Opinion
MDL 2724
10-20-2023
IN RE GENERIC PHARMACEUTICALS PRICING ANTITRUST LITIGATION THIS DOCUMENT RELATES TO ALL ACTIONS
ORDER
HON. CYNTHIA M. RUFE JUDGE.
Plaintiff States sought a protective order as to Defendants' Request for Production 68 (“RFP 68”), contending that it was extremely broad and disproportionate to the discovery needs of the MDL. RFP 68 sought reports and analyses concerning the price or supply of generic pharmaceutical products. During a lengthy meet-and-confer process before Special Master David Marion, Defendants modified and limited RFP 68. The Special Master issued his Twelfth Report and Recommendation (“Twelfth R&R”), which concluded that the original request was overbroad, but determined that Defendants' modified RFP was acceptable as limited to:
Twelfth R&R Ex. A [MDL Doc. No. 2050] at 8-9.
Twelfth R&R [MDL Doc. No. 2050].
[A]ny reports, analyses, or studies (including any drafts and underlying data or documents that relate to such reports, analyses, or studies) relating to the price or supply of generic[] pharmaceutical products that meet one or more of the following conditions:
1. Materials possessed and/or created by or for the office of a State's attorney general.
2. Materials created by or for a State's Legislature, including considered or passed bills, and other reports.
3. Materials created by or for a State's agencies and/or entities for which the primary responsibility is healthcare, as well as any auditor/oversight committee reports.
4. Materials received by a State from healthcare providers pursuant to State reporting requirements. See, e.g., Hawaii Rev. Stat. § 431-R-4 (2016) (requiring that prescription drug and health benefit plans file yearly reports
with the state “insurance commissioner”); Va. Code § 38.2-3468(b) (requiring that insurers, certain health maintenance organizations, and health care service providers submit quarterly reports).
5. Materials, including drafts, data, and documents, relating to the specific reports and analyses conducted by Ohio, Minnesota, Massachusetts, and New York that are cited in Defendants' February 25 letter.
Twelfth R&R at 4-5.
Moreover, Defendants had proposed, and the R&R agreed, that there be a meet-and-confer process on a state-by-state basis if there is “reasonable doubt about the scope of these categories.” After the Twelfth R&R was issued, a significant number of States resolved their objections through stipulations approved by the Court, and the Court delayed ruling on the objections to encourage such agreements.
Twelfth R&R at 5.
See MDL Doc. Nos. 2096 (Pennsylvania), 2097 (Florida), 2098 (Maine), 2110 (Idaho), 2111 (South Carolina), 2185 (New Jersey), 2188 (Vermont), 2230 (Kansas), 2262 (Indiana), 2302 (Colorado), 2346 (Illinois), 2371 (Tennessee), 2423 (Washington), and 2424 (California). Kentucky and South Dakota also resolved the dispute with Defendants without submitting a formal stipulation for the Court's approval. See Defs.' Resp. in Opp'n to Objs. to Twelfth R&R [MDL Doc. No. 2113], at 15. The Court has been informally advised by counsel for the Plaintiff States that Hawaii (which has since withdrawn its claims), Nevada, and Wisconsin have satisfied RFP 68 and that Mississippi has represented that it has no further documents to produce.
The Objecting Plaintiff States argue that RFP 68 should be limited to apply only to the Attorneys General Offices (“AGOs”) and the agencies for which the Objecting Plaintiff States seek damages and from whom they have already produced documents. The Objecting Plaintiff States contend that RFP 68 is vague, overbroad, and unduly burdensome, and that the AGOs lack possession, custody, and control over many or all of the documents that have not already been produced.
The Court does not address the objections of those States that later reached agreement with Defendants or States that have withdrawn their claims.
Defendants argue that the Objecting Plaintiff States did not assert state-specific arguments or that the documents are not in their possession, custody, or control, and that the failure to so constitutes a forfeiture of any objections now. Defendants also argue that it is the States, not the AGOs, that are the Plaintiffs in the MDL, and that States necessarily include state agencies.
The parties also disagree as to whether the Court should review the Twelfth R&R de novo for abuse of discretion. Under the particular circumstances here, the Court's ruling would be the same under either standard.
With regard to the legislative materials, upon careful review of the modified RFP 68 and the stipulated resolutions of certain Plaintiff States, the Court determines it appropriate to grant a protective order as to the second category, “[m]aterials created by or for a State's Legislature, including considered or passed bills, and other reports.” Certainly, Defendants can themselves obtain bills that were passed into law, and many other legislative materials are publicly available as well. It is not at all clear what remaining legislative materials are at issue, what relevance they have to the claims and asserted damages in the MDL, and what legislative privileges may apply. The individual stipulations between Plaintiffs and certain State Plaintiffs resolving objections to the Twelfth R&R do not include legislative materials, further indicating that the modified RFP is overbroad in seeking such materials. The Court therefore will exclude this category.
With regard to documents in the possession of state agencies, the Objecting Plaintiff States argue that the AGOs do not have the authority to require state agencies to produce documents, and therefore lack possession, custody, or control over the documents. The fact that the Objecting Plaintiff States did not clearly and fully raise the issue of possession, custody, and control before the Special Master was contrary to the Court's purpose in referring certain disputes to the special masters in the first instance, and has unnecessarily complicated the resolution of this dispute. However, the Court will not hold that the arguments have been forfeited, as there is some confusion as to the timing of the proceedings before the Special Master.
See Objs. to Twelfth R&R Ex. A [MDL Doc. No. 2088-1], at 2.
The Court has addressed a similar issue before in the context of the production of documents by Pennsylvania. The State Actions are brought in the names of the States, Commonwealths, Territories, and District (collectively, States), not in the names of the AGOs.The question is whether an AGO, in representing a State, lacks the authority under state law to obtain documents from a state agency when the state agency itself is not a party to the litigation. General arguments regarding a possible conflict between the AGO and the governor of a State with authority over state agencies are not sufficient, particularly when state agencies “undoubtedly hold many relevant documents and stand to benefit from the Attorney General's success in the case.”
See In re Generic Pharms. Pricing Antitrust Litig., 571 F.Supp.3d 406, 408 (E.D. Pa. 2021) (addressing a dispute concerning Pennsylvania agencies). The Objecting Plaintiff States cite cases decided by Magistrate Judges. See United States v. Am. Express Co., No. 10-4496, 2011 WL 13073683 (E.D.N.Y. July 29, 2011); Colorado v. Warner Chilcott Holdings Co. III, Ltd., No. 05-2182, 2007 WL 9813287 (D.D.C. May 8, 2007); New York ex rel. Boardman v. Nat'l R.R. Passenger Corp., 233 F.R.D. 259 (N.D.N.Y. 2006).
See, e.g., Am. Compl., Sept. 9, 2021 [Doc. No. 62] in Civil Action No. 20-3539 (E.D. Pa.). Contrary to the Objecting Plaintiff States' argument, the Court did not hold in the earlier dispute that the AGO was the party to the litigation.
Illinois ex rel. Raoul v. Monsanto Co., No. 22-5339, 2023 WL 4083934, at * 4 (N.D. Ill. June 20, 2023).
The Court therefore will turn to the state-specific arguments regarding the production of documents from a state agency. A party may be required to turn over documents owned by a non-party if the producing party has either actual possession of the documents or control over documents not in its physical possession. Control includes “the legal right to obtain the documents requested on demand.”
Devon Robotics v. DeViedma, No. 09-3552, 2010 WL 3985877, at *2 (E.D. Pa. Oct. 8, 2010).
Id. (quoting Gerling Int'l Ins. Co. v. Comm'r, 839 F.2d 131, 140 (3d Cir. 1988)).
Arizona
Arizona argues that under state law, state agencies may withdraw their consent to be represented by the AGO in antitrust cases, and therefore the AGO does not represent the agencies without their express permission. However, here the claim is pursued on behalf of the State of Arizona, and with certain exceptions not apparently relevant here, the AGO provides legal representation and legal services both to the State of Arizona and to state agencies. Arizona has identified no provision of law that would prohibit the AGO from obtaining documents from state agencies in the course of prosecuting a lawsuit on behalf of the State.
Arizona's Obj. to Twelfth R&R [MDL Doc. No. 2089] at 2 (citing Ariz. Rev. Stat. § 41-192(A)(5)).
Connecticut
Under Connecticut law, the “Attorney General shall have general supervision over all legal matters in which the state is an interested party, except those legal matters over which prosecuting officers have direction. He shall appear for the state . . . and for all heads of departments and state boards . . . in all suits and other civil proceedings . . . in which the state is a party or is interested[.]” The Connecticut Supreme Court has held that:
The Attorney General's responsibility is not limited to serving or representing the particular interests of State agencies, including opposing State agencies, but embraces serving or representing the broader interests of the State. This responsibility will occasionally, if not frequently, include instances where State agencies are the opposing parties. It seems to us that if the Attorney General is to have the unqualified role of chief legal officer of the State, he or she must be able to direct the legal affairs of the State and its agencies.
Connecticut Comm 'n on Special Revenue v. Connecticut Freedom of Info. Comm 'n, 387 A.2d 533, 537-38 (Conn. 1978).
This broad grant of authority undercuts the argument that in the prosecution of an action on behalf of the State of Connecticut, the AGO cannot obtain documents from state agencies.
Connecticut cites Blumenthal v. Barnes, 804 A.2d 152 (Conn. 2002), for the proposition that the Attorney General's authority is limited, but that case concerned the question of limitations on the common-law authority of the Attorney General to bring an action, which is not relevant here.
District of Columbia
The District of Columbia argues that the AGO is an independent agency, that it does not report to the mayor, and that it has no possession, custody or control. The District of Columbia cites a trial court decision in District of Columbia v. EADS, LLC, which held that when the AGO brings a civil enforcement case in its capacity as an independent agency, it does not have the authority to produce documents from other District agencies. However, the District of Columbia Court of Appeals in another case cited by the Objecting Plaintiff States has held that the Attorney General has “broad power to exercise all such authority as the public interest requires” and has “wide discretion in determining what litigation to pursue to uphold the public interest, absent specific constitutional or statutory guidance to the contrary.” This broad authority, in the context of litigation where the AGO is representing the District of Columbia, does not support the position that the AGO cannot exercise its authority to obtain documents from other agencies.
No. 2018 CA 005830 B (D.C. Super. Ct. 2021); see Objs. to Twelfth R&R Ex. B [MDL Doc. No. 2088-2], at 1-2.
District of Columbia v. ExxonMobil Oil Corp., 172 A.3d 412, 429 (D.C. Ct. App. 2017) (internal quotation marks, modifications, and citation omitted).
Massachusetts
Massachusetts relies upon a trial court's decision in Commonwealth v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., which held that the AGO did not have control over documents of other state agencies in an enforcement action under state law. The court in that case based its decision on three rationales: first, that state agencies should not be aggregated together, particularly where the defendant had issued broad requests that did not differentiate between agencies; second, that there was no reason to think that the Governor (as the head of the state agencies) was aware of this narrow enforcement action; and third, that unlike an antitrust case with “massive and wide ranging issues,” the defendant sought extraordinarily broad discovery despite the fact that the focus of the case was a limited issue of marketing that did not require proof of individualized injury. The State Actions in the MDL, by contrast, bring wide-ranging claims that seek substantial damages, and the documents sought in RFP 68 have been narrowed, with further opportunity to confer and reach agreement. This litigation is fully distinguishable from that at issue in Ortho-McNeil-Janssen Pharmaceuticals, Inc., and the AGO cites no authority preventing it from obtaining documents from state agencies in these circumstances.
No. 2011-2811, 2012 WL 5392617, at *3 (Super. Ct. Mass. Oct. 5, 2012).
Id. at *2-3 (internal citations omitted).
The Massachusetts Attorney General issued a press release upon joining the Dermatology Action, indicating that it is a significant litigation, unlike in Ortho-McNeil-Janssen. See Press Release, Mass. Off. Att'y Gen., AG Healey Joins Third Major Lawsuit in Ongoing Antitrust Investigation into Generic Drug Price Fixing (June 12, 2020), https://www.mass.gov/news/ag-healey-joins-third-major-lawsuit-in-ongoing-antitrust-investigation-into-generic-drug-price-fixing [https://perma.cc/3VMC-PMH9] (last accessed Oct. 20, 2023).
Michigan
Michigan argues that the Attorney General has two duties: to protect the interest of the general public and to serve as legal counsel for the institutions of Michigan, and that to order it to produce documents held by state agencies would conflate those two roles. However, Michigan cites no caselaw “stating that non-party state agencies cannot be subject to party discovery” in cases filed by the State.
Objs. to Twelfth R&R [MDL Doc. No. 2088], at 17 (citing MCL §§ 14.28, 14.29).
Monsanto, 2023 WL 4083934, at * 3.
To the extent that Michigan objects to the production of any documents from the legislature or the judiciary, the Court has sustained the objection to legislative documents and the record does not show that any materials of the judicial branch have ever been sought.
Missouri
Missouri argues that state law provides that each governmental entity is responsible for its own records and that one agency cannot disseminate or produce another agency's records.These cases do not speak to the ability of the AGO to obtain documents after instituting a suit “requisite or necessary to protect the rights and interests of the state.”
See State ex rel. Daly v. Info. Tech. Servs. Agency of St. Louis, 417 S.W.3d 804, 809 (Mo.Ct.App. 2013) (citing Mo. Rev. Stat. § 610.023.1); see also Bedell v. Dir. of Revenue, 935 S.W.2d 94, 96 (Mo.Ct.App. 1996).
North Carolina
North Carolina primarily argues with regard to legislative documents, which are now moot. North Carolina also argues that under North Carolina law, a state agency's records are within the possession, custody, and control of the head of that agency. To be accurate, the statute provides that the head of a state department “shall have legal custody of all public records,” which North Carolina law also provides “are the property of the people” to be made available at minimal cost. Thus, such public records certainly should be available for North Carolina's prosecution of an antitrust suit, which is broadly authorized by statute.
Objs. to Twelfth R&R [MDL Doc. No. 2088], at 19 (citing N.C. Gen. Stat. § 143B-10(f)).
N.C. Gen. Stat. §§ 143B-10(f), 132-1 (emphasis added).
Ohio
Ohio cites an unpublished trial court decision in Ohio v. Monsanto Co., in which the court acknowledged that there is little guidance on the issue from the appellate courts of Ohio, but ultimately held that because the state agencies were not parties, they could not be required to answer discovery under the Ohio Rules of Civil Procedure, and that the documents were under the physical control of those agencies. However, Monsanto does not appear to be an antitrust case, and as Ohio acknowledges, the Attorney General has broad authority under state law to “do all things necessary . . . to properly conduct an antitrust case” as the attorney at law for the State. Ohio law relating to antitrust enforcement further provides that “[p]ublic officers . . . shall render and furnish to the attorney general, or to the attorney general's designated representatives when so requested, all information and assistance in their possession or within their power.” The Court therefore does not find Monsanto to preclude the production of records held by non-party Ohio state agencies in an antitrust suit like this one.
Case No. A1801237 (Hamilton Cnty. Ct. Comm. Pleas); see Objs. to Twelfth R&R, Ex. C [MDL Doc. No. 20883], at 4-6.
Ohio Rev. Code § 1331.16(N). Ohio law further defines a “public office” as “any state agency, public institution, political subdivision, or other organized body . . . established by the laws of this state for the exercise of any function of government.” Ohio Rev. Code § 1331.01.
Oregon
Oregon argues that it already has produced over 350,000 documents from agencies for whom it seeks damages, and that it does not seek damages for other agencies. Oregon's current objection is directed to the legislative materials. As the Court already has ruled in the Objecting Plaintiff States' favor as to that category, the objection is moot.
Wyoming
Wyoming does not cite the Wyoming constitution or any statutes or cases that would bar the production of documents from state agencies under the circumstances here. The Court will overrule Wyoming's objection on that basis.
AND NOW, this 20th day of October 2023, upon consideration of Special Master David H. Marion's Twelfth Report and Recommendation (“Twelfth R&R”) [MDL Doc. No. 2050], and the objections, responses, and replies thereto, it is hereby ORDERED that the objections are SUSTAINED in part and OVERRULED in part as follows:
1. The protective order is GRANTED as to “[m]aterials created by or for a State's Legislature, including considered or passed bills, and other reports.”
2. The R&R is otherwise APPROVED, subject to the obligation to meet and confer as to the scope of the categories and the ability to produce documents as applied to specific Plaintiff States.
It is so ORDERED.