Meijer, Inc. V. Warner Chilcott Holdings Co.
Meijer, Inc. V. Warner Chilcott Holdings Co.
Opinion of the Court
MEMORANDUM OPINION
Pending before the Court are Defendant Barr Pharmaceutical Inc.’s Motion to Compel Answers to Interrogatories and the Production of Documents (“First Motion to Compel”) [55/28]; Direct Purchaser Class Plaintiffs’ Response to the First Motion to Compel, filed on behalf of the Meijer Plaintiffs (“Meijer Opposition”) [59]; Walgreen Plaintiffs’ Memorandum in Opposition to First Motion to Compel (“Walgreen Opposition”) [29]; and Defendant Barr Pharmaceutical Inc’s (“Barr”) reply to the Opposition to First Motion to Compel (“Reply to First Motion”) [74/40]. Also pending before this Court are Defendant Barr’s Motion to Compel Answers to Interrogatories and the Production of Documents from Direct Purchaser Plaintiffs (“Second Motion to Compel”) [115/69]; Plaintiffs’ Statement of Points and Authorities in Opposition to Barr’s June 28, 2007 Motion to Compel Discovery (“Opposition to Second Motion”) [118/70]; and Barr’s reply to the Opposition to Second Motion (“Reply to Second Motion”) [123/74]. The Court held a hearing on both motions on July 31, 2007.
Background
Discovery pursuant to Fed.R.Civ.P. 26(a)(1) commenced on March 15, 2006, in the Meijer case, Civil Action No. 05-2195(CKK) (D.D.C. 2005). (First Motion to Compel at 3.) On May 23, 2006, Barr served the Meijer Plaintiffs with its First Request for Production of Documents and First Set of Interrogatories, and Plaintiff responded on June 26, 2006.(/d) Barr indicates that the Meijer Plaintiffs, in their Answers and Objections, ¶ 9, generally objected:
to the instructions, definitions and Documente ] Requests to the extent they request information concerning the resale of pharmaceutical products below the manufacturer level as not being relevant, nor reasonably calculated to lead to the discovery of admissible evidence. Because Plaintiffs have alleged an overcharge theory of damages and are not seeking any damages relating to lost profits, any sales, profit, loss, or other “downstream” information is not relevant to this case.
(Id.)
Barr and the Meijer Plaintiffs met and conferred on August 21, 2006, regarding the disputed discovery, but they were unable to reach a compromise, (id. at 4), and accordingly, Barr filed its First Motion to Compel on September 13, 2006, requesting, inter alia, downstream sales data for Ovcon 35 (“Ovcon”).
Discovery in the Walgreen case, Civil Action No. 06-494(CKK) (D.D.C. 2006), eommenced on April 20, 2006, with exchange of initial disclosures in accord with Fed.R.Civ.P. 26(a)(1). (Id.) On May 23, 2006, Barr served the Walgreen Plaintiffs with its First Requests for Production of Documents and First Set of Interrogatories, to which the Plaintiffs responded and raised specific objections on June 23, 2006. (Id.) On August 25, 2006, Barr met with the Walgreen Plaintiffs to confer about contested discovery but no compromise was reached, and thus, the First Motion to Compel was also directed at the Walgreen Plaintiffs.
On June 28, 2007, Barr filed its Second Motion to Compel, directed at both groups of Direct Purchaser Plaintiffs, alleging that “Plaintiffs refuse to produce any documents regarding CHCs other than Ovcon 35 and its generic equivalents ... [even though] data regarding CHCs other than Ovcon 35 are directly relevant to this case.” (Second Motion to Compel at 2.) Barr asserts that information about Ovcon 35 and other CHCs is relevant to its affirmative defenses relating to Defendants’ alleged lack of market power, and further, such information will “permit Barr to assess the impact of Plaintiffs’ hypothetical generic version of Ovcon 35.” (Id.) Barr further requests information about Plaintiffs’ purchases of Ovcon 35 and its generic equivalents, including the contracts and agreements under which such purchases were made. (Id. at 3.)
Legal Standard
Fed.R.Civ.P. 26(b)(1) authorizes discovery “regarding any matter, not privileged, that is relevant to the claim or defense of any party, including the existence, description, nature, custody, condition, and location of any ... documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter.” Fed.R.Civ.P. 26(b)(1). “Relevance for discovery purposes is broadly construed.” Doe v. District of Columbia, 231 F.R.D. 27, 30 (D.D.C. 2005). “A showing of relevance can be viewed as a showing of need; for the purpose of prosecuting or defending a specif
Pursuant to Fed.R.Civ.P. 26(b)(2)(iii), the court may limit discovery on its own initiative, if it determines that the “burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issue at stake in the litigation, and the importance of the proposed discovery in resolving those issues.” See Hammerman v. Peacock, 108 F.R.D. 66, 67 (D.D.C. 1985) (Rule 26(b)(1) was amended to give the court the power, sua sponte, to limit discovery.) See also United States v. Krizek, 192 F.3d 1024, 1029 (D.C.Cir. 1999) (A trial court has considerable discretion over discovery matters); Food Lion, Inc. v. United Food and Commercial Workers Int’l. Union, 103 F.3d 1007, 1012 (D.C.Cir. 1997) (“[A] district court’s decision to permit or deny discovery is reviewable only for an abuse of discretion.”) (citation omitted).
In drafting discovery requests, the party who seeks discovery “bears the burden of fashioning such requests appropriately.” Washington v. Thurgood Marshall Academy, 232 F.R.D. 6 (D.D.C. 2005) (quoting Peterson v. Hantman, 227 F.R.D. 13, 17 (D.D.C.2005.)) In turn, the party objecting to discovery requests must justify its objections by explaining them in detail as opposed to relying on general assertions. See United States ex rel. Pogue v. Diabetes Treatment Centers of America, 235 F.R.D. 521, 523-24 (D.D.C. 2006) (citing Alexander v. FBI, 192 F.R.D. 50, 53 (D.D.C. 2000)) (“[A] party objecting to an interrogatory on [the] basis [of undue burden] must explain in detail how the interrogatory is burdensome.”)
Analysis of Motions to Compel Second Motion to Compel
As a preliminary matter, the Direct Purchaser Plaintiffs argue that Barr’s Second Motion to Compel is untimely because their responses and objections to Barr’s discovery requests were served in June 2006, and Barr waited until a year later to file this Second Motion to Compel, approximately one and one-half weeks prior to July 6, 2007 close of fact discovery, with the effect that granting this Motion to Compel would effectively extend discovery.
In its Second Motion, Barr requests that the Direct Purchaser Plaintiffs produce documents and purchase data concerning CHCs other than Ovcon 35 and its generic equivalents, on grounds that such informa
Plaintiffs argue that even if the trial court were to apply a rule of reason analysis, documents and purchase data about other oral contraceptives are not relevant since these contraceptives are not economic substitutes for Ovcon 35. “The issue of whether two products are economic substitutes comes into play in resolving issues of market power.” (Opposition to Second Motion at 14.) Plaintiffs conclude that because “Ovcon 35, ..., is priced at many times its marginal cost [and] [o]nee it is determined that a product is priced substantially above its marginal cost, it follows that the seller has market power and any further efforts at market definition are unnecessary.” (Opposition to Second Motion at 15; string citation omitted.) The Court notes that while Plaintiffs’ arguments about market power and economic substitutes assume (and challenge) Barr’s intended use of the information sought, such arguments do not bear on the relevance of the information for purposes of discovery but rather may weigh on the admissibility of such information at trial. See Alexander v. FBI, 194 F.R.D. 316, 326 (D.D.C. 2000) (“Discovery is not to be denied because it relates to a claim or defense that is being challenged as insufficient.”)
In explaining the relevance of information relating to other CHCs, Barr notes that “Plaintiffs’ entire case is founded on a ‘but-for’ world in which a generic version of Ovcon 35 would have been available for their purchase and resale beginning in 2004” and therefore, Plaintiffs’ damages will depend on the price of a hypothetical generic version of Ovcon 35, the percentage of Ovcon 35 purchases that would have been replaced with generic Ovcon 35, and those that would have been replaced by purchases of other branded and generic CHCs. (Second Motion to Compel at 8.) Barr references one of Plaintiffs expert reports, which notes that sources for data for this hypothetical “but-for” world include:
“(1) economic literature and empirical data regarding the effect of generic entry on other brand name drugs, (2) Defendants’ generic penetration models and forecasts (which are based on data regarding other CHCs), and (3) data for other branded products that have experienced generic competition.” (Second Motion at 9, n. 3, citing March 12, 2007 Expert Report of Jeffrey J. Leitzinger, Ph.D. at 17-28) (emphasis added by Barr).
The Court finds Barr has demonstrated, that for purposes of discovery, information about other CHCs is relevant to the claims and defenses at issue. Barr’s need for this information must now be balanced against the burden imposed on Plaintiffs in obtaining it. In their Opposition to the Second Motion, Plaintiffs concede that data regarding other oral contraceptives has “limited relevance” but they argue that “[tjracking down and producing [such] data showing every purchase of every oral contraceptive stocked by Plaintiffs is an extraordinary burden.” (Id.) See Vitamins Antitrust Litigation, 198 F.R.D. 296, 301-02 (D.D.C. 2000) (plaintiffs’ transaction data, while marginally relevant, need not be produced because the benefit to defendants of having the data was outweighed by the burden to plaintiffs of producing it.)
Plaintiffs fail to demonstrate that the burden of producing documents outweighs Barr’s need for these documents to be able to defend against Plaintiffs’ claims in this litigation. The Court will however impose certain restrictions on the amount and type of information that the Plaintiffs are responsible for producing. Plaintiffs will produce pricing and sales data for four (4) CHCs (other than Ovcon and its generic equivalents), to be selected by Barr, for the period of time beginning when the agreement between Warner-Chileott and Barr became effective through the date when Balziva became available to the public. The format of such sales and pricing data shall be more specifically defined by the parties at a meet and confer. The production of such data shall be made within 30 days after the meet and confer between the parties.
In its Second Motion to Compel, Barr demands that several individual Plaintiffs produce documents and data regarding Ovcon 35 and its generic equivalents, including purchase data; contracts and agreements relating to such purchases; and forecasts and analyses regarding both. Barr asserts that this information is relevant to the subject matter of this litigation to show, inter alia, the amount of Ovcon purchased by Plaintiffs, the terms of such purchases, including net price and how the October 2006 entry of Balziva impacted these purchases. (Second Motion to Compel at 10.) A summary of this requested information is included in Barr’s Appendix A, and Plaintiffs incorporate their responses in an Appendix A attached to their Opposition. Plaintiffs’ responses to these requests do not challenge the relevance of such information, but instead indicate certain “obstacles” to production. To the extent that Plaintiffs indicate that certain data will be produced, or will be produced “if it exists,” Plaintiffs should undertake a good faith effort to obtain this information within 20 days from the date of this Memorandum Opinion and to promptly convey this information to Barr, or alternatively, to confirm to Barr that the information sought does not exist. To the extent Plaintiffs have indicated that certain information is cumulative and has “already been produced,” the Plaintiffs should clearly identify the responsive information that has been produced. The Plaintiffs need not produce information that is not in their possession, custody or control.
First Motion to Compel
Barr’s First Motion to Compel focuses on the production of “downstream” sales and profitability data from the representative Direct Purchaser Plaintiffs for use in performing Barr’s damage calculation.
During the hearing on these Motions, counsel for the Walgreen Plaintiffs indicated that their expert used aggregate dispensing data [versus sales transaction data] to show the substitution rate that the generic drug would have achieved with market entry. There is no dispute that this dispensing data was provided to Barr.
The Direct Purchaser Plaintiffs assert that Barr may not use “downstream” pricing and sales data for purposes of asserting a “pass on” defense to Plaintiffs’ overcharge claim. See Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968) (holding that an antitrust plaintiff who proves that the price it paid for goods or services was artificially higher than it should have been due to an antitrust violation is entitled to recover the difference in price even if the plaintiff has suffered no actual injury.) Plaintiff “prove[s] injury and the amount of its damages” when it shows that the defendant obtained a higher price from the plaintiff that the plaintiff would have paid if there was no violation. Id. at 494, 88 S.Ct. 2224 See also Illinois Brick Co. v. Illinois, 431 U.S. 720, 724-5, 97 S.Ct. 2061, 52 L.Ed.2d 707 (discussing Hanover Shoe, 392 U.S. at 494, 88 S.Ct. 2224, noting that the Court held that usually a direct purchaser is injured “by the full amount of the overcharge paid by it and that the antitrust defendant is not permitted to introduce evidence that indirect purchasers were in fact injured by illegal overcharge.”)
Direct Purchaser Plaintiffs assert that “downstream resale data” is not relevant in an action brought by a direct purchaser plaintiff pursuing a federal antitrust cause of action. (Meijer Opposition at 3.)
Barr argues that even if “downstream data” may not be used to assert a “pass-on” defense, such information is relevant to: 1) a determination whether the “cost-plus” exception to Shoe applies, and 2) calculation of Plaintiffs damage claims.
The Walgreen Plaintiffs assert that retail pharmacies do not have “cost plus” contracts (Walgreen Opposition at 5) and the Meijer Plaintiffs note that no court has ever found that this exception applies in a pharmaceutical antitrust suit, and further, Barr has not cited any “reason to believe that any direct purchaser of pharmaceuticals employs such contracts----” (Meijer Opposition at 5.) Barr contends that it should be allowed to discover Plaintiffs’ sales and pricing data in order to “determine whether plaintiffs sell Oveon on a cost-plus basis to indirect purchasers.” (Reply to First Motion at 7.) The Court notes that none of the parties proffer more than a cursory explanation as to why or why not the “cost plus” exception may be allowable, and accordingly the Court is not sure whether Barr asserts that it needs actual sales data to determine the applicability of the cost-plus exception or alternatively, more detailed information about the pricing formulas employed by Plaintiffs.
ORDER
Upon consideration of Barr Pharmaceutical Inc.’s Motion to Compel Answers to Interrogatories and Production of Documents (“First Motion to Compel”) [55/28] and Defendant Barr’s Motion to Compel Answers to Interrogatories and the Production of Documents from Direct Purchaser Plaintiffs [115/69] (“Second Motion to Compel”), and the respective oppositions thereto and replies in support thereof, and for the reasons set forth in the accompanying Memorandum Opinion, it is this 21st day of September, 2007,
ORDERED that the Barr’s First Motion to Compel is granted in part and deferred in part. The Court orders the parties to meet and confer for the purpose of discussing production of documents that will allow Barr to determine the applicability, if any, of the cost-plus exception. The scope and format of these documents is to be determined by the parties, taking into account the Court’s finding that Barr is entitled to receipt of information regarding the cost-plus exception, and also considering the availability of such information and the potential burden imposed on Plaintiffs. It is further
ORDERED that Barr’s Second Motion to Compel is granted in part and denied in part. Plaintiffs will produce pricing and sales data for four (4) Combined Hormonal Contraceptives (other than Ovcon and its generic equivalents), to be selected by Barr, for a period of time beginning when the agreement between Warner-Chilcott and Barr became effective through the date when Balziva became available to the public. The format of such sales and pricing data shall be more specifically defined by the parties at a meet and confer, and the production of such data shall be made within 30 days thereafter. Barr demands that several individual Plaintiffs produce documents and data regarding Ovcom 35 and its generic equivalents, as summarized on Appendix A. Regarding Appendix A, the Court orders that in cases
. Plaintiffs' underlying assertion in both cases is that Defendants Warner Chilcott Holdings Co. Ill, Ltd. ("Warner Chilcott”) and Barr entered into an agreement whereby Warner Chilcott agreed to pay Barr $20 million and Barr agreed, inter alia, not to launch its FDA-approved generic version of the oral contraceptive Ovcon 35 for five years. (Opposition to Second Motion to Compel at 2.) In September 2006, approximately twenty-nine months after the agreement was made, Warner Chilcott allowed Barr to launch the generic version of Ovcon 35, which was marketed under the trade name Balziva. (Id.) The [Direct Purchaser] Plaintiffs allege that Defendants’ actions "artificially inflated the price of [Ovcon], forcing direct purchasers to pay higher prices for Ovcon products than they would have, had generic versions been sold.” (Meijer Opposition at 2.) Plaintiffs seek damages in the "form of overcharges (trebled) they paid, and continue to pay for, Ovcon products....” (Id.)
. In both Motions, Barr notes that there are a number of specific discovery responses in dispute. In order to expedite a decision on this matter, this Memorandum Order will not address the contested responses individually but will instead address the discovery issues as they were summarized at the oral hearing and in the briefs.
. All discovery was to be completed by August 22, 2007. At the July 31, 2007 hearing, counsel for the Meijer Plaintiffs noted that the Motion(s) to Compel may be moot because both class certification briefing and expert discovery have closed. Barr's counsel acknowledged that the class certification briefing is ripe and expert reports have been filed, but disputed that the record is closed.
. During the hearing, counsel for Barr indicated that there is overlap in the issues addressed in these two motions.
. On June 5, 2007, the trial court denied without prejudice Plaintiffs' motion for partial summary judgment, noting that "dispositive motions are not to be filed until discovery is complete and the Court sets a briefing schedule.” (June 5, 2007 Minute Entry Order.)
. Assuming arguendo that these Motions are denied, Barr is not precluded from moving for additional discovery for the purpose of responding to the allegations in Plaintiffs' anticipated dispositive motion, pursuant to Fed.R.Civ.P. 56(f).
. Barr notes that "plaintiffs have not offered any estimates of potential costs, time demands, or
. At the July 31, 2007 hearing, counsel for the Meijer Plaintiffs indicated that their expert, Dr. Leitzinger did not use sales data for Plaintiffs but instead analyzed purchase data derived from Barr and Warner Chilcott sales data, and "backcasted” this data to derive overcharge damages.
. Plaintiffs suggest that Barr could obtain this information from third party subscription services but Barr responds by noting that "plaintiffs' own experts do not rely on such third party data to conduct their analyses and, indeed, conclude that such data would not be adequate.” (Reply to Second Motion at 6, referencing May 18, 2007 Expert Report of Keith Leffler, at 12 n. 26.) Barr further argues that it has requested
. Barr proffers no explanation or affidavits showing how it will make use of the "downstream” sales data.
. The Walgreen Plaintiffs assert that they are retailers although some of them are proceeding under an assignment from their wholesaler.
. Barr’s counsel claims that Walgreen’s expert used sales data for 5 of 8 opt-out Plaintiffs, for a period of less than one year to calculate damages by "backcasting,” and Barr wants the "universe of sales data.” (July 31, 2007 Hearing.)
. This expert also "backcasted” the data to calculate damages.
. The arguments relating to use of downstream data in connection with indirect purchaser claims are now moot, in light of the fact that the related indirect purchaser cases have settled.
. During the hearing, Barr indicated that it has received some general information regarding pricing formulas utilized by Plaintiffs but Barr noted gaps in this information.
Reference
- Full Case Name
- MEIJER, INC. v. WARNER CHILCOTT HOLDINGS CO., III, LTD., Defendants Walgreen Co. v. Warner Chilcott Holdings Co., III, Ltd.
- Cited By
- 11 cases
- Status
- Published