In re Novartis and Par Antitrust Litigation

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

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: ORDER GRANTING MOTION

: TO COMPEL DISCOVERY

In Re Novartis and Par Antitrust Litigation :

: 18 Civ. 4361 (AKH)

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ALVIN K. HELLERSTEIN, U.S.D.J.:

Plaintiffs move pursuant to Federal Rule of Civil Procedure 45 for an order

compelling nonparties Lupin Limited and Lupin Pharmaceuticals, Inc. (collectively, “Lupin”) to

produce various materials responsive to a subpoena. See Motion to Compel, ECF No. 244. For

the reasons set forth below, Plaintiffs’ motion to compel is granted, with the caveat that Plaintiffs

must cover the cost of Lupin’s compliance with the subpoena going forward. Familiarity with

the basic facts of this dispute, which I have described in a prior order, see Order (Aug. 15, 2019),

ECF No. 193, is assumed.

Background1

A. Underlying Litigation

In this civil antitrust action, Plaintiffs allege that the Defendants–––Novartis

Pharmaceuticals Corporation and Novartis AG (together, “Novartis”) and Par Pharmaceutical,

Inc. (“Par”)–––entered into an unlawful agreement to delay the entry of generic competition to

brand-name drug “Exforge,” a prescription drug used to treat hypertension. In that agreement,

Par agreed not to launch a generic version of Exforge until September 30, 2014 and Novartis in

1 The following facts are drawn from the operative complaint and from the memorandums of law submitted in

connection with this motion (along with exhibits attached thereto).

turn agreed not to compete with Par by launching its own generic version of Exforge for the 180-

day regulatory exclusivity period following Par’s entry to the market. Plaintiffs contend that, but

for the agreement, Par would have come to market with its generic Exforge before September 30,

2014, triggering an earlier start of the 180-day exclusivity window, which would have resulted in

other generic competitors, such as Lupin, entering the generic Exforge market prior to March 30,

2015 (when the 180-day exclusivity period in fact ran out), and lowering Exforge’s market price.

See Amended Complaint, ECF No. 139, at ¶¶ 1-11.

Embedded in the Plaintiffs’ complaint is a key assumption: that Lupin or some

other “generic competitor … had the capacity, capability[,] and economic incentive to enter the

market earlier absent the Novartis/Par reverse payment agreement.” Pl. Mem. in Support of Mtn.

to Compel, ECF No. 245, at 1. In other words, if generic competitors were, for whatever reason,

incapable of entering the market prior to March 30, 2015 even if they had wanted to do so, then

it cannot be said that the alleged Novartis/Par agreement “delayed competition from lower-priced

generic versions of Exforge.” Amended Compl. at ¶ 10.

B. The Subpoena

Plaintiffs served Lupin with the subpoena at issue in this motion on February 11,

2019.2 Notice of Service of Subpoena Duces Tecum (the “Subpoena”), ECF No. 246-1.

2 The record reflects that, prior to serving the February 11, 2019 subpoena, Plaintiffs served an earlier version for the

same request in December, upon which the parties met and conferred, and which Plaintiffs later withdrew in favor of

serving the February 11, 2019 iteration of the subpoena. The record also reflects that in January 2019, Plaintiffs also

served a subpoena on Novel Laboratories, Inc., a subsidiary of Lupin, seeking similar information. See Declaration

of Zarema Jaramillo, ECF No. 250, at ¶¶ 1-6 and 2 n.1. Because Plaintiffs have only moved to compel production in

relation to the February 11, 2019 subpoena, I do not address the withdrawn December 2018 subpoena or the request

for production made on Novel Laboratories.

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Therein, Plaintiffs made, inter alia, two requests targeted to documents probative of Lupin’s

ability, plan, incentives, and so on, to enter the generic Exforge market:

Documents Concerning Market Entry of Generic Exforge …

4. All documents concerning Your, Par’s, Novartis’s or any other company’s

actual, proposed, or contemplated plans for launching Generic Exforge or Generic

Exforge HCT, including the following: (i) launch timelines, new product launch

meeting minutes, projections, and forecasts, including any assumptions used; (ii)

schedules; (iii) launch updates, action items from new product launch meetings,

and launch team meeting minutes; (iv) “at-risk” launch analyses and discussions;

(v) manufacturing forecasts; (vi) sourcing of active and inactive ingredients

(including communications with any suppliers); (vii) exhibit batches, scale up,

validation, building and maintenance of commercial quantities, and/or

manufacture, sale, transfer, or destruction of same; and (viii) public statements

(including statements to investors or courts) and competitive intelligence.

5. All documents concerning any regulatory, legal, technical, manufacturing, or

other issues or reasons why You or any other Generic Exforge ANDA filer could

or could not or would or would not commercially launch a Generic version of

Exforge prior to September 30, 2014, including but not limited to:

a. All documents concerning the manufacturing sites, facilities, equipment,

and other resources proposed, contemplated, or actually used in the

development, regulatory approval, scale-up, validation, commercial

manufacturing, and launch of Generic Exforge;

b. All documents concerning CGMP, inspections, manufacturing, quality

control, or quality assurance regarding any manufacturing sites, facilities,

or equipment proposed, contemplated, or actually used in the

development, regulatory approval, scale-up, validation, commercial

manufacturing, and launch of Generic Exforge;

c. All documents relating to potential or actual suppliers of active and

inactive ingredients, container/closure systems, labeling, tooling, or other

vendors of products or services for Generic Exforge, including, but not

limited to, communications with any such company(ies); orders and

cancellation of orders; invoices and payments; contracts (including

amendments and supplements thereto); drafts of contracts; compliance

with contracts; disputes; settlements of disputes; forecasts; projections;

manufacturing ability; supply requirements; production schedules; supply

schedules; product marketing; product launch dates internal memorandum;

emails; meeting agendas and minutes; transcripts of conversations; and

drug master files;

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d. All documents relating to actual and theoretical manufacturing capacity

and the rate limiters on that capacity, including any shortages in raw

materials, manufacturing sites and/or equipment, or other rate limiters for

Your Generic Exforge product;

e. Documents sufficient to show the amount of inventory expressed in

terms of weeks or months on hand of inventory that You had of Generic

Exforge at the time of anticipated launch and/or at the time You actually

launched Your Generic Exforge product;

f. Documents sufficient to show batch sizes, manufacturing process,

throughput times per batch, and manufacturing rates for Your Generic

Exforge product.

Subpoena at 8-10. Thereafter, the parties extensively negotiated the scope of the subpoena, in so

doing reaching agreements on a number of Plaintiffs’ request, but failing to resolve disagreement

as to Requests 4 and 5 quoted above. See, e.g. Pl. Mem. at 6 n.15 (listing at least 25 occasions in

which the parties have exchanged letters or met via phone or in-person). Over the course of the

negotiations, Lupin made, by my count, somewhere in the range of six document productions to

Plaintiffs, totaling over 1,100 documents and 20,000 pages. See Jaramillo Decl. at ¶¶ 10-35.3

In April 2020, Lupin wrote to Plaintiffs and stated that, following a reasonable

search, Lupin was unable to find any additional responsive documents and Lupin was of the view

that it had fully complied with the subpoena:

3 Plaintiffs represent in their briefing that “[d]uring negotiations, Lupin confirmed its express understanding of the

nature of the documents sought … and never claimed the documents were not available to too burdensome to

produce.” Pl. Mem. at 6; see also id. at 17-18 (“This Court … should order Lupin to comply with its discovery

obligations and promptly produce the documents it agreed to produce almost a year ago.” Plaintiffs also refer to

these as the “Agreed-Upon Documents” throughout their papers. See id. at 10, 12. But a close reading of the

correspondence cited by Plaintiffs does not show that Defendants “agreed” to any such production. Instead, in the

letter principally referenced, Lupin describes Plaintiffs’ document requests and then goes on to suggest that Plaintiff

cover the costs of the production. See Letter from Lupin to Plaintiffs (Apr. 19, 2019), ECF No. 246-2 (“Please

confirm that, should Lupin agree to produce … documents responsive to Requests No. 4 and 5 that are in its

possession, custody, or control, Plaintiffs will reimburse Lupin for the reasonable costs of complying with the

Subpoena.”) Plaintiffs selectively quote from the letter but omit this critical sentence–––this comes uncomfortably

close to the line that separates framing the facts from misrepresentation.

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Lupin … ha[s] fully complied with Plaintiffs’ Subpoenas, through a series of

rolling productions made to Plaintiffs….

Plaintiffs nonetheless demand that Lupin produce additional “launch preparation

documents. In addition to producing its entire ANDA file for generic Exforge and

generic Exforge HCT, which shows that Lupin did not have FDA approval to

launch generic Exforge until March 2015, Lupin also produced to Plaintiffs its

New Product Launch meeting minutes describing Lupin’s launch plans for

generic Exforge and generic Exforge HCT, as well as other documents reflecting

Lupin’s ability to scale-up and launch Generic Exforge and Generic Exforge

HCT. For the avoidance of doubt, following a reasonable search, Lupin has

located no other non-privileged documents responsive to Requests 4 and 5 of

Plaintiffs’ Subpoena of Lupin.

Letter from Lupin to Plaintiffs (Apr. 17, 2020), ECF No. 246-3. Plaintiffs do not share Lupin’s

view that the production is sufficient, and identify nine categories in which Lupin’s production is

purportedly deficient:

1. Process validation reports for all four strengths of Lupin’s Generic Exforge.

2. Process validation batch manufacturing records for all four strengths of Lupin’s

Generic Exforge.

3. New Product Launch Meeting minutes for Lupin’s Generic Exforge from the

date launch planning began until April 1, 2015.

4. Documents sufficient to show the amount of generic Exforge finished product

inventory that Lupin had on hand at the time of launch on March 30, 2015 and the

date Lupin began to manufacture that inventory.

5. Lupin’s generic Exforge launch timeline(s) showing planned and completed

tasks in preparation for launch starting on January 1, 2011 and ending on April 1,

2015.

6. Documents sufficient to show when Lupin ordered the required active

pharmaceutical ingredients (“API”), other excipients, and packaging intended for

use in its first commercial batches of generic Exforge manufactured for its March

30, 2015 launch, and in what quantities.

7. Documents between January 1, 2011 and March 30, 2015 sufficient to show the

extent to which, if at all, Lupin considered and took steps towards launching

generic Exforge earlier than March 30, 2015. This may include launch timelines,

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purchases of API or other excipients, manufacturing of process validation batches,

or internal correspondence indicating a proposed launch date.

8. Documents sufficient to show whether Lupin encountered any difficulties in

manufacturing its commercial batches of generic Exforge in preparation for its

March 30, 2015 launch.

9. Documents sufficient to show when Lupin purchased or made available the

equipment used in the manufacturing of generic Exforge commercial batches in

advance of its March 30, 2015 launch.

Pl. Mem. at 2-3.

C. Procedural History

On May 29, 2020, Plaintiffs filed this motion to compel Lupin to produce

additional documents in response to Plaintiffs’ subpoena–––specifically, to produce documents

in the nine categories quoted above–––and a supporting brief with accompanying exhibits. See

ECF Nos. 244, 245, 246. Lupin has filed its opposition, also with accompanying exhibits. See

ECF Nos. 249, 250. The motion became fully briefed on June 17, 2020. See ECF No. 251.

Discussion

A. Legal Principles

1. Subpoenas of Non-Parties under Rule 45

Federal Rule of Civil Procedure 45 “allows a party to serve a subpoena on a non-

party for the production of documents.” Mackey v. IDT Energy, Inc., No. 19 Misc. 29, 2019 WL

2004280, at *3 (S.D.N.Y. May 7, 2019); see Fed. R. Civ. P. 45(a). Motions to compel discovery

are subject to a “two-step analytical framework”: First, the moving party must demonstrate that

the information sought is “discoverable”; second, once discoverability has been shown, “it is up

to the responding party to justify curtailing discovery.” In re Namenda Dir. Purchaser Antitrust

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Litig., No. 15 Civ. 7488, 2017 WL 3822883, at *4 (S.D.N.Y. Aug. 30, 2017) (quotation marks

and alterations omitted) (“In re Namenda”).

The scope of what is properly discoverable is affixed by Federal Rule of Civil

Procedure 26, which provides in pertinent part that parties may obtain discovery

regarding any nonprivileged matter that is relevant to any party’s claim or defense

and proportional to the needs of the case, considering the importance of the issues

at stake in the action, the amount in controversy, the parties’ relative access to

relevant information, the parties’ resources, the importance of the discovery in

resolving the issues, and whether the burden or expense of the proposed discovery

outweighs its likely benefit. Information within this scope of discovery need not

be admissible in evidence to be discoverable.

….

On motion or on its own, the court must limit the frequency or extent of discovery

otherwise allowed by these rules or by local rule if it determines that … [among

other things,] the discovery sought is unreasonably cumulative or duplicative, or

can be obtained from some other source that is more convenient, less burdensome,

or less expensive.

Fed. R. Civ. P. 26(b). As such, Rule 26 limits discovery to matters that are, inter alia, “relevant”

and “proportional” to the case’s needs. Id. If the party issuing the subpoena establishes that the

materials sought are relevant, “the burden then shifts to the [third party] to demonstrate an undue

burden.” Mackey, 2019 WL 2004280, at *3.

Whether a “subpoena imposes an undue burden depends on such factors as

relevance, the need of the party for the documents, the breadth of the document, the time period

covered by it, the particularity with which the documents are described and the burden imposed.”

Id. (quotation marks omitted). And if, as here, the “subpoena seeks discovery from a non-party,”

the court may consider “the expense or inconvenience that compliance would cause.” Id. Trial

courts have “broad discretion to determine whether a subpoena imposes an undue burden,” id.,

but in the case of subpoenas targeted at nonparties, should be “particularly sensitive to weighing

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the probative value of the information sought against the burden of production to the nonparty,”

UMB Bank, NA v. Sanofi, No. 15 Civ. 8725, 2017 WL 6398628, at *1 (S.D.N.Y. Nov. 22, 2017);

see also, e.g., In re Namenda, 2017 WL 3822883, at *4 (“Litigants and courts are instructed to

be especially solicitous of non-party targets of subpoenas.”); MacNamara v. City of New York,

No. 04 Civ. 9612, 2006 WL 3298911, at *15 (S.D.N.Y. Nov. 13, 2006) (courts “give special

weight to the burden on non-parties of producing documents to parties involved in litigation”);

but see In re Namenda, 2017 WL 3822883, at *4 (“Inconvenience alone” to a non-party is not

enough to justify noncompliance with a subpoena).

Claims of undue burden must “explain the manner and extent of the burden, as

well as the consequences of compliance.” Id. at *9. Due to the importance of context in gauging

the propriety of a Rule 45 subpoena, assessing undue burden is “a highly case specific inquiry.”

Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2463.1 (3d ed. 2008).

2. Cost-Shifting

Courts in this district have found “[c]ost-shifting … particular appropriate in the

context of subpoenas, since Rule 45 directs courts to minimize the burden on non-parties.” Id. at

*10 (quotation marks omitted). In determining whether cost-shifting is warranted, the following

factors are often considered: “(1) whether the party has an interest in the outcome of the case; (2)

whether the nonparty can more readily bear the costs; and (3) whether the litigation if of public

importance.” In re World Trade Center Disaster Site Litig., No. 21 Mc. 100, 2010 WL 3582921,

at *1 (S.D.N.Y. Sept. 14, 2010); see also In re Namenda, 2017 WL 38228823, at *10 (shifting

costs where the object of the subpoena was a non-party and there was “no indication” that the

non-party was better situated to “pay the costs of document production” than plaintiffs); Kenyon

v. Simon & Schuster, Inc., No. 16 Misc. 327, 2016 WL 5930265, at *7 (S.D.N.Y. Oct. 11, 2016)

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(inviting the non-party to “apply … for cost-shifting if the costs of responding to the subpoena

become too onerous”); Fed. R. Civ. P. 45 Application Note (“A non-party required to produce

documents or materials is protected against significant expense resulting from involuntary

assistance to the court.”).

B. Application

Lupin first argues that it has “produced to Plaintiffs more than 20,000 pages of

responsive material,” and that the production already accomplished “appropriately balances the

parties’ need for this discovery against Lupin’s rights to avoid undue burden and expense as a

non-party.” Def. Opp. Mem., ECF No. 249, at 7. Lupin contends that its “production–––

including [Lupin’s] forecasts, ANDA file, New Product Launch meeting minutes, transactional

data, and launch preparation documents–––is sufficient” for purposes of fleshing out Plaintiffs’

theory that Lupin could have entered Exforge generics market earlier than it ultimately did. See

id. at 8. Next, Lupin argues that Plaintiffs’ subpoena is unduly burdensome, contending that the

“nine categorical requests are sweepingly broad” and further that “Lupin has been unable to

locate and produce responsive documents despite more than 18 months of” reasonable, good-

faith searches. Id. at 9.

Plaintiffs’ production request is broad, and complying with Plaintiffs’ subpoena

would impose a burden on Lupin. See generally Jaramillo Decl. (describing eighteen months of

document searches and also noting that at least at least certain “manufacturing documents”

requested by Plaintiffs are housed in a facility based in India, which is “inaccessible” as it is

under “complete lockdown” due to the COVID-19 pandemic).

However, the materials requested by the subpoena are relevant to this complex

dispute. For instance, if “generic Exforge launch timeline(s)” were to show that Lupin was

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willing and able to enter the generic Exforge market prior to the expiration of Par’s exclusivity

period, this would clearly be probative of Plaintiffs’ claim that the Novartis/Par agreement

delayed would-be entrants to the market. Lupin hardly contests relevance, mustering as a

response only that (1) Lupin is mentioned by name only four times in Plaintiffs’ complaint, see

Def. Opp. Mem. at 2, and (2) unlike in other cases involving Lupin, see, e.g., In re Namenda,

2017 WL 3822883, here Lupin was not a party to the settlement with Novartis that is challenged

in the underlying litigation, see Def. Opp. Mem. at 10. Neither claim changes the fact that the

ability of third-parties to enter the Exforge generics market lies at the core of Plaintiffs’ case for

damages .

These competing conclusions can easily be managed by shifting costs such that

Plaintiffs will pay Lupin for reasonable expenses and attorneys’ fees incurred in complying with

Plaintiffs’ production request going forward. Indeed, In re Namenda, upon which Plaintiffs rely

throughout their briefing, reached precisely this same result. See 2017 WL 3822883, at *10. As

Lupin is neither a party to this litigation nor accused by Plaintiffs’ of wrongdoing, at some point

the breadth of Plaintiffs’ production demands border on punitive. Cf. Wells Fargo Bank, N.A. v.

Konover, 259 F.R.D. 206, 207 (D. Conn. 2009) (“In determining whether the requesting party

should be required to bear the costs of production, a number of courts have looked to whether the

non-party was substantially involved in the underlying transaction and could have anticipated

that such transaction could potentially spawn litigation or discovery.”). And nothing in the

record indicates that Plaintiffs are unable to cover these costs as compared to Lupin. See id. In

sum, Lupin shall comply with the “narrowed Request Nos. 4-5” by producing documents that fit

the nine categories outlined by Plaintiffs, see Pl. Mem. at 2-3, 18, but the burden triggered by

this compliance will be addressed by Plaintiffs covering Lupin’s reasonable fees and expenses.

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Conclusion

For the foregoing reasons, the motion to compel discovery is granted. Plaintiffs

shall pay to Lupin the reasonable expenses and attorneys’ fees incurred in complying with this

motion going forward. Lupin shall produce the requested documents within 45 days from the

issuance of this order. The Clerk is instructed to close the open motion (ECF No. 244).

SO ORDERED.

Dated: June 18, 2020 ______________/s/____________

New York, New York ALVIN K. HELLERSTEIN

United States District Judge

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