo. at 109:7-21, 112:7-113:5; GLENMARK-ZETIA-00304970. To the contrary, the evidence reflects that there was no connection in the negotiations between the entry date on the one hand and any request for a no-AG provision on the other. See 10/15/19 Deposition of Timothy Hester ("Hester Depo.") at 58:11-58:24, 76:7-23; 10/18/19 Deposition of Paul Matukaitis ("Matukaitis Depo.") at 229:6-23; 11/26/19 Deposition of Lisa Jakob ("Jakob Depo.") at 288:2-8; 10/24/19 Deposition of Lawrence Brown ("L. Brown Depo.") at 259:10-21; Soni Depo. at 228:3-20. Under such circumstances, and based on my experience, a reasonable brand company would not agree to an entry date earlier than the first demand, and instead would expect the agreement to reflect a compromise with significantly less early entry than was first demanded.
ECF No. 1091-14 at 29 n.52.
Ultimately, The Magistrate Judge construed the Causation Opinion as relying upon the early entry request made in the November 2009 demand, and the fact that any subsequent request would be for less, rather than more time. ECF No. 1315 at 15-16. Merck rejects this construction, arguing that Robbins did not "base [his] opinion on an assumption or assertion that the initial demand made by Glenmark lacked the challenged conduct." ECF No. 1318 at 8. Instead, Merck argues that the Magistrate Judge should have construed the Causation Opinion as positing only that "a reasonable party in Glenmark's position," would not have requested a longer period of early entry, even if it was not accompanied by a request for a No AG Agreement. Id. at 8. In reaching this conclusion, Merck explains that Robbins considered that "Merck was only open to a short period of early entry," and "unique attributes of the pharmaceutical industry." Id.
Depending upon the trial evidence and its context, Merck can offer relevant support for its position from an appropriate fact witness(es) as to what period of early entry it would have considered. The Federal Rules of Evidence would control the court's ruling at that time, as well as the evidence produced during the discovery of this case at bar.
The court finds that, at a minimum, the Magistrate Judge did not commit clear error when construing the Causation Opinion as he did. The Magistrate Judge's construction is consistent with Robbins's own words in the Report, which references the November 2009 demand as a "bookend." ECF No. 1091-14 at 29 n.52. Robbins's only analysis of what would have occurred in the "but-for world" appearing in the footnote considers what a "reasonable brand company" would have accepted once presented with Glenmark's November 2009 "first demand." Id. Moreover, Merck's attempts to contextualize the Causation Opinion as not relying on this benchmark are unconvincing, as they mainly address what Robbins cited to support his ultimate conclusion, rather than the substance of his written opinion. On this record, the court is not left with a "definite and firm conviction" that the Magistrate Judge clearly erred. See United States Gypsum Co., 333 U.S. 364 at 395, 68 S.Ct. 525. The Magistrate Judge's reasoning, therefore, is AFFIRMED .
See supra note 6 and accompanying text.
B. THE MAGISTRATE JUDGE'S ULTIMATE CONCLUSION
The Magistrate Judge ultimately concluded that the Causation Opinion was inadmissible as it was neither helpful to the trier of fact nor reliably based on Robbins's expertise or experience, because it did not "provide an economic analysis free of the challenged conduct." ECF No. 1315 at 13, 21. Merck argues that this was clearly erroneous, explaining that "properly understood as an opinion that applies industry expertise to the facts of the case, rather than an attempted economic analysis, [Robbins's] opinion is plainly reliable and helpful to the trier of fact." ECF No. 1318 at 10.
For the reasons stated above, the court finds that the Magistrate Judge's understanding was not clearly erroneous. Further, the Magistrate Judge's ultimate conclusion was not "contrary to law," as the record reflects the Magistrate Judge's thorough and accurate application of Federal Rule of Evidence 702. See ECF No. 1315 at 13-21; see Sardis, 10 F.4th at 281 (identifying this rule as the appropriate standard).
See supra Part III.A.
Given that Robbins did not employ a hypothetical "but-for world" free of the allegedly anticompetitive conduct to arrive at his opinion, the opinion would not aid the trier of fact in assessing the affect of the alleged antitrust violation. See Fed. R. Evid. 702(a) (requiring that expert opinions "help the trier of fact to understand the evidence or determine a fact in issue"). This same flaw illustrates Robbins's failure to reliably apply the principles of antitrust law to the facts of this case. See Fed. R. Evid. 702(d). Moreover, the characterization of the Causation Opinion – as one based on economics or one based on industry expertise – does not affect the improper benchmark Robbins relied on to reach it. It is this reliance that renders the Causation Opinion inadmissible under Federal Rule of Evidence 702, not the category of analysis Robbins undertook.
See supra Part III.A. (discussing the Magistrate Judge's construction of the Causation Opinion).
Finding no clear error in the Magistrate Judge's construction of the Causation Opinion, the court also finds that his ultimate conclusion did not constitute clear error and was not contrary to law. The Magistrate Judge's conclusion, therefore, is AFFIRMED .
C. GLENMARK'S LIMITED JOINDER
Glenmark joined in Merck's Objections to the extent that they challenge any holding by the Magistrate Judge that "Plaintiffs can satisfy their burden of proving causation solely by reference to what ‘reasonable companies’ in Merck's and Glenmark's position would have done, without regard to evidence of what Merck and Glenmark actually would have done ...." ECF No. 1319 at 1-2. The court does not read the Order as deciding this issue. The Magistrate Judge's Order resolved only whether portions of Robbins's testimony satisfied the requirements of Federal Rule of Evidence 702, not whether the standard for causation that Plaintiffs must ultimately satisfy is subjective or objective. This objection is MOOT .
IV. CONCLUSION
For the reasons stated above, the Objections are OVERRULED and Magistrate Judge Miller's well-reasoned Order Granting Plaintiffs’ Motion to Exclude Portions of the Proposed Testimony of Mark Robins is AFFIRMED . The Magistrate Judge's ruling did not amount to clear error and was not contrary to law. Accordingly, Robbins's testimony interpreting the Merck/Glenmark Settlement Agreement and his opinion that Merck and Glenmark would not have agreed to an entry date more than six months early are excluded at trial.