The opinion
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
__________________________________________
:
MSP RECOVERY CLAIMS, SERIES LLC; :
MSPA CLAIMS 1 LLC; MAO-MSO :
RECOVERY II LLC; MSP RECOVERY :
CLAIMS SERIES 44 LLC; MSP RECOVERY : Civil Action No. 21-20451 (ES) (MAH)
CLAIMS PROV, SERIES LLC; MSP :
RECOVERY CLAIMS CAID, SERIES LLC; :
SERIES PMPI, :
:
Plaintiffs, :
:
v. :
:
CELGENE CORPORATION; BRISTOL- :
MYERS SQUIBB CORPORATION; : OPINION
PATIENT ACCESS NETWORK :
FOUNDATION; CHRONIC DISEASE FUND :
d/b/a GOOD DAYS FUND, :
:
Defendants. :
__________________________________________:
Hammer, United States Magistrate Judge
This matter comes before the Court by way of the objections of MSP Recovery Claims
Series LLC (“MSP”) and related plaintiff entities (collectively, “MSP” or “Plaintiffs”) to the
Special Discovery Master’s Report and Recommendation No. 1, which was filed on December
22, 2023, D.E. 259 (hereinafter “R&R No. 1”). The Court has considered MSP’s objections to
the Report and Recommendation [D.E. 262-263], and Defendants’ response to MSP’s
objections [D.E. 265]. The Court held oral argument on the objections on March 28, 2024. For
the reasons set forth herein, the Court will affirm the Special Discovery Master’s
recommendations, and order MSP to produce full custodial discovery from each of the
assignors.
I. Background
Plaintiffs are a series of entities that claim to have been assigned the rights to pursue
this litigation against Defendants on behalf of approximately fifty-two healthcare plans.1 See,
e.g., Second Amended Complaint, May 27, 2022, D.E. 71 (“SAC”), at ¶¶ 21-31. According to
the Second Amended Complaint, the assignor healthcare plans paid the pharmaceutical claims
for those enrollees who were prescribed Revlimid and Thalomid. Id. at ¶ 32. MSP asserts that
the Defendants have blocked generic competitors from entering the market through sham patent
litigation, the abuse of Celgene’s risk evaluation and mitigation strategies (“REMS”) protocols,
refusal to sell samples to generic manufacturers, and have caused the assignors to pay inflated
prices for those prescriptions. Id. MSP seeks relief on behalf of the healthcare plans for, inter
alia, violations of the Sherman Act, 15 U.S.C. § 1 et seq., the Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., and state law.
At issue before the Special Discovery Master was whether MSP should be required to
produce to Defendants full discovery, including the utilization of search terms and custodial
searches, from each of MSP’s fifty-plus assignors. MSP proposed that it would be sufficient
for it to produce full discovery from two of the assignors, specifically AvMed Inc. and Fallon
Community Health Plan Inc. MSP proposed that after it produced that discovery, Defendants
could request specific discovery from specific assignors, or so-called “go get” discovery.
1 Plaintiffs have provided inconsistent totals for the number of healthcare-plan assignors.
Before the Special Discovery Master, Plaintiffs asserted that there were fifty-two assignors.
R&R No. 1 at 2; Joint Discovery Dispute Letter, June 22, 2023, D.E. 201, at 6-7; id. Ex. A
(MSP’s Rule 26 disclosures identifying fifty-two assignors). In its objections, however, MSP
asserts that there are fifty-six assignors. Plaintiffs’ Objections to the Special Master Report,
D.E. 262, at 1-2. MSP fails to explain the discrepancy. For purposes of deciding MSP’s
objections, the inconsistency is not material.
The Special Discovery Master considered the parties’ arguments on this dispute,
including both the filings made to this Court, i.e., D.E. 201, 217, and 229, and the parties’
submissions directly to her. The Special Discovery Master held a hearing on this and other
disputes on December 4, 2023. R&R No. 1 at 2 n.1. The Special Discovery Master noted that
MSP’s claims in this matter are predicated on its “capacity as the assignee of the claims of 52
health plans and other entities (the “assignors”).” Id. at 2. The Special Discovery Master noted
that two courts in the District of New Jersey have rejected similar arguments by MSP to limit
discovery on behalf of assignors, and have required MSP to produce discovery from all of the
assignors. Id. at 2-3 (citing MSP Recovery Claims Series, LLC v. Abbott Laboratories, No. 19-
21607, 2022 WL 11804007 (D.N.J. Oct. 17, 2022); MSP Recovery Claims Series, LLC v.
Sanofi-Aventis U.S. LLC, No. 18-2211, 2021 WL 4306866 (D.N.J. Sept. 22, 2021). The Special
Discovery Master concluded that MSP’s arguments in this case were not materially different
than those that the courts in Sanofi-Aventis and Abbott Laboratories had rejected. Id. at 3.
Additionally, the Special Discovery Master reasoned that MSP’s offer of the “go get” discovery
was an insufficient substitute for full discovery from the assignors, in the absence of any legal
justification to relieve MSP of the discovery obligation “that any other plaintiffs would have.”
Id. (emphasis in original).
II. MSP’s Objections to R&R No. 1
MSP contends that the Special Discovery Master did not adequately address the
proportionality of the Defendants’ requests. Plaintiffs’ Objections to the Special Master Report,
D.E. 262, at 8, 10 (hereinafter “Plaintiffs’ Objections”). MSP contends that rather than produce
full discovery for all assignors, considerations of proportionality under Federal Rule of Civil
Procedure 26(b) should require Defendants to review the “go get” documents for the fifty-plus
assignors for which it has not produced full discovery, determine whether additional documents
should be produced, articulate the relevance of that additional production, and issue specific
requests to MSP, which will then seek the documents from the particular assignor(s). Id. at 2.
MSP avers that particularly in complex civil cases, courts should, and regularly do, implement
“special procedural mechanisms” such as sampling in the form of bellwether or representative
plaintiffs. Id. at 12. MSP argues that such an approach is appropriate in this case, because it is
the assignee for fifty-six similarly situated healthcare plans. MSP represents that although the
healthcare plans are similarly situated, they have varying degrees of document accessibility and
technological capabilities. Id. at 13. Relying on a declaration from the eDiscovery vendor that
MSP retained in this case, MSP avers that custodial collections from each assignor are
“significantly more expensive” than the targeted “go get” discovery that the MSP Entities
propose. Decl. of Cheryll A. Calderon, Jan. 9, 2024, D.E. 263 (“Calderon Decl.”), at ¶ 11.
Relatedly, MSP complains that the Special Discovery Master’s reliance on Sanofi-Aventis and
Abbott Labs. was flawed because neither of those cases contemplated the discovery approach
that MSP proposes here.
III. Analysis
Pursuant to Federal Rule of Civil Procedure 53(f), this Court reviews the Special
Discovery Master’s factual findings and conclusions of law de novo. Fed. R. Civ. P. 53(f)(3) &
(4). See also Order Appointing Special Discovery Master, Sept. 15, 2023, D.E. 232, at ¶ 10
(“Order of Appointment”). Rulings on procedural matters will be reviewed for an abuse of
discretion. Fed. R. Civ. P. 53(f)(5); Order of Appointment at ¶ 10.
Federal Rule of Civil Procedure 26(b)(1) establishes that a party may obtain discovery
regarding any matter that is relevant to the subject matter of the case and that is not privileged.
The purpose of discovery is to uncover facts about the claims and defenses set forth in the
pleadings and thus the boundaries of relevance under Rule 26 depend upon the context of each
action. See Salamone v. Carter’s Retail, Inc., No. 09-5856, 2011 WL 1458063, at *2 (D.N.J.
Apr. 14, 2011), accord Hickman v. Taylor, 329 U.S. 495, 507 (1947). As a general matter,
courts construe Rule 26 “broadly to encompass any matter that bears on, or that reasonably
could lead to other matters that could bear on, any issue that is or may be in the case.”
Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978).
Rule 26 does not, however, permit the parties to “go fishing” and, in fact, “the trial court
retains broad discretion to determine that a discovery request is too broad and oppressive.”
Schneck v. IBM, 1993 WL 765638, *2 (D.N.J. July 27, 1993) (quoting Marshall v.
Westinghouse, 576 F.2d 588, 591 (5th Cir. 1978)). The 2015 amendments to Rule 26 reinforced
that discovery must be “proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1).
However, “the amendments to Rule 26(b) do not alter the basic allocation of the burden on the
party resisting discovery—in order to successfully resist a motion to compel—specifically
object and show that . . . a discovery request would impose an undue burden or expense or is
otherwise objectionable.” Oxbow Carbon & Minerals LLC v. Union Pacific Railroad Co., 322
F.R.D. 1, 6 (D.D.C. 2017) (quoting Mir v. L-3 Communications Integrated Sys., L.P., 319
F.R.D. 220, 226 (N.D. Tex. 2016)). See also Fed. R. Civ. P. 26, Advisory Committee Note to
2015 Amendment (instructing that the amendments were not intended to “permit the opposing
party to refuse discovery simply by making a boilerplate objection that it is not proportional”).
A proportionality analysis under Rule 26 requires the court to consider several factors,
including:
(1) the importance of the issues at stake in this action; (2) the amount in controversy;
(3) the parties’ relative access to relevant information; (4) the parties’ resources;
(5) the importance of discovery in resolving the issues; and (6) whether the burden
or expense of the proposed discovery outweighs its likely benefit.
Williams v. BASF Catalysts LLC, No. 11-1754, 2017 WL 3317295, at *4 (D.N.J. Aug. 3, 2017).
See also Carusone v. Kane, No. 16-1944, 2019 WL 5424333, at *1 (M.D. Pa. Oct. 23, 2019)
(“In conducting a proportionality analysis, the court should begin by examining the
significance of the controversy at issue, the parties’ resources and access to information, and
whether the burden or expense of complying with the discovery outweighs its benefit.”).
It is well settled that the assignee of a claim bears the same discovery production
obligations as if the assignor had initiated the litigation itself. Sanofi-Aventis, 2021 WL
7837251, at *3; Abbott Laboratories, 2022 WL 11804007, at *4 (quoting Sanofi-Aventis, 2021
WL 7837251, at *3); Royal Park Investments SA/NV v. Deutsche Bank National Trust Co., 314
F.R.D. 341, 344-45 (S.D.N.Y. 2016). As one district court reasoned, “[a]fter all, since the
assignees are suing in the shoes of the original lenders, having purchased the right to bring the
lawsuit, there is nothing unfair about imposing on them the cost of purchasing cooperation or
otherwise complying with discovery obligations.” J.P. Morgan Chase Bank v. Winnick, 228
F.R.D. 505, 507 (S.D.N.Y. 2005).
MSP recognizes as much. MSP acknowledges that “an assignee-plaintiff has an
obligation to produce discovery as to its assignor to the extent the defendant would be entitled
to such discovery had the assignor brought the action itself.” Plaintiffs’ Objections at 1. Their
attempt to walk back that basic discovery principle on the basis of proportionality is
unpersuasive, and the Court overrules their objections.
As the Special Discovery Master fairly noted, two separate judges in the United States
District Court for the District of New Jersey have rejected similar requests by MSP to limit
assignor discovery. In Sanofi-Aventis, MSP was the assignee for fifty-seven healthcare plans.
2021 WL 4306866, at *1. There, as here, the defendants sought full discovery concerning those
healthcare plans that had assigned their claims to MSP. MSP contended that requiring
discovery from each of those fifty-seven assignors would be costly and disproportional. Id. at
*4. The court denied MSP’s objections to the special master’s recommendations, and required
MSP to produce the discovery on behalf of all of the assignor healthcare plans. Id. at *5.
In Abbott Laboratories, MSP sought to produce “representative discovery” from a
subset of the numerous assignors alleging third-party overpayment for insulin test strips
because of a fraudulent pricing scheme. 2022 WL 11804007, at *2. Defendants sought full
discovery on behalf of each assignor. Relying on Sanofi-Aventis, the court found that
“Plaintiffs have an obligation [to] produce any documents and information as to each Assignor
to which Defendants would be entitled under the Federal Rules of Civil Procedure to the same
extent as if each Assignor brought this action themselves.” Id. at *4.
MSP’s arguments fare no better here. Both in its brief and through the Declaration from
Cheryll A. Calderon, MSP chiefly argues that production of relevant discovery from such a
large number of assignors would be difficult, even as MSP itself made the decision to represent
those assignors in this litigation, and even as MSP itself acknowledges the obligation to
produce discovery from those assignors to the same extent as if those assignors brought these
claims. Plaintiffs’ Objections at 1. However, MSP does little to actually address the above-
described proportionality factors. In any event, application of those factors compels the
conclusion that requiring the production of fulsome discovery as to all assignors is necessary
and appropriate, and is not disproportionate to the needs of this litigation.
First, the controversy is significant.2 MSP contends that Defendants have engaged in a
wide-ranging anticompetitive scheme that included sham patent litigation, abuse of Celgene’s
REMS protocols, and refusal to sell samples to generic manufacturers, all to protect Celgene’s
market for Thalomid and Revlimid by stifling competition from generic manufacturers over the
course of many years. See, e.g., SAC at ¶¶ 1-2, 39, 118-120, 126-76, 470-72. According to the
Second Amended Complaint, Defendants’ conduct and resulting monopoly over the market for
Thalomid and Revlimid not only caused healthcare plans such as the assignors in this case to
suffer inflated costs to purchase Thalomid and Revlimid, id. at ¶¶ 10-12, 488-90, but also
compromised “the safety program designed to protect patients from thalidomide and
lenalidomide’s teratogenic properties.” Id. at ¶ 8.
The second factor—the amount in controversy—also supports requiring MSP to
produce complete discovery for all assignors. Although the Second Amended Complaint does
not plead a specific quantification of money damages, it alleges that more than fifty assignor-
healthcare plans have suffered enormous monetary damages over the course of many years
because of the Defendants’ anticompetitive conduct. MSP seeks, among other things,
disgorgement of Celgene’s profits in an industry the product sales for which well exceed a
billion dollars. MSP also seeks treble damages, punitive damages, and attorneys’ fees against
all Defendants under RICO, 18 U.S.C. §§ 1964(c), (d). Id. at ¶¶ 613, 626. Further, MSP seeks
declaratory and injunctive relief against Celgene pursuant to the Sherman Act and Clayton Act,
15 U.S.C. § 26, that would require Celgene to cease, and take corrective actions for, its
anticompetitive activity. Id. at ¶¶ 581-82.
2 The Court’s concludes that the controversy is significant solely in the context of the
proportionality analysis under Rule 26(b), and not as a statement concerning the merits of
either the claims or defenses in this matter.
The third and fourth factors similarly support requiring MSP to produce complete
custodial discovery for all assignors. The discovery at issue in this case is uniquely within the
possession of MSP and/or the assignors, and MSP does not argue to the contrary. For example,
information concerning the scope, content, and timing of the assignments, which is necessary to
assess MSP’s standing to prosecute these claims, is exclusively within the possession of MSP
and its assignors. Similarly, MSP and the assignors have sole control over any internal
communications and other materials that might be probative of whether the alleged kickbacks
that Celgene paid to Chronic Disease Fund and Patient Access Network as charitable donations
deceived the healthcare plans. Id. at ¶¶ 549, 646. As concerns the parties’ resources, it is true
that Celgene is a large, well resourced corporation. However, Plaintiffs are sophisticated
litigants that specialize in the litigation of assigned claims, and routinely represent dozens of
healthcare plans in complex anticompetition and commercial litigation before this and other
courts throughout the country, as reflected in Sanofi-Aventis, 2021 WL 4306866, at *1, Abbott
Laboratories, 2022 WL 11804007, at *2, MSP Recovery Claims, Series 44 LLC v. Zurich Am.
Ins. Co., No. 22-5054, 2023 WL 8851153 (N.D. Ill. Aug. 15, 2023), MSP Recovery Claims,
Series LLC v. Safeco Ins. Co. of Am., 673 F. Supp. 3d 18 (D. Mass. 2023), and MSP Recovery
Claims, Series LLC v. Phoenix Ins. Co., 426 F. Supp.3d 458 (N.D. Ohio 2019).
The fifth factor strongly supports requiring MSP to produce complete custodial
discovery for all assignors. MSP itself acknowledges its obligation to produce full discovery
for the assignors as if those assignors themselves filed this action, and has already agreed to do
so for AvMed Inc. and Fallon Community Health Plan Inc. Plaintiffs’ Objections at 1.
Moreover, MSP points to no specific flaw in the Special Discovery Master’s reasoning based
on relevance. Plaintiffs do not, for example, argue that they should not have to produce any
specific category of documents. Instead, MSP contends the Report and Recommendation did
not adequately address proportionality and burden, or MSP’s alternative “go get” proposal.
See, e.g., Plaintiffs’ Objections at 8-9. Passing that the Special Master indeed considered and
rejected the “go get” proposal, R&R No. 1 at 2-3, the Court is satisfied that the discovery is
highly relevant to MSP’s standing, as well as the claims and defenses in this litigation. For
example, Defendants are entitled to know, as to each assignor, the scope, terms, and timing of
the assignments. Defendants also are entitled to each assignor’s transactional data that will be
probative of issues such as damages, and how the relevant market that Celgene is alleged to
have monopolized is defined, and whether the assignors were deceived by charitable donations
to Chronic Disease Fund and Patient Access Network.
Finally, the likely benefit of full custodial discovery as to each assignor well exceeds the
burden of producing it. Relying on Ms. Calderon’s declaration, MSP projects that custodial
discovery as to all assignor-healthcare plans will impose on it an additional $458,527.00 in
costs. Calderon Decl. at ¶ 15. See also Plaintiffs’ Objections at 7. By contrast, she estimates
that a targeted self-collection of “go get” discovery would cost MSP only $25,000 to $35,000.
Id. at ¶ 14. But the additional expenditures for fulsome discovery are hardly disproportionate
in the context of the more than fifty assignors bringing these nationwide antitrust and RICO
claims. As Defendants observe, on a per assignor basis, the costs break down to an additional
approximately $9,000 in production costs and $2,100 in annual hosting charges. Those costs
are hardly disproportionate in view of the number of claims and assignors in this action.
Moreover, Ms. Calderon’s estimate for the targeted self-collection fails to account for
several variables that might drive up the costs of completing written discovery under MSP’s
proposal. For one, given that MSP proposes “go get” discovery for at least fifty assignors
beyond AvMed Inc. and Fallon Community Health Plan Inc., it is difficult to predict with any
reliability how many assignors would be involved in subsequent targeted discovery requests
and collection, or the scope of documents that Defendants would have to seek. If, for example,
Defendants required further discovery from thirty or more assignors, the costs presumably
would be much higher than additional discovery from ten assignors. MSP and Ms. Calderon
also fail to account for the distinct possibility that such subsequent discovery requests would
result in disputes regarding the requests themselves, and the adequacy of the productions.
Those disputes inevitably would drive up litigation costs, to MSP as well as Defendants, and
delay the completion of discovery.
The caselaw on which MSP relies is unpersuasive, as it was in Sanofi-Aventis. MSP
relies on MAO-MSO Recovery II, LLC v. Mercury Gen’l Corp., No. 17-2525, 2019 WL
2619637 (C.D. Cal. May 10, 2019). But that court did not limit discovery as to only certain
assignors, or hold that requiring plaintiffs to produce fulsome custodial discovery as to all
assignors would be disproportionate under Rule 26. Instead, the plaintiffs in MAO-MSO
represented that they had access to documents for only a limited number of the assignors.
MAO-MSO, 2019 WL 2619637, at *3. The court required plaintiffs to produce all relevant
documents that they possessed, as well as responsive “documents in their assignors’ possession
that [plaintiffs] have the legal right to obtain upon demand.” Id. at *4. In short, MAO-MSO
principally concerned an issue not raised here—i.e., control of, and access to, the assignors’
documents.
MSP’s reliance on Blackrock Balanced Capital Portfolio v. HSBC Bank USA, No. 14-
9366, 2016 WL 11187259 (S.D.N.Y. June 2, 2016), also is unavailing. Blackrock Balanced
Capital Portfolio, much like MAO-MSO, principally concerned control over and access to
relevant discovery, not proportionality. In Blackrock Balanced Capital Portfolio, the
defendants sought discovery concerning the prior holders of certificates of residential
mortgage-backed securities trusts (“RMBS”) that plaintiffs had purchased from HSBC. 2016
WL 11187259, at *1. Plaintiffs protested that the documents were not in their custody or
control, and that they had no relationship with the prior owners. And unlike this case, in which
the identities of the assignors are known, the RMBS certificates were traded anonymously and
were not tied to any “unique identification number.” Id. at *3. Therefore, identifying the prior
certificate holders presented challenges that do not exist here. Even then, however, the court in
Black Rock Balanced Capital Portfolio held that plaintiffs “bear the burden of obtaining third-
party discovery from prior owners whose rights they intend to assert[,]” and allowed that third-
party discovery might be necessary to establish that the prior owners had already relinquished
their claims through settlement or otherwise. Id. Accordingly, the court required plaintiffs to
serve subpoenas to identify prior certificate owners. To mitigate some of the burden of
identifying the previous RMBS certificate owners, the court implemented a staged discovery
process to allow the parties to ascertain the significance of that third-party discovery before
proceeding with more fulsome third-party discovery.3 Id.
3 To the extent MSP argues that full custodial discovery as to all assignors is unduly
burdensome, the Court disagrees for the same reasons it rejects MSP’s proportionality
argument. An undue-burden analysis under Rule 26(b)(2)(C) involves many of the same
considerations as a proportionality analysis. For example, in Trask v. Olin Corp., 298 F.R.D.
244, 265 (W.D. Pa. 2014), the court considered an assertion of undue burden. That court
considered many of the same factors this Court has evaluated as part of the proportionality
analysis, including “the needs of the case, the amount in controversy, the parties’ resources, the
importance of the issues at the present stage in the action, and the importance of the discovery
in resolving the issues.” Id. Therefore, MSP’s arguments are no more availing if presented as a
claim of undue burden than in the proportionality context. Further, “a party resisting discovery
on the grounds of burden or expense ‘bears the burden of showing specifically how the request
is burdensome.’” In re Mercedes-Benz Emissions Litig., No. 21-881, 2020 WL 747195, at *5
(D.N.J. Feb. 14, 2020) (quoting Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., No. 09-290,
IV. Conclusion
For the reasons set forth above, Plaintiffs’ objections to R&R No. 1 are overruled, and
R&R No. 1 is affirmed. MSP shall produce full custodial discovery from each of the assignors.
s/ Michael A. Hammer
United States Magistrate Judge
Dated: March 28, 2024
2010 WL 4922701, at *3 (W.D. Pa. Nov. 29, 2010)). Indeed, a party claiming undue burden
bears a “heavy burden,” and must support the undue-burden assertion with specific proof of
that burden. Campbell v. Sedgwick, Detert, Moran & Arnold, No. 11-642, 2012 WL 12898345,
at *3 (D.N.J. Oct. 9, 2012) (quoting Wyeth v. Abbott Laboratories, No. 08-0230, 2011 WL
2429318, at *8 (D.N.J. June 13, 2011)). As explained above, MSP’s arguments and Ms.
Calderon’s declaration do not persuade the Court that requiring MSP to produce full custodial
discovery for the assignors is either disproportionate or unduly burdensome.