Opinion
Civil Action No. 10-5954-WHW-SCM
08-30-2013
JANSSEN PRODUCTS, L.P. et al., Plaintiffs, v. LUPIN LIMITED, et al., Defendants.
NOT FOR PUBLICATION
OPINION AND ORDER ON INFORMAL
MOTIONS
[D.E. 303, 312, 314, 338,
347, 350]
I. INTRODUCTION
This matter comes before the Court by way of various informal applications by plaintiff Janssen. Specifically, this opinion and order will address Janssen's (1) applications to compel process-related discovery from non-party Cipla and defendants Teva and Lupin, (D.E. 303, 312, 314); (2) application to compel the production of ANDA product samples from Mylan, (D.E. 338); (3) application to compel Mylan and Lupin to produce discovery responsive to Janssen's Rule 30(b)(6) notices, (D.E. 347, 350); and (4) application for attorney's fees. The Court held oral argument on the aforementioned applications on June 13, 2013. (D.E. 382, Transcript of June 13, 2013, Proceedings). The Court will address the aforementioned applications in turn.
A. Process-Related Discovery
Janssen seeks an order compelling discovery from non-party Cipla and defendant Teva in reference to two non-party suppliers, Chinese Company Desano and Indian company Penn Bio. The discovery at issue concerns manufacturing processes used by the foreign suppliers in the production of Bis-THF used in the proposed generic darunavir products that are the subject of this litigation. (D.E. 326).
Janssen primarily relies on the argument that a defendant cannot use a foreign corporate affiliate as both a sword and a shield. Sanofi-Aventis v. Sandoz, Inc., 272 F.R.D. 391 (D.N.J. 2011). Essentially, Janssen argues that a party cannot use a foreign corporate affiliate for some aspect of its ANDA, only to then limit its production of discovery in litigation by virtue of using said corporate affiliate. (Id.). Janssen asserts that both Cipla and Lupin have the ability to access and control the requested documents from Desano and Lupin, respectively. Thus, Janssen argues that because these documents would be submitted to the FDA upon request in connection with the ANDA application, they must be turned over in litigation as well. (D.E. 303). Janssen also references the testimony of Dr. Purandare to illustrate that Desano has a history of providing such information when called upon by Cipla, and similarly references the testimony of Dr. Singh to allege a similar relationship between Penn Bio and Lupin. (D.E. 326, 382).
Defendants contend that the case at bar is distinguishable from Sanofi on its facts, as the foreign affiliates in this matter are distinct entities. Specifically, Defendants assert that their foreign affiliates are independent companies, and that Defendants do not possess the authority required to compel independent, foreign entities to produce documents. (D.E. 382). Defendants also contend that they must go through the same Hague process as Janssen to obtain the desired information from the foreign companies at the center of this dispute. (Id.).
In Sanofi, that plaintiff successfully sought to compel discovery from a defendant's corporate affiliate. 272 F.R.D. 391. There, defendant and the affiliate were sister companies under the parent Novartis. Id. The defendant filed an ANDA application with the FDA pursuant to the Hatch-Watchman Act, and asserted that its generic did not infringe plaintiff's patent. Id. The defendant developed and manufactured its ANDA product through the affiliate, a foreign pharmaceutical company. Id. The defendant and affiliate had more than just a buyer and supplier relationship. The defendant listed several affiliate witnesses as its own employees; defendant relied on the affiliate in its submissions made to the FDA in connection with its ANDA; the affiliate provided supplemental testing for the ANDA; the defendant had arranged for the affiliate's employees to consult with its own experts; and the defendant's corporate logo was prominently displayed in several locations throughout the affiliate's homepage. Id. Judge Falk, citing Judge Shwartz in (Merck & Co. v. Sandoz) compelled discovery "largely because they acted together in seeking approval of the generic." Id. Because the foreign sister companies provided "critical assistance" to the ANDA application, discovery was compelled. Id.
While Cipla, Teva and Lupin all use their foreign affiliates as a shield, none seem to use their foreign affiliates as a sword. Rather, the foreign companies at issue appear to be nothing more than independent contractors that supply Bis-THF. There is no indication of any parent, sister, or subsidiary relationship. Cipla, Teva and Lupin have not relied on their foreign affiliates for ANDA initial or supplemental testing, nor have they acted together in seeking ANDA approval. Unlike Sanofi, no privilege has been asserted between either Lupin and Penn Bio, or Cipla/Teva and Desano. 272 F.R.D. 391. Therefore, the facts of this case illustrate a different relationship than that of the companies in Sanofi. Id. Accordingly, for the aforementioned reasons, the Court finds that Defendants do not "control" the foreign affiliates and an order compelling production of discovery is not appropriate at this juncture.
The closer legal question is whether or not Cipla, Teva and Lupin should be compelled to produce the documents in question under the "reasonably available" standard of Sanofi or the "legal right, authority or ability to obtain documents upon demand" standard of Camden Iron & Metal, Inc. v. Marubeni Am. Corp., 138 F.R.D. 438, 443 (D.N.J. 1991). From a practical standpoint, the method of obtaining these documents may be the same regardless of party: the Hague process. While the Court certainly sympathizes with plaintiffs reservations regarding the use of the Hague, these documents appear to be no more "reasonably available" to defendants for the reasons discussed above. This is true even without considering the fact that Cipla and Desano are competitors. (See D.E. 382).
However, the Court will grant Janssen permission to conduct limited, control related discovery with regard to the foreign affiliates at issue. The parties are each permitted three depositions for that purpose and shall submit a joint proposed schedule.
B. API Batch Samples
Janssen seeks to compel Mylan to produce 200 gram samples of six batches of its active pharmaceutical ingredient ("API") manufactured in 2010 and 2012. Janssen asserts that Mylan manufactured three batches of API in 2010 and another three batches in 2012, and that testing of all six API batches is necessary in order to determine whether Mylan's product infringes Janssen's '645 patent. The reason for this is that "[i]t is well known in the pharmaceutical industry that drug composition may vary by small but detectible amounts in different manufacturing batches of a drug." (D.E. 338, Janssen's May 15, 2013, Letter, at *2). Accordingly, Janssen requested 200 gram samples of each batch of Mylan's API, however, Mylan has not produced any samples of API from batches manufactured in 2010, and has produced samples from only two out of three API batches manufactured in 2012. Janssen further alleges that the samples Mylan has produced have only been 50 grams each, just one quarter of the 200 gram sample amounts that Janssen's consultant had requested. (D.E. 338, Janssen's May 15, 2013, Letter, at *4).
Mylan argues that it has produced a reasonable quantity of the available API, and there is no remaining API available other than a limited quality held in retention "pursuant to internal policy or procedure and/or regulatory requirements [...] for the specific purpose of responding to FDA inquiries and for stability testing[.]" (D.E. 382, Transcript of June 13, 2013, Proceedings). Mylan also asserts that it provided 50 gram samples to Janssen instead of the requested 200 gram samples because when the API batches were manufactured it was packaged in sealed 50 gram units. (Id.). Further, Mylan argues that Janssen has failed to explain why 50 gram samples are insufficient. (Id.).
While the Court appreciates that Mylan must retain a certain amount of API in order to comply with regulatory requirements, Mylan has not specified exactly how much API it is required to hold in retention, nor how much is currently in its possession. Without this information the Court cannot determine with certainty whether Mylan is in possession of any API outside of that reserved for retention. Accordingly, the Court orders Mylan to produce samples of the remaining four API batches.
The Court notes that Janssen has indicated that it is willing to compromise with regard to sample size. (D.E. 338, Ex. 3). Mylan has already provided 50 gram samples to Janssen from two batches of API, and Janssen appears to stop short of alleging that a 50 gram sample is inadequate for testing purposes. Furthermore, considering that the API is packaged in sealed, 50 gram units, the Court finds that Mylan's production of 50 gram samples is reasonable and convenient. Accordingly, the Court will order that the four remaining samples be produced as 50 gram samples.
C. Depositions
Janssen also seeks to compel Mylan and Lupin to produce witnesses to testify on certain topics. (D.E. 338). On December 18, 2012, Janssen served 30(b)(6) deposition notices on Mylan and Lupin regarding a number of topics. Janssen argues that Mylan and Lupin improperly objected to three topics included in Janssen's Rule 30(b)(6) notices in their entirety, asserting that their responses were privileged. (D.E. 338, Janssen's May 15, 2013, Letter, at *7). The topics at issue include: (1) the facts and circumstances surrounding defendant decisions to provide FDA with Paragraph III certifications for the patents-in-suit and defendant decisions to later amend Paragraph III certifications to Paragraph IV certifications; (2) any consideration, review, analysis or other investigations concerning the patents-in-suit, including but not limited to analysis of the validity of the patents-in-suit; and (3) defendant attempts to seek patent protection relating to darunavir or any crystalline form of darunavir, or to license such patents or patent applications. (D.E. 338 at *6). Janssen alleges that these topics are relevant to its allegations of willful infringement, Mylan's and Lupin's defenses, and encompass at least some non-privileged information. Further, Janssen argues that blanket objections are improper to deposition notices.
Both Mylan and Lupin counter that the topics outlined in Janssen's notices are either relevant only to the willful infringement claim that is not a proper issue in this case, or encompass privileged information. (D.E. 347, 350). Additionally, Lupin has produced a witness to testify on its attempts to seek patent protection relating to darunavir or license such patent applications. (Id.).
The Federal Rules of Civil Procedure set forth "a liberal policy for providing discovery." Jones v. DeRosa, 238 F.R.D. 157, 163 (D.N.J. 2006). Federal Rule of Civil Procedure 26 defines the bounds of relevant discovery. Fed.R.Civ.P. 26. Pursuant to subparagraph (b)(1), "parties may obtain discovery regarding any matter, not privileged that is relevant to the claim or defense of any party." Fed.R.Civ.P. 26(b)(1). The Federal Rules of Civil Procedure "allow broad and liberal discovery." Pacitti v. Macy's, 193 F.3d 766, 777 (3d Cir. 1999). Courts have interpreted the federal rules to mean that discovery encompasses "any matter that bears on or reasonably could lead to other matters that could bear on any issue that is or may be in the case." Kopacz v. Del. River and Bay Auth., 225 F.R.D. 494, 496 (D.N.J. 2004).
In interpreting Rule 26(b)(1), district courts must remain mindful that relevance is a broader inquiry at the discovery stage than at the trial stage. Nestle Foods Corp. v. Aetna Cas. & Sur. Co., 135 F.R.D. 101, 104 (D.N.J. 1990). Accordingly, Rule 26(b)(1) provides that "[f]or good cause, the court may order discovery of any matter relevant to the subject matter involved in the action."
"When a party fails to make disclosure of discovery, the opposing party may file a motion to compel. When a motion to compel is filed and asks the court to overrule certain objections, the objecting party must specifically show how each discovery request is objectionable." Kannaday v. Ball, 2013 W.L. 1367055 at 2 (D.Kan. 2013).
Further, Federal Rule of Civil Procedure 30 allows a party to depose any person, including a party, without a leave of court as long as the party who wants to depose another party gives a reasonable written notice stating "the time and place of the deposition and, if known, the deponent's name and address." Fed. R. Civ. P. 30(a)(1). After receipt of a Rule 30 notice, a party must either appear for the deposition or file a motion for a protective order pursuant to Rule 26(c). See Fed. R. Civ. P. 30. No other response to a Rule 30 Notice including a written objection to a deposition will suffice. See Fed. R. Civ. P. 30.
In the instant matter, Mylan and Lupin were served with Rule 30(b)(6) notices on December 18, 2012. (D.E. 338, Exhibits 6 & 7). To date, Mylan and Lupin have not moved for a protective order or produced witnesses with regard to the topics at issue, and have instead merely offered blanket assertions of privilege.
Conversely, the proper way to assert an objection based on privilege is to produce a witness and assert objections to individual questions. See v. Mane Fils, S.A. v. Int'l Flavors & Fragrances, Inc., No. 06-2304, 2008 WL 3887621 at *4 (D.N.J. Aug. 20, 2008) (holding that the subpoenaed party had to appear for the deposition and during that deposition the attorney should have objected to individual questions; the blanket assertion of privilege was deemed an improper method of objection to the deposition). Accordingly, the Court compels Mylan and Lupin to respond to Janssen's Rule 30(b)(6) notices by producing witnesses to testify with regard to the topics at issue.
D. Attorney's Fees
Finally, the Court will address the issue of attorney's fees. Janssen contends that it is entitled to attorneys' fees in connection with the filing of this motion because defendants' failure to produce requested discovery was not "substantially justified." (D.E. 338). Janssen states that despite its numerous requests asking defendants to explain their objections, defendants failed to provide any clarification. (Id.). Further, Janssen asserts that attorneys' fees are warranted because Mylan failed to provide any justification as to why it refused to provide the requested amount of all six API samples and failed to explain their blanket assertions of privilege. (D.E. 364).
In response, Mylan and Lupin both claim that their objections were limited and "substantially justified." (D.E. 347, 350). Mylan argues that it provided reasonable quantities of samples, and that its refusal to provide samples from all requested batches was justified in light of internal policy and regulatory requirements. Both defendants assert that their responses to Janssen's 30(b)(6) notices were proper because the information sought is either in reference to willful infringement or privileged. (Id.).
Mylan and Lupin argue that Janssen's letter-motion should be denied as untimely because it was filed after the close of discovery. (D.E. 347 & D.E. 350). In response, Janssen asserts that there is no deadline for filing motions to compel and there is no prohibition on filing a motion to compel after the close of fact discovery. (D.E. 364).
The Federal Rules do not provide for a period of time when a motion to compel must be filed. See Fed.R.Civ.P. 37. Furthermore, district courts have broad discretion to manage their dockets, including discovery matters. Arnold PontiacGMG, Inc. v. General Motors Corp., 786 F.2d 564, 568 (3d Cir. 1994). However, parties cannot ignore discovery remedies for months and "motions to compel must be filed within the scheduled time for discovery." Altana Pharma AG v. Teva Pharmaceuticals USA, Inc., No. 042355, 2010 WL 451168 at *2 (D.N.J. Feb. 5, 2010).
Here, fact discovery closed on April 19, 2013. (D.E. 264, Scheduling Order). Janssen filed the instant application on May 15, 2013. (D.E. 338). No application to extend fact discovery has been made by Janssen prior to the filing of this motion, and there is no indication that Janssen ignored the fact discovery deadline. Rather, it appears that Janssen filed the motion after the close of discovery as a result of good faith attempts to resolve the disputes before involving the Court. Accordingly, defendants' request to deny the motion as untimely is denied.
Federal Rule of Civil Procedure 37 provides that "if the motion is granted ... the court must ... require the party ... whose conduct necessitated the motion ... to pay the movant's reasonable expenses incurred in making this motion, including attorney's fees" unless the movant did not attempt "in good faith to obtain the disclosure or discovery without court action," "the opposing party's nondisclosure, response, or objection was substantially justified," or "other circumstances make an award of expenses unjust." Fed. R. Civ. P. 37(a)(5). Here, it is undisputed that Janssen attempted to obtain discovery in good faith prior to the filing of its motion and thus, the good faith prong is inapplicable.
Mylan and Lupin objected to Janssen's Rule 30(b)(6) deposition notices from the outset. Further, there is no indication that either Mylan or Lupin raised their objections in bad faith. While defendants utilized an improper method of asserting their objections, they had a legitimate reason to object to depositions. Similarly, although Mylan's assertion that it has no API outside of retention is not properly supported, Mylan's objections to the production of samples is legitimate if its assertion is, in fact, true. Therefore, for the purposes of determining whether sanctions are warranted, Mylan's and Lupin's objections are "substantially justified." Accordingly, Janssen's application for attorney's fees is denied.
II. CONCLUSION
For the foregoing reasons, and good cause shown,
IT IS on this 30th day of August, 2013,
ORDERED that Janssen's informal applications to compel process-related discovery from non-party Cipla and defendants Teva and Lupin (D.E. 303, 312, 314) is DENIED; and it is further
ORDERED that Janssen has leave to conduct limited control related discovery with regard to the foreign affiliates at-issue by way of depositions consistent with this opinion. The parties will submit a joint proposed schedule to complete same within 14 days; and it is further
ORDERED that Janssen's application to compel the production of ANDA product samples from Mylan (D.E. 338) is GRANTED. Mylan is hereby ORDERED to produce 50 gram samples of the remaining four API batches within 14 days; and it is further
ORDERED that Janssen's application to compel Mylan and Lupin to produce discovery responsive to Janssen's Rule 30(b)(6) notices (D.E. 347, 350) is GRANTED; and it is further
ORDERED that Janssen's application for attorney's fees is hereby DENIED.
Honorable Steve Mannion, U.S.M.J.
United States District Court,
for the District of New Jersey