Brigham Young University v. Pfizer, Inc.
Brigham Young University v. Pfizer, Inc.
Opinion of the Court
ORDER AND MEMORANDUM DECISION GRANTING IN PART PLAINTIFFS’ MOTION FOR SANCTIONS
Plaintiffs Brigham Young University and Dr. Daniel Simmons (collectively BYU) have filed a motion for sanctions concerning discovery under Federal Rule 37(b) against Defendant Pfizer, Incorporated et al. BYU asks this Court to enter the following sanctions: (1) striking Pfizer’s Answer; (2) ordering Pfizer to pay BYU’s costs and fees associated in “discovering Pfizer’s discovery abuses;”
After considering the parties’ memoranda and certifications
BACKGROUND
This ease arises from the historical discovery of an enzyme eyclooxygenase-2, or in short, COX-2. The discovery of this enzyme led to the development of nonsteroidal anti-inflammatory drugs such as Celebrex and Bextra which have enjoyed tremendous success.
Defendants contest the involvement of Dr. Simmons with the discovery of the COX-2 enzyme and the subsequent selective inhibitors that resulted in the blockbuster drugs.
The parties entered into a tolling agreement in 2001, but were unable to resolve their dispute through mediation. In October of 2006 Plaintiffs filed suit seeking inter alia, correction of inventorship concerning certain patents
BYU served its First Request for Production of Documents on February 13, 2007.
In its motion BYU sought scientific notebooks and other documents from Pfizer and Monsanto research scientists.
I. The Court’s Order Granting BYU’s Motion
The Court heard argument on BYU’s motion, and a few other related motions, on March 19, 2008.
• “produce all documents produced in the ... Rochester, Merck and Teva litigation matters.”20
• produce legible copies of certain scientific notebooks.
• provide the requested biological materials which included logs concerning any “repairs and malfunctions of freezer labs”21 that contained “Dr. Simmons’ Biological materials.”22
• “produce all correspondence and agreements with any third parties relating to*641 COX, its COX II projects or any use of biological materials provided by Dr. Simmons.”23
• provide “all internal correspondence including email, memoranda, meeting minutes, reports (including those to Boards of Directors) and other corporate documents referring or relating to plaintiffs DIP and COX II projects.”24
Finally, the Court ordered Pfizer to comply with the order within 60 days and “certify, in writing that its production in response to BYU’s Discovery Requests is complete.”
In its order the Court expressed some of its concerns with the discovery process. For example, the Court stated:
The court is concerned because Pfizer appears to be primarily relying on its production of documents in prior litigation that may involve issues which differ from those in the instant case. Although the items produced during prior litigation may be relevant to the instant litigation, such prior production does not absolve Pfizer of its duties in this litigation to provide responsive discovery and the appropriate certifications regarding its efforts to provide such discovery27
The Court’s order also incorporated items that arose directly from the parties’ representations. For example, Lisa Schneider counsel for Pfizer, represented at the March 19, 2008, hearing that Pfizer did have the biological materials sought by BYU “back in the early 2000’s during the mediation,”
II. Activities Following the Entry of the Order
On May 27, 2008, Pfizer filed a motion for extension of time to comply with the discovery order.
In addition, on this same date Pfizer asked the Court for relief from portions of the discovery order concerning documents from third parties Boehringer Ingelheim Pharmaceuticals, Schering-Plough Corporation and Teva Pharmaceuticals USA.
The Court held a hearing on these two motions and ruled denying Pfizer’s motion for relief from portions of the discovery or
Pfizer has filed one certification
Contrary to Ms. Schneider’s simple solution concerning certifications suggested at the March 2008 hearing, the filing of affidavits regarding Pfizer’s discovery efforts created a whole new series of issues. In an effort to allegedly “err on the side of over compliance”
At this same hearing Pfizer agreed to rely on the redacted affidavits rather than those submitted in camera.
Given this background, the Court now turns to the motion for sanctions.
ANALYSIS
Plaintiffs seek the following sanctions in their motion:
(1) striking Pfizer’s Answer
(2) awarding Plaintiffs their costs and fees associated with discovering Pfizer’s alleged discovery abuses
(3) “entering a spoliation instruction that all the documents Pfizer has destroyed or otherwise withheld support BYU’s*643 Simmons’s COX-2 contention that Dr. clones worked;”50
(4) finding Pfizer in contempt of court;
(5) ordering the deposition of witnesses, including Pfizer’s attorneys Mr. O’Mally and Ms. Schnider, who will be asked to explain any discovery abuses; and
(6) “entering a jury instruction that, in the event BYU proves at trial that Dr. Simmons’s contribution to Pfizer’s development of Celebrex provided Pfizer with a head start and/or first to market advantage, that BYU’s damages for the head start Dr. Simmons’s biological material and other trade secrets provided Pfizer should be calculated at, at least, $10 million per day.”51
Rule 37 of the Federal Rules of Civil Procedure permits a court to impose a number of sanctions for a party’s failure to comply with a court’s discovery orders. Such sanctions include, but are not limited to:
(i) directing that the matters embraced in the order or other designated facts be taken as established for purposes of the action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vii) treating as contempt of court, the failure to obey any order except an order to submit to a physical or mental examination.52
The Court has discretion to impose any such sanction that is “just and related to the particular claim which was at issue in the order to provide discovery.”
Generally before imposing sanctions-especially a sanction such as striking Pfizer’s answer-courts in this Circuit consider what are called the Ehrenhaus factors. The Tenth Circuit laid out these factors in affirming a district court’s decision to dismiss a complaint with prejudice as a sanction for violating a discovery order. They are not a “rigid test”
With this backdrop in mind the Court now considers each of the Ehrenhaus factors before turning to the specific sanctions sought by Plaintiffs.
I. Ehrenhaus Factors
a. The degree of actual prejudice to Plaintiffs
Plaintiffs argue they are prejudiced just like the party was in Ehrenhaus by “delay
Defendant, however, alleges BYU has not been prejudiced by its actions. The Court has extended fact discovery and BYU by its own choice has failed to take a single deposition.
The Court disagrees with Pfizer. While Pfizer’s conduct may not be as blatant as that of Mr. Ehrenhaus yet, it is still prejudicial to BYU. For example, just recently during a review of Pfizer’s redacted affidavits, BYU discovered information about a collection of COX-2 related documents that Pfizer had yet again failed to produce. Pfizer continually represents that it has spent thousands of hours and vast resources to comply with BYU’s requests and this Court’s order. But, based on the continued need for BYU to file discovery motions, and the repeated holes that are found in Pfizer’s production, the Court wonders if Pfizer is counting its efforts and production of documents in other cases as part of its thousands of hours calculus. The large volume of documents produced after BYU’s motion was filed and after this Court entered its order is indicative of the prejudice caused. In addition, it is troubling to the Court that there are repeated failures in producing documents such as exhibits and articles that pertain to crucial witnesses. The Court finds Pfizer’s incomplete discovery responses have created delay, mounting attorneys’ fees and is prejudicial to Plaintiffs.
Accordingly, the first factor weighs in favor of Plaintiffs.
b. The amount of interference with the judicial process
BYU claims Pfizer has significantly interfered with the judicial process. Plaintiffs cite to Ehrenhaus once again arguing Pfizer has willfully failed to comply with the order which inhibits the Court from administering orderly justice. As support BYU cites to Pfizer’s defacto extension of the discovery order deadline and its failure to comply with the order.
In contrast Pfizer argues it has not willfully ignored the Court’s order. Pfizer points to its discovery efforts including the certifications it has filed concerning discovery. Additionally, Pfizer cites to Danjanovich v. Robbins,
Here, there has not been a complete failure by Pfizer to comply with the Court’s orders or participate in the discovery process. But, over the history of this case thus far, this Court has been forced to intervene
Pfizer is reminded that under rule 26(b)(1) of the Federal Rules of Civil Procedure, “[pjarties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense.”
c. The culpability of Pfizer
The Court has given Defendants multiple opportunities to comply with its orders and Pfizer has repeatedly failed to fully comply in a timely manner. While the Court understands there may be some delay in producing discovery, Pfizer did not represent to the Court that its production would be a long slow rolling production. BYU argues this pattern of “ongoing pattern of discovery abuses demonstrates a willingness to disregard discovery obligations and this Court’s orders.”
The Court agrees with Pfizer in part and notes that given the age of the circumstances surrounding this case, there is likely to be some expected difficulties in obtaining discovery and deposing witnesses. In the Court’s view the record reveals that Pfizer’s conduct has not risen to a level of willful and intentional disobedience. But, Pfizer’s production has been negligent to the point that it closely approaches a finding of bad faith. For example, it is inexcusable to find an entire collection of COX-2 related documents after many months of Pfizer’s alleged super search efforts. Moreover, it was BYU that discovered the missing collection and not Pfizer coming forward with the newly discovered documents.
As noted by Pfizer, “[i]n this Circuit, a finding of culpability is predicated upon a showing that the party acted willfully or in bad faith.”
d. Whether the Court has warned Pfizer regarding the possibility of severe sanctions
Notwithstanding BYU’s arguments, the Court agrees with Pfizer concerning this factor. The Court has not explicitly warned Pfizer of the possibility of severe sanctions although it has expressed concern about Pfiz
e. The efficacy of lesser sanctions
Generally courts in this Circuit do not enter severe sanctions until a party has been sanctioned to a lessor degree. Severe sanctions such as striking an answer or dismissal are “ ‘used as a weapon of last, rather than first, resort.’ ”
Here, the Court has yet to enter sanctions against Pfizer. BYU claims that “Pfizer has almost unlimited resources.”
II. Sanctions Sought by BYU
As noted previously, Plaintiffs seek the following sanctions: (1) striking Pfizer’s Answer; (2) awarding Plaintiffs their costs and fees associated with discovery Pfizer’s alleged discovery abuses; (3) entering a spoliation instruction regarding Pfizer’s destruction of documents that showed Dr. Simmon’s COX-2 clones worked; (4) finding Pfizer in contempt of court; (5) order the deposition of certain witness, including attorneys, who would be required to testify concerning Pfizer’s discovery abuses; and (6) entering a jury instruction concerning damages.
After reviewing the record, the parties’ memoranda and Pfizer’s certifications, and pursuant to the Ehrenhaus factors as outlined above the Court:
(1) Denies Plaintiffs’ motion to strike Pfizer’s Answer. The Court finds Pfizer’s conduct during discovery does not at this time warrant striking Pfizer’s Answer.
(2) Grants Plaintiffs’ motion for costs and fees. The Court further discusses its decision to award costs and fees below.
(3) Denies without prejudice Plaintiffs’ motion for entering a spoliation instruction. In the Court’s view, Plaintiffs request for a spoliation instruction should be brought after completing discovery and at or near the start of trial.
(4) Denies Plaintiffs’ motion to find Pfizer in contempt of court. The Court finds Pfizer’s conduct thus far does not support a finding of contempt.
(5) Grants in part Plaintiffs’ request for depositions concerning discovery abuses. Plaintiffs seek the testimony of a number of individuals concerning discovery production. The Court notes that generally, deposing opposing counsel is disfavored. It “lowers the standards of the profession [and] adds to the already burdensome time and costs of litigation.”
Given Pfizer’s conduct, however, the Court finds it appropriate to allow depositions concerning Pfizer’s discovery efforts. The Court grants BYU five additional depositions that may be used however BYU so chooses to address discovery issues. In addition, the depositions of Kathy Owen and Scott Hau-ser — which Pfizer has agreed to provide as 30(b)(6) deponents — will not count toward BYU’s total number of depositions or toward the five additional depositions allowed by the Court. The Court declines to compel the depositions of specific individuals; rather, BYU should set these additional depositions pursuant to a subpoena.
(6) Denies without prejudice Plaintiffs’ motion to enter a jury instruction concerning damages. In similar fashion to Plaintiffs’ motion for entering a spoliation instruction, any jury instruction, is in the Court’s opinion, best left for trial after discovery has closed and will likely come under the purview of Judge Kimball.
Finally, BYU “further requests that the Court remedy Pfizer’s improper redaction of documents, especially scientific notebooks [by reviewing] unredacted copies of the documents in camera to determine whether they are, in fact, privileged.”
III. Costs and Fees
Rule 37(a) provides that “If the motion is granted — or if the disclosure or requested discovery is provided after the motion was filed — the court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant’s reasonable expenses incurred in making the motion, including attorney’s fees.”
Here, the Court granted BYU’s Motion to Compel — from which the instant Motion for Sanctions arose — on March 28, 2008.
Further, Rule 37(b)(2) provides for the award of reasonable expenses and attorney’s fees for the failure of a party “to obey an order to provide or permit discovery.”
Having concluded that fees and expenses are appropriate, the Court now turns to the reasonableness of BYU’s request. At the outset the Court notes that it has reviewed the rates charged by comparable counsel in both the Salt Lake City,
Pfizer takes issue with BYU’s requested fees and costs arguing the $1,681,157.76, as set forth by BYU in its proposed findings, is excessive “because, for example, it includes $202,184.26 in costs that are not adequately documented, at least $512,704.50 for fees associated with document review ... other excessive fees, and fees associated with work unrelated to preparing its motion for sanctions.”
First, the Court declines to award BYU the “associated costs” of $202,184.26 set forth in its proposed findings because the associated costs are not set forth in detail in the affidavits.
Next, in Digecor, Inc., v. E.Digital Corp.,
• $94,513.50 for time that Beus Gilbert spent in reviewing documents from June 2007 to January 2008;96
• $274,378.50 for Beus Gilbert’s review of “approximately 2,002,950 pages of documents produced by Pfizer;”97
• $88,730.50 related to Beus Gilbert’s review of approximately “5,283,959 pages of documents produced by Pfizer after the 29 July 2008 status conference;”98
• $54,426.00 in fees for Ray Quinney & Nebeker’s review of “2,002,950 pages of documents produced by Pfizer after BYU filed it Motion to Compel and before the 29 July 2008 status conference;”99 and
• $656 for Ray Quinney & Nebeker’s review of “5,283,959 pages of documents produced by Pfizer after the 29 July 2008 status conference.”100
Taking into account these reductions, this leaves $966,269 in requested costs and fees
In support of its position, Pfizer cites to Liew v. Breen,
Pfizer next contends that BYU seeks “other excessive and duplicative fees.”
The Court agrees with this principle and finds that BYU’s requested fees and expenses related to travel time should be reduced. A summary of the billing entries for Beus Gilbert’s attorneys and paralegals is attached as Exhibit 1 to Leo Beus’ Affidavit. Some entries consist entirely of travel. Other entries, however, have travel coupled with other work activities that likely occurred outside of travel. For example, on page 10 two travel entries state, “Travel to Salt Lake city; Prepare for oral argument” and “Travel to Utah and meet with Jim Jardine and others RE: oral argument.” In comparison the third travel entry on page 10 states, “Travel back to Phoenix.”
Given these mixed types of entries it is somewhat difficult for the Court to ascertain exactly how much travel time there is in Plaintiffs’ affidavits. But, rather than have Plaintiffs refile their affidavits, which would create another round of briefing on issues already properly before the Court and place additional strain and costs upon all the clients, parties, and the Court, the Court reduces the requested fees involving travel as follows: for entries that outline only travel the Court reduces them by 50%, in similar fashion to the Wirtz court; for time involving travel and other listed work activities the Court reduces the fees sought by 25%. The Court believes this strikes the proper balance between reducing travel time that is not the equivalent to work done in the office, while still recognizing the fact that the some entries in the affidavits support work performed outside of travel. These reductions also address Pfizer’s concern that the travel time claimed by BYU is excessive.
Beus Gilbert’s Affidavits request $48,627.50 in mixed travel entries and $18,571.50 in travel time. Ray Quinney’s Affidavits request $7464 in mixed travel entries and $3710 in travel time. Accordingly Plaintiffs are awarded $53,209.38 in expenses and fees related to travel and work coupled with travel in their affidavits.
Next, as noted by Pfizer, BYU “has also sought fees for time spent preparing for and attending depositions.”
BYU also seeks costs and fees for multiple attorneys attending the same depositions. The Court finds these requests to be excessive. Additionally, the Court further finds that the documented time and requested fees spent in preparation for the two day sanctions hearing, over 611 hours for approximately 6 hours of Court time, excessive. Finally, given Pfizer’s conduct in this case, the Court is not convinced that BYU has improperly sought fees for tasks performed by partners that associate or paralegals should have performed.
Based upon the foregoing, the Court reduces the remaining costs and fees sought by BYU by an additional 10%. BYU therefore is awarded $799,106.70 in fees and costs against Pfizer. Coupled with the travel fees and costs awarded previously, this brings the total amount to $852,315.80. This is a substantial sum of money. Yet, given Pfizer’s conduct in this ease as outlined in detail above, the Court finds such an award is appropriate. The Court is hopeful that such an award will “entice Pfizer to comply with its discovery obligations.”
Conclusion
Based upon the forgoing BYU’s Motion for Sanctions is GRANTED IN PART and DENIED IN PART. Pfizer is ordered to pay $852,315.80 in costs and fees by November 30, 2009.
. Pla.s' mem. in supp. p. 123.
. Id.
. Id.
. This includes review of the Notice of Supplemental Authority submitted by Pfizer on August 24, 2009, docket no. 298.
. See Compl. p. 2; see also Answer p. 5 (admitting that sales of Celebrex and Bextra have generated total sales exceeding $20 billion dollars).
. See Answer p. 2.
. Id.
. July 29, 2008, hearing transcript p. 50:11-12.
. See Compl. p. 56-58.
. Docket no. 36.
. Docket no. 58.
. See University of Rochester v. G.D. Searle, et al, 6:00-cv-6161-DGL-JWF (W.D.N.Y.).
. See Pfizer, Inc., et al. v. Teva Pharmaceuticals USA, Inc., 2:04-cv-754-GEB-MCA (D.N.J).
. Op. to Mtn. to Compel Immediate Production p. 3.
. See BYU's Motion for Immediate Production of Documents p. 3.
. Id. at p. 7, request number 39.
. Id. at p. 9.
. Docket no. 101.
. Order dated March 26, 2008, p. 1.
. Id. at 2.
. Id. at 4.
. Id.
. Id. at 5.
. Id.
. Id.
. Id. at 6.
. Order dated March 26, 2008, p. 1-2.
. March 19, 2008, hearing transcript p. 53:10-11.
. Id. at 53:23.
. Id. at 58:4-5.
. Docket no. 113.
. Motion for extension of time p. 2.
. Id.
. Mem. in supp. p. 2.
. Id.
. Docket no. 115.
. The court modified the protective order including an attorney's eyes only provision that alleviated most of the third parties’ concerns with Pfizer providing documents to BYU. See docket no. 152.
. Docket no. 190.
. Docket no. 117.
. Docket nos. 134, 147 and 157.
. Docket no. 179.
. Docket nos. 221 and 222.
. April 8, 2009, Transcript 171:9-10.
. Docket no. 229.
. Expedited Motion to Preserve and Produce Evidence of COX-2 Related Documents p. 2.
. Docket no. 240.
. Docket no. 272.
. See Transcript of July 2, 2009, hearing 18:6-9.
. See Pla.s' notice regarding 22 July 2009 hearing, docket no. 273.
. Pla.s' mem. in supp. p. 123.
. Id.
. Fed. R.Civ. P. 37(b)(2)(A) (2009).
. Ehrenhaus v. Reynolds, 965 F.2d 916, 921 (10th Cir. 1992).
. Procter & Gamble Co. v. Haugen, 427 F.3d 727, 738 (10th Cir. 2005) (quoting Ehrenhaus, 965 F.2d at 920).
. Ehrenhaus, 965 F.2d at 921.
. See id.; see also Procter & Gamble Co., 427 F.3d at 738; Gripe v. City of Enid, 312 F.3d 1184, 1187 (10th Cir. 2002).
. See Chavez v. City of Albuquerque, 402 F.3d 1039, 1044 (10th Cir. 2005).
. Ehrenhaus, 965 F.2d at 921 (internal quotation marks omitted).
. Id.
. Mem. in supp. p. 125.
. See op. p. 87.
. Id.
. Id. at 88.
. 2006 WL 1348204, 2006 U.S. Dist. LEXIS 31175 (D.Utah May 15, 2006), Utah Case No. 2:04-cv-623 TS.
. 2008 WL 4500757 (C.D.Cal. Oct.6, 2008).
. Danjanovich, 2006 WL 1348204 at *1, 2006 U.S. Dist. LEXIS at *2-3.
. Construction Laborers, 2008 WL 4500757 at *3.
. Fed.R.Civ.P. 26(b)(1) (2009).
. Id,
. Gohler v. Wood, 162 F.R.D. 691, 695 (D.Utah 1995).
. See Regan-Touhy v. Walgreen Co., 526 F.3d 641, 648 (10th Cir. 2008) ("the [United States] Supreme Court has underscored that 'the requirement of Rule 26(b)(1) that the material sought in discovery be "relevant" should be firmly applied, and the district courts should not neglect their power to restrict discovery [to protect] "a party or person from annoyance, embarrassment, [or] oppression.” ' ”) (quoting Herbert v. Lando, 441 U.S. 153, 177, 99 S.Ct. 1635, 60 L.Ed.2d 115 (1979) (quoting Fed.R.Civ.P. 26(b)(1), (c)(1))).
. Mem. in supp. p. 127.
. Op. p. 91.
. For e.g. see, Order dated March 26, 2008, p. 1.
. Ehrenhaus, 965 F.2d at 920 (quoting Meade v. Grubbs, 841 F.2d 1512, 1520 n. 6 (10th Cir. 1988)).
. Id. at 921.
. Mem. in supp. p. 128.
. Id. at 129.
. Shelton v. American Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986).
. See Boughton v. Cotter Corp., 65 F.3d 823, 830 (10th Cir. 1995).
. Mem. in supp. p. 132-33.
. Fed.R.Civ.P. 37(a)(5)(A).
. Op. p. 52.
. Docket no. 106.
. Fed. R.Civ. P. 37(b)(2)(A).
. Ray Quinney & Nebeker's principal office is located in Salt Lake City, Utah.
. Beus Gilbert’s principal office is located in Scottsdale, Arizona which is part of the greater Phoenix, Arizona metropolitan area.
. See Tr. from April 8, 2009, hearing 170:13-16. (“I want you, Mr. Beus and Mr. Bettilyon on behalf of the plaintiffs to submit for my consideration affidavits related to your fees in bringing this matter.”).
. Docket nos. 232 and 233.
. Affidavit of Mark Battilyon p. 2, docket no. 232.
. Affidavit of Leo Beuss p. 2, docket no. 233.
. Op. p. 49.
. For e.g., see, Lucky Brand Dungarees, Inc. v. Ally Apparel Res. LLC., 2009 WL 466136, * 6 (S.D.N.Y. Feb. 25, 2009) (declining to award other costs that are not set forth in sufficient detail to warrant awarding them).
. 2008 WL 803108 (D.Utah March 22, 2008).
. Id. at * 6.
. See affidavit of Leo Beuss p. 2-3.
. Id. atp. 3.
. Id. at p. 4.
. Affidavit of Mark Bettilyon p. 3.
. Id. at p. 4.
. 640 F.2d 1046 (9th Cir. 1981).
. See id. at 1051.
. Op. p. 53.
. 355 F.Supp.2d 1190 (D.Kan. 2005).
. Id. at 1199 (quoting Aquilino v. Univ. of Kansas, 109 F.Supp.2d 1319, 1326 (D.Kan. 2000)).
. Id.
. See Op. p. 53.
. Op. p. 53.
Reference
- Full Case Name
- BRIGHAM YOUNG UNIVERSITY, and Dr. Daniel L. Simmons v. PFIZER, INC.
- Cited By
- 6 cases
- Status
- Published