In Re Accutane Litigation

NO. 13-754

NORTH CAROLINA COURT OF APPEALS

Filed: 8 April 2014

In re: ACCUTANE LITIGATION

Orange County

No. 13 CVS 265

Appeal by Dr. Michael D. Kappelman from order entered 16

April 2013 by Judge Robert H. Hobgood in Orange County Superior

Court. Heard in the Court of Appeals 8 January 2014.

Nelson Mullins Riley & Scarborough LLP, by Christopher J.

Blake, Joseph S. Dowdy, and T. Carlton Younger, III, for

Hoffman-LaRoche Inc., and Roche Laboratories, Inc.-

appellees.

Ashmead P. Pipkin for Dr. Michael D. Kappelman-appellant.

STEELMAN, Judge.

Where the defendant in a New Jersey mass tort litigation

subpoenas a North Carolina witness for a deposition, the North

Carolina trial court’s protective order was an interlocutory

order. Where the witness failed to allege any substantial right

that would be jeopardized absent immediate review, but instead

speculates that if certain fact scenarios occur in the future

his rights might be implicated, his appeal must be dismissed.

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I. Factual and Procedural Background

In the early 1980s Hoffmann-LaRoche, Inc., began marketing

Accutane, the brand name for the drug isotretinoin, which is

used to treat severe acne. Beginning in 2003, lawsuits were

filed alleging that the use of Accutane had caused inflammatory

bowel disease. In May 2005, the New Jersey Supreme Court ordered

that the litigation pertaining to Accutane be administered as a

mass tort, and as of “July 2012, there [were] nearly 8000 cases

listed on New Jersey’s Accutane mass tort list.” Sager v.

Hoffman-La Roche, Inc., 2012 N.J. Super. Unpub. LEXIS 1885 *9

fn2, petition for certification denied, 213 N.J. 568, 65 A.3d

835 (2013).

Dr. Kappelman is an Assistant Professor on the faculty of

the Medical School of the University of North Carolina at Chapel

Hill, whose duties include treating patients, conducting

research studies, and publishing the results of his studies.

This is primarily in the field of pediatric gastroenterology. He

is not a party in the Accutane litigation and has not consulted

with any of the parties. However, Dr. Kappelman was a co-author

of “A [Causal] Association between Isotretinoin and Inflammatory

Bowel Disease Has Yet to Be Established,” an article published

in 2009 in The American Journal of Gastroenterology (TAJG). Dr.

Kappelman discussed the article in a March 2010 interview

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published in the Gastroenterology & Hepatology journal. He was

also a co-author of “Isotretinoin Use and Risk of Inflammatory

Bowel Disease: A Case Control Study,” an article published in

September of 2010 in TAJG. This article resulted in a letter to

the editor by Hoffmann-LaRoche employees, published in TAJG in

May 2011, which criticized the methodology described in the

September 2010 article. This issue also contains a letter by Dr.

Kappelman responding to the criticisms. Plaintiffs in the

Accutane litigation have cited some of Dr. Kappelman’s work in

support of a causal link between Accutane and inflammatory bowel

disease. When Hoffmann-LaRoche sought to introduce other

writings by Dr. Kappelman to rebut plaintiffs’ evidence, New

Jersey trial judge Carol E. Higbee ruled that Hoffmann-LaRoche

could not introduce this evidence in documentary form but would

have to depose Dr. Kappelman.

Based upon a subpoena ad testificandum filed 15 February

2013 by the Superior Court of Atlantic County, New Jersey, the

Clerk of the Superior Court of Orange County, North Carolina,

issued a subpoena on 15 February 2013, for Dr. Kappelman to be

deposed on 14 March 2013 in Chapel Hill. On 5 March 2013 Dr.

Kappelman filed a motion to quash the subpoena and for a

protective order. The motion was heard on 8 April 2013, and on

16 April 2013 the trial court entered a protective order barring

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Hoffmann-LaRoche from deposing Dr. Kappelman as an “involuntary

non-fact” witness, but stating that he could be deposed as an

expert witness without violating the protective order. The order

states in relevant part:1

Applying a balancing test set forth in Anker

v. G.D. Searle & Co., 126 F.R.D. 515, 518

(M.D.N.C. 1989), the Court finds that Dr.

Kappelman is not a party to this litigation;

he is an independent researcher and has

demonstrated that he is [an] involuntary

non-fact witness who has substantially

demonstrated that his deposition would

result in undue hardship and would be

substantially burdensome to him as an

involuntary non-fact witness in the context

of the defendants’ mass tort litigation in

New Jersey involving 7,700 pending claims;

and, no party in that litigation has

retained Dr. Kappelman as an expert.

Therefore, Dr. Kappelman’s motion for a

protective order is granted with respect to

future subpoenas to Dr. Kappelman as an

involuntary non-fact witness.

Notwithstanding this ruling, defendants may

have subpoenas issued to Dr. Kappelman as an

expert witness without violating this

protective order, and Dr. Kappelman will be

required to appear for a deposition if he is

subpoenaed as an expert.

1

As Dr. Kappelman notes, the trial court did not rule on

his motion to quash the subpoena. At the time of the hearing on

Dr. Kappelman’s motion, the date set for his deposition had

passed. Furthermore, a North Carolina trial court lacks

authority to quash a subpoena issued by a New Jersey court. See

Capital Resources, LLC v. Chelda, Inc., __ N.C. App. __, __, 735

S.E.2d 203, 209 (2012) (“a superior court judge in this State

does not have any authority over the courts of other states, and

thus could not quash subpoenas issued by such courts”) (citing

Irby v. Wilson, 21 N.C. 568, 580 (1837)), cert. denied, __ N.C.

__, 736 S.E.2d 191 (2013).

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The parties agreed during the hearing that defendant had

subpoenaed Dr. Kappelman as a fact witness; however, the order

does not address whether Dr. Kappelman may be deposed as a fact

witness, but only bars defendants from deposing Dr. Kappelman as

“an involuntary non-fact witness.” And, although the most common

type of “non-fact witness” is an expert witness,2 the order also

states that the protective order would not bar Hoffmann-LaRoche

from issuing a subpoena for Dr. Kappelman as an expert witness.

As a result, the only legal effect of the protective order is to

prevent defendants from deposing Dr. Kappelman as an involuntary

non-fact lay witness. Dr. Kappelman argues in his response to

Hoffmann-LaRoche’s dismissal motion that the trial court’s order

is “muddled” and “self-contradictory.” However, Dr. Kappelman

did not file a motion seeking clarification of the order. See

Alston v. Fed. Express Corp., 200 N.C. App. 420, 423-24, 684

2

The order does not explain what this term means. There

appear to be no cases in North Carolina defining this term. A

“non-fact” witness may be an expert, see, Express One Int'l,

Inc. v. Sochata, No. 3-97 CV3121-M, 2001 U.S. Dist. LEXIS 25281,

at *2 (N.D. Tex. 2 March 2001) (noting that the “five non-fact

witnesses are traditional experts whose involvement is solely

for litigation to give opinions in their specific areas of

expertise”). However, in particular circumstances a person may

testify as a non-fact lay witness, see, e.g., Jones v Williams,

557 So. 2d 262, 263, 266 (La. App. 4 Cir. 1990) (parking manager

for defendant City of New Orleans and “plaintiff’s only non-fact

witness” testified regarding the City’s customary practice

regarding enforcement of parking regulations), cert. denied, 558

So. 2d 607, 1990 La. LEXIS 726 (La. 1990).

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S.E.2d 705, 707 (2009) (“Pursuant to Rule 60(b)(6)’s ‘grand

reservoir of equitable power,’ the trial court had jurisdiction

to revisit its order so that its intentions could be made

clear.”) (quoting In re Oxford Plastics v. Goodson, 74 N.C. App.

256, 259, 328 S.E.2d 7, 9 (1985)).

Dr. Kappelman appeals.

II. Hoffmann-LaRoche’s Motion to Dismiss Appeal

On 23 July 2013 Hoffmann-LaRoche filed a motion seeking

dismissal of Dr. Kappelman’s appeal, arguing that Dr. Kappelman

had appealed from an interlocutory order that did not affect a

substantial right. We agree.

A. Interlocutory Nature of Appeal

According to N.C. Gen. Stat. § 1A-1, Rule 54(a), a

“judgment is either interlocutory or the final determination of

the rights of the parties.” “‘An interlocutory order is one made

during the pendency of an action, which does not dispose of the

case, but leaves it for further action by the trial court in

order to settle and determine the entire controversy.’” Hill v.

StubHub, Inc., __ N.C. App. __, __, 727 S.E.2d 550, 553-54

(2012) (quoting Veazey v. Durham, 231 N.C. 357, 362, 57 S.E.2d

377, 381 (1950)), disc. review denied, 366 N.C. 424, 736 S.E.2d

757 (2013).

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On appeal, Dr. Kappelman argues that we should treat the

trial court’s order as final based on his interpretation of the

statement in the trial court’s order that, notwithstanding the

court’s entry of a protective order, “defendants may have

subpoenas issued to Dr. Kappelman as an expert witness without

violating this protective order, and Dr. Kappelman will be

required to appear for a deposition if he is subpoenaed as an

expert.” Dr. Kappelman interprets this as a ruling in which the

trial court “unjustly compelled Dr. Kappelman to testify as an

expert without compensation or limitations on the scope of the

deposition.” He contends that if Hoffmann-LaRoche issues a

subpoena seeking to depose him as an expert witness, that he

will not be permitted to raise any objections to the subpoena or

the deposition and that the trial court’s order “forecloses” his

ability to challenge or seek a protective order, regardless of

the scope of the deposition or his circumstances at the time. We

disagree.

N.C. Gen. Stat. § 1A-1, Rule 26(c) provides in part that:

Upon motion by a party or by the person from

whom discovery is sought, and for good cause

shown, the judge of the court in which the

action is pending may make any order which

justice requires to protect a party or

person from unreasonable annoyance,

embarrassment, oppression, or undue burden

or expense[.] . . .

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In order to determine whether a party or deponent has shown

“good cause” for an order protecting him “from unreasonable

annoyance, embarrassment, oppression, or undue burden or

expense,” the trial court must consider the specific discovery

sought and the factual circumstances of the party from whom

discovery is sought. See, e.g., Guessford v. Pa. Nat’l Mut. Cas.

Ins. Co., 2013 U.S. Dist. LEXIS 71636, *9-10 (M.D.N.C., May 21,

2013) (“Rule 26(c)’s requirement of a showing of ‘good cause’ to

support the issuance of a protective order . . . contemplates a

particular and specific demonstration of fact”) (quoting Jones

v. Circle K Stores, 185 F.R.D. 223, 224 (M.D.N.C. 1999)

(internal quotation omitted)), partial summary judgment granted

in part and denied in part on other grounds, 2013 U.S. Dist.

LEXIS 150070 (M.D.N.C. Oct. 18, 2013). Given that the trial

court’s order addressed only the type of testimony for which Dr.

Kappelman might be deposed, and given that the trial court could

not know in advance what specific circumstances might exist at

the time of a future subpoena or what information Hoffmann-

LaRoche might be seeking, we conclude that the order’s statement

that “Dr. Kappelman will be required to appear for a deposition

if he is subpoenaed as an expert” is simply a reiteration of the

first part of the same sentence which states that “defendants

may have subpoenas issued to Dr. Kappelman as an expert witness

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without violating this protective order.” In other words, the

trial court was merely emphasizing that if Hoffmann-LaRoche

subpoenaed Dr. Kappelman as an expert witness, he could not

argue that this violated the protective order. We hold, however,

that in the event that Hoffmann-LaRoche seeks to depose Dr.

Kappelman as an expert witness, he may seek a protective order

under Rule 26(c), if appropriate.

We also reject Dr. Kappelman’s contention that we should

apply the reasoning of certain federal cases as a basis for

treating this as an appeal from a final order. Dr. Kappelman

cites several federal cases holding that, if a judge from a

different district than the location of the trial enters an

order denying discovery, the party seeking discovery may appeal,

given that the party will not be able to raise the issue as part

of an appeal from judgment in the case. Dr. Kappelman asserts,

without citation to authority, that “[t]his rationale should

apply equally to the appellant who is opposing discovery.”

However:

The nonappealability of orders requiring the

production of evidence from witnesses has

long been established. In Alexander v.

United States, 201 U.S. 117, 50 L. Ed. 686,

26 S. Ct. 356 (1906) . . . The Supreme Court

held that the order directing the witnesses

to testify and produce documents was

interlocutory and could be challenged by the

witnesses only upon an appeal from an

adjudication of contempt. . . . [T]he

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Supreme Court has repeatedly held that an

order denying a motion to quash, or an order

compelling testimony or production of

documents, is not final and, hence, is not

appealable regardless of how the matter is

raised.

Micro Motion, Inc. v. Exac Corp., 876 F.2d 1574, 1576-77 (Fed.

Cir. 1989), appeal dismissed, 899 F.2d 1227 (Fed. Cir. 1990).

The Micro Motion court explained further:

We are mindful of the harshness inherent in

requiring a witness to place themself in

contempt to create a final appealable

decision. . . . However, it is all too

certain that the consequences of recognizing

a right to appeal all orders refusing to

quash a subpoena, even where such an order

‘ends’ ancillary proceedings against a non-

party, would be to “constitute the courts of

appeals as second-stage motion courts

reviewing pretrial applications of all non-

party witnesses alleging some damage because

of the litigation.” Thus, the courts, with

rare exceptions, have opted to require that

the contempt route be followed.

Micro Motion, 876 F.2d at 1577-78 (quoting Borden Co. v. Sylk,

410 F.2d 843, 846 (3d Cir. 1969)). Dr. Kappelman does not

distinguish cases such as this or cite any authority to the

contrary, and we conclude that “this issue would no more be

immediately appealable as a ‘collateral matter’ under the

federal test for interlocutory appeals than it is under the

substantial rights doctrine.” Frost v. Mazda Motor of Am., Inc.,

353 N.C. 188, 195 fn2, 540 S.E.2d 324, 328-29 fn2 (2000)

(quoting Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 171-72, 40

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L. Ed. 2d 732, 744-45, 94 S. Ct. 2140 (1974) (internal quotation

omitted).

Dr. Kappelman also argues that the court’s order was final,

because it was “a final judgment as to [his] motion.” However,

“[a] final judgment is one which disposes of the cause as to all

the parties, leaving nothing to be judicially determined between

them in the trial court.” Veazey, 231 N.C. at 361-62, 57 S.E.2d

at 381 (citation omitted) (emphasis added). The trial court’s

order addressed only the ancillary issue of Dr. Kappelman’s

entitlement to a protective order limiting the scope of

deposition, and clearly did not resolve the case “as to all the

parties” involved in the litigation pertaining to Accutane. In

addition, all of Dr. Kappelman’s appellate arguments are

premised on the likelihood of future litigation in North

Carolina. We conclude that Dr. Kappelman has attempted to appeal

from an interlocutory order.

B. Substantial Right

“As a general rule, interlocutory discovery orders are not

immediately appealable.” K2 Asia Ventures v. Trota, 209 N.C.

App. 716, 718-19, 708 S.E.2d 106, 108 (2011) (citing Dworsky v.

Insurance Co., 49 N.C. App. 446, 447, 271 S.E.2d 522, 523 (1980)

(“orders denying or allowing discovery are not appealable since

they are interlocutory and do not affect a substantial right

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which would be lost if the ruling were not reviewed before final

judgment.”). However, N.C. Gen. Stat. § 7A-27(b)(3)(a) permits

immediate appeal from an interlocutory order that “[a]ffects a

substantial right.” See also § N.C. Gen. Stat. § 1-277(a) (“An

appeal may be taken from every judicial order or determination

of a judge . . . which affects a substantial right[.]”).

“‘Essentially a two-part test has developed — the right

itself must be substantial and the deprivation of that

substantial right must potentially work injury . . . if not

corrected before appeal from final judgment.’” Braun v. Trust

Dev. Group, LLC, 213 N.C. App. 606, 609, 713 S.E.2d 528, 530

(2011) (quoting Goldston v. American Motors Corp., 326 N.C. 723,

726, 392 S.E.2d 735, 736 (1990)). “A substantial right is ‘one

which will clearly be lost or irremediably adversely affected if

the order is not reviewable before final judgment.’ . . . Our

courts generally have taken a restrictive view of the

substantial right exception. . . . The burden is on the

appellant to establish that a substantial right will be affected

unless he is allowed immediate appeal from an interlocutory

order.” Embler v. Embler, 143 N.C. App. 162, 165-66, 545 S.E.2d

259, 262 (2001) (quoting Turner v. Norfolk S. Corp., 137 N.C.

App. 138, 142, 526 S.E.2d 666, 670 (2000) (internal quotation

omitted), and citing Blackwelder v. Dept. of Human Resources, 60

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N.C. App. 331, 335, 299 S.E.2d 777, 780 (1983), and Jeffreys v.

Raleigh Oaks Joint Venture, 115 N.C. App. 377, 444 S.E.2d 252

(1994)).

Dr. Kappelman identifies two “substantial rights” that he

contends are implicated by the trial court’s order: his alleged

right under the federal and state constitutions to be paid for

expert testimony, and a right, based on Dr. Kappelman’s

contention that he qualifies as a “journalist,” to refuse to

divulge information that is protected by journalistic privilege.

Dr. Kappelman speculates that Hoffmann-LaRoche may subpoena him

as an expert witness in the future; that if this occurs,

Hoffmann-LaRoche may be unwilling to pay him for his time,3 or

Hoffmann-LaRoche might seek information that Dr. Kappelman

believes is privileged based on his assertion that he is a

“journalist.” It is undisputed that neither of these scenarios

has yet occurred. Therefore, any opinion we might offer as to

3

Dr. Kappelman does not discuss N.C. Gen. Stat. § 7A-305(d),

which “sets out the costs that the trial court is ‘required to

assess.’ Under . . . N.C. Gen. Stat. § 7A-305(d)(11), a trial

court is required to assess costs for ‘[r]easonable and

necessary fees of expert witnesses solely for actual time spent

providing testimony at trial, deposition, or other

proceedings.’” Springs v. City of Charlotte, 209 N.C. App. 271,

282, 704 S.E.2d 319, 327 (2011) (quoting Lord v. Customized

Consulting Specialty, Inc., 164 N.C. App. 730, 734, 596 S.E.2d

891, 895 (2004). “However, a trial court may tax expert witness

fees as costs only when that witness is under subpoena.” Peters

v. Pennington, 210 N.C. App. 1, 26, 707 S.E.2d 724, 741 (2011)

(citing Jarrell v. Charlotte-Mecklenburg Hosp. Auth., 206 N.C.

App. 559, 563, 698 S.E.2d 190, 193 (2010)).

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(1) Dr. Kappelman’s right, if any, to a particular fee for his

testimony; (2) whether Dr. Kappelman qualifies as a “journalist”

or; (3) whether specific information is subject to a

journalist’s privilege would be entirely hypothetical and

speculative. It is well-established that “‘courts have no

jurisdiction to determine matters purely speculative, enter

anticipatory judgments, declare social status, deal with

theoretical problems, give advisory opinions, answer moot

questions, adjudicate academic matters, provide for

contingencies which may hereafter rise, or give abstract

opinions.’” Baxter v. Jones, 283 N.C. 327, 332, 196 S.E.2d 193,

196 (1973) (quoting Little v. Trust Co., 252 N.C. 229, 243, 113

S.E. 2d 689, 700 (1960)).

We conclude that the trial court’s order was interlocutory,

that Dr. Kappelman has not identified any substantial right that

would be jeopardized by delay of appeal, and that the issues

raised by Dr. Kappelman all pertain to possible ramifications of

a hypothetical subpoena that might or might not ever be issued,

and thus do not present issues that are ripe for review. For

these reasons, we conclude that Dr. Kappelman’s appeal must be

dismissed.

DISMISSED.

Judges STEPHENS and DAVIS concur.